Financial Instruments and Risk Management (Tables)

9 Months Ended

Sep. 30, 2021

Financial Instruments and Risk Management

Schedule of additional information related to the commercial risk management instruments

($ in millions)	September 30, 2021
Commercial risk area	Commodity			Currency		Interest Rate
Notional amount of contracts	$	1,692	(a)	$	2,803	$	1,795
Net gain (loss) included in AOCI, after-tax		138	(b)		27		—
Net gain (loss) included in AOCI, after-tax, expected to be recognized in net earnings within the next 12 months		130	(b)		19		—
Longest duration of forecasted cash flow hedge transactions in years		3			3		2

(a) Substantially all aluminum contracts received hedge accounting treatment as of September 30, 2021.

(b) Substantially all of this gain (loss) will be offset by pricing changes in sales and purchase contracts.

Schedule of fair value of derivative instruments

		September 30, 2021
($ in millions)	Balance Sheet Location	Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments		Total
Assets:
Commodity contracts		$	188	$	—	$	188
Currency contracts			4		19		23
Other contracts			—		2		2
Total current derivative contracts	Other current assets	$	192	$	21	$	213
Commodity contracts		$	11	$	—	$	11
Currency contracts			47		—		47
Total noncurrent derivative contracts	Other noncurrent assets	$	58	$	—	$	58
Liabilities:
Commodity contracts		$	45	$	—	$	45
Currency contracts			—		5		5
Other contracts			—		9		9
Total current derivative contracts	Other current liabilities	$	45	$	14	$	59
Currency contracts		$	—	$	3	$	3
Total noncurrent derivative contracts	Other noncurrent liabilities	$	—	$	3	$	3

		December 31, 2020
		Derivatives Designated as Hedging Instruments		Derivatives not Designated as Hedging Instruments		Total
Assets:
Commodity contracts		$	50	$	—	$	50
Currency contracts			3		27		30
Other contracts			—		2		2
Total current derivative contracts	Other current assets	$	53	$	29	$	82
Commodity contracts		$	8	$	—	$	8
Total noncurrent derivative contracts	Other noncurrent assets	$	8	$	—	$	8
Liabilities:
Commodity contracts		$	17	$	—	$	17
Currency contracts			—		63		63
Other contracts			—		4		4
Total current derivative contracts	Other current liabilities	$	17	$	67	$	84
Currency contracts		$	8	$	2	$	10
Total noncurrent derivative contracts	Other noncurrent liabilities	$	8	$	2	$	10

Schedule of impact on earnings from derivative instruments

		Three Months Ended September 30,
		2021				2020
($ in millions)	Location of Gain (Loss) Recognized in Earnings on Derivatives	Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss)		Gain (Loss) on Derivatives not Designated as Hedge Instruments		Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss)		Gain (Loss) on Derivatives not Designated as Hedge Instruments
Commodity contracts - manage exposure to customer pricing	Net sales	$	(28)	$	—	$	(4)	$	—
Commodity contracts - manage exposure to supplier pricing	Cost of sales		53		3		(27)		(7)
Interest rate contracts - manage exposure for outstanding debt	Interest expense		—		—		(2)		—
Currency contracts - manage currency exposure	Selling, general and administrative		27		12		(30)		(51)
Equity contracts	Selling, general and administrative		—		23		—		37
Total		$	52	$	38	$	(63)	$	(21)

		Nine Months Ended September 30,
		2021				2020
($ in millions)	Location of Gain (Loss) Recognized in Earnings on Derivatives	Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss)		Gain (Loss) on Derivatives not Designated as Hedge Instruments		Cash Flow Hedge - Reclassified Amount from Accumulated Other Comprehensive Earnings (Loss)		Gain (Loss) on Derivatives not Designated as Hedge Instruments
Commodity contracts - manage exposure to customer pricing	Net sales	$	(89)	$	—	$	33	$	1
Commodity contracts - manage exposure to supplier pricing	Cost of sales		95		9		(62)		2
Interest rate contracts - manage exposure for outstanding debt	Interest expense		—		—		(5)		—
Currency contracts - manage currency exposure	Selling, general and administrative		66		32		(23)		(11)
Cross-currency swaps - manage intercompany currency exposure	Selling, general and administrative		—		—		(1)		—
Equity contracts	Selling, general and administrative		—		(11)		—		47
Total		$	72	$	30	$	(58)	$	39

Schedule of changes in accumulated other comprehensive earnings (loss) for effective derivatives

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in millions)	2021		2020		2021		2020
Amounts reclassified into earnings:
Commodity contracts	$	(25)	$	31	$	(6)	$	29
Cross-currency swap contracts		—		—		—		1
Interest rate contracts		—		2		—		5
Currency exchange contracts		(27)		30		(66)		23
Change in fair value of cash flow hedges:
Commodity contracts		44		21		137		(8)
Interest rate contracts		(1)		1		(1)		(3)
Cross-currency swap contracts		—		(1)		—		—
Currency exchange contracts		26		(39)		58		16
Currency and tax impacts		(1)		(9)		(24)		(12)
	$	16	$	36	$	98	$	51