Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value of Financial Instruments [Abstract]

Fair value of financial instruments

Following is a summary of the Company's financial instruments which have been valued at fair value in the Company's Consolidated Balance Sheets at September 30, 2014 and December 31, 2013:

	Fair Value Based on Quoted Prices in Active Markets for Identical Assets (Level 1)				Fair Value Based on Significant Other Observable Inputs (Level 2)					Total
(in millions)	2014		2013		2014			2013		2014			2013
Cash and cash equivalents:
Cash	$	497	$	618	$	–		$	–	$	497		$	618
Money market funds		493		1,172		–			–		493			1,172
Commercial paper		–		–		21			4		21			4
U.S. corporate obligations		11		–		–			–		11
Non-U.S. bank and other obligations		36		19		–			–		36			19
Short-term investments:
Commercial paper		–		–		9			–		9			–
U.S. Treasury securities		71		41		–			–		71			41
U.S. corporate obligations		35		–		–			–		35			–
Non-qualified plan assets:
Money market funds		1		1		–			–		1			1
Domestic bond funds		3		3		–			–		3			3
Domestic equity funds		6		5		–			–		6			5
International equity funds		3		3		–			–		3			3
Blended equity funds		5		4		–			–		5			4
Common stock		2		2		–			–		2			2
Derivatives, net asset (liability):
Foreign currency contracts		–		–		(43	)		19		(43	)		19
	$	1,163	$	1,868	$	(13	)	$	23	$	1,150		$	1,891

Open derivative contracts

Total gross volume bought (sold) by notional currency and maturity date on open derivative contracts at September 30, 2014 was as follows (in millions):

	Notional Amount - Buy										Notional Amount - Sell
	2014		2015		2016		2017		Total		2014			2015			2016			Total
Foreign exchange forward contracts -
Notional currency in:
Euro		103		79		14		–		196		(44	)		(5	)		(1	)		(50	)
Malaysian ringgit		46		260		3		–		309		–			(20	)		–			(20	)
Norwegian krone		293		675		103		4		1,075		(70	)		(69	)		–			(139	)
Pound sterling		97		23		5		–		125		(52	)		(22	)		(1	)		(75	)
U.S. dollar		29		7		–		–		36		(330	)		(456	)		(47	)		(833	)
Foreign exchange option contracts -
Notional currency in:
Euro		29		87		–		–		116		–			–			–			–

Fair values of derivative financial instruments

The fair values of derivative financial instruments recorded in the Company's Consolidated Condensed Balance Sheets at September 30, 2014 and December 31, 2013 were as follows (in millions):

	September 30, 2014				December 31, 2013
	Assets		Liabilities		Assets		Liabilities
Derivatives designated as hedging instruments:
Current	$	6	$	34	$	28	$	10
Non-current		1		6		3		2
Total derivatives designated as hedging instruments		7		40		31		12
Derivatives not designated as hedging instruments:
Current		3		13		6		6
Non-current		–		–		–		–
Total derivatives not designated as hedging instruments		3		13		6		6
Total derivatives	$	10	$	53	$	37	$	18

Pre-tax gain (loss) from ineffective portion of derivatives

The amount of pre-tax gain (loss) from the ineffective portion of derivatives designated as hedging instruments and from derivatives not designated as hedging instruments was (in millions):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2014			2013			2014			2013
Derivatives designated as hedging instruments -
Cost of sales	$	(4	)	$	3		$	(3	)	$	2
Derivatives not designated as hedging instruments -
Cost of sales		(6	)		7			(4	)		3
Other costs		(4	)		(1	)		(4	)		(1	)
	$	(14	)	$	9		$	(11	)	$	4