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Financial Instruments and Risk Management (Tables)

12 Months Ended

Dec. 31, 2016

Fair Value Disclosures [Abstract]

Notional Amounts of Outstanding Derivative Instruments

As at December 31, 2016, the Company had the following outstanding derivative instruments that were entered into to hedge Euro-denominated and Singapore dollar-denominated forecasted transactions:

In millions of Euros		Notional amount for hedge on forecasted R&D and other operating expenses				Notional amount for hedge on forecasted manufacturing costs
Forward contracts			237				347
Currency collars			248				387
In millions of Singapore dollars		Notional amount for hedge on forecasted R&D and other operating expenses				Notional amount for hedge on forecasted manufacturing costs
Forward contracts			—				123

Fair Value of Derivative Instruments

Information on fair value of derivative instruments and their location in the consolidated balance sheets as at December 31, 2016 and December 31, 2015 is presented in the table below:

As at December 31, 2016

As at December 31, 2015

Asset Derivatives

Balance sheet location

Fair value

Balance sheet location

Fair value

Derivatives designated as a hedge:

Foreign exchange forward contracts

Other current assets

1

Other current assets

3

Currency collars

Other non-current assets

—

Other non-current assets

1

Currency collars

Other current assets

—

Other current assets

1

Total derivatives designated as a hedge

1

5

Derivatives not designated as a hedge:

Foreign exchange forward contracts

Other current assets

1

Other current assets

1

Total derivatives not designated as a hedge:

1

1

Total Derivatives

2

6

		As at December 31, 2016						As at December 31, 2015
Liability Derivatives		Balance sheet location		Fair value				Balance sheet location		Fair value
Derivatives designated as a hedge:
Foreign exchange forward contracts		Other payables and accrued liabilities			(31	)		Other payables and accrued liabilities			(18	)
Currency collars		Other long-term liabilities			(1	)		Other long-term liabilities			—
Currency collars		Other payables and accrued liabilities			(11	)		Other payables and accrued liabilities			(6	)
Total derivatives designated as a hedge					(43	)					(24	)
Derivatives not designated as a hedge:
Foreign exchange forward contracts		Other payables and accrued liabilities			(2	)		Other payables and accrued liabilities			(1	)
Total derivatives not designated as a hedge:					(2	)					(1	)
Total Derivatives					(45	)					(25	)

Effect on Consolidated Statements of Income of Derivative Instruments

The effect on the consolidated statements of income for the year ended December 31, 2016 and December 31, 2015 and on the “Accumulated other comprehensive income (loss)” (“AOCI”) as reported in the statements of equity as at December 31, 2016 and December 31, 2015 of derivative instruments designated as cash flow hedge is presented in the table below:

		Gain (loss) deferred in OCI on derivative								Location of gain (loss) reclassified from OCI into earnings		Gain (loss) reclassified from OCI into earnings
		December 31, 2016				December 31, 2015						December 31, 2016				December 31, 2015
Foreign exchange forward contracts			(24	)			(14	)		Cost of sales			(5	)			(63	)
Foreign exchange forward contracts			(2	)			(1	)		Selling, general and administrative			—				(8	)
Foreign exchange forward contracts			(8	)			(4	)		Research and development			(1	)			(29	)
Currency collars			(8	)			(3	)		Cost of sales			(2	)			(42	)
Currency collars			(1	)			—			Selling, general and administrative			—				(6	)
Currency collars			(4	)			(1	)		Research and development			(1	)			(22	)
Total			(47	)			(23	)					(9	)			(170	)

Effect on Consolidated Statements of Income of Derivative Instruments Not Designated as Hedge

The effect on the consolidated statements of income for the year ended December 31, 2016 and December 31, 2015 of derivative instruments not designated as a hedge is presented in the table below:

		Location of gain recognized in earnings		Gain recognized in earnings
				December 31, 2016				December 31, 2015
Foreign exchange forward contracts		Other income and expenses, net			(3	)			11
Total					(3	)			11

Schedule of Financial Assets (Liabilities) Measured at Fair Value on Recurring Basis

The table below details financial assets (liabilities) measured at fair value on a recurring basis as at December 31, 2016:

						Fair Value Measurements using
		December 31, 2016				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Marketable securities – U.S. Treasury Bonds			335				335				—				—
Equity securities classified as available-for-sale			11				11				—				—
Equity securities classified as held-for-trading			8				8				—				—
Derivative instruments designated as cash flow hedge			1				—				1				—
Derivative instruments designated as cash flow hedge			(43	)			—				(43	)			—
Derivative instruments not designated as cash flow hedge			1				—				1				—
Derivative instruments not designated as cash flow hedge			(2	)			—				(2	)			—
Contingent consideration on business combinations			(12	)			—				—				(12	)
Total			299				354				(43	)			(12	)

The table below details financial assets (liabilities) measured at fair value on a recurring basis as at December 31, 2015:

						Fair Value Measurements using
		December 31, 2015				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)				Significant Unobservable Inputs (Level 3)
Marketable securities – U.S. Treasury Bonds			335				335				—				—
Equity securities classified as available-for-sale			11				11				—				—
Equity securities classified as held-for-trading			8				8				—				—
Derivative instruments designated as cash flow hedge			5				—				5				—
Derivative instruments designated as cash flow hedge			(24	)			—				(24	)			—
Derivative instruments not designated as cash flow hedge			1				—				1				—
Derivative instruments not designated as cash flow hedge			(1	)			—				(1	)			—
Total			335				354				(19	)			—

Schedule of Assets (Liabilities) Measured at Fair Value on Recurring Basis Using Significant Unobservable Inputs (Level 3)

For assets (liabilities) measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the reconciliation between January 1, 2016 and December 31, 2016 is presented as follows:

		Fair Value Measurements using Significant Unobservable Inputs (Level 3)
January 1, 2016			—
Contingent consideration on business combination			(12	)
December 31, 2016			(12	)
Amount of total losses for the period included in earnings attributable to assets still held at the reporting date			—

Fair Value Information on Other Financial Assets and Liabilities Recorded at Amortized Cost

The following table includes additional fair value information on financial assets and liabilities as at December 31, 2016 and 2015:

		2016												2015
		Level				Carrying Amount				Estimated Fair Value				Carrying Amount				Estimated Fair Value
Cash equivalents(1)			1				960				960				1,099				1,099
Long-term debt
– Bank loans (including current portion)			2				525				525				708				708
– Senior unsecured convertible bonds(2)			1				926				1,127				904				960

(1) Cash equivalents primarily correspond to deposits at call with banks.

(2) The carrying amount of the senior unsecured convertible bonds as reported above corresponds to the liability component only, since, at initial recognition, an amount of $121 million was recorded directly in shareholders’ equity as the value of the equity instrument embedded in the issued convertible bonds.

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