XML 41 R24.htm IDEA: XBRL DOCUMENT
v3.25.0.1

Financial Instruments | 12 Months Ended
--- | ---
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | FINANCIAL INSTRUMENTS Fair Value Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy: •Level 1 — Quoted prices for identical instruments in active markets. •Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets. •Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company determines the fair value of structured liabilities (where performance is linked to structured interest rates, inflation or currency risks) using the Term SOFR swap curve and forward interest and exchange rates at period end. Such instruments are classified as Level 2 based on the observability of significant inputs to the model. The Company does not have any instruments classified as Level 3, other than those included in pension asset trusts included in Note 8. These valuations take into consideration the Company’s credit risk and its counterparties’ credit risk. The carrying value and the estimated fair values of financial instruments at December 31 consisted of the following:
| 2024 |  | 2023
(DOLLARS IN MILLIONS) | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
LEVEL 1 |  |  |  |  |  |  |
Cash and cash equivalents(1) | $ | 469 |  |  | $ | 469 |  |  | $ | 709 |  |  | $ | 709 |
LEVEL 2 |  |  |  |  |  |  |
Bank overdrafts and other(2) | 2 |  |  | 2 |  |  | 3 |  |  | 3 |
Derivatives |  |  |  |  |  |  |
Derivative assets(3) | 9 |  |  | 9 |  |  | 41 |  |  | 41 |
Derivative liabilities(3) | 129 |  |  | 129 |  |  | 165 |  |  | 165 |
Long-term debt: |  |  |  |  |  |  |
2024 Euro Notes(4) | — |  |  | — |  |  | 552 |  |  | 549 |
2025 Notes(4) | 1,000 |  |  | 972 |  |  | 1,000 |  |  | 924 |
2026 Euro Notes(4) | 827 |  |  | 813 |  |  | 879 |  |  | 835 |
2027 Notes(4) | 1,209 |  |  | 1,102 |  |  | 1,212 |  |  | 1,049 |
2028 Notes(4) | 398 |  |  | 391 |  |  | 398 |  |  | 389 |
2030 Notes(4) | 1,507 |  |  | 1,274 |  |  | 1,508 |  |  | 1,240 |
2040 Notes(4) | 771 |  |  | 536 |  |  | 773 |  |  | 536 |
2047 Notes(4) | 495 |  |  | 392 |  |  | 495 |  |  | 382 |
2048 Notes(4) | 787 |  |  | 686 |  |  | 787 |  |  | 678 |
2050 Notes(4) | 1,568 |  |  | 985 |  |  | 1,569 |  |  | 1,029 |
2024 Term Loan Facility(5) | — |  |  | — |  |  | 270 |  |  | 270 |
2026 Term Loan Facility(5) | 413 |  |  | 413 |  |  | 625 |  |  | 625 |
_______________________ (1)The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments. (2)The carrying amount approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments. (3)The carrying amount approximates fair value as the instruments are marked-to-market and held at fair value on the Consolidated Balance Sheets. (4)The fair value of the Note is obtained from pricing services engaged by the Company, and the Company receives one price for each security. The fair value provided by the pricing services are estimated using pricing models, where the inputs to those models are based on observable market inputs or recent trades of similar securities. The inputs to the valuation techniques applied by the pricing services are typically benchmark yields, benchmark security prices, credit spreads, reported trades and broker-dealer quotes, all with reasonable levels of transparency. (5)The carrying amount approximates fair value as the Term Loans were assumed at fair value and the interest rate is reset frequently based on current market rates. Derivatives and Other Hedging Activities Foreign Currency Forward Contracts The Company periodically enters into foreign currency forward contracts with the objective of managing our exchange rate risk related to foreign currency denominated monetary assets and liabilities of our operations. These contracts generally involve the exchange of one currency for a second currency at a future date, have maturities not exceeding twelve months and are with counterparties which are major international financial institutions. Commodity Contracts The Company utilizes options that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory such as soybeans. The Company also uses swaps that are designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of natural gas used in our manufacturing process. Hedges Related to Issuances of Debt Subsequent to the issuance of the 2026 Euro Notes during the third quarter of 2018, the Company designated the debt as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in OCI as a component of foreign currency translation adjustments in the accompanying Consolidated Statements of Income (Loss) and Comprehensive Loss. Subsequent to the issuance of the 2024 Euro Notes during the first quarter of 2016, the Company designated the debt as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in OCI as a component of foreign currency translation adjustments in the accompanying Consolidated Statements of Income (Loss) and Comprehensive Loss. During the first quarter of 2016, the Company entered into and settled two Euro interest rate swap agreements to hedge the anticipated issuance of fixed-rate debt. These swaps were designated as cash flow hedges. The effective portions of cash flow hedges are recorded in OCI as a component of Losses on derivatives qualifying as hedges in the accompanying Consolidated Statements of Income (Loss) and Comprehensive Loss. The Company incurred a loss of €3 million ($3 million) due to the termination of these swaps. The loss was amortized as interest expense over the life of the 2024 Euro Notes as discussed in Note 14. During the fourth quarter of 2016 and the first quarter of 2017, the Company entered into interest rate swap agreements to hedge the anticipated issuance of fixed-rate debt, which are designated as cash flow hedges. The various hedge instruments were settled upon issuance of the debt on May 18, 2017 and resulted in a loss of approximately $5 million. As discussed in Note 14, the loss is being amortized as interest expense over the life of the 2047 Notes. Cross Currency Swaps During the third quarter of 2022, the Company entered into a transaction to unwind the fourteen outstanding EUR/USD cross currency swaps designated as net investment hedges issued between the third quarter of 2019 and the first quarter of 2022. The Company received proceeds of approximately $173 million. The gain arising from the termination of the swaps has been included as a component of Accumulated other comprehensive loss. The Company has twelve EUR/USD cross currency swaps, with a notional value of $1.400 billion that mature through November 2030. The swaps all qualified as net investment hedges in order to mitigate a portion of the Company’s net European investments from foreign currency risk. As of December 31, 2024, the twelve remaining swaps were in a liability position with an aggregate fair value of $90 million which were classified as Other liabilities on the Consolidated Balance Sheets. Changes in fair value related to cross currency swaps are recorded in OCI. The following table shows the notional amount of the Company’s derivative instruments outstanding as of December 31, 2024 and December 31, 2023:
| December 31,
(DOLLARS IN MILLIONS) | 2024 |  | 2023
Foreign currency forward contracts(1) | $ | (1,512) |  |  | $ | (1,400) |
Commodity contracts(1) | 7 |  |  | 7 |
Cross currency swaps | 1,400 |  |  | 1,400 |
______________________ (1)Foreign currency forward contracts and commodity contracts are presented net of contracts bought and sold. The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy) as reflected in the Consolidated Balance Sheets as of December 31, 2024 and December 31, 2023:
| December 31, 2024
(DOLLARS IN MILLIONS) | Fair Value of Derivatives Designated as Hedging Instruments |  | Fair Value of Derivatives Not Designated as Hedging Instruments |  | Total Fair Value
Derivative assets(1) |  |  |  |  |
Foreign currency forward contracts | $ | — |  |  | $ | 8 |  |  | $ | 8 |
Commodity contracts | 1 |  |  | — |  |  | 1 |
Total derivative assets | $ | 1 |  |  | $ | 8 |  |  | $ | 9 |
Derivative liabilities(2) |  |  |  |  |
Foreign currency forward contracts | $ | — |  |  | $ | 39 |  |  | $ | 39 |
Cross currency swaps | 90 |  |  | — |  |  | 90 |
Total derivative liabilities | $ | 90 |  |  | $ | 39 |  |  | $ | 129 |
| December 31, 2023
(DOLLARS IN MILLIONS) | Fair Value of Derivatives Designated as Hedging Instruments |  | Fair Value of Derivatives Not Designated as Hedging Instruments |  | Total Fair Value
Derivative assets(1) |  |  |  |  |
Foreign currency forward contracts | $ | — |  |  | $ | 41 |  |  | $ | 41 |
Derivative liabilities(2) |  |  |  |  |
Foreign currency forward contracts | $ | — |  |  | $ | 4 |  |  | $ | 4 |
Cross currency swaps | 161 |  |  | — |  |  | 161 |
Total derivative liabilities | $ | 161 |  |  | $ | 4 |  |  | $ | 165 |
_______________________ (1)Derivative assets are recorded to Prepaid expenses and other current assets on the Consolidated Balance Sheets. (2)Derivative liabilities are recorded to Other current liabilities and Other liabilities on the Consolidated Balance Sheets. The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments in the Consolidated Statements of Income (Loss) and Comprehensive Loss for the years ended December 31, 2024 and 2023:
(DOLLARS IN MILLIONS) | Amount of Gain or (Loss) Recognized in Income on Derivative Settlements December 31, |  | Amount of Gain (Loss) Recognized in Income on Changes in Fair Value December 31, | Location of Gain (Loss) Recognized in Income on Derivative
2024 |  | 2023 |  | 2022 |  | 2024 |  | 2023 |  | 2022
Foreign currency forward contracts(1) | $ | (102) |  |  | $ | (16) |  |  | $ | 3 |  |  | $ | (68) |  |  | $ | 37 |  |  | $ | — |  | Other expense (income), net
Commodity contracts | (1) |  |  | 2 |  |  | — |  |  | — |  |  | — |  |  | — |  | Cost of sales
Total | $ | (103) |  |  | $ | (14) |  |  | 3 |  | $ | (68) |  |  | $ | 37 |  |  | $ | — |  |
_______________________ (1)The foreign currency forward contract net gains (losses) offset any recognized gains (losses) arising from the revaluation of the related intercompany loans during the same respective periods. The following table shows the effect of the Company’s derivative and non-derivative instruments designated as cash flow and net investment hedging instruments, net of tax, in the Consolidated Statements of Income (Loss) and Comprehensive Loss for the years ended December 31, 2024 and 2023:
| Amount of Gain (Loss) Recognized in OCI on Derivative and Non-Derivative (Effective Portion) | Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion) |
| For the years ended December 31, |
(DOLLARS IN MILLIONS) | 2024 |  | 2023 |  | 2022 |
Derivatives in Cash Flow Hedging Relationships: |  |  |  |  |  |  |
Foreign currency contracts | $ | (7) |  |  | $ | — |  |  | $ | — |  | N/A |
Commodity contracts | 3 |  |  | — |  |  | — |  | Cost of sales |
Derivatives in Net Investment Hedging Relationships: |  |  |  |  |  |  |
Cross currency swaps | $ | 55 |  |  | $ | (67) |  |  | $ | (16) |  | N/A |
Non-Derivatives in Net Investment Hedging Relationships: |  |  |  |  |  |  |
2024 Euro Notes | 3 |  |  | (16) |  |  | 27 |  | N/A |
2026 Euro Notes | 42 |  |  | (26) |  |  | 43 |  | N/A |
Total | $ | 96 |  |  | $ | (109) |  |  | $ | 54 |  |  |
| Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
| For the year ended December 31,
(DOLLARS IN MILLIONS) | 2024 |  | 2023 |  | 2022
Derivatives in Cash Flow Hedging Relationships: |  |  |  |  |
Commodity contracts | $ | (1) |  |  | $ | — |  |  | $ | — |
Total | $ | (1) |  |  | $ | — |  |  | $ | — |
The ineffective portion of the above noted net investment hedges was approximately $15 million, $15 million, and $10 million for the years ended December 31, 2024, 2023, and 2022 respectively, and was recorded as a reduction to interest expense on the Consolidated Statements of Income (Loss) and Comprehensive Loss. At December 31, 2024, based on current market rates, the Company does not expect any derivative losses (net of tax), included in AOCI, to be reclassified into earnings within the next 12 months.

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 financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration