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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2019
Summary of Derivative Instruments [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Disclosures reflect the adoption of ASU 2017-12, Derivatives and Hedging (Topic 815), in the first quarter of 2019. Prior period amounts have not been restated.
Cash Flow Hedges
Our cash flow hedges include foreign currency forward contracts, commodity swaps and commodity purchase contracts. We use foreign currency forward contracts to manage currency risk associated with certain transactions, specifically forecasted sales and purchases made in foreign currencies. Our foreign currency contracts hedge forecasted transactions through 2025. We use commodity derivatives, such as fixed-price purchase commitments and swaps to hedge against potentially unfavorable price changes for items used in production. Our commodity contracts hedge forecasted transactions through 2023.
Fair Value Hedges
Interest rate swaps under which we agree to pay variable rates of interest are designated as fair value hedges of fixed-rate debt. The net change in fair value of the derivatives and the hedged items is reported in Boeing Capital interest expense. As of December 31, 2019, there are no fair value hedges reported on the Consolidated Statements of Financial Position.
Derivative Instruments Not Receiving Hedge Accounting Treatment
We have entered into agreements to purchase and sell aluminum to address long-term strategic sourcing objectives and non-U.S. business requirements. These agreements are derivative instruments for accounting purposes. The quantities of aluminum in these agreements offset and are priced at prevailing market prices. We also hold certain foreign currency forward contracts which do not qualify for hedge accounting treatment.
Notional Amounts and Fair Values
The notional amounts and fair values of derivative instruments in the Consolidated Statements of Financial Position as of December 31 were as follows:
 
Notional
  amounts(1)
Other assets
Accrued
liabilities
 
2019

 
2018

2019

 
2018

2019

 
2018

Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
Foreign exchange contracts

$2,590

 

$3,407


$29

 

$32


($60
)
 

($132
)
Interest rate contracts


 
125



 


 
 
 
Commodity contracts
645

 
57

4

 
9

(72
)
 
(2
)
Derivatives not receiving hedge accounting treatment:
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
285

 
414

1

 
11

(6
)
 
(2
)
Commodity contracts
1,644

 
478

 
 
 
 
 


Total derivatives

$5,164

 

$4,481

34

 
52

(138
)
 
(136
)
Netting arrangements
 
 
 
(20
)
 
(24
)
20

 
24

Net recorded balance
 
 
 

$14

 

$28


($118
)


($112
)
(1) 
Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
Gains/(losses) associated with our hedging transactions and forward points recognized in Other comprehensive income are presented in the following table: 
Years ended December 31,
2019

 
2018

Recognized in Other comprehensive income, net of taxes:
 
 
 
Foreign exchange contracts

$15

 

($156
)
Commodity contracts
(63
)
 
10


Gains/(losses) associated with our hedging transactions and forward points reclassified from AOCI to earnings are presented in the following table:
Years ended December 31,
2019

 
2018

Foreign exchange contracts
 
 
 
Revenues


 

Costs and expenses

($26
)
 

($30
)
General and administrative
(9
)
 
(12
)
Commodity contracts
 
 
 
Revenues

 

Costs and expenses

$1

 

$2

General and administrative expense
1

 
2


Gains/(losses) related to undesignated derivatives on foreign exchange cash flow hedging transactions recognized in Other income, net were insignificant for the years ended December 31, 2019 and 2018. Forward points related to foreign exchange cash flow hedging transactions recognized in Other income, net was a gain of $1 for the year ended December 31, 2018.
Based on our portfolio of cash flow hedges, we expect to reclassify losses of $8 (pre-tax) out of Accumulated other comprehensive loss into earnings during the next 12 months.
We have derivative instruments with credit-risk-related contingent features. For foreign exchange contracts with original maturities of at least five years, our derivative counterparties could require settlement if we default on our five-year credit facility. For certain commodity contracts, our counterparties could require collateral posted in an amount determined by our credit ratings. The fair value of foreign exchange and commodity contracts that have credit-risk-related contingent features that are in a net liability position at December 31, 2019 was $19. At December 31, 2019, there was no collateral posted related to our derivatives.