XML 33 R19.htm IDEA: XBRL DOCUMENT
v3.20.2

Derivative Financial Instruments | 9 Months Ended
--- | ---
Sep. 30, 2020
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments |
1 1. | Derivative Financial Instruments
The Company uses forward currency contracts to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit (cash flow hedge). The Company also executes forward currency contracts to manage the foreign currency exchange rate risk on recognized nonfunctional currency monetary accounts (non-designated hedge). Th e fair value of these derivative financial instruments is determined using L evel 2 inputs (inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability) in the fair value hierarchy as the fair value is based on publicly available foreign exchange and interest rates at each financial reporting dat e. Forward currency contracts consist of (in millions):
|  | Currency Denomination |
|  | September 30, |  |  | December 31, |
Foreign Currency |  | 2020 |  |  | 2019 |
South Korean Won |  | KRW |  | 17,600 |  |  | KRW |  | 17,600 |
Norwegian Krone |  | NOK |  | 4,210 |  |  | NOK |  | 5,377 |
Russian Ruble |  | RUB |  | 1,164 |  |  | RUB |  | 1,012 |
Danish Krone |  | DKK |  | 885 |  |  | DKK |  | 21 |
Brazilian Real |  | BRL |  | 768 |  |  | BRL |  | — |
Mexican Peso |  | MXN |  | 444 |  |  | MXN |  | 115 |
U.S. Dollar |  | USD |  | 411 |  |  | USD |  | 686 |
Japanese Yen |  | JPY |  | 341 |  |  | JPY |  | 36 |
Euro |  | EUR |  | 185 |  |  | EUR |  | 188 |
South African Rand |  | ZAR |  | 124 |  |  | ZAR |  | 124 |
Singapore Dollar |  | SGD |  | 36 |  |  | SGD |  | 42 |
British Pound Sterling |  | GBP |  | 18 |  |  | GBP |  | 20 |
Canadian Dollar |  | CAD |  | 1 |  |  | CAD |  | 3 |
Cash Flow Hedging Strategy To protect against the volatility of forecasted foreign currency cash flows resulting from forecasted revenues and expenses, the Company instituted a cash flow hedging program. For derivative instruments that are designated and qualify as a cash flow hedge, gains or losses are recorded in accumulated other comprehensive income (loss) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings (e.g., in “revenues” when the hedged transactions are cash flows associated with forecasted revenues). The Company includes time value in hedge relationships. The Company expects $13 million of the accumulated other comprehensive income (loss) will be reclassified into earnings within the next twelve months. Non-designated Hedging Strategy The Company enters into forward exchange contracts to hedge certain nonfunctional currency monetary accounts. The gain or loss on the derivative instrument is recognized in earnings in other income (expense), together with the changes in the hedged nonfunctional monetary accounts. The amount of gain (loss) recognized in other income (expense), net, was $11 million and ($27) million for the three and nine months ended September 30, 2020, respectively, and ($7) million and ($10) million for the three and nine months ended September 30, 2019, respectively. The Company has the following fair values of its derivative instruments and their balance sheet classifications (in millions):
|  | Asset Derivatives |  |  | Liability Derivatives |
|  |  |  | Fair Value |  |  |  |  | Fair Value |
|  | Balance Sheet |  | September 30, |  |  | December 31, |  |  | Balance Sheet |  | September 30, |  |  | December 31, |
|  | Location |  | 2020 |  |  | 2019 |  |  | Location |  | 2020 |  |  | 2019 |
Derivatives designated as hedging instruments under ASC Topic 815 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Prepaid and other current assets |  | $ | 4 |  |  | $ | 5 |  |  | Accrued liabilities |  | $ | 19 |  |  | $ | 18 |
Foreign exchange contracts |  | Other Assets |  |  | 6 |  |  |  | 4 |  |  | Other liabilities |  |  | 2 |  |  |  | 2 |
Total derivatives designated as hedging instruments under ASC Topic 815 |  |  |  | $ | 10 |  |  | $ | 9 |  |  |  |  | $ | 21 |  |  | $ | 20 |
Derivatives not designated as hedging instruments under ASC Topic 815 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Prepaid and other current assets |  | $ | 8 |  |  | $ | 8 |  |  | Accrued liabilities |  | $ | 12 |  |  | $ | 6 |
Foreign exchange contracts |  | Other Assets |  |  | 1 |  |  |  | 1 |  |  | Other Liabilities |  |  | — |  |  |  | — |
Total derivatives not designated as hedging instruments under ASC Topic 815 |  |  |  | $ | 9 |  |  | $ | 9 |  |  |  |  | $ | 12 |  |  | $ | 6 |
Total derivatives |  |  |  | $ | 19 |  |  | $ | 18 |  |  |  |  | $ | 33 |  |  | $ | 26 |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration