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Derivative Instruments | 12 Months Ended
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Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | DERIVATIVE INSTRUMENTS Foreign Currency Hedges We use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges (both long-term intercompany loans payable and forward exchange contracts) and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings and cash flow. We do not enter into derivative instruments for speculative purposes. We are exposed to credit loss in the event of nonperformance by counterparties on our outstanding derivative instruments but do not anticipate nonperformance by any of our counterparties. Should a counterparty default, our maximum exposure to loss is the asset balance of the instrument.
2017 | Designated | Non-Designated | Total
Gross notional amount | $ | 1,104 |  | $ | 4,767 |  | $ | 5,871 |
Maximum term in days |  |  | 548 |
Fair value: |  |  |
Other current assets | $ | 11 |  | $ | 4 |  | $ | 15 |
Other noncurrent assets | 1 |  | — |  | 1 |
Other current liabilities | (7 | ) | (29 | ) | (36 | )
Other noncurrent liabilities | (1 | ) | — |  | (1 | )
Total fair value | $ | 4 |  | $ | (25 | ) | $ | (21 | )
2016 |  |  |
Gross notional amount | $ | 1,058 |  | $ | 2,841 |  | $ | 3,899 |
Maximum term in days |  |  | 548 |
Fair value: |  |  |
Other current assets | $ | 24 |  | $ | 17 |  | $ | 41 |
Other noncurrent assets | 4 |  | — |  | 4 |
Other current liabilities | (9 | ) | (7 | ) | (16 | )
Other noncurrent liabilities | (2 | ) | — |  | (2 | )
Total fair value | $ | 17 |  | $ | 10 |  | $ | 27 |
On December 31, 2017 the total after-tax amount in AOCI related to our designated net investment hedges was $30. We evaluate the effectiveness of our net investment hedges quarterly. We have not recognized any ineffectiveness in 2017.
Net Currency Exchange Rate Gains (Losses)
Recorded in: | 2017 | 2016 | 2015
Cost of sales | $ | (6 | ) | $ | — |  | $ | 19 |
Other income (expense), net | (9 | ) | (19 | ) | (22 | )
Total | $ | (15 | ) | $ | (19 | ) | $ | (3 | )
On December 31, 2017 pretax gains recorded in AOCI on derivatives designated as hedges that are expected to be reclassified to earnings within 12 months of the balance sheet date were $7 compared with less than $1 on December 31, 2016. This reclassification is primarily due to the sale of inventory that includes previously hedged purchases. There were de minimis ineffective portions of derivatives, which are included in the table above. Interest Rate Hedges On December 31, 2017 we had interest rate swaps with notional amounts of $600 designated as forward starting interest rate swaps in anticipation of future debt issuances. The market value of outstanding interest rate swap agreements on December 31, 2017 was $44, which was recorded in other current assets with an offsetting amount recorded in AOCI. Upon the probable issuance of the debt, these amounts will be released to interest expense over the term of the debt. The cash flow effect of this hedge is recorded in cash flow from operations. On December 31, 2017 we had interest rate swaps with gross notional amounts of $500 designated as fair value hedges of underlying fixed rate obligations representing a portion of our $600 senior unsecured notes due in 2024. There was no hedge ineffectiveness recorded as a result of these fair value hedges in 2017.
Fair Value Interest Rate Hedge Instruments
| 2017 |  | 2016
Gross notional amount | $ | 500 |  |  | $ | 500 |
Fair value: |  |  |
Other noncurrent assets | 5 |  |  | 9 |
Long-term debt | (5 | ) |  | (9 | )
Total | $ | — |  |  | $ | — |

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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