Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions. These two types of inputs create the following fair value hierarchy:

•Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company determines the fair value of structured liabilities (where performance is linked to structured interest rates, inflation or currency risks) using the London Interbank Offer Rate ("LIBOR") swap curve and forward interest and exchange rates at period end. Such instruments are classified as Level 2 based on the observability of significant inputs to the model. The Company does not have any instruments classified as Level 3, other than those included in pension asset trusts as discussed in Note 16 of the Company's 2020 Form 10-K.

These valuations take into consideration the Company's credit risk and its counterparties’ credit risk. The estimated change in the fair value of these instruments due to such changes in its own credit risk (or instrument-specific credit risk) was not material as of March 31, 2021.


	March 31, 2021				December 31, 2020
(DOLLARS IN MILLIONS)	Carrying Value		Fair Value		Carrying Value		Fair Value
LEVEL 1
Cash and cash equivalents(1)	$	872	$	872	$	650	$	650
2025 Notes(6)	1,001		982		—		—
2027 Notes(6)	1,220		1,172		—		—
2030 Notes(6)	1,511		1,454		—		—
2040 Notes(6)	775		736		—		—
2050 Notes(6)	1,574		1,470		—		—
LEVEL 2
Credit facilities and bank overdrafts(2)	11		11		2		2
Derivatives
Derivative assets(3)	3		3		1		1
Derivative liabilities(3)	18		18		29		29

Long-term debt:(4)

2021 Euro Notes	353		353		368		370
2022 Notes	300		300		—		—
2023 Notes	299		314		299		316
2024 Euro Notes	587		615		614		648
2026 Euro Notes	936		1,008		978		1,061
2028 Notes	397		453		397		472
2047 Notes	494		561		494		608
2048 Notes	786		984		786		1,059
2018 Term Loan Facility(2)	240		240		240		240
2022 Term Loan Facility(2)	200		200		199		200
2024 Term Loan Facility(7)	625		625		—		—
2026 Term Loan Facility(7)	625		625		—		—
Amortizing Notes(5)	24		25		36		37

(5)The fair value of the Amortizing Notes of the TEUs is based on the most recently quoted price for the outstanding securities, adjusted for any known significant deviation in value. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange.

The Company periodically enters into foreign currency forward contracts with the objective of reducing exposure to cash flow volatility associated with its intercompany loans, foreign currency receivables and payables and anticipated purchases of certain raw materials used in operations. These contracts generally involve the exchange of one currency for a second currency at a future date, have maturities not exceeding twelve months and are with counterparties which are major international financial institutions.

The Company utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory such as soybeans, soybean oil and soybean meal.

The Company maintains several forward currency contracts which qualified as cash flow hedges. The objective of these hedges is to protect against the currency risk associated with forecasted U.S. dollar ("USD") denominated raw material purchases made by Euro ("EUR") functional currency entities which result from changes in the EUR/USD exchange rate. The effective portions of cash flow hedges are recorded in OCI as a component of Gains on derivatives qualifying as hedges in the accompanying Consolidated Statement of (Loss) Income and Comprehensive Loss. Realized gains/(losses) in AOCI related to cash flow hedges of raw material purchases are recognized as a component of Cost of goods sold in the accompanying Consolidated Statement of (Loss) Income and Comprehensive Loss in the same period as the related costs are recognized.

Subsequent to the issuance of the 2021 Euro Notes and 2026 Euro Notes during the third quarter of 2018, the Company designated the debt as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in OCI as a component of foreign currency translation adjustments in the accompanying Consolidated Statement of (Loss) Income and Comprehensive Loss.

Subsequent to the issuance of the 2024 Euro Notes during the first quarter of 2016, the Company designated the debt as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in OCI as a component of foreign currency translation adjustments in the accompanying Consolidated Statement of (Loss) Income and Comprehensive Loss.

During the third quarter of 2019, the Company entered into four EUR/USD cross currency swaps that mature through May 2023. The swaps all qualified as net investment hedges in order to mitigate a portion of the Company's net European investments from foreign currency risk. During the third quarter of 2020, the Company entered into a transaction to unwind two of the swaps issued in the third quarter of 2019 and paid proceeds of $15 million, net of accrued interest receivable of $2 million. The loss arising from the termination of the swaps has been included as a component of accumulated other comprehensive loss. As of March 31, 2021, the two remaining swaps were in a net liability position with an aggregate fair value of $11 million which was classified as other current liabilities. Changes in fair value related to cross currency swaps are recorded in OCI.

The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy), as reflected in the Consolidated Balance Sheet as of March 31, 2021 and December 31, 2020:


	March 31, 2021
(DOLLARS IN MILLIONS)	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative assets(1)
Foreign currency contracts	$	2	$	1	$	3



Derivative liabilities(2)
Foreign currency contract	$	—	$	7	$	7
Cross currency swaps	11		—		11
Total derivative liabilities	$	11	$	7	$	18


	December 31, 2020
(DOLLARS IN MILLIONS)	Fair Value of Derivatives Designated as Hedging Instruments		Fair Value of Derivatives Not Designated as Hedging Instruments		Total Fair Value
Derivative assets(1)
Foreign currency contracts	$	—	$	1	$	1



Derivative liabilities(2)
Foreign currency contracts	$	6	$	—	$	6
Cross currency swaps	23		—		23
Total derivative liabilities	$	29	$	—	$	29

The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments in the Consolidated Statement of (Loss) Income and Comprehensive Loss for the three months ended March 31, 2021 and 2020 (in millions):


	Amount of Gain (Loss)				Location of Gain (Loss) Recognized in Income on Derivative
(DOLLARS IN MILLIONS)	Three Months Ended March 31,
	2021		2020
Foreign currency contracts(1)	$	(3)	$	(8)	Other (income) expense, net

(1)The foreign currency contract net gains (losses) offset any recognized gains (losses) arising from the revaluation of the related intercompany loans during the same respective periods.

The following table shows the effect of the Company’s derivative and non-derivative instruments designated as cash flow and net investment hedging instruments, net of tax, in the Consolidated Statement of (Loss) Income and Comprehensive Loss for the three months ended March 31, 2021 and 2020 (in millions):


	Amount of Gain (Loss) Recognized in OCI on Derivative				Location of Gain (Loss) Reclassified from AOCI into Income	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income
	Three Months Ended March 31,					Three Months Ended March 31,
(DOLLARS IN MILLIONS)	2021		2020			2021		2020
Derivatives in Cash Flow Hedging Relationships:
Foreign currency contracts	$	4	$	1	Cost of goods sold	$	(2)	$	2

Derivatives in Net Investment Hedging Relationships:

Cross currency swaps	9		21		N/A	—		—
Non-Derivatives in Net Investment Hedging Relationships:
2024 Euro Notes	20		10		N/A	—		—
2021 Euro Notes & 2026 Euro Notes	45		21		N/A	—		—
Total	$	78	$	53		$	(2)	$	2

The Company expects that $3 million (net of tax) of derivative gain included in AOCI at March 31, 2021, based on current market rates, will be reclassified into earnings within the next 12 months. The majority of this amount will vary due to fluctuations in foreign currency exchange rates.