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DERIVATIVE AND NON-DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
6 Months Ended
Jun. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]  
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]
The following table shows the notional amounts outstanding at June 30, 2017 and December 31, 2016 associated with the Company's hedging programs.
Notional Outstanding
June 30, 2017
 
December 31, 2016
 
 
 
 
 
Derivatives designated as cash flow hedges:
 
 
 
Foreign Exchange Forward and Option Contracts (in millions)
 
 
 
 
EUR/USD (in EUR)
€360
 
€378
 
EUR/USD (in approximate USD equivalent)
$411
 
$398
 
JPY/USD (in JPY)
¥900
 
¥1,800
 
JPY/USD (in approximate USD equivalent)
$8
 
$15
Commodity Forward and Collar Contracts
 
 
 
 
Feedstock (in million barrels)
10

 
11

 
Energy (in million million british thermal units)
20

 
23

 
 
 
 
Derivatives designated as fair value hedges:
 
 
 
Fixed-for-floating interest rate swaps (in millions)
$75
 
$75
 
 
 
 
Non-derivatives designated as net investment hedges:
 
 
 
Foreign Currency Net Investment Hedges (in millions)
 
 
 
 
EUR/USD (in EUR)
€1,239
 
€1,238
Derivative Instrument Gain Loss in Statement of Financial Performance
The tables below present the effect of hedging instruments on OCI and the financial performance for second quarter and first six months 2017 and 2016:
(Dollars in millions)
 
Change in amount of after tax gain/(loss) recognized in OCI on derivatives (effective portion)
 
Pre-tax amount of gain/(loss) reclassified from Accumulated OCI into income (effective portion)
 
Additional pre-tax gain/(loss) recognized in earnings (effective portion)
 
 
 
 
Second Quarter
 
Second Quarter
 
Second Quarter
 
 
Hedging Relationships
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
Income Statement Classification
Derivatives in cash flow hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
$
9

 
$
79

 
$
(20
)
 
$
(65
)
 
$

 
$

 
Cost of sales
Foreign exchange contracts
 
(20
)
 
1

 
10

 
15

 

 

 
Sales
Forward starting interest rate and treasury lock swap contracts
 
1

 
(9
)
 
(1
)
 
(2
)
 

 

 
Net interest expense
Derivatives in fair value hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-for-floating interest rate swaps
 

 

 

 

 
1

 
3

 
Net interest expense
Non-derivatives in net investment hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment hedges (pre-tax)
 
(91
)
 
3

 

 

 

 

 
N/A
Derivatives not designated as hedges: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
 

 

 

 

 
10

 
23

 
Other (income) charges, net

(1) 
The gains or losses on derivatives that are not designated as hedges are marked to market and represent foreign exchange derivatives denominated in multiple currencies and are transacted and settled in the same quarter.
(Dollars in millions)
 
Change in amount of after tax gain/(loss) recognized in OCI on derivatives (effective portion)
 
Pre-tax amount of gain/(loss) reclassified from Accumulated OCI into income (effective portion)
 
Additional pre-tax gain/(loss) recognized in earnings (effective portion)
 
 
 
 
First Six Months
 
First Six Months
 
First Six Months
 
 
Hedging Relationships
 
2017
 
2016
 
2017
 
2016
 
2017
 
2016
 
Income Statement Classification
Derivatives in cash flow hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commodity contracts
 
$
(7
)
 
$
109

 
$
(27
)
 
$
(85
)
 
$

 
$

 
Cost of sales
Foreign exchange contracts
 
(30
)
 
(25
)
 
22

 
30

 

 

 
Sales
Forward starting interest rate and treasury lock swap contracts
 
2

 
(27
)
 
(2
)
 
(4
)
 

 

 
Net interest expense
Derivatives in fair value hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed-for-floating interest rate swaps
 

 

 

 

 
2

 
7

 
Net interest expense
Non-derivatives in net investment hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment hedges (pre-tax)
 
(109
)
 
3

 

 

 

 

 
N/A
Derivatives not designated as hedges: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign Exchange Contracts
 

 

 

 

 
4

 
14

 
Other (income) charges, net

(1) 
The gains or losses on derivatives that are not designated as hedges are marked to market and represent foreign exchange derivatives denominated in multiple currencies and are transacted and settled in the same quarter.
Financial assets and liabilities valued on a recurring basis
The following table shows the financial assets and liabilities valued on a gross basis as of June 30, 2017 and December 31, 2016. Additionally, the table below indicates where the derivatives are reported on the Unaudited Consolidated Statements of Financial Position. During the periods presented, there were no transfers between fair value hierarchy levels.
The Financial Position and Fair Value Measurements of Hedging Instruments on a Gross Basis
(Dollars in millions)
 
 
 
 
 
 
Derivative Type
 
Statements of Financial
Position Classification
 
June 30, 2017
Level 2
 
December 31, 2016
Level 2
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
Commodity contracts
 
Other current assets
 
$
1

 
$
5

Commodity contracts
 
Other noncurrent assets
 

 
2

Foreign exchange contracts
 
Other current assets
 
35

 
49

Foreign exchange contracts
 
Other noncurrent assets
 
16

 
47

 
 
 
 
 
 
 
Derivatives designated as fair value hedges:
 
 
 
 
 
 
Fixed-for-floating interest rate swap
 
Other current assets
 
1

 
1

Total Derivative Assets
 
 
 
$
53

 
$
104

 
 
 
 
 
 
 
Derivatives designated as cash flow hedges:
 
 
 
 
 
 
Commodity contracts
 
Payables and other current liabilities
 
$
75

 
$
62

Commodity contracts
 
Other long-term liabilities
 
58

 
69

Foreign exchange contracts
 
Payables and other current liabilities
 
1

 

Foreign exchange contracts
 
Other long-term liabilities
 
1

 

 
 
 
 
 
 
 
Derivatives designated as fair value hedges:
 
 
 
 
 
 
Fixed-for-floating interest rate swap
 
Long-term borrowings
 
3

 
4

Total Derivative Liabilities
 
 
 
$
138

 
$
135

Total Net Derivative Liabilities
 
 
 
$
85

 
$
31