Financial Instruments And Risk Management Financial Instruments And Risk Management

3 Months Ended

Mar. 31, 2015

Fair Value, Concentration of Risk [Table Text Block]

Financial Instruments and Risk Management

Foreign currency risk. We conduct business globally in numerous currencies and are therefore exposed to foreign currency fluctuations. We may use derivative instruments to reduce the volatility of earnings and cash flows associated with changes in foreign currency exchange rates. We do not use derivative instruments for speculative trading purposes. We generally utilize foreign exchange forwards and currency option contracts to hedge exposures associated with forecasted future cash flows and to hedge exposures present on our balance sheet.

The following table presents, by currency, the gross notional value of our foreign currency exchange forwards and option contracts used to hedge exposures on our balance sheet that were outstanding as of March 31, 2015:



	March 31,
USD Equivalent, Dollars in Millions	2015
United States Dollar	958
Australian Dollar	375
Pound Sterling	86
Canadian Dollar	25
Swedish Kroner	11
Saudi Riyal	8
Indian Rupee	5
Norwegian Kroner	2
Total balance sheet hedges	1,470

Over 99% of the above balance sheet hedges had durations of 30 days or less. We also had approximately $19 million (notional value) of cash flow hedges of up to 33 months in duration.

We hedge certain forecasted future cash flows using derivatives instruments. In most cases, these derivatives are designated as cash flow hedges and are carried at fair value. The effective portion of the gain or loss is initially recognized as a component of accumulated other comprehensive income (loss), and upon occurrence of the forecasted transaction, is subsequently re-classed into the income or expense line item to which the hedged transaction relates. In each period the ineffective portion of the designated hedge and the changes in fair value of non-designated hedges are recognized in our condensed consolidated statements of operations.

We may also hedge portions of our balance sheet exposures associated with changes in fair value of monetary assets and liabilities denominated in currencies other than the functional currency of the consolidated subsidiary that is party to the transaction. Changes in fair value associated with these derivative instruments are recorded within our condensed consolidated statements of operations and largely offset the remeasurement of the underlying assets and liabilities being hedged.

The following table presents the fair value of derivative instruments included within our condensed consolidated balance sheets as of March 31, 2015 and December 31, 2014:



	Asset Derivatives					Liability Derivatives
	Balance Sheet	March 31,		December 31,		Balance Sheet	March 31,		December 31,
Dollars in millions	Location	2015		2014		Location	2015		2014
Balance sheet hedges	Other current assets	$	4	$	3	Other current liabilities	$	12	$	7
Cash flow hedges	Other current assets	—		—		Other current liabilities	1		—
Total		$	4	$	3		$	13	$	7

These fair values of our derivatives are considered Level 2 under ASC 820 - Fair Value Measurement as they are based on quoted prices directly observable in active markets.

The following table summarizes the recognized changes in fair value of our balance sheet hedges offset by remeasurement of balance sheet positions. These amounts are recognized in our statements of operations for the periods presented. The net of our changes in fair value of hedges and the remeasurement of our assets and liabilities is included in "other non-operating income (expense)" on our condensed consolidated statements of operations.



	March 31,			December 31,
Gains (losses) dollars in millions	2015			2014
Balance sheet hedges - fair value	$	(41	)	$	(47	)
Balance sheet position - remeasurement	48			47
Net	$	7		$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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