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Derivative Financial Instruments
 9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Disclosures reflect the adoption of ASU 2017-12, Derivatives and Hedging (Topic 815), in the first quarter of 2019. Prior period amounts have not been restated.
Cash Flow Hedges
Our cash flow hedges include foreign currency forward contracts, commodity swaps and commodity purchase contracts. We use foreign currency forward contracts to manage currency risk associated with certain transactions, specifically forecasted sales and purchases made in foreign currencies. Our foreign currency contracts hedge forecasted transactions through 2025. We use commodity derivatives, such as fixed-price purchase commitments and swaps to hedge against potentially unfavorable price changes for items used in production. Our commodity contracts hedge forecasted transactions through 2023.
Fair Value Hedges
Interest rate swaps under which we agree to pay variable rates of interest are designated as fair value hedges of fixed-rate debt. The net change in fair value of the derivatives and the hedged items is reported in Boeing Capital interest expense.
Derivative Instruments Not Receiving Hedge Accounting Treatment
We have entered into agreements to purchase and sell aluminum to address long-term strategic sourcing objectives and non-U.S. business requirements. These agreements are derivative instruments for accounting purposes. The quantities of aluminum in these agreements offset and are priced at prevailing market prices. We also hold certain foreign currency forward contracts which do not qualify for hedge accounting treatment.
Notional Amounts and Fair Values
The notional amounts and fair values of derivative instruments in the Condensed Consolidated Statements of Financial Position were as follows:
  
Notional amounts (1)
Other assets
Accrued liabilities
  
September 30
2019

December 31
2018

September 30
2019

December 31
2018

September 30
2019

December 31
2018

Derivatives designated as hedging instruments:
 
 
 
 
 
 
Foreign exchange contracts

$2,733


$3,407


$17


$32


($105
)

($132
)
Interest rate contracts
125

125








Commodity contracts
669

57

4

9

(93
)
(2
)
Derivatives not receiving hedge accounting treatment:
 
 
 
 
 
 
Foreign exchange contracts
824

414

6

11

(18
)
(2
)
Commodity contracts
1,713

478





 
 
Total derivatives

$6,064


$4,481


$27


$52


($216
)

($136
)
Netting arrangements
 
 
(20
)
(24
)
20

24

Net recorded balance
 
 

$7


$28


($196
)

($112
)
(1) 
Notional amounts represent the gross contract/notional amount of the derivatives outstanding.
Gains/(losses) associated with our hedging transactions and forward points recognized in Other comprehensive income are presented in the following table: 
 
Nine months ended September 30
 
Three months ended September 30
  
2019

 
2018

 
2019

 
2018

Recognized in Other comprehensive income, net of taxes:
 
 
 
 
 
 
 
Foreign exchange contracts

($6
)
 

($80
)
 

($34
)
 

$4

Commodity contracts
(78
)
 
2

 
(30
)
 
1


Gains/(losses) associated with our hedging transactions and forward points reclassified from AOCI to earnings are presented in the following table:
 
Nine months ended September 30
 
Three months ended September 30
 
2019

 
2018

 
2019

 
2018

Foreign exchange contracts
 
 
 
 
 
 
 
Revenues


 

 

($6
)
 


Costs and expenses

($21
)
 

($17
)
 
(9
)
 

($9
)
General and administrative
(9
)
 
(8
)
 
(18
)
 
(5
)
Commodity contracts
 
 
 
 
 
 
 
Revenues

 

 

 

Costs and expenses
1

 
1

 

 
1

General and administrative expense
1

 

 
1

 
1


Gains/(losses) related to undesignated derivatives on foreign exchange cash flow hedging transactions recognized in Other income were gains of $1 and losses of $1 for the nine and three months ended September 30, 2019 and losses of $2 and $1 for the nine and three months ended September 30, 2018. Forward points related to foreign exchange cash flow hedging transactions recognized in Other income were gains of $5 and $0 for the nine and three months ended September 30, 2018.
Based on our portfolio of cash flow hedges, we expect to reclassify losses of $15 (pre-tax) out of Accumulated other comprehensive loss into earnings during the next 12 months.
We have derivative instruments with credit-risk-related contingent features. For foreign exchange contracts with original maturities of at least five years, our derivative counterparties could require settlement if we default on our five-year credit facility. For certain commodity contracts, our counterparties could require collateral posted in an amount determined by our credit ratings. The fair value of foreign exchange and commodity contracts that have credit-risk-related contingent features that are in a net liability position at September 30, 2019 was $42. At September 30, 2019, there was no collateral posted related to our derivatives.