Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2021

Investments, All Other Investments [Abstract]

Carrying Amount and Estimated Fair Values of Financial Instruments

The carrying values and the estimated fair values of financial instruments at March 31, 2021 and December 31, 2020 consisted of the following:

	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

_______________________

(1)The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments.

(2)The carrying amount approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments.

(3)The carrying amount approximates fair value as the instruments are marked-to-market and held at fair value on the Consolidated Balance Sheet.

(4)The fair value of the Company's long-term debt was calculated using discounted cash flows applying current interest rates and current credit spreads based on its own credit risk.

(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.

(6)The fair value of the Notes is based on market quoted price as there is an active market for the Notes and observable market data and inputs.

(7)The carrying amount approximates fair value as the Term Loans were assumed at fair value and the interest rate is reset frequently based on current market rates.

Derivative Instruments Notional Amount Outstanding

The following table shows the notional amount of the Company’s derivative instruments outstanding as of March 31, 2021 and December 31, 2020:

(DOLLARS IN MILLIONS)	March 31, 2021		December 31, 2020
Foreign currency contracts	$	121	$	221
Commodity contracts	5		—
Cross currency swaps	300		300

Derivative Instruments Measured at Fair Value

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

 _______________________

(1)Derivative assets are recorded to Prepaid expenses and other current assets in the Consolidated Balance Sheet.

(2)Derivative liabilities are recorded as Other current liabilities in the Consolidated Balance Sheet

Derivative Instruments Which Were Not Designated as Hedging Instruments

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.

Derivative Instruments Designated as Cash Flow and Net Investment Hedging Instruments

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