XML 34 R18.htm IDEA: XBRL DOCUMENT

Fair Value Measurements

12 Months Ended

Dec. 31, 2023

Investments and Derivatives

The fair values of the Company’s financial assets and liabilities by level in the fair value hierarchy as of December 31, 2023 and December 31, 2022 were as follows:


December 31, 2023	Level 1		Level 2		Total
Assets:
Foreign exchange derivative contracts	$	—	$	13	$	13
Equity swap contracts	1		—		1




Common stock and equivalents	28		—		28
Liabilities:
Foreign exchange derivative contracts	$	—	$	4	$	4
Treasury rate lock	—		12		—


December 31, 2022	Level 1		Level 2		Total
Assets:
Foreign exchange derivative contracts	$	—	$	15	$	15




Common stock and equivalents	21		—		21
Liabilities:
Foreign exchange derivative contracts	$	—	$	5	$	5

Pension and Postretirement Health Care Benefits Plan Assets

The fair values of the various pension and postretirement health care benefits plans’ assets by level in the fair value hierarchy as of December 31, 2023 and 2022 were as follows:

U.S. Pension Benefit Plans


December 31, 2023	Level 1		Level 2		Level 3		Total
Equities	$	27	$	—	$	—	$	27
Commingled funds	1,230		479		—		1,709

Government fixed income securities	—		192		—		192

Corporate fixed income securities	—		894		—		894



Short-term investment funds	253		—		—		253

Private assets	—		—		157		157
Total investment securities	$	1,510	$	1,565	$	157	$	3,232
Accrued income receivable							23
Cash							18
Fair value plan assets							$	3,273

The following table summarizes the changes in fair value of the Level 3 assets:


			2023
Fair value at January 1, 2023			111

Actual return on plan assets			10
Purchases			36

Fair value at December 31, 2023			157


December 31, 2022	Level 1		Level 2		Level 3		Total
Equities	$	48	$	—	—		$	48
Commingled funds	1,159		488		—		1,647

Government fixed income securities	—		159		—		159

Corporate fixed income securities	—		863		—		863


Short-term investment funds	186		—		—		186
Private Assets	—		—		111		111
Total investment securities	$	1,393	$	1,510	$	111	$	3,014
Accrued income receivable							45
Cash							17
Fair value plan assets							$	3,076

Non-U.S. Pension Benefit Plans


December 31, 2023	Level 1		Level 2		Total
Equities	$	60	$	—	$	60
Commingled funds	289		32		321


Government fixed income securities	—		663		663


Short-term investment funds	60		—		60



Total investment securities	$	409	$	695	$	1,104
Cash					5
Accrued income receivable					16
Insurance contracts					47

Fair value plan assets					$	1,172


December 31, 2022	Level 1		Level 2		Total
Equities	$	55	$	—	$	55
Commingled funds	252		41		293
Government fixed income securities	—		491		491


Short-term investment funds	83		—		83
Total investment securities	$	390	$	532	$	922
Cash					3
Accrued income receivable					121
Insurance contracts					46
Fair value plan assets					$	1,092

Postretirement Health Care Benefits Plan


December 31, 2023	Level 1		Level 2		Level 3		Total
Equities	$	1	$	—	$	—	$	1
Commingled funds	49		20		—		69
Government fixed income securities	—		8		—		8

Corporate fixed income securities	—		38		—		38

Short-term investment funds	10		—		—		10
Private funds	—		—		7		7
Total investment securities	$	60	$	66	7		133

Accrued income receivable							1
Fair value plan assets							$	134

The following table summarizes the changes in fair value of the Level 3 assets:


			2023
Fair value at January 1, 2023			5

Purchases			2
Fair value at December 31, 2023			7


December 31, 2022	Level 1		Level 2		Level 3		Total
Equities	$	2	$	—	$	—	$	2
Commingled funds	49		22		—		71
Government fixed income securities	—		7		—		7

Corporate fixed income securities	—		39		—		39

Short-term investment funds	8		—		—		8
Private funds	—		—		5		5
Total investment securities	$	59	$	68	$	5	$	132
Accrued income receivable							2
Fair value plan assets							$	134

The following is a description of the categories of investments:

Equities — A diversified portfolio of corporate common and preferred stocks.

Commingled funds — A diversified portfolio of assets that includes corporate common and preferred stocks, emerging market and high-yield fixed income securities among others.

Government fixed income securities — Securities issued by municipal, domestic and foreign government agencies, index-linked government bonds as well as interest rate derivatives.

Corporate fixed income securities — A diversified portfolio of primarily investment grade bonds issued by corporations.

Short-term investment funds — Investments in money market accounts and derivatives with a liquidity of less than 90 days.

Private funds — A diversified portfolio of assets that includes private equity funds and private loans.

Level 1 investments include securities which are valued at the closing price reported on the active market in which the individual securities are traded. Level 2 investments consist principally of securities which are valued using independent third party pricing sources. Level 3 investments include securities with valuations derived from valuation techniques, in which one or more significant inputs are unobservable. A variety of inputs are utilized by the independent pricing sources including market based inputs, binding quotes, indicative quotes, and ongoing redemption and subscription activity. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation.

At December 31, 2023, the Company had $863 million of investments in money market government and U.S. treasury funds (Level 1) classified as Cash and cash equivalents in its Consolidated Balance Sheet, compared to $490 million at December 31, 2022. The money market funds had quoted market prices that are approximately at par.

Using quoted market prices and market interest rates, the Company determined that the fair value of long-term debt at December 31, 2023 was $6.4 billion, of which the Senior Convertible Notes were $1.6 billion (Level 2). The fair value of long-term debt at December 31, 2022 was $5.9 billion, of which the Senior Convertible Notes were $1.3 billion (Level 2). Since considerable judgment is required in interpreting market information, the fair value of the long-term debt is not necessarily indicative of the amount which could be realized in a current market exchange. Refer to "Note 5: Debt and Credit Facilities" in this “Part II. Item 8. Financial Statements and Supplementary Data” of this Form 10-K for a further discussion of the Senior Convertible Notes.

All other financial instruments are carried at cost, which is not materially different from the instruments’ fair values.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details