Financial Instruments and Fair Value Measures

6 Months Ended

Jun. 30, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Financial Instruments and Fair Value Measures

Note 14. Financial Instruments and Fair Value Measures

Our credit, market and foreign currency risk management policies are described in Note 18, Financial Instruments and Fair Value Measures, of the notes to the audited annual Consolidated Financial Statements for the year ended December 31, 2019 included in our 2019 Form 10-K. At June 30, 2020 and December 31, 2019, we had contracts with aggregate gross notional amounts of $1,399 million and $1,820 million, respectively, to limit interest rate risk and to exchange foreign currencies, principally the U.S. Dollar, Swiss Franc, Euro, Chinese Yuan, Japanese Yen, Mexican Peso, New Romanian Leu, Czech Koruna, Australian Dollar and Korean Won.

Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2020 and December 31, 2019:

					Fair Value
	Notional Amounts				Assets					Liabilities
	June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019			June 30, 2020		December 31, 2019
Designated forward currency exchange    contracts	$	286	$	392	$	4	$	5	(a)	$	1	$	1	(b)
Undesignated instruments:
Undesignated cross-currency swap		418		420		1		—	(c)		—		1	(d)
Undesignated interest rate swap		471		561		—		—			2		1	(d)
Undesignated forward currency exchange    contracts		224		447		2		2	(a)		—		3	(b)
	$	1,399	$	1,820	$	7	$	7		$	3	$	6

(a) Recorded within Other current assets in the Company’s Consolidated Interim Balance Sheets

(b) Recorded within Accrued liabilities in the Company’s Consolidated Interim Balance Sheets

(c) Recorded within Other assets in the Company’s Consolidated Interim Balance Sheets

(d) Recorded within Other liabilities in the Company´s Consolidated Interim Balance Sheets

The foreign currency exchange, interest rate swap and cross-currency swap contracts are valued using market observable inputs. As such, these derivative instruments are classified within Level 2. The assumptions used in measuring fair value of the cross-currency swap are considered Level 2 inputs, which are based upon market observable interest rate curves, cross currency basis curves, credit default swap curves, and foreign exchange rates.

The carrying value of Cash and cash equivalents, Account receivables, Notes and Other receivables, and Account payables contained in the Consolidated Balance Sheets approximates fair value.

The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value:

	June 30, 2020
	Carrying Value		Fair Value
Long-term debt and related current maturities	$	1,407	$	1,309

The Company determined the fair value of certain of its long-term debt and related current maturities utilizing transactions in the listed markets for similar liabilities. As such, the fair value of the long-term debt and related current maturities is considered Level 2.