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Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Outstanding Foreign Currency Forward Contracts

The Company had the following outstanding foreign currency forward contracts that were entered into to hedge nonfunctional currency cash flows from forecasted revenues and expenses (in millions):

 

     Currency Denomination  

Foreign Currency

    June 30,
2017		      December 31,
2016		  

Norwegian Krone

      NOK        4,762        NOK        5,621  

Japanese Yen

      JPY        1,142        JPY        1,462  

U.S. Dollar

      USD        275        USD        321  

Euro

      EUR        88        EUR        279  

Danish Krone

      DKK        29        DKK        29  

British Pound Sterling

      GBP        12        GBP        1  

Singapore Dollar

      SGD        1        SGD        2  

 

The Company had the following outstanding foreign currency forward contracts that hedge the fair value of nonfunctional currency monetary accounts (in millions):

 

     Currency Denomination  

Foreign Currency

    June 30,
2017		      December 31,
2016		  

Russian Ruble

      RUB        2,417        RUB        1,893  

Norwegian Krone

      NOK        1,115        NOK        538  

U.S. Dollar

      USD        461        USD        457  

South African Rand

      ZAR        150        ZAR        150  

Euro

      EUR        84        EUR        272  

Danish Krone

      DKK        17        DKK        49  

Singapore Dollar

      SGD        4        SGD        7  

British Pound Sterling

      GBP        2        GBP        3  

Canadian Dollar

      CAD        1        CAD        1  

 

 
Derivative Instruments and their Balance Sheet Classifications

The Company has the following gross fair values of its derivative instruments and their balance sheet classifications:

 

    

Asset Derivatives

    

Liability Derivatives

  
          Fair Value          Fair Value  
    

Balance Sheet Location

    June 30,
2017		      December 31,
2016		    

Balance Sheet
Location

    June 30,
2017		      December 31,
2016		  

Derivatives designated as hedging instruments under ASC Topic 815

                 

Foreign exchange contracts

    Prepaid and other current assets    $ 8      $ 24     Accrued liabilities    $ 8      $ 37  

Foreign exchange contracts

    Other Assets      6        6     Other liabilities      1        11  
     

 

 

     

 

 

       

 

 

     

 

 

  

Total derivatives designated as hedging instruments under ASC Topic 815

       $ 14      $ 30        $ 9      $ 48  
     

 

 

     

 

 

       

 

 

     

 

 

  

Derivatives not designated as hedging instruments under ASC Topic 815

                 

Foreign exchange contracts

    Prepaid and other current assets    $ 12      $ 32     Accrued liabilities    $ 12      $ 29  
     

 

 

     

 

 

       

 

 

     

 

 

  

Total derivatives not designated as hedging instruments under ASC Topic 815

       $ 12      $ 32        $ 12      $ 29  
     

 

 

     

 

 

       

 

 

     

 

 

  

Total derivatives

       $ 26      $ 62        $ 21      $ 77  
     

 

 

     

 

 

       

 

 

     

 

 

  
Effect of Derivative Instruments on Consolidated Statements of Income

The Effect of Derivative Instruments on the Consolidated Statements of Income

($ in millions)

Derivatives in ASC
Topic 815 Cash Flow
Hedging

Relationships

   Amount of
Gain (Loss)
Recognized in OCI on
Derivative
(Effective Portion) (a)		    

Location of Gain (Loss)
Reclassified from

Accumulated

OCI into Income

(Effective Portion)

     Amount of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective Portion)		    

Location of Gain (Loss)
Recognized in Income on
Derivative (Ineffective
Portion and  Amount
Excluded from
Effectiveness

Testing)

   Amount of Gain (Loss)
Recognized in Income on
Derivative (Ineffective
Portion and  Amount
Excluded from
Effectiveness Testing) (b)		  
    Six Months Ended
June 30,		           Six Months Ended
June 30,		         Six Months Ended
June 30,		  
    2017     2016           2017     2016         2017     2016  
     

Revenue

Cost of revenue

 

 

     4       3    

Cost of revenue

Other income (expense), net

    
 13
  
 		     (17 ) 

Foreign exchange contracts

     34       65         (17 )      (105 )        5       1  
 

 

 

    

 

 

      

 

 

    

 

 

      

 

 

    

 

 

  

Total

     34       65         (13 )      (102 )        18       (16 ) 
 

 

 

    

 

 

        

 

 

    

 

 

      

 

 

    

 

 

  

Derivatives Not Designated
as Hedging Instruments
under ASC
Topic 815

   Location of
Gain (Loss)
Recognized in Income
on Derivative		    

Amount of Gain (Loss)
Recognized in

Income on Derivative

        
               

Six Months Ended June 30,

    
               

2017

   2016    

Foreign exchange contracts

    
 Other income
(expense), net		  
 		     46     3    
     

 

  

 

 

    

Total

       46     3    
     

 

  

 

 

    

 

(a) The Company expects that $8 million of the accumulated other comprehensive income (loss) will be reclassified into earnings within the next twelve months with an offset by gains from the underlying transactions resulting in no impact to earnings or cash flow.

 

(b) The amount of gain (loss) recognized in income represents $13 million and $(17) million related to the ineffective portion of the hedging relationships for the six months ended June 30, 2017 and 2016, respectively, and $5 million and $1 million related to the amount excluded from the assessment of the hedge effectiveness for the six months ended June 30, 2017 and 2016, respectively.