Financial Instruments, Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2019

Financial Instruments, Derivatives and Hedging Activities

Schedule of location and amount of assets and liabilities reported in balance sheet

	Fair Value of Hedging Instruments as of September 30, 2019
	Designated Hedging Instruments (in millions)								Non-Designated Hedging Instruments (in millions)
Balance Sheet Location		Commodity Contracts		Foreign Currency Contracts		Interest Rate Contracts	Total			Commodity Contracts		Foreign Currency Contracts		Interest Rate Contracts	Total
Accounts receivable, net	$	8	$	6	$	—	$	14	$	2	$	10	$	—	$	12
Other assets		—		6		2		8		—		1		—		1
Assets		8		12		2		22		2		11		—		13
Accounts payable and accrued liabilities		17		3		—		20		1		3		—		4
Non-current liabilities		5		5		—		10		—		3		—		3
Liabilities		22		8		—		30		1		6		—		7
Net (Liabilities)/Assets	$	(14)	$	4	$	2	$	(8)	$	1	$	5	$	—	$	6

	Fair Value of Hedging Instruments as of December 31, 2018
	Designated Hedging Instruments (in millions)								Non-Designated Hedging Instruments (in millions)
Balance Sheet Location		Commodity Contracts		Foreign Currency Contracts		Interest Rate Contracts	Total			Commodity Contracts		Foreign Currency Contracts		Interest Rate Contracts	Total
Accounts receivable, net	$	5	$	1	$	—	$	6	$	—	$	16	$	—	$	16
Other assets		1		—		—		1		—		1		—		1
Assets		6		1		—		7		—		17		—		17
Accounts payable and accrued liabilities		6		—		—		6		3		9		—		12
Non-current liabilities		3		—		1		4		—		4		—		4
Liabilities		9		—		1		10		3		13		—		16
Net (Liabilities)/Assets	$	(3)	$	1	$	(1)	$	(3)	$	(3)	$	4	$	—	$	1

Schedule of fair value hedges

Line item in the statement of financial position in which the hedged item is included (in millions)	Carrying Amount of the Hedged Assets/(Liabilities)				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of Hedged Assets/(Liabilities)
Balance sheet date as of	September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
Interest Rate Contracts:
Long-Term Debt	$	(202)	$	(199)	$	(2)	$	1

Schedule of amount of gains and losses recognized in OCI and location and amount of gains and losses reported in income statement

					Location of Gains
	Amount of Gains (Losses)				(Losses)	Amount of Gains (Losses)
Derivatives in Cash-Flow	Recognized in OCI				Reclassified from	Reclassified from AOCI into Income
Hedging Relationships	Three Months Ended September 30,				AOCI	Three Months Ended September 30,
(in millions, pre-tax)	2019		2018		into Income	2019		2018
Commodity contracts	$	(20)	$	(5)	Cost of sales	$	2	$	(2)
Foreign currency contracts		3		3	Net sales/Cost of sales		1		—
Interest rate contracts		—		—	Financing costs, net		—		—
Total	$	(17)	$	(2)		$	3	$	(2)

					Location of Gains
	Amount of Gains (Losses)				(Losses)	Amount of Gains (Losses)
Derivatives in Cash-Flow	Recognized in OCI				Reclassified from	Reclassified from AOCI into Income
Hedging Relationships	Nine Months Ended September 30,				AOCI	Nine Months Ended September 30,
(in millions, pre-tax)	2019		2018		into Income	2019		2018
Commodity contracts	$	(20)	$	(2)	Cost of sales	$	(1)	$	(5)
Foreign currency contracts		4		1	Net sales/Cost of sales		(1)		1
Interest rate contracts		—		—	Financing costs, net		(1)		(1)
Total	$	(16)	$	(1)		$	(3)	$	(5)

Schedule of location and amount of gain (loss) recognized in income

	For the Three Months Ended September 30, 2019						For the Three Months Ended September 30, 2018
Location and Amount of Gains (Losses) Recognized in Income on Fair Value and Cash Flow Hedging Relationships (in millions, pre-tax)	Net sales before shipping and handling costs			Cost of Sales		Financing costs, net	Net sales before shipping and handling costs			Cost of Sales		Financing costs, net
Income (expense) reported in earnings	$	1,574	$	(1,113)	$	(24)	$	1,563	$	(1,116)	$	(24)
Fair value hedging relationships:
Interest Rate Contracts:
Hedged Items	$	—	$	—	$	—	$	—	$	—	$	1
Derivatives designated as hedging instruments		—		—		—		—		—		(1)
Cash flow hedging relationships:
Commodity Contracts:
Gains (losses) reclassified from other comprehensive income into earnings	$	—	$	2	$	—	$	—	$	(2)	$	—
Foreign Exchange Contracts:
Gains reclassified from other comprehensive income into earnings		1		—		—		—		—		—
Interest Rate Contracts:
Gains (losses) reclassified from other comprehensive income into earnings		—		—		—		—		—		—

	For the Nine Months Ended September 30, 2019						For the Nine Months Ended September 30, 2018
Location and Amount of Gains (Losses) Recognized in Income on Fair Value and Cash Flow Hedging Relationships (in millions, pre-tax)	Net sales before shipping and handling costs			Cost of Sales		Financing costs, net	Net sales before shipping and handling costs			Cost of Sales		Financing costs, net
Income (expense) reported in earnings	$	4,660	$	(3,322)	$	(62)	$	4,752	$	(3,367)	$	(65)
Fair value hedging relationships:
Interest Rate Contracts:
Hedged Items	$	—	$	—	$	(3)	$	—	$	—	$	4
Derivatives designated as hedging instruments		—		—		3		—		—		(4)
Cash flow hedging relationships:
Commodity Contracts:
Losses reclassified from other comprehensive income into earnings	$	—	$	(1)	$	—	$	—	$	(5)	$	—
Foreign Exchange Contracts:
(Losses) gains reclassified from other comprehensive income into earnings		(2)		1		—		2		(1)		—
Interest Rate Contracts:
Losses reclassified from other comprehensive income into earnings		—		—		(1)		—		—		(1)

Schedule of fair value of financial instruments and derivatives

	As of September 30, 2019								As of December 31, 2018
(in millions)	Total		Level 1 (a)		Level 2 (b)		Level 3 (c)		Total		Level 1 (a)		Level 2 (b)		Level 3 (c)
Available for sale securities	$	13	$	13	$	—	$	—	$	11	$	11	$	—	$	—
Derivative assets		35		9		26		—		24		4		20		—
Derivative liabilities		37		10		27		—		26		6		20		—
Long-term debt		1,986		—		1,986		—		1,954		—		1,954		—

(a) Level 1 inputs consist of quoted prices (unadjusted) in active markets for identical assets or liabilities.

(b) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 2 inputs are based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability or can be derived principally from or corroborated by observable market data.  

(c) Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.