FINANCIAL INSTRUMENTS (Tables)
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12 Months Ended |
Dec. 31, 2018 |
Investments, All Other Investments [Abstract] |
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Schedule of fair value of financial instruments |
The following table summarizes the fair value of financial instruments at December 31, 2018 and 2017:
| | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value of Financial Instruments at Dec 31 | 2018 | 2017 | In millions | Cost | Gain | Loss | Fair Value | Cost | Gain | Loss | Fair Value | Cash equivalents 1 | $ | 9,951 |
| $ | 12 |
| $ | — |
| $ | 9,963 |
| $ | 6,927 |
| $ | — |
| $ | — |
| $ | 6,927 |
| Restricted cash equivalents 1, 2 | $ | 500 |
| $ | — |
| $ | — |
| $ | 500 |
| $ | 558 |
| $ | — |
| $ | — |
| $ | 558 |
| Marketable securities | | | | | | | |
|
| Available-for-sale 3 | $ | 100 |
| $ | — |
| $ | — |
| $ | 100 |
| $ | 4 |
| $ | — |
| $ | — |
| $ | 4 |
| Held-to-maturity 1, 4 | 34 |
| — |
| — |
| 34 |
| 952 |
| — |
| — |
| 952 |
| Total marketable securities | $ | 134 |
| $ | — |
| $ | — |
| $ | 134 |
| $ | 956 |
| $ | — |
| $ | — |
| $ | 956 |
| Other investments: | | | | | | | | | Debt securities: | | | | | | | | | Government debt 5 | $ | 714 |
| $ | 9 |
| $ | (23 | ) | $ | 700 |
| $ | 637 |
| $ | 13 |
| $ | (11 | ) | $ | 639 |
| Corporate bonds | 1,026 |
| 20 |
| (63 | ) | 983 |
| 704 |
| 32 |
| (3 | ) | 733 |
| Total debt securities | $ | 1,740 |
| $ | 29 |
| $ | (86 | ) | $ | 1,683 |
| $ | 1,341 |
| $ | 45 |
| $ | (14 | ) | $ | 1,372 |
| Equity securities 6 | $ | 17 |
| $ | 1 |
| $ | (2 | ) | $ | 16 |
| $ | 164 |
| $ | 2 |
| $ | (26 | ) | $ | 140 |
| Total other investments | $ | 1,757 |
| $ | 30 |
| $ | (88 | ) | $ | 1,699 |
| $ | 1,505 |
| $ | 47 |
| $ | (40 | ) | $ | 1,512 |
| Total cash and restricted cash equivalents, marketable securities and other investments | $ | 12,342 |
| $ | 42 |
| $ | (88 | ) | $ | 12,296 |
| $ | 9,946 |
| $ | 47 |
| $ | (40 | ) | $ | 9,953 |
| Long-term debt including debt due within one year 7 | $ | (38,299 | ) | $ | 390 |
| $ | (1,457 | ) | $ | (39,366 | ) | $ | (32,123 | ) | $ | 69 |
| $ | (2,121 | ) | $ | (34,175 | ) | Derivatives relating to: | | | | | | | | | Interest rates | $ | — |
| $ | — |
| $ | (64 | ) | $ | (64 | ) | $ | — |
| $ | — |
| $ | (4 | ) | $ | (4 | ) | Foreign currency 8 | — |
| 157 |
| (49 | ) | 108 |
| — |
| 31 |
| (159 | ) | (128 | ) | Commodities 8 | — |
| 91 |
| (178 | ) | (87 | ) | — |
| 130 |
| (256 | ) | (126 | ) | Total derivatives | $ | — |
| $ | 248 |
| $ | (291 | ) | $ | (43 | ) | $ | — |
| $ | 161 |
| $ | (419 | ) | $ | (258 | ) |
| | 1. | Prior period amounts were updated to conform with the current year presentation. |
| | 2. | Classified as "Other current assets" in the consolidated balance sheets. |
| | 3. | Available-for-sale securities with maturities of less than one year at the time of purchase. |
| | 4. | Held-to-maturity securities with maturities of more than three months to less than one year at the time of purchase. |
| | 5. | U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities’ obligations. |
| | 6. | Equity securities with a readily determinable fair value. Presented in accordance with ASU 2016-01. See Notes 1 and 2 for additional information. |
| | 7. | Cost includes fair value adjustments of $78 million at December 31, 2018 and $492 million at December 31, 2017, related to the accounting for the Merger. Cost also includes fair value hedge adjustments of $18 million at December 31, 2018 and $19 million at December 31, 2017 on $2,290 million of debt at December 31, 2018 and $2,390 million of debt at December 31, 2017. |
| | 8. | Presented net of cash collateral where master netting arrangements allow. |
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Schedule of investing results |
The following table provides the investing results from available-for-sale securities for the years ended December 31, 2018, 2017 and 2016.
| | | | | | | | | | | Investing Results 1 | | | | In millions | 2018 | 2017 | 2016 | Proceeds from sales of available-for-sale securities | $ | 1,053 |
| $ | 245 |
| $ | 396 |
| Gross realized gains | $ | 21 |
| $ | 5 |
| $ | 15 |
| Gross realized losses | $ | 30 |
| $ | — |
| $ | 1 |
|
| | 1. | Prior period amounts were updated to conform with the current year presentation as a result of the adoption of ASU 2016-01. |
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Schedule of the contractual maturities of investments |
The following table summarizes the contractual maturities of the Company’s investments in debt securities:
| | | | | | | | Contractual Maturities of Debt Securities at Dec 31, 2018 1 | Amortized Cost | Fair Value | In millions | Within one year | $ | 124 |
| $ | 124 |
| One to five years | 455 |
| 444 |
| Six to ten years | 717 |
| 683 |
| After ten years | 444 |
| 432 |
| Total | $ | 1,740 |
| $ | 1,683 |
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| | 1. | Includes marketable securities with maturities of less than one year. |
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Schedule of fair value and gross unrealized losses of investments |
The following tables provide the fair value and gross unrealized losses of the Company’s investments in debt securities that were deemed to be temporarily impaired at December 31, 2018 and 2017, aggregated by investment category:
| | | | | | | | | | | | | | | | | | | | Temporarily Impaired Debt Securities at Dec 31, 2018 | Less than 12 months | 12 months or more | Total | Fair Value | Unrealized losses | Fair Value | Unrealized losses | Fair Value | Unrealized losses | In millions | Government debt 1 | $ | 287 |
| $ | (17 | ) | $ | 187 |
| $ | (6 | ) | $ | 474 |
| $ | (23 | ) | Corporate bonds | 724 |
| (58 | ) | 64 |
| (5 | ) | 788 |
| (63 | ) | Total temporarily impaired debt securities | $ | 1,011 |
| $ | (75 | ) | $ | 251 |
| $ | (11 | ) | $ | 1,262 |
| $ | (86 | ) |
1. U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities' obligations.
| | | | | | | | | | | | | | | | | | | | Temporarily Impaired Debt Securities at Dec 31, 2017 | Less than 12 months | 12 months or more | Total | Fair Value | Unrealized losses | Fair Value | Unrealized losses | Fair Value | Unrealized losses | In millions | Government debt 1 | $ | 295 |
| $ | (4 | ) | $ | 151 |
| $ | (7 | ) | $ | 446 |
| $ | (11 | ) | Corporate bonds | 163 |
| (2 | ) | 19 |
| (1 | ) | 182 |
| (3 | ) | Total temporarily impaired debt securities | $ | 458 |
| $ | (6 | ) | $ | 170 |
| $ | (8 | ) | $ | 628 |
| $ | (14 | ) |
1. U.S. Treasury obligations, U.S. agency obligations, agency mortgage-backed securities and other municipalities' obligations.
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Schedule of notional amounts |
The notional amounts of the Company's derivative instruments presented on a net basis at December 31, 2018 and 2017, were as follows:
| | | | | | | | Notional Amounts - Net | Dec 31, 2018 | Dec 31, 2017 1 | In millions | Derivatives designated as hedging instruments: | | | Interest rate swaps | $ | 2,049 |
| $ | 185 |
| Foreign currency contracts | $ | 4,457 |
| $ | 4,343 |
| Derivatives not designated as hedging instruments: | | | Interest rate swaps | $ | 5 |
| $ | — |
| Foreign currency contracts | $ | 21,342 |
| $ | 15,963 |
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| | 1. | Prior period amounts were previously presented on a gross basis and have been updated to conform with the current year net presentation. |
The notional amounts of the Company's commodity derivatives at December 31, 2018 and 2017, were as follows:
| | | | | | | Commodity Notionals - Net
| Dec 31, 2018 | Dec 31, 2017 1 | Notional Volume Unit | Derivatives designated as hedging instruments: | | | | Hydrocarbon derivatives | 39.9 |
| 71.3 |
| million barrels of oil equivalent | Seed derivatives | 82.4 |
| 100.9 |
| million bushels | Derivatives not designated as hedging instruments: | | | | Hydrocarbon derivatives | 1.2 |
| 4.1 |
| million barrels of oil equivalent | Seed derivatives | 0.7 |
| 2.8 |
| million bushels | Seed derivatives | 9.0 |
| 8.2 |
| kilotons | Power derivatives | 73.9 |
| — |
| thousands of megawatt hours |
| | 1. | Prior period amounts were previously presented on a gross basis and have been updated to conform with the current year net presentation. |
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Schedule of fair value of derivative instruments using Level 2 inputs |
The following tables provide the fair value and gross balance sheet classification of derivative instruments at December 31, 2018 and 2017:
| | | | | | | | | | | | Fair Value of Derivative Instruments | Dec 31, 2018 | In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheet | Asset derivatives: | | | | | Derivatives designated as hedging instruments: | | | | | Foreign currency contracts | Other current assets | $ | 98 |
| $ | (42 | ) | $ | 56 |
| Commodity contracts | Other current assets | 47 |
| (13 | ) | 34 |
| Commodity contracts | Deferred charges and other assets | 18 |
| (3 | ) | 15 |
| Total | | $ | 163 |
| $ | (58 | ) | $ | 105 |
| Derivatives not designated as hedging instruments: | | | | | Foreign currency contracts | Other current assets | $ | 200 |
| $ | (99 | ) | $ | 101 |
| Commodity contracts | Other current assets | 41 |
| (1 | ) | 40 |
| Commodity contracts | Deferred charges and other assets | 4 |
| (2 | ) | 2 |
| Total | | $ | 245 |
| $ | (102 | ) | $ | 143 |
| Total asset derivatives | | $ | 408 |
| $ | (160 | ) | $ | 248 |
| | | | | | Liability derivatives: | | | | | Derivatives designated as hedging instruments: | | | | | Interest rate swaps | Other noncurrent obligations | $ | 64 |
| $ | — |
| $ | 64 |
| Foreign currency contracts | Accrued and other current liabilities | 46 |
| (42 | ) | 4 |
| Commodity contracts | Accrued and other current liabilities | 111 |
| (18 | ) | 93 |
| Commodity contracts | Other noncurrent obligations | 86 |
| (9 | ) | 77 |
| Total | | $ | 307 |
| $ | (69 | ) | $ | 238 |
| Derivatives not designated as hedging instruments: | | | | | Foreign currency contracts | Accrued and other current liabilities | $ | 124 |
| $ | (79 | ) | $ | 45 |
| Commodity contracts | Accrued and other current liabilities | 7 |
| (4 | ) | 3 |
| Commodity contracts | Other noncurrent obligations | 8 |
| (3 | ) | 5 |
| Total | | $ | 139 |
| $ | (86 | ) | $ | 53 |
| Total liability derivatives | | $ | 446 |
| $ | (155 | ) | $ | 291 |
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| | 1. | Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between Historical Dow and Historical DuPont and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. |
| | | | | | | | | | | | Fair Value of Derivative Instruments | Dec 31, 2017 | In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheet | Asset derivatives: | | | | | Derivatives designated as hedging instruments: | | | | | Foreign currency contracts | Other current assets | $ | 51 |
| $ | (46 | ) | $ | 5 |
| Commodity contracts | Other current assets | 20 |
| (4 | ) | 16 |
| Commodity contracts | Deferred charges and other assets | 70 |
| (5 | ) | 65 |
| Total | | $ | 141 |
| $ | (55 | ) | $ | 86 |
| Derivatives not designated as hedging instruments: | | | | | Foreign currency contracts | Other current assets | $ | 121 |
| $ | (95 | ) | $ | 26 |
| Commodity contracts | Other current assets | 50 |
| (5 | ) | 45 |
| Commodity contracts | Deferred charges and other assets | 7 |
| (3 | ) | 4 |
| Total | | $ | 178 |
| $ | (103 | ) | $ | 75 |
| Total asset derivatives | | $ | 319 |
| $ | (158 | ) | $ | 161 |
| | | | | | Liability derivatives: | | | | | Derivatives designated as hedging instruments: | | | | | Interest rate swaps | Other noncurrent obligations | $ | 4 |
| $ | — |
| $ | 4 |
| Foreign currency contracts | Accrued and other current liabilities | 109 |
| (46 | ) | 63 |
| Commodity contracts | Accrued and other current liabilities | 96 |
| (15 | ) | 81 |
| Commodity contracts | Other noncurrent obligations | 143 |
| (12 | ) | 131 |
| Total | | $ | 352 |
| $ | (73 | ) | $ | 279 |
| Derivatives not designated as hedging instruments: | | | | | Foreign currency contracts | Accrued and other current liabilities | $ | 186 |
| $ | (90 | ) | $ | 96 |
| Commodity contracts | Accrued and other current liabilities | 45 |
| (6 | ) | 39 |
| Commodity contracts | Other noncurrent obligations | 8 |
| (3 | ) | 5 |
| Total | | $ | 239 |
| $ | (99 | ) | $ | 140 |
| Total liability derivatives | | $ | 591 |
| $ | (172 | ) | $ | 419 |
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| | 1. | Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between Historical Dow and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. |
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Schedule of effect of derivative instruments |
| | | | | | | | | | | | | | | | | | | | | Effect of Derivative Instruments | Amount of gain (loss) recognized in OCI 1 | Amount of gain (loss) recognized in income 2 | Income Statement Classification | In millions | 2018 | 2017 | 2016 | 2018 | 2017 | 2016 | Derivatives designated as hedging instruments: | | | | | | | | Fair value hedges: | | | | | | | | Interest rate swaps | $ | — |
| $ | — |
| $ | — |
| $ | — |
| $ | (2 | ) | $ | — |
| Interest expense and amortization of debt discount 3 | Cash flow hedges: | | | | | | | | Interest rate swaps | 26 |
| 2 |
| 2 |
| (3 | ) | 4 |
| 6 |
| Interest expense and amortization of debt discount | Foreign currency contracts | 19 |
| (30 | ) | 8 |
| (18 | ) | 7 |
| (5 | ) | Cost of sales | Foreign currency contracts | (3 | ) | (5 | ) | 25 |
| — |
| (17 | ) | (13 | ) | Sundry income (expense) - net | Commodity contracts | (69 | ) | 38 |
| 55 |
| (63 | ) | 7 |
| (28 | ) | Cost of sales | Net investment hedges: | | | | | | | | Foreign currency contracts | 116 |
| (73 | ) | 5 |
| — |
| — |
| — |
| | Total derivatives designated as hedging instruments | $ | 89 |
| $ | (68 | ) | $ | 95 |
| $ | (84 | ) | $ | (1 | ) | $ | (40 | ) | | Derivatives not designated as hedging instruments: | | | | | | | | Foreign currency contracts | $ | — |
| $ | — |
| $ | — |
| $ | 195 |
| $ | (198 | ) | $ | (180 | ) | Sundry income (expense) - net | Commodity contracts | — |
| — |
| — |
| (7 | ) | (9 | ) | 6 |
| Cost of sales | Total derivatives not designated as hedging instruments | $ | — |
| $ | — |
| $ | — |
| $ | 188 |
| $ | (207 | ) | $ | (174 | ) | | Total derivatives | $ | 89 |
| $ | (68 | ) | $ | 95 |
| $ | 104 |
| $ | (208 | ) | $ | (214 | ) | |
| | 1. | OCI is defined as "Other comprehensive income (loss)." |
| | 3. | Gain (loss) recognized in income of derivatives is offset by gain (loss) recognized in income of the hedged item. |
|