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Derivative Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2018
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 non-functional currency cash flows from forecasted revenues and expenses (in millions):

 

     Currency Denomination  
     June 30,      December 31,  

Foreign Currency

    2018      2017  

Norwegian Krone

      NOK        4,040        NOK        4,013  

Japanese Yen

      JPY        326        JPY        982  

U.S. Dollar

      USD        120        USD        163  

Euro

      EUR        89        EUR        120  

Danish Krone

      DKK        19        DKK        30  

British Pound Sterling

      GBP        15        GBP        11  

Canadian Dollar

      CAD        1        CAD        —    

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

 

     Currency Denomination  
     June 30,      December 31,  

Foreign Currency

    2018      2017  

Norwegian Krone

      NOK        1,998        NOK        1,734  

Russian Ruble

      RUB        1,284        RUB        2,699  

U.S. Dollar

      USD        512        USD        463  

South African Rand

      ZAR        176        ZAR        150  

Euro

      EUR        119        EUR        99  

Danish Krone

      DKK        12        DKK        15  

British Pound Sterling

      GBP        4        GBP        3  

Canadian Dollar

      CAD        1        CAD        —    
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   June 30,     December 31,     Balance Sheet   June 30,     December 31,  
   

Location

   2018     2017    

Location

   2018     2017  

Derivatives designated as hedging instruments under ASC Topic 815

            

Foreign exchange contracts

   Prepaid and other current assets   $ 12     $ 13     Accrued liabilities   $ 6     $ 3  

Foreign exchange contracts

   Other Assets     3       8     Other liabilities     2       2  
   

 

 

    

 

 

      

 

 

    

 

 

  

Total derivatives designated as hedging instruments under ASC Topic 815

     $ 15     $ 21       $ 8     $ 5  
   

 

 

    

 

 

      

 

 

    

 

 

  

Derivatives not designated as hedging instruments under ASC Topic 815

            

Foreign exchange contracts

   Prepaid and other current assets   $ 5     $ 10     Accrued liabilities   $ 7     $ 5  

Foreign exchange contracts

   Other Assets     1       2     Other Liabilities     —         1  
   

 

 

    

 

 

      

 

 

    

 

 

  

Total derivatives not designated as hedging instruments under ASC Topic 815

     $ 6     $ 12       $ 7     $ 6  
   

 

 

    

 

 

      

 

 

    

 

 

  

Total derivatives

     $ 21     $ 33       $ 15     $ 11  
   

 

 

    

 

 

      

 

 

    

 

 

  
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           Six Months Ended           Six Months Ended  
    June 30,           June 30,           June 30,  
    2018     2017           2018     2017           2018     2017  
        Revenue       1       4      
 Cost of
revenue		  
 		     2       13  

Foreign exchange contracts

     5       34       Cost of revenue       3       (17 )     


 Other
income
(expense),
net		  
 
 
 		     (3 )      5  
 

 

 

    

 

 

        

 

 

    

 

 

      

 

 

    

 

 

  

Total

     5       34         4       (13 )        (1 )      18  
 

 

 

    

 

 

        

 

 

    

 

 

      

 

 

    

 

 

  
Derivatives Not Designated as   Location of Gain (Loss)     Amount of Gain (Loss)                                
Hedging Instruments under   Recognized in Income     Recognized in Income on                                

ASC Topic 815

   on Derivative     Derivative                                
                Six Months Ended                                
                June 30,                                
                2018     2017                                

Foreign exchange contracts

    
 Other income
(expense), net		  
 		     (8 )      46            
     

 

 

    

 

 

            

Total

         (8 )      46            
     

 

 

    

 

 

            

 

(a) The Company expects that $9 million of the accumulated other comprehensive income (loss) will be reclassified into earnings within the next twelve months with an offset by losses from the underlying transactions resulting in no impact to earnings or cash flow.
(b) The amount of gain (loss) recognized in income represents $2 million and $13 million related to the ineffective portion of the hedging relationships for the six months ended June 30, 2018 and 2017, respectively, and $(3) million and $5 million related to the amount excluded from the assessment of the hedge effectiveness for the six months ended June 30, 2018 and 2017, respectively.