Cash Flow Hedge Gain (Loss) to be Reclassified within Twelve Months

  
  
We do not offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable netting agreements. However, if we were to offset and record the asset and liability balances of derivatives on a net basis, the amounts presented in the Consolidated Balance Sheets as of July 31, 2022, and August 1, 2021, would be adjusted as detailed in the following table:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
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|  |  | 2022 |  | 2021 |
| (Millions) |  | Gross Amounts Presented in the Consolidated Balance Sheet |  | Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements |  | Net Amount |  | Gross Amounts Presented in the Consolidated Balance Sheet |  | Gross Amounts Not Offset in the Consolidated Balance Sheet Subject to Netting Agreements |  | Net Amount |
| Total asset derivatives |  | $ | 25  |  |  | $ | (17) |  |  | $ | 8  |  |  | $ | 57  |  |  | $ | (1) |  |  | $ | 56  |  |
| Total liability derivatives |  | $ | 34  |  |  | $ | (17) |  |  | $ | 17  |  |  | $ | 3  |  |  | $ | (1) |  |  | $ | 2  |  |

We are required to maintain cash margin accounts in connection with funding the settlement of open positions for exchange-traded commodity derivative instruments. A cash margin asset balance of $8 million at July 31, 2022, and a liability balance of $14 million at August 1, 2021, were included in Other current assets and Accrued liabilities, respectively, in the Consolidated Balance Sheets.The following tables show the effect of our derivative instruments designated as cash-flow hedges for the years ended July 31, 2022, August 1, 2021, and August 2, 2020 in other comprehensive income (loss) (OCI) and the Consolidated Statements of Earnings:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |   |  | Total Cash-Flow HedgeOCI Activity |
| (Millions) |   |  | 2022 |  | 2021 |  | 2020 |
| OCI derivative gain (loss) at beginning of year |  |  | $ | (5) |  |  | $ | (8) |  |  | $ | (11) |  |
| Effective portion of changes in fair value recognized in OCI: |  |  |  |  |  |  |  |
| Commodity contracts |  |  | 13  |  |  | 4  |  |  | —  |  |
| Foreign exchange forward contracts |  |  | 4  |  |  | (9) |  |  | 3  |  |
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| Amount of loss (gain) reclassified from OCI to earnings: | Location in Earnings |  |  |  |  |  |  |
| Commodity contracts | Cost of products sold |  | (14) |  |  | —  |  |  | —  |  |
| Foreign exchange forward contracts | Cost of products sold |  | 1  |  |  | 6  |  |  | (2) |  |
| Foreign exchange forward contracts | Other expenses / (income) |  | —  |  |  | 1  |  |  | —  |  |
| Foreign exchange forward contracts | Earnings (loss) from discontinued operations |  | —  |  |  | —  |  |  | 1  |  |
| Forward starting interest rate swaps | Interest expense |  | 1  |  |  | 1  |  |  | 1  |  |
| OCI derivative gain (loss) at end of year |  |  | $ | —  |  |  | $ | (5) |  |  | $ | (8) |  |

Based on current valuations, the amount expected to be reclassified from OCI into earnings within the next 12 months is a gain of $4 million.The following table shows the total amounts of line items presented in the Consolidated Statements of Earnings for the years ended 2022, 2021, and 2020 in which the effects of derivative instruments designated as cash-flow hedges are recorded and the total effect of hedge activity on these line items are as follows:

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 2022 |  | 2021 |  | 2020 |
| (Millions) |  | Cost of products sold |  |  |  | Interest expense |  | Cost of products sold |  | Other expenses / (income) |  | Interest expense |  |  |  | Cost of products sold |  | Interest expense |  | Earnings (loss) from discontinued operations |
| Consolidated Statements of Earnings: |  | $ | 5,935  |  |  |  |  | $ | 189  |  |  | $ | 5,665  |  |  | $ | (254) |  |  | $ | 210  |  |  |  |  | $ | 5,692  |  |  | $ | 345  |  |  | $ | 1,036  |  |
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| Loss (gain) on cash-flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Amount of loss (gain) reclassified from OCI to earnings |  | $ | (13) |  |  |  |  | $ | 1  |  |  | $ | 6  |  |  | $ | 1  |  |  | $ | 1  |  |  |  |  | $ | (2) |  |  | $ | 1  |  |  | $ | 1  |  |
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