XML 41 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
DEBT, FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)
 9 Months Ended
Sep. 30, 2017
Debt Financial Instruments And Fair Value Measurements [Abstract]  
Summary of Activity Relating to Securitization Arrangement

The following is a summary of the activity relating to the company’s securitization arrangement in Japan.

 

 

 

Three months ended

September 30,

 

 

Nine months ended

September 30,

 

(in millions)

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Sold receivables at beginning of period

 

$

63

 

 

$

62

 

 

$

68

 

 

$

81

 

Proceeds from sales of receivables

 

 

69

 

 

 

75

 

 

 

198

 

 

 

272

 

Cash collections (remitted to the owners of the receivables)

 

 

(66

)

 

 

(71

)

 

 

(203

)

 

 

(299

)

Effect of currency exchange rate changes

 

 

—

 

 

 

2

 

 

 

3

 

 

 

14

 

Sold receivables at end of period

 

$

66

 

 

$

68

 

 

$

66

 

 

$

68

 

 
Summary of Gains and Losses on Derivative Instruments

The following tables summarize the income statement locations and gains and losses on the company’s derivative instruments for the three months ended September 30, 2017 and 2016.

 

 

 

Gain (loss) recognized in OCI

 

 

Location of gain (loss)

 

Gain (loss) reclassified from AOCI

into income

 

(in millions)

 

2017

 

 

2016

 

 

in income statement

 

2017

 

 

2016

 

Cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

—

 

 

$

—

 

 

Other (income) expense, net

 

$

—

 

 

$

5

 

Foreign exchange contracts

 

 

(11

)

 

 

3

 

 

Cost of sales

 

 

(3

)

 

 

(2

)

Net investment hedge

 

 

(39

)

 

 

—

 

 

Other (income) expense, net

 

 

—

 

 

 

—

 

Total

 

$

(50

)

 

$

3

 

 

 

 

$

(3

)

 

$

3

 

 

 

 

 

 

Gain (loss) recognized in income

 

(in millions)

 

Location of gain (loss) in income statement

 

2017

 

 

2016

 

Fair value hedges

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

Net interest expense

 

$

(1

)

 

$

(7

)

Undesignated derivative instruments

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Other (income) expense, net

 

$

(3

)

 

$

9

 

 

The following tables summarize the income statement locations and gains and losses on the company’s derivative instruments for the nine months ended September 30, 2017 and 2016.

 

 

 

Gain (loss) recognized in OCI

 

 

Location of gain (loss)

 

Gain (loss) reclassified from AOCI

into income

 

(in millions)

 

2017

 

 

2016

 

 

in income statement

 

2017

 

 

2016

 

Cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

(3

)

 

$

—

 

 

Other (income) expense, net

 

$

—

 

 

$

9

 

Foreign exchange contracts

 

 

(24

)

 

 

(8

)

 

Cost of sales

 

 

(4

)

 

 

(3

)

Net investment hedge

 

 

(70

)

 

 

—

 

 

Other (income) expense, net

 

 

—

 

 

 

—

 

Total

 

$

(97

)

 

$

(8

)

 

 

 

$

(4

)

 

$

6

 

 

 

 

 

 

Gain (loss) recognized in income

 

(in millions)

 

Location of gain (loss) in income statement

 

2017

 

 

2016

 

Fair value hedges

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

Net interest expense

 

$

(1

)

 

$

19

 

Undesignated derivative instruments

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Other (income) expense, net

 

$

(7

)

 

$

4

 

 
Classification and Fair Value Amounts of Derivative Instruments

The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of September 30, 2017.

 

 

 

Derivatives in asset positions

 

 

Derivatives in liability positions

 

(in millions)

 

Balance sheet location

 

Fair value

 

 

Balance sheet location

 

Fair value

 

Derivative instruments designated as hedges

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

Other long-term assets

 

$

6

 

 

Other long-

term liabilities

 

$

—

 

Foreign exchange contracts

 

Prepaid expenses and other

 

 

11

 

 

Accounts payable and

accrued liabilities

 

 

 

4

 

Foreign exchange contracts

 

Other long-term assets

 

 

2

 

 

Other long-

term liabilities

 

 

—

 

Total derivative instruments designated as hedges

 

 

 

$

19

 

 

 

 

$

4

 

Undesignated derivative instruments

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Prepaid expenses and other

 

$

—

 

 

Accounts payable and

accrued liabilities

 

$

1

 

Total derivative instruments

 

 

 

$

19

 

 

 

 

$

5

 

The following table summarizes the classification and fair values of derivative instruments reported in the condensed consolidated balance sheet as of December 31, 2016.

 

 

 

Derivatives in asset positions

 

 

Derivatives in liability positions

 

(in millions)

 

Balance sheet location

 

Fair value

 

 

Balance sheet location

 

Fair value

 

Derivative instruments designated as hedges

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

Other long-term assets

 

$

7

 

 

Other long-

term liabilities

 

$

—

 

Foreign exchange contracts

 

Prepaid expenses and other

 

 

22

 

 

Accounts payable

and

accrued liabilities

 

 

1

 

Total derivative instruments designated as hedges

 

 

 

$

29

 

 

 

 

$

1

 

Undesignated derivative instruments

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange contracts

 

Prepaid expenses and other

 

$

1

 

 

Accounts payable

and

accrued liabilities

 

$

2

 

Total derivative instruments

 

 

 

$

30

 

 

 

 

$

3

 

 
Derivative Positions Presented on Net Basis

The following table provides information on the company’s derivative positions as if they were presented on a net basis, allowing for the right of offset by counterparty.

 

 

 

September 30, 2017

 

 

December 31, 2016

 

(in millions)

 

Asset

 

 

Liability

 

 

Asset

 

 

Liability

 

Gross amounts recognized in the consolidated balance sheet

 

$

19

 

 

$

5

 

 

$

30

 

 

$

3

 

Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet

 

 

(5

)

 

 

(5

)

 

 

(3

)

 

 

(3

)

Total

 

$

14

 

 

$

—

 

 

$

27

 

 

$

—

 

 
Summary of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables summarize the bases used to measure financial assets and liabilities that are carried at fair value on a recurring basis in the condensed consolidated balance sheets.

 

 

 

 

 

 

 

Basis of fair value measurement

 

(in millions)

 

Balance as of

September 30, 2017

 

 

Quoted prices in

active markets for

identical assets

(Level 1)

 

 

Significant other

observable inputs

(Level 2)

 

 

Significant

unobservable

inputs

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency hedges

 

$

13

 

 

$

—

 

 

$

13

 

 

$

—

 

Interest rate hedges

 

 

6

 

 

 

—

 

 

 

6

 

 

 

—

 

Available-for-sale securities

 

 

11

 

 

 

11

 

 

 

—

 

 

 

—

 

Total assets

 

$

30

 

 

$

11

 

 

$

19

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency hedges

 

$

5

 

 

$

—

 

 

$

5

 

 

$

—

 

Contingent payments related to acquisitions

 

 

10

 

 

 

—

 

 

 

—

 

 

 

10

 

Total liabilities

 

$

15

 

 

$

—

 

 

$

5

 

 

$

10

 

 

 

 

 

 

 

 

Basis of fair value measurement

 

(in millions)

 

Balance as of

December 31, 2016

 

 

Quoted prices in

active markets for

identical assets

(Level 1)

 

 

Significant other

observable inputs

(Level 2)

 

 

Significant

unobservable

inputs

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency hedges

 

$

23

 

 

$

—

 

 

$

23

 

 

$

—

 

Interest rate hedges

 

 

7

 

 

 

—

 

 

 

7

 

 

 

—

 

Available-for-sale securities

 

 

9

 

 

 

9

 

 

 

—

 

 

 

—

 

Total assets

 

$

39

 

 

$

9

 

 

$

30

 

 

$

—

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency hedges

 

$

3

 

 

$

—

 

 

$

3

 

 

$

—

 

Contingent payments related to acquisitions

 

 

19

 

 

 

—

 

 

 

—

 

 

 

19

 

Total liabilities

 

$

22

 

 

$

—

 

 

$

3

 

 

$

19

 

 
Investments in Available-For-Sale Equity Securities

The following table provides information relating to the company’s investments in available-for-sale equity securities.

 

(in millions)

 

Amortized cost

 

 

Unrealized gains

 

 

Unrealized losses

 

 

Fair value

 

September 30, 2017

 

$

9

 

 

$

3

 

 

$

1

 

 

$

11

 

December 31, 2016

 

$

13

 

 

$

—

 

 

$

4

 

 

$

9

 

 
Book Values and Fair Values of Financial Instruments

the following table provides the values recognized in the condensed consolidated balance sheets and the approximate fair values as of September 30, 2017 and December 31, 2016.

 

 

 

Book values

 

 

Approximate fair values

 

(in millions)

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

$

42

 

 

$

31

 

 

$

42

 

 

$

31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt and lease obligations

 

$

3

 

 

$

3

 

 

$

3

 

 

$

3

 

Long-term debt and lease obligations

 

 

3,495

 

 

 

2,779

 

 

 

3,568

 

 

 

2,756

 

 
Summarization of Bases Used to Measure Fair Value of Financial Instruments

The following tables summarize the bases used to measure the approximate fair value of the financial instruments as of September 30, 2017 and December 31, 2016.

 

 

 

 

 

 

 

Basis of fair value measurement

 

(in millions)

 

Balance as of

September 30,

2017

 

 

Quoted prices in

active markets for

identical assets

(Level 1)

 

 

Significant other

observable inputs

(Level 2)

 

 

Significant

unobservable inputs

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

$

42

 

 

$

—

 

 

$

—

 

 

$

42

 

Total assets

 

$

42

 

 

$

—

 

 

$

—

 

 

$

42

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt and lease obligations

 

$

3

 

 

 

 

 

 

$

3

 

 

 

 

 

Long-term debt and lease obligations

 

 

3,568

 

 

 

 

 

 

 

3,568

 

 

 

 

 

Total liabilities

 

$

3,571

 

 

$

—

 

 

$

3,571

 

 

$

—

 

 

 

 

 

 

 

 

Basis of fair value measurement

 

(in millions)

 

Balance as of

December 31,

2016

 

 

Quoted prices in

active markets for

identical assets

(Level 1)

 

 

Significant other

observable inputs

(Level 2)

 

 

Significant

unobservable inputs

(Level 3)

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

$

31

 

 

$

—

 

 

$

—

 

 

$

31

 

Total assets

 

$

31

 

 

$

—

 

 

$

—

 

 

$

31

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current maturities of long-term debt and lease obligations

 

$

3

 

 

$

—

 

 

$

3

 

 

$

—

 

Long-term debt and lease obligations

 

 

2,756

 

 

 

—

 

 

 

2,756

 

 

 

—

 

Total liabilities

 

$

2,759

 

 

$

—

 

 

$

2,759

 

 

$

—