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Hedges and Derivative Financial Instruments (Tables) | 6 Months Ended
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Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [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 June 30, 2019 and December 31, 2018:
|  | Notional (Local) |  | Notional (USD) |  | Current Maturity
Instrument |  | 2019 |  | 2018 |  | 2019 |  | 2018 |
Senior note - 0.625% |  | € | 500 |  |  | € | 500 |  |  | $ | 569 |  |  | $ | 573 |  |  | March 2020
Commercial Paper |  | € | 296 |  |  | € | — |  |  | $ | 337 |  |  | $ | — |  |  | July 2019
Foreign exchange forwards/options |  | MXN 7,200 |  |  | MXN 7,200 |  |  | $ | 375 |  |  | $ | 366 |  |  | August 2022
The following table summarizes our outstanding derivative contracts and their effects in our Consolidated Condensed Balance Sheets at June 30, 2019 and December 31, 2018:
|  |  |  | Fair Value of |  | Type of Hedge(1) |  |
|  | Notional Amount |  | Hedge Assets |  | Hedge Liabilities |  | Maximum Term (Months)
Millions of dollars |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  | 2019 |  | 2018 |  |  | 2019 |  | 2018
Derivatives accounted for as hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forwards/options |  | $ | 3,108 |  |  | $ | 3,126 |  |  | $ | 43 |  |  | $ | 49 |  |  | $ | 44 |  |  | $ | 48 |  |  | (CF/NI) |  | 38 |  | 44
Commodity swaps/options |  | 235 |  |  | 216 |  |  | 4 |  |  | 1 |  |  | 21 |  |  | 27 |  |  | (CF) |  | 24 |  | 30
Interest rate derivatives |  | 700 |  |  | — |  |  | 14 |  |  | — |  |  | 36 |  |  | — |  |  | (CF) |  | 116 |  | 0
Total derivatives accounted for as hedges |  |  |  |  |  |  |  | $ | 61 |  |  | $ | 50 |  |  | $ | 101 |  |  | $ | 75 |  |  |  |  |  |  |
Derivatives not accounted for as hedges |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange forwards/options |  | $ | 2,804 |  |  | $ | 4,382 |  |  | $ | 20 |  |  | $ | 27 |  |  | $ | 23 |  |  | $ | 69 |  |  | N/A |  | 15 |  | 21
Commodity swaps/options |  | 4 |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | N/A |  | 24 |  | 0
Total derivatives not accounted for as hedges |  |  |  |  |  |  |  | 20 |  |  | 27 |  |  | 23 |  |  | 69 |  |  |  |  |  |  |
Total derivatives |  |  |  |  |  | $ | 81 |  |  | $ | 77 |  |  | $ | 124 |  |  | $ | 144 |  |  |  |  |  |  |
Current |  |  |  |  |  | $ | 40 |  |  | $ | 60 |  |  | $ | 52 |  |  | $ | 95 |  |  |  |  |  |  |
Noncurrent |  |  |  |  |  |  |  | 41 |  |  | 17 |  |  | 72 |  |  | 49 |  |  |  |  |  |  |
Total derivatives |  |  |  |  |  | $ | 81 |  |  | $ | 77 |  |  | $ | 124 |  |  | $ | 144 |  |  |  |  |  |  |
(1) Derivatives accounted for as hedges are considered either cash flow (CF) or net investment (NI) hedges
Schedule of Effects of Derivative Instruments on Consolidated Statements of Income | The following tables summarize the effects of derivative instruments and foreign currency debt designated as net investment hedges in our Consolidated Condensed Statements of Comprehensive Income for the periods presented:
|  |  |  | Three Months Ended June 30,
|  |  | Gain (Loss) Recognized in OCI (Effective Portion ) (2)
Cash Flow Hedges - Millions of dollars |  |  | 2019 |  | 2018
Foreign exchange forwards/options |  | $ | (4 | ) |  | $ | 76 |
Commodity swaps/options |  | (22 | ) |  | — |
Interest rate derivatives |  | (5 | ) |  | — |
Net Investment Hedges |  |  |  |
Foreign currency |  | (20 | ) |  | 69 |
|  | $ | (51 | ) |  | $ | 145 |
|  |  |  |  |  | Three Months Ended June 30,
|  | Location of Gain (Loss) Reclassified from OCI into Earnings (Effective Portion) |  | Gain (Loss) Reclassified from OCI into Earnings (Effective Portion)
Cash Flow Hedges - Millions of dollars |  |  | 2019 |  | 2018
Foreign exchange forwards/options |  | Net sales |  | $ | (1 | ) |  | $ | — |
Foreign exchange forwards/options |  | Cost of products sold |  | 6 |  |  | (6 | )
Foreign exchange forwards/options |  | Interest and sundry (income) expense |  | (4 | ) |  | 50 |
Commodity swaps/options (3) |  | Cost of products sold |  | $ | (6 | ) |  | $ | 10 |
Interest rate derivatives |  | Interest expense |  | $ | 3 |  |  | $ | (1 | )
Interest rate derivatives |  | Interest and sundry (income) expense |  | (8 | ) |  | — |
|  |  |  | $ | (10 | ) |  | $ | 53 |
|  |  |  |  |  | Three Months Ended June 30,
|  | Location of Gain (Loss) Recognized on Derivatives not Accounted for as Hedges |  | Gain (Loss) Recognized on Derivatives not Accounted for as Hedges
Derivatives not Accounted for as Hedges - Millions of dollars |  |  | 2019 |  | 2018
Foreign exchange forwards/options |  | Interest and sundry (income) expense |  | $ | (35 | ) |  | $ | 134 |
(2) The tax impact of the cash flow hedges was $5 million and $(5) million for the three months ended June 30, 2019 and 2018. The tax impact of the net investment hedges was $5 million and $(13) million for the three months ended June 30, 2019 and 2018, respectively. (3) Cost for commodity swaps/options are recognized in cost of sales as products are sold.
|  |  |  |  |  | Six Months Ended June 30,
|  |  |  |  |  | Gain (Loss) Recognized in OCI (Effective Portion)(4)
Cash Flow Hedges - Millions of dollars |  |  |  |  |  | 2019 |  | 2018
Foreign exchange |  | $ | 24 |  |  | $ | 76 |
Commodity swaps/options |  | — |  |  | (15 | )
Interest rate derivatives |  | (22 | ) |  |
Net Investment Hedges |  |  |  |
Foreign currency |  | (19 | ) |  | 6 |
|  | $ | (17 | ) |  | $ | 67 |
|  |  |  |  |  | Six Months Ended June 30,
|  | Location of Gain (Loss) Reclassified from OCI into Earnings (Effective Portion) |  | Gain (Loss) Reclassified from OCI into Earnings (Effective Portion)
Cash Flow Hedges - Millions of dollars |  |  | 2019 |  | 2018
Foreign exchange forwards/options |  | Net sales |  | $ | (2 | ) |  | $ | (2 | )
Foreign exchange forwards/options |  | Cost of products sold |  | 11 |  |  | (12 | )
Foreign exchange forwards/options |  | Interest and sundry (income) expense |  | 33 |  |  | 56 |
Commodity swaps/options (3) |  | Cost of products sold |  | (9 | ) |  | 23 |
Interest rate derivatives |  | Interest expense |  | 4 |  |  | (1 | )
Interest rate derivatives |  | Interest and sundry (income) expense |  | — |  |  |
|  |  |  | $ | 37 |  |  | $ | 64 |
|  |  |  |  |  | Six Months Ended June 30,
|  | Location of Gain (Loss) Recognized on Derivatives not Accounted for as Hedges |  | Gain (Loss) Recognized on Derivatives not Accounted for as Hedges (2)
Derivatives not Accounted for as Hedges - Millions of dollars |  |  | 2019 |  | 2018
Foreign exchange forwards/options |  | Interest and sundry (income) expense |  | $ | (6 | ) |  | $ | 63 |
(4) The tax impact of the cash flow hedges was $10 million and $0 million for the six months ended June 30, 2019 and 2018. The tax impact of the net investment hedges was $6 million and $(1) million for the six months ended June 30, 2019 and 2018, respectively.

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- Definition Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5624163-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5580258-113959 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41620-113959 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579245-113959 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41638-113959 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41678-113959 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=109980867&loc=d3e41641-113959 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5624171-113959 Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)(2)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=109980867&loc=SL5579240-113959 + Details
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