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Hedges and Derivative Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2017
General Discussion of Derivative Instruments and Hedging Activities [Abstract]  
Schedule of Derivative Instruments
The following table summarizes our foreign currency denominated debt and foreign exchange forwards/options designated as net investment hedges at September 30, 2017 and December 31, 2016:
 
 
Notional (Local)
 
Notional (USD)
 
Maturity
 
 
2017
 
2016
 
2017
 
2016
 
 
Instrument
 
 
 
 
 
 
 
 
 
 
Senior note - 0.625%
 
€
500

 
€
500

 
$
591

 
$
527

 
March 2020
Commercial Paper
 
€
300

 
€
—

 
$
354

 
$
—

 
October 2017
Foreign exchange forwards/options
 
MXN 7,200
 
MXN 0
 
$
396

 
$
—

 
August 2022
The following table summarizes our outstanding derivative contracts and their effects on our Consolidated Condensed Balance Sheets at September 30, 2017 and December 31, 2016:
 

 

Fair Value of

Type 
of
Hedge(1)

 


Notional Amount

Hedge Assets

Hedge Liabilities

Maximum Term (Months)
Millions of dollars

2017

2016

2017

2016

2017

2016

 

2017

2016
Derivatives accounted for as hedges


















Foreign exchange forwards/options

$
3,257


$
1,813


$
9


$
32


$
108


$
10


(CF/NI)

59

58
Commodity swaps/options

280


299


28


7


1


11


(CF)

39

36
Total derivatives accounted for as hedges





$
37


$
39


$
109


$
21







Derivatives not accounted for as hedges


















Foreign exchange forwards/options

$
3,190


$
3,262


$
24


$
39


$
36


$
16


N/A

36

35
Commodity swaps/options

1


2


—


—


—


—


N/A

8

2
Total derivatives not accounted for as hedges





24


39


36


16







Total derivatives





$
61


$
78


$
145


$
37






























Current





$
52


$
54


$
82


$
35







Noncurrent





9


24


63


2







Total derivatives





$
61


$
78


$
145


$
37








(1) Derivatives accounted for as hedges are considered either cash flow (CF) or net investment (NI) hedges in 2017. During 2016, foreign exchange derivatives accounted for as hedges were classified as cash flow (CF) hedges.
Schedule of Effects of Derivative Instruments on Consolidated Statements of Income
The following tables summarize the effects of derivative instruments on our Consolidated Condensed Statements of Comprehensive Income for the three and nine months ended as follows:
 
 
Three Months Ended September 30,
 
 
 
Gain (Loss)
Recognized in OCI
(Effective Portion)
 
Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion) (1)
 
Cash Flow Hedges - Millions of dollars
 
2017
 
2016
 
2017
 
2016
 
Foreign exchange forwards/options
 
$
(49
)
 
$
9

 
$
(34
)
 
$
(1
)
(a)
Commodity swaps/options
 
18

 
(2
)
 
11

 
(6
)
(a)
Interest rate derivatives
 
—

 
—

 
(1
)
 
—

(b)
 
 
 
 
 
 
 
 
 
 
Net Investment Hedges
 
 
 
 
 
 
 
 
 
Foreign currency
 
(23
)
 
—

 
—

 
—

 
 
 
$
(54
)

$
7

 
$
(24
)
 
$
(7
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30,
 
 
 
 
 
 
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges (2)
 
Derivatives not Accounted for as Hedges - Millions of dollars
 
 
 
 
 
2017
 
2016
 
Foreign exchange forwards/options
 
 
 
 
 
$
(21
)
 
$
(9
)
 
 
 
Nine Months Ended September 30,
 
 
 
Gain (Loss)
Recognized in OCI
(Effective Portion)
 
Gain (Loss) Reclassified from
OCI into Earnings
(Effective Portion) (1)
 
Cash Flow Hedges - Millions of dollars
 
2017
 
2016
 
2017
 
2016
 
Foreign exchange
 
$
(109
)
 
$
3

 
$
(76
)
 
$
11

(a)
Commodity swaps/options
 
35

 
19

 
29

 
(30
)
(a)
Interest rate derivatives
 
—

 
—

 
(1
)
 
—

(b)
 
 
 
 
 
 
 
 
 
 
Net Investment Hedges
 
 
 
 
 
 
 
 
 
Foreign currency
 
(63
)
 
—

 
—

 
—

 
 
 
$
(137
)
 
$
22

 
$
(48
)
 
$
(19
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
 
 
 
 
 
 
Gain (Loss) Recognized on Derivatives not
Accounted for as Hedges (2)
 
Derivatives not Accounted for as Hedges - Millions of dollars
 
 
 
 
 
2017
 
2016
 
Foreign exchange forwards/options
 
 
 
 
 
$
(100
)
 
$
(43
)
 

(1) Gains and losses reclassified from accumulated OCI and recognized in income are recorded in (a) cost of products sold or (b) interest expense.
(2) Mark to market gains and losses recognized in income are recorded in interest and sundry (income) expense.