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Fair Value Measurements and Derivatives | 9 Months Ended
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Sep. 30, 2015
Fair Value Disclosures [Abstract] |
Fair Value Measurements and Derivatives | Fair Value Measurements and Derivatives In measuring the fair value of our assets and liabilities, we use market data or assumptions that we believe market participants would use in pricing an asset or liability including assumptions about risk when appropriate. Our valuation techniques include a combination of observable and unobservable inputs. Fair value measurements on a recurring basis — Assets and liabilities that are carried in our balance sheet at fair value are as follows:
|  |  |  | Fair Value Measurements Using
|  |  |  | Quoted Prices in Active Markets |  | Significant Other Observable Inputs
September 30, 2015 |  | Total |  | (Level 1) |  | (Level 2)
Marketable securities |  | $ | 157 |  |  | $ | 60 |  |  | $ | 97 |
Currency forward contracts - Accounts receivable other |  |  |  |  |  |
Cash flow hedges |  | 1 |  |  |  |  | 1 |
Undesignated |  | 2 |  |  |  |  | 2 |
Currency forward contracts - Other accrued liabilities |  |  |  |  |  |
Cash flow hedges |  | 8 |  |  |  |  | 8 |
Undesignated |  | 1 |  |  |  |  | 1 |
Currency swaps - Accounts receivable other |  |  |  |  |  |
Undesignated |  | 4 |  |  |  |  | 4 |
Currency swaps - Other noncurrent liabilities |  |  |  |  |  |  |
Undesignated |  | 1 |  |  |  |  | 1 |
December 31, 2014 |  |  |  |  |  |  |  |  |
Marketable securities |  | $ | 169 |  |  | $ | 72 |  |  | $ | 97 |
Currency forward contracts - Accounts receivable other |  |  |  |  |  |
Cash flow hedges |  | 1 |  |  |  |  | 1 |
Undesignated |  | 1 |  |  |  |  | 1 |
Currency forward contracts - Other accrued liabilities |  |  |  |  |  |
Cash flow hedges |  | 11 |  |  |  |  | 11 |
Currency swaps - Other accrued liabilities |  |  |  |  |  |
Undesignated |  | 9 |  |  |  |  | 9 |
Fair value of financial instruments – The financial instruments that are not carried in our balance sheet at fair value are as follows:
| September 30, 2015 |  | December 31, 2014
| Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Senior notes | $ | 1,525 |  |  | $ | 1,528 |  |  | $ | 1,580 |  |  | $ | 1,643 |
Other indebtedness* | 67 |  |  | 57 |  |  | 79 |  |  | 77 |
Total | $ | 1,592 |  |  | $ | 1,585 |  |  | $ | 1,659 |  |  | $ | 1,720 |
* The carrying value includes an unamortized fair value adjustment related to a terminated interest rate swap at September 30, 2015. The fair value of our senior notes is estimated based upon a market approach (Level 2) while the fair value of our other indebtedness is based upon an income approach (Level 2). Fair value measurements on a nonrecurring basis — Certain assets are measured at fair value on a nonrecurring basis. These are long-lived assets that are subject to fair value adjustments only in certain circumstances. These assets include intangible assets and property, plant and equipment which may be written down to fair value when they are held for sale or as a result of impairment. Interest rate derivatives — Our portfolio of derivative financial instruments periodically includes interest rate swaps designed to mitigate our interest rate risk. Near the end of the third quarter of 2015, we terminated a fixed-to-floating interest rate swap on our $425, 5.500% fixed-rate senior notes, due December 15, 2024 (the "designated fixed-rate debt"). This interest rate swap economically served to convert the designated fixed-rate debt into variable-rate debt, using the 3-month U.S. LIBOR as the benchmark interest rate plus a spread of 307 basis points. Of the $425 total notional amount of the interest rate swap, $340 had been designated as a fair value hedge of the $425 fixed-rate debt. During the third quarter of 2015, prior to its termination, we realized a $2 interest expense reduction and cash savings from the interest rate swap. Upon termination, we also received a cash settlement of $4, indicative of the swap's favorable market value at that date. As a fair value hedge of the designated fixed-rate debt, the difference between the changes in fair value of the designated portion of the interest rate swap and the designated fixed-rate debt was treated as ineffectiveness and was recorded in the income statement as an adjustment to interest expense. Changes in the fair value associated with the undesignated portion of the interest rate swap do not represent ineffectiveness but were also recorded as an adjustment to interest expense. The total amount recorded as ineffectiveness and other such costs was $4 during the third quarter of 2015. As of September 30, 2015, no interest rate swaps remain outstanding. However, the $8 fair value adjustment to the carrying amount of the designated fixed-rate debt remains deferred at that date. This amount will be amortized as a reduction of interest expense through the period ending December 2024, the scheduled maturity date of the designated fixed-rate debt. Foreign currency derivatives — Our foreign currency derivatives include forward contracts associated with forecasted transactions, primarily involving the purchases and sales of inventory through the next seventeen months, as well as currency swaps associated with certain recorded intercompany loans receivable and payable. Periodically, our foreign currency derivatives also include net investment hedges of certain of our investments in foreign operations. The total notional amount of outstanding foreign currency forward contracts, involving the exchange of various currencies, was $196 as of September 30, 2015 and $296 as of December 31, 2014. The total notional amount of outstanding foreign currency swaps was $199 as of September 30, 2015 and $10 as of December 31, 2014. The following currency derivatives were outstanding at September 30, 2015:
|  |  |  | Notional Amount (U.S. Dollar Equivalent) |  |
Functional Currency |  | Traded Currency |  | Designated as Cash Flow Hedges |  | Undesignated |  | Total |  | Maturity
U.S. dollar |  | Mexican peso, euro |  | $ | 52 |  |  | $ | 3 |  |  | $ | 55 |  |  | Dec-16
Euro |  | U.S. dollar, Canadian dollar, Hungarian forint, British pound, Swiss franc, Indian rupee, Russian ruble |  | 44 |  |  | 27 |  |  | 71 |  |  | Dec-16
British pound |  | U.S. dollar, Euro |  | 5 |  |  | 1 |  |  | 6 |  |  | Sep-16
Swedish krona |  | Euro |  | 15 |  |  |  |  |  | 15 |  |  | Feb-17
South African rand |  | U.S. dollar, Euro |  |  |  |  | 7 |  |  | 7 |  |  | Feb-17
Thai baht |  | U.S. dollar, Australian dollar |  |  |  | 11 |  |  | 11 |  |  | May-16
Brazilian real |  | U.S. dollar, Euro |  |  |  |  | 4 |  |  | 4 |  |  | Mar-16
Indian rupee |  | U.S. dollar, British pound, Euro |  |  |  |  | 27 |  |  | 27 |  |  | Feb-17
Total forward contracts |  |  |  | 116 |  |  | 80 |  |  | 196 |  |  |
U.S. dollar |  | Euro |  |  |  |  | 116 |  |  | 116 |  |  | Dec-16
Euro |  | Canadian dollar, British pound |  |  |  | 83 |  |  | 83 |  |  | Dec-16
Total currency swaps |  |  |  | — |  |  | 199 |  |  | 199 |  |  |
Total currency derivatives |  |  |  | $ | 116 |  |  | $ | 279 |  |  | $ | 395 |  |  |
Cash flow hedges — With respect to contracts designated as cash flow hedges, changes in fair value during the period in which the contracts remain outstanding are reported in other comprehensive income (OCI) to the extent such contracts remain effective. Changes in fair value of those contracts that are not designated as cash flow hedges are reported in income in the period in which the changes occur. Forward contracts associated with product-related transactions are marked to market in cost of sales while other contracts are marked to market through other income, net. Net investment hedges — With respect to contracts designated as net investment hedges, we apply the forward method and report changes in fair value in the cumulative translation adjustment (CTA) component of OCI during the period in which the contracts remain outstanding to the extent such contracts remain effective. During the second quarter of 2015, we settled our $98 forward contract that had been executed and designated as a net investment hedge of the equivalent portion of certain of our European operations during the first quarter of 2015. Although no net investment hedges remain outstanding at September 30, 2015, a deferred loss of $2 associated with this settled contract has been recorded in AOCI as of that date and will remain deferred until such time as the investment in the associated subsidiary is substantially liquidated. See also Note 5. Amounts to be reclassified to earnings — Deferred gains or losses associated with effective cash flow hedges are reported in AOCI and are reclassified to earnings in the same periods in which the underlying transactions affect earnings. Amounts expected to be reclassified to earnings assume no change in the current hedge relationships or to September 30, 2015 exchange rates. Deferred losses of $7 at September 30, 2015 are expected to be reclassified to earnings during the next twelve months, compared to deferred losses of $10 at December 31, 2014. Amounts reclassified from AOCI to earnings arising from the discontinuation of cash flow hedge accounting treatment were not material during the third quarter of 2015. See also Note 5.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13537-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13504-108611 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=49121117&loc=d3e13433-108611 + Details
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