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Financial Instruments | 3 Months Ended
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Mar. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments [Text Block] | Financial Instruments We enter into derivative instruments primarily for risk management purposes, including derivatives designated as hedging instruments under the Derivatives and Hedging Topic of the FASB ASC and those utilized as economic hedges. We operate internationally and, in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates and commodity prices. These fluctuations can increase the costs of financing, investing and operating the business. We have used derivative instruments, including swaps, forward contracts and options, to manage certain foreign currency, interest rate and commodity price exposures. The four quarter rolling average of the notional amount of foreign exchange contracts hedging foreign currency transactions was $18.2 billion and $17.8 billion at March 31, 2020 and December 31, 2019, respectively. The following table summarizes the fair value and presentation in the Condensed Consolidated Balance Sheets for derivative instruments as of March 31, 2020 and December 31, 2019:
(dollars in millions) | Balance Sheet Location | March 31, 2020 |  | December 31, 2019
Derivatives designated as hedging instruments: |  |  |  |
Foreign exchange contracts | Asset Derivatives: |  |  |  |
| Other assets, current |  | $ | 10 |  |  | $ | 11 |
| Other assets |  | 2 |  |  | 13 |
| Total asset derivatives |  | $ | 12 |  |  | $ | 24 |
| Liability Derivatives: |  |  |  |
| Accrued liabilities |  | (223) |  |  | (72) |
| Other long-term liabilities |  | (329) |  |  | (98) |
| Total liability derivatives |  | $ | (552) |  |  | $ | (170) |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign exchange contracts | Asset Derivatives: |  |  |  |
| Other assets, current |  | $ | 122 |  |  | $ | 27 |
| Other assets |  | 3 |  |  | 5 |
| Total asset derivatives |  | $ | 125 |  |  | $ | 32 |
| Liability Derivatives: |  |  |  |
| Accrued liabilities |  | (41) |  |  | (116) |
| Other long-term liabilities |  | (1) |  |  | (1) |
| Total liability derivatives |  | $ | (42) |  |  | $ | (117) |
The effect of cash flow hedging relationships on Accumulated other comprehensive income and on the Condensed Consolidated Statement of Operations for the quarters ended March 31, 2020 and 2019 are presented in the table below. The amounts of loss are attributable to foreign exchange contract activity and are recorded as a component of Product sales when reclassified from Accumulated other comprehensive income.
| Quarter Ended March 31, |  |  |  |  |  |
(dollars in millions) | 2020 |  | 2019 |  |  |  |
(Loss) gain recorded in Accumulated other comprehensive loss | $ | (404) |  |  | $ | 7 |  |  |  |  |
Loss reclassified from Accumulated other comprehensive loss into Product sales | 29 |  |  | 4 |  |  |  |  |
The Company utilizes the critical terms match method in assessing derivatives for hedge effectiveness. Accordingly, the hedged items and derivatives designated as hedging instruments are highly effective. As of March 31, 2020, we have €1.25 billion of euro-denominated long-term debt outstanding, €750 million variable rate debt due May 2020, which has been de-designated and resides in Long-term debt currently due. As of March 31, 2020, €500 million of euro-denominated long-term debt qualifies as a net investment hedge against our investments in European businesses. As of March 31, 2020, the net investment hedge is deemed to be effective. Assuming current market conditions continue, a $140 million pr e-tax loss is e xpected to be reclassified from Accumulated other comprehensive loss into Product sales to reflect the fixed prices obtained from foreign exchange hedging within the next 12 months. At March 31, 2020, all derivative contracts accounted for as cash flow hedges will m ature by April 2024. The effect of derivatives not designated as hedging instruments within Other income, net, on the Condensed Consolidated Statement of Operations was as follows:
| Quarter Ended March 31, |  |  |  |  |  |
(dollars in millions) | 2020 |  | 2019 |  |  |  |
Foreign exchange contracts | $ | (49) |  |  | $ | 18 |  |  |  |  |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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