XML 30 R17.htm IDEA: XBRL DOCUMENT
v3.10.0.1

FINANCIAL INSTRUMENTS | 6 Months Ended
--- | ---
Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS The Company uses derivative financial instruments to manage its exposure to market risks for changes in interest rates and, from time to time, foreign currencies. This strategy includes the use of interest rate swap agreements, forward starting interest rate swap agreements, treasury lock agreements and foreign currency forward contracts to manage its exposure to movements in interest and currency rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These policies prohibit holding or issuing derivative financial instruments for speculative purposes. The Company does not enter into derivative financial instruments that contain credit-risk-related contingent features or requirements to post collateral. Interest Rate Risk The Company is exposed to interest rate risk on its cash and cash equivalents and its debt obligations. Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows and the impact of interest rate risk is not material. The Company's debt obligations consist of fixed-rate and variable-rate debt instruments. The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has entered into interest rate swaps. Interest rate swaps involve the periodic exchange of payments without the exchange of underlying principal or notional amounts. Net settlements between the counterparties are recognized as an adjustment to interest expense, net. Interest Rate Derivatives – Cash Flow Hedges From time to time, the Company has entered into various interest rate lock agreements and forward starting interest rate swap agreements to hedge part of the Company's interest rate exposure associated with the variability in future cash flows attributable to changes in interest rates. The total net loss, net of taxes, recognized in accumulated other comprehensive loss, related to the Company's cash flow hedges was $9 million as of both June 30, 2018 and December 31, 2017. The net amount of deferred losses on cash flow hedges that is expected to be reclassified from accumulated other comprehensive loss into interest expense, net within the next twelve months is $3 million. Interest Rate Derivatives – Fair Value Hedges The Company maintains various fixed-to-variable interest rate swaps to convert a portion of the Company's long-term debt into variable interest rate debt. A summary of the notional amounts of these interest rate swaps as of June 30, 2018 and December 31, 2017 was as follows:
|  | Notional Amount
Debt Instrument |  | June 30, 2018 |  | December 31, 2017
4.25% Senior Notes due April 2024 |  | $ | 250 |  |  | $ | 250 |
3.50% Senior Notes due March 2025 |  | 600 |  |  | 600 |
3.45% Senior Notes due June 2026 |  | 350 |  |  | 350 |
|  | $ | 1,200 |  |  | $ | 1,200 |
The fixed-to-variable interest rate swap agreements in the table above have variable interest rates ranging from one-month LIBOR plus 2.2% to one-month LIBOR plus 3.0%. As of June 30, 2018 and December 31, 2017, the following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges included in the carrying amount of long-term debt:
|  |  | Carrying Amount of Hedged Long-Term Debt |  | Hedge Accounting Basis Adjustment (a) |  | Carrying Amount of Hedged Long-Term Debt |  | Hedge Accounting Basis Adjustment (a)
Balance Sheet Classification |  | June 30, 2018 |  | June 30, 2018 |  | December 31, 2017 |  | December 31, 2017
Long-term debt |  | $ | 1,097 |  |  | $ | (73 | ) |  | $ | 1,132 |  |  | $ | (33 | )
(a) The balance includes $48 million and $56 million of remaining unamortized hedging adjustment on a discontinued relationship as of June 30, 2018 and December 31, 2017, respectively. The following table presents the effect of fair value hedge accounting on the statement of operations for the three and six months ended June 30, 2018 and 2017:
|  |  | Three Months Ended June 30, |  | Six Months Ended June 30,
|  |  | 2018 |  | 2017 |  | 2018 |  | 2017
|  | Other income (expense), net |  | Other income (expense), net |  | Other income (expense), net |  | Other income (expense), net
Total for line item in which the effects of fair value hedges are recorded |  | $ | 1 |  |  | $ | 11 |  |  | $ | (1 | ) |  | $ | 14 |
Gain (loss) on fair value hedging relationships: |  |  |  |  |  |  |  |
Hedged items (Long-term debt) |  | $ | 7 |  |  | $ | (11 | ) |  | $ | 32 |  |  | $ | (11 | )
Derivatives designated as hedging instruments |  | $ | (7 | ) |  | $ | 11 |  |  | $ | (32 | ) |  | $ | 11 |
A summary of the fair values of derivative instruments in the consolidated balance sheets was as follows:
|  | June 30, 2018 |  | December 31, 2017
Derivatives Designated as Hedging Instruments |  | Balance Sheet Classification |  | Fair Value |  | Balance Sheet Classification |  | Fair Value
Interest rate swaps |  | Other liabilities |  | $ | 121 |  |  | Other liabilities |  | $ | 89 |
A full description regarding the Company's use of derivative financial instruments is contained in Note 14 to the consolidated financial statements in the Company's 2017 Annual Report on Form 10-K.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration