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Fair values
12 Months Ended
Dec. 31, 2015
Fair values  
Fair values

 

Note 6—Fair values

Recurring fair value measures

        The fair values of financial assets and liabilities measured at fair value on a recurring basis were as follows: 

                                                                                                                                                                                    

 

 

December 31, 2015

 

($ in millions)

 

Level 1

 

Level 2

 

Level 3

 

Total
fair value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities in "Cash and equivalents":

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities—Corporate

 

 

 

 

11 

 

 

 

 

11 

 

Available-for-sale securities in "Marketable securities and short-term investments":

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

 

 

667 

 

 

 

 

667 

 

Debt securities—U.S. government obligations

 

 

121 

 

 

 

 

 

 

121 

 

Debt securities—Other government obligations

 

 

 

 

 

 

 

 

 

Debt securities—Corporate

 

 

 

 

508 

 

 

 

 

508 

 

Derivative assets—current in "Other current assets"

 

 

 

 

296 

 

 

 

 

297 

 

Derivative assets—non-current in "Other non-current assets"

 

 

 

 

186 

 

 

 

 

186 

 

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

 

122 

 

 

1,670 

 

 

 

 

1,792 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities—current in "Other current liabilities"

 

 

 

 

315 

 

 

 

 

318 

 

Derivative liabilities—non-current in "Other non-current liabilities"

 

 

 

 

134 

 

 

 

 

134 

 

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

 

 

 

449 

 

 

 

 

452 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

                                                                                                                                                                                    

 

 

December 31, 2014

 

($ in millions)

 

Level 1

 

Level 2

 

Level 3

 

Total
fair value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale securities in "Cash and equivalents":

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt securities—Corporate

 

 

 

 

85 

 

 

 

 

85 

 

Available-for-sale securities in "Marketable securities and short-term investments":

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

 

 

110 

 

 

 

 

110 

 

Debt securities—U.S. government obligations

 

 

136 

 

 

 

 

 

 

136 

 

Debt securities—Other government obligations

 

 

 

 

 

 

 

 

 

Debt securities—Corporate

 

 

 

 

652 

 

 

 

 

652 

 

Derivative assets—current in "Other current assets"

 

 

 

 

289 

 

 

 

 

289 

 

Derivative assets—non-current in "Other non-current assets"

 

 

 

 

189 

 

 

 

 

189 

 

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

 

136 

 

 

1,327 

 

 

 

 

1,463 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities—current in "Other current liabilities"

 

 

 

 

438 

 

 

 

 

438 

 

Derivative liabilities—non-current in "Other non-current liabilities"

 

 

 

 

108 

 

 

 

 

108 

 

​  

​  

​  

​  

​  

​  

​  

​  

Total

 

 

 

 

546 

 

 

 

 

546 

 

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

​  

        The Company uses the following methods and assumptions in estimating fair values of financial assets and liabilities measured at fair value on a recurring basis:

 

 

 

           

•          

Available-for-sale securities in "Cash and equivalents", "Marketable securities and short-term investments" and "Other non-current assets":  If quoted market prices in active markets for identical assets are available, these are considered Level 1 inputs; however, when markets are not active, these inputs are considered Level 2. If such quoted market prices are not available, fair value is determined using market prices for similar assets or present value techniques, applying an appropriate risk-free interest rate adjusted for nonperformance risk. The inputs used in present value techniques are observable and fall into the Level 2 category. 

           

•          

Derivatives:  The fair values of derivative instruments are determined using quoted prices of identical instruments from an active market, if available (Level 1). If quoted prices are not available, price quotes for similar instruments, appropriately adjusted, or present value techniques, based on available market data, or option pricing models are used. Cash-settled call options hedging the Company's WAR liability are valued based on bid prices of the equivalent listed warrant. The fair values obtained using price quotes for similar instruments or valuation techniques represent a Level 2 input unless significant unobservable inputs are used.

Non-recurring fair value measures

        There were no significant non-recurring fair value measurements during 2015 and 2014.

Disclosure about financial instruments carried on a cost basis

        The fair values of financial instruments carried on a cost basis were as follows: 

                                                                                                                                                                                    

 

 

December 31, 2015

 

($ in millions)

 

Carrying
value

 

Level 1

 

Level 2

 

Level 3

 

Total
fair value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents (excluding available-for-sale securities with original maturities up to 3 months):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

1,837 

 

 

1,837 

 

 

 

 

 

 

1,837 

 

Time deposits

 

 

2,717 

 

 

 

 

2,717 

 

 

 

 

2,717 

 

Marketable securities and short-term investments (excluding available-for-sale securities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits

 

 

104 

 

 

 

 

104 

 

 

 

 

104 

 

Receivables under reverse repurchase agreements

 

 

224 

 

 

 

 

224 

 

 

 

 

224 

 

Other short-term investments

 

 

 

 

 

 

 

 

 

 

 

Other non-current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans granted

 

 

29 

 

 

 

 

30 

 

 

 

 

30 

 

Held-to-maturity securities

 

 

99 

 

 

 

 

110 

 

 

 

 

110 

 

Restricted cash and cash deposits

 

 

176 

 

 

55 

 

 

138 

 

 

 

 

193 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term debt and current maturities of long-term debt (excluding capital lease obligations)

 

 

1,427 

 

 

614 

 

 

817 

 

 

 

 

1,431 

 

Long-term debt (excluding capital lease obligations)

 

 

5,889 

 

 

5,307 

 

 

751 

 

 

 

 

6,058 

 

Non-current deposit liabilities in "Other non-current liabilities"

 

 

215 

 

 

 

 

244 

 

 

 

 

244 

 

 

                                                                                                                                                                                    

 

 

December 31, 2014

 

($ in millions)

 

Carrying
value

 

Level 1

 

Level 2

 

Level 3

 

Total
fair value

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and equivalents (excluding available-for-sale securities with original maturities up to 3 months):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash

 

 

2,218 

 

 

2,218 

 

 

 

 

 

 

2,218 

 

Time deposits

 

 

3,140 

 

 

 

 

3,140 

 

 

 

 

3,140 

 

Marketable securities and short-term investments (excluding available-for-sale securities):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time deposits

 

 

200 

 

 

 

 

200 

 

 

 

 

200 

 

Receivables under reverse repurchase agreements

 

 

219 

 

 

 

 

219 

 

 

 

 

219 

 

Other short-term investments

 

 

 

 

 

 

 

 

 

 

 

Other non-current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans granted

 

 

41 

 

 

 

 

44 

 

 

 

 

44 

 

Held-to-maturity securities

 

 

95 

 

 

 

 

109 

 

 

 

 

109 

 

Restricted cash and cash deposits

 

 

198 

 

 

64 

 

 

161 

 

 

 

 

225 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term debt and current maturities of long-term debt (excluding capital lease obligations)

 

 

324 

 

 

115 

 

 

209 

 

 

 

 

324 

 

Long-term debt (excluding capital lease obligations)

 

 

7,198 

 

 

6,148 

 

 

1,404 

 

 

 

 

7,552 

 

Non-current deposit liabilities in "Other non-current liabilities"

 

 

222 

 

 

 

 

267 

 

 

 

 

267 

 

        The Company uses the following methods and assumptions in estimating fair values of financial instruments carried on a cost basis:

 

 

 

           

•          

Cash and equivalents (excluding available-for-sale securities with original maturities up to 3 months), and Marketable securities and short-term investments (excluding available-for-sale securities):  The carrying amounts approximate the fair values as the items are short-term in nature. 

           

•          

Other non-current assets:  Includes (i) loans granted whose fair values are based on the carrying amount adjusted using a present value technique to reflect a premium or discount based on current market interest rates (Level 2 inputs), (ii) held-to-maturity securities (see Note 4) whose fair values are based on quoted market prices in inactive markets (Level 2 inputs), (iii) restricted cash whose fair values approximate the carrying amounts (Level 1) and (iv) cash deposits pledged in respect of certain non-current deposit liabilities whose fair values are determined using a discounted cash flow methodology based on current market interest rates (Level 2 inputs). 

           

•          

Short-term debt and current maturities of long-term debt (excluding capital lease obligations):  Short-term debt includes commercial paper, bank borrowings and overdrafts. The carrying amounts of short-term debt and current maturities of long-term debt, excluding capital lease obligations, approximate their fair values. 

           

•          

Long-term debt (excluding capital lease obligations):  Fair values of outstanding bonds are determined using quoted market prices (Level 1 inputs), if available. For other bonds and other long-term debt, the fair values are determined using a discounted cash flow methodology based upon borrowing rates of similar debt instruments and reflecting appropriate adjustments for non-performance risk (Level 2 inputs). 

           

•          

Non-current deposit liabilities in "Other non-current liabilities":  The fair values of non-current deposit liabilities are determined using a discounted cash flow methodology based on risk-adjusted interest rates (Level 2 inputs).