DERIVATIVE INSTRUMENTS (Notes)

3 Months Ended

Mar. 31, 2016

Notes To Financial Statements [Abstract]

DERIVATIVE INSTRUMENTS

NOTE 11. DERIVATIVE INSTRUMENTS

The following disclosures summarize the fair value of derivative instruments not designated as hedging instruments in the condensed consolidated balance sheets and the effect of changes in fair value related to those derivative instruments not designated as hedging instruments on the condensed consolidated statements of operations (in millions):

Derivative Instruments Not Designated As Hedging Instruments		Fair Value as of
	Balance Sheet Location	March 31, 2016		December 31, 2015
Asset Derivatives:
Foreign currency	Prepaid expenses and other current assets	$	1	$	6

		Amount of Gain or (Loss) Recognized In Income on Derivatives
Effect on Income of Derivative Instruments Not Designated As Hedging Instruments	Location of Gain or (Loss) Recognized in Income on Derivatives	For the Three Months Ended March 31,
		2016			2015
Foreign currency	Other expense, net	$	(4	)	$	—
Effect on income of derivative instruments not designated as hedging instruments		$	(4	)	$	—

Foreign Currency Hedge

In order to hedge the risk of adverse foreign currency exchange rate fluctuations impacting the expected sale proceeds from our equity transfer agreement in China (See Note 3. Dispositions and Assets Held for Sale), we entered into a foreign currency exchange collar with two financial institutions, which matured in March 2016 and April 2016, with proceeds of $2 million and $1 million, respectively. We subsequently entered into foreign currency forwards for approximately $100 million, which will settle in June 2016 and July 2016, to protect against rate fluctuations through the expected close of the sale of our ownership interest to CITIC. The foreign currency forwards are accounted for as derivative instruments and, accordingly, are recorded at fair value quarterly with any change in fair value recognized in our condensed consolidated statements of operations as "Other expense, net." As of March 31, 2016, the fair value of the foreign currency exchange derivatives of $1 million, pre-tax, was recorded as a current asset.

We have also entered into a foreign currency forward to manage foreign currency exchange rate fluctuations associated with a series of fixed payments to be made by an international subsidiary through the end of 2017. This foreign currency forward is accounted for as a derivative instrument at fair value in our quarterly condensed consolidated balance sheet with any changes in fair value recognized in our condensed consolidated statements of operations as "Other expense, net." This derivative instrument was not material to our condensed consolidated statement of operations nor was it material to our condensed consolidated balance sheet as of March 31, 2016.

Energy Price Risk

Following the expiration of certain long-term energy sales contracts, we may have exposure to market risk, and therefore revenue fluctuations, in energy markets. We have entered into contractual arrangements that will mitigate our exposure to short-term volatility through a variety of hedging techniques, and will continue to do so in the future. Our efforts in this regard will involve only mitigation of price volatility for the energy we produce, and will not involve taking positions (either long or short) on energy prices in excess of our physical generation. We have entered into agreements with various financial institutions to hedge approximately 1.8 million MWh, 1.6 million MWh and 0.1 million MWh of energy production from exposure to market risk for 2016, 2017 and 2018, respectively.

As of March 31, 2016, the fair value of the energy derivatives of $22 million, pre-tax, was recorded as a $17 million current asset and a $5 million noncurrent asset. The change in fair value was recorded as a component of AOCI. As of March 31, 2016, the amount of hedge ineffectiveness was not material. During the three months ended March 31, 2016, the cash provided by and used in energy derivative settlements of $14 million and $0 million, respectively, was included in the change in working capital on our condensed consolidated statement of cash flows. The cash provided by and used in energy derivative settlements during the three months ended March 31, 2015 were $3 million and $7 million, respectively.

Interest Rate Swaps

In order to hedge the risk of adverse variable interest rate fluctuations associated with the Dublin senior term loan, we have entered into floating to fixed rate swap agreements with various financial institutions terminating between 2016 and 2021, denominated in Euros, for the full €250 million loan amount. This interest rate swap is designated as a cash flow hedge which is recorded at fair value with changes in fair value recorded as a component of AOCI. As of March 31, 2016, the fair value of the interest rate swap derivative of $22 million, pre-tax, was recorded as a $2 million and $20 million current and noncurrent liability, respectively. There was an immaterial amount of ineffectiveness recorded during the quarter recognized in our condensed consolidated statements of operations as interest expense.