XML 301 R48.htm IDEA: XBRL DOCUMENT v3.22.0.1
Financial Instruments and Risk Management (Tables)
12 Months Ended
Dec. 31, 2021
Disclosure of detailed information about financial instruments [abstract]  
Groups and measurement bases of financial assets and financial liabilities
B. Groups and measurement bases of financial assets and financial liabilities
 
 
As of December 31, 2021
 
Financial assets
Financial liabilities
 
Measured at fair value through the statement of income
Measured at amortized cost
Measured at fair value through the statement of income
Measured at amortized cost
 
$ millions
$ millions
$ millions
$ millions
Current assets
       
Cash and cash equivalents
-
473
-
-
Short-term investments and deposits
-
91
-
-
Trade receivables
-
1,418
-
-
Other receivables
-
45
-
-
Foreign currency derivative designated as economic hedge
23
-
-
-

Marine transport derivative designated as economic hedge

2

-

-

-

Foreign currency and interest derivative instruments designated as cash flow hedge

23

-

-

-

Non-current assets
       
Foreign currency and interest derivative instruments designated as cash flow hedge
97
-
-
-
Other non-current asset
-
14
-
-
Total financial assets
145
2,041
-
-
Current liabilities
       
Short term debt
-
-
-
(577)
Trade payables
-
-
-
(1,064)
Other current liabilities
-
-
-
(153)
Foreign currency derivative designated as economic hedge
-
-
(3)
-
Non-current liabilities
       
Long term debt and debentures
-
-
-
(2,436)
Interest derivative instruments designated as economic hedge
-
-
(7)
-
Other non- current liabilities
-
-

-

(49)
Total financial liabilities
-
-
(10)
(4,279)
Total financial instruments, net
145
2,041
(10)
(4,279)

 
 
As of December 31, 2020
 
Financial assets
Financial liabilities
 
Measured at fair value through the statement of income
Measured at fair value through the statement
of comprehensive income
Measured at
amortized cost
Measured at fair value through the statement of income
Measured at amortized cost
 
$ millions
$ millions
$ millions
$ millions
$ millions
 
Current assets
         
Cash and cash equivalents
-
-
214
-
-
Short-term investments and deposits
-
-
100
-
-
Trade receivables
-
-
883
-
-
Other receivables
-
-
122
-
-

Investments at fair value through other comprehensive income

-

53

-

-

-

Foreign currency and interest derivative designated as economic hedge
24
-
-
-
-
Non-current assets
         
Foreign currency and interest derivative instruments designated as cash flow hedge
115
-
-
-
-
Investments at fair value through other comprehensive income
-
83
-
-
-
Other non-current asset
-
-
8
-
-
Total financial assets
139
136
1,327
-
-
Current liabilities
         
Short term debt
-
-
-
-
(679)
Trade payables
-
-
-
-
(740)
Other current liabilities
-
-
-
-
(156)
Foreign currency and interest derivative designated as economic hedge
-
-
-
(42)
-
Energy and marine transport derivative designated as economic hedge
-
-
-
(1)
-
Non-current liabilities
         
Long term debt and debentures
-
-
-
-
(2,053)
Foreign currency and interest derivative designated as economic hedge
-
-
-
(13)
-

Foreign currency and interest derivative instruments designated as cash flow hedge

-
-
-
(28)
-
Other non- current liabilities
-
-
-
-
(53)
Total financial liabilities
-
-
-
(84)
(3,681)
Total financial instruments, net
139
136
1,327
(84)
(3,681)

Maximum credit exposure
(2) Maximum Exposure to credit risk
 
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
 
 
As of December 31
 
Carrying amount ($ millions)
 
2021
2020
 
Cash and cash equivalents
473
214
Short term investments and deposits
91
100
Trade receivables
1,418
883
Other receivables
45
122
Derivatives
145
139
Other non-current assets
14
8
 
2,186
1,466
Maximum credit exposure by geographical region
The maximum exposure to credit risk for trade receivables, at the reporting date by geographic region was:
 
 
As of December 31
 
Carrying amount ($ millions)
 
2021
2020
 

Asia

440
258

Europe

362
330

South America

306
68

North America

193
144
Israel
95
67
Other
22
16
 
1,418
883
Aging of debts and impairment losses
 
(3) Aging of debts and impairment losses
 
The aging of trade receivables at the reporting date was:
 
 
As of December 31
 
2021
2020
 
Gross
Impairment
Gross
Impairment
 
$ millions
$ millions
$ millions
$ millions
 
Not past due
1,313
(1)
788
-
Past due up to 3 months
82
-
58
-
Past due 3 to 12 months
23
(2)
7
(1)
Past due over 12 months
9
(6)
40
(9)
 
1,427
(9)
893
(10)
Allowance of doubtful accounts
(3) Aging of debts and impairment losses (cont'd)
 
The movement in the allowance for doubtful accounts during the year was as follows:
 
 
2021
2020
 
$ millions
$ millions
 
Balance as of January 1
10
3
Additional allowance
(3)
5
Reversals
(2)
-
Changes due to translation differences
4
2
Balance as of December 31
9
10
Liquidity risk
The following are the contractual maturities of financial liabilities, including estimated interest payments:
 
 
As of December 31, 2021
 
Carrying amount
12 months or less
1-2 years
3-5 years
More than 5 years
 
$ millions
 
Non-derivative financial liabilities
         
Short term debt (not including current maturities)
327
329
-
-
-
Trade payables
1,064
1,064
-
-
-
Other current liabilities
153
153
-
-
-
Long-term debt, debentures and others
2,735
352
1,003
799
1,532
 
4,279
1,898
1,003
799
1,532
Financial liabilities – derivative instruments
         

Foreign currency and interest derivative designated as economic hedge

10
3
-
7
-

 
 
As of December 31, 2020
 
Carrying amount
12 months or less
1-2 years
3-5 years
More than 5 years
 
$ millions
 
Non-derivative financial liabilities
         
Short term debt (not including current maturities)
296
299
-
-
-
Trade payables
740
740
-
-
-
Other current liabilities
156
156
-
-
-

Long-term debt, debentures and others

2,489
489
529
859
1,559
 
3,681
1,684
529
859
1,559
Financial liabilities – derivative instruments utilized for economic hedging
         
Foreign currency and interest derivative designated as economic hedge
55
42
-
-
13
Energy and marine transport derivative designated as economic hedge
1
1
-
-
-

Foreign currency and interest derivative designated as cash flow hedge

28
-
-
-
28
 
84
43
-
-
41
Interest rate profile
(a) Interest Rate Profile
 
Set forth below are details regarding the type of interest on the Company’s non-derivative interest‑bearing financial instruments:
 
 
As of December 31
 
2021
2020
 
$ millions
$ millions
 
Fixed rate instruments
 
 
Financial assets
338
165
Financial liabilities
(2,466)
(2,450)
 
(2,128)
(2,285)
Variable rate instruments
   
Financial assets
36
223
Financial liabilities
(562)
(296)
 
(526)
(73)
Sensitivity analysis for variable rate instruments
(c) Sensitivity analysis for variable rate instruments
 
The below analysis assumes that all other variables (except for the interest rate), in particular foreign currency rates, remain constant.
 
 
As of December 31, 2021
 
Impact on profit (loss)
 
Decrease of 1%
in interest
Decrease of 0.5%
in interest
Increase of 0.5%
in interest
Increase of 1%
in interest
 
$ millions
$ millions
$ millions
$ millions
 
SWAP instruments
       
Changes in U.S. Dollar interest
(32)
(16)
15
29
Changes in Israeli Shekel interest
39
19
(18)
(35)

Terms of derivative financial instruments used to hedge interest risk
(d) Terms of derivative financial instruments used to hedge interest risk
 
 
As of December 31, 2021
 
Carrying amount
(fair value)
Stated
amount
Maturity date
Interest rate
range
 
$ millions
$ millions
Years
%
 
U.S. Dollar
       
SWAP contracts from variable interest to fixed interest
(7)
150
2024
2.47-2.6%
Israeli Shekel
       
SWAP contracts from fixed ILS interest to fixed USD interest
119
579
2034
2.4-4.47%

 
 
As of December 31, 2020
 
Carrying amount
(fair value)
Stated
amount
Maturity date
Interest rate
range
 
$ millions
$ millions
Years
%
 
U.S. Dollar
       
SWAP contracts from variable interest to fixed interest
(13)
150
2024
2.47%-2.60%
Israeli Shekel
       
SWAP contracts from fixed ILS interest to fixed USD interest
87
701
2034
2.40%-4.47%

GBP

       

SWAP contracts from variable USD interest to fixed GBP interest.

5
63

18/05/2021

1-month libor
Euro
       
SWAP contracts from variable USD interest to fixed EUR interest
(41)
324
19/05/2021
1-month libor

Sensitivity analysis non-derivative financial instruments
(a) Sensitivity analysis
 
A 10% increase at the rate of the US$ against the following currencies would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
 
 
As of December 31
 
Impact on profit (loss)
 
2021
2020
 
$ millions
$ millions
 
Non-derivative financial instruments
   
U.S. Dollar/Euro
(80)
(96)
U.S. Dollar/Israeli Shekel
177
134
U.S. Dollar/British Pound
(1)
2
U.S. Dollar/Chinese Yuan
1
(1)
U.S. Dollar/Turkey Lira
-
(1)

 
A 10% decrease of the US$ against the above currencies as of December 31 would have the same effect but in the opposite direction.
Market risk sensitivity analysis
Presented hereunder is a sensitivity analysis of the Company’s foreign currency derivative instruments as of December 31, 2021. Any change in the exchange rates of the principal currencies shown below would have increased (decreased) profit and loss and equity by the amounts shown below. This analysis assumes that all other variables remain constant.
 
 
As of December 31, 2021
 
Increase 10%
Increase 5%
Decrease 5%
Decrease 10%
 
$ millions
$ millions
$ millions
$ millions
 
U.S. Dollar/Israeli Shekel
       
Forward transactions
(48)
(25)
27
58
Options
(40)
(18)
25
55
SWAP
(69)
(36)
40
85
         

Euro/ U.S. Dollar

       
Forward transactions
22
11
(11)
(22)
Options
5
2
(3)
(6)
         

U.S Dollar/RMB

       
Forward transactions
(4)
(2)
3
5

Terms of derivative financial instruments used to economically hedge foreign currency risk
 
(b) Terms of derivative financial instruments used to reduce foreign currency risk
 
 
As of December 31, 2021
 
Carrying amount
Stated amount
Average
 
$ millions
$ millions

exchange rate

 
Forward contracts
     
U.S. Dollar/Israeli Shekel
3
515
3.2
Euro/U.S. Dollar
4
240
1.2

U.S Dollar/Brazilian Real

(1)

37

5.4

U.S. Dollar/British Pound
-
16
1.4
U.S. Dollar/Chinese Yuan Renminbi
1
46
6.5
Other
-
23
-
Currency and interest SWAPs
     
U.S. Dollar/Israeli Shekel
119
579
3.7
Put options
     
U.S. Dollar/Israeli Shekel
14
660
3.2
Euro/U.S. Dollar
2
57
1.2
U.S. Dollar/Japanese Yen
-
4
109.7
U.S. Dollar/British Pound
-
12
1.4
Call options
     
U.S. Dollar/Israeli Shekel
(2)
660
3.2
Euro/U.S. Dollar
-
57
1.2
U.S. Dollar/Japanese Yen
-
4
109.7
U.S. Dollar/British Pound
-
12
1.4

 
As of December 31, 2020
 
Carrying amount
Stated amount
Average
 
$ millions
$ millions

exchange rate

 
Forward contracts
     
U.S. Dollar/Israeli Shekel
8
377
3.2
Euro/U.S. Dollar
-
150
1.2
U.S. Dollar/British Pound
-
27
1.4
U.S. Dollar/Chinese Yuan Renminbi
-
23
6.6
Other
-
53
-
Currency and interest SWAPs
     
U.S. Dollar/Israeli Shekel
87
701
3.7
Euro/U.S. Dollar
(41)
324
1.1
U.S. Dollar/British Pound
5
63
1.3
Put options
     
U.S. Dollar/Israeli Shekel
13
400
3.3
Euro/U.S. Dollar
-
47
1.2
U.S. Dollar/Japanese Yen
-
2
107
U.S. Dollar/British Pound
-
10
1.3
Call options
     
U.S. Dollar/Israeli Shekel
(1)
380
3.3
Euro/U.S. Dollar
(2)
47
1.2
U.S. Dollar/Japanese Yen
-
2
107
U.S. Dollar/British Pound
-
10
1.3

 

Linkage terms of monetary balances
(c) Linkage terms of monetary balances – in millions of Dollars
 
 
As of December 31, 2021
 
US Dollar
Euro
British Pound
Israeli Shekel
Brazilian Real
Chinese Yuan Renminbi
Other
Total
 
Non-derivative instruments:
               
Cash and cash equivalents
89
23
5
3
76
263
14
473
Short term investments and deposits
86
-
-
-
-
3
2
91
Trade receivables
684
260
41
82
222
91
38
1,418
Other receivables
2
22
1
19
1
-
-
45
Other non-current assets
4
4
-
-
5
-
1
14
Total financial assets
865
309
47
104
304
357
55
2,041
Short-term debt
196
92
12
184
41
52
-
577
Trade payables
210
216
28
410
103
91
6
1,064
Other current liabilities
33
73
4
18
10
15
 
153
Long term debt, debentures and others
1,161
499
21
635
51
67
2
2,436
Other non-current liabilities
1
46
-
-
2
-
-
49
Total financial liabilities
1,601
926
65
1,247
207
225
8
4,279
Total non-derivative financial instruments, net
(736)
(617)
(18)
(1,143)
97
132
47
(2,238)
Derivative instruments:
               
Forward transactions
-
240
16
515
37
46
23
877
Cylinder
-
57
12
660
-
-
4
733
SWAPS – U.S. Dollar into Israeli Shekel
-
-
-
579
-
-
-
579
Total derivative instruments
-
297
28
1,754
37
46
27
2,189
Net exposure
(736)
(320)
10
611
134
178
74
(49)

 
 
As of December 31, 2020
 
US Dollar
Euro
British Pound
Israeli Shekel
Brazilian Real
Chinese Yuan Renminbi
Others
Total
 
Non-derivative instruments:
               
Cash and cash equivalents
114
13
5
2
6
60
14
214
Short term investments and deposits
88
5
-
-
-
4
3
100
Trade receivables
454
227
35
58
21
51
37
883
Other receivables
72
41
-
7
-
-
2
122
Investments at fair value through other comprehensive income
-
-
-
-
-
136
-
136
Other non-current assets
1
3
-
-
4
-
-
8
Total financial assets
729
289
40
67
31
251
56
1,463
Short-term debt
267
70
85
181
7
68
1
679
Trade payables
145
163
21
326
11
66
8
740
Other current liabilities
41
68
4
17
-
26
 
156
Long term debt, debentures and others
1,211
36
22
716
2
60
6
2,053
Other non-current liabilities
2
51
-
-
-
-
-
53
Total financial liabilities
1,666
388
132
1,240
20
220
15
3,681
Total non-derivative financial instruments, net
(937)
(99)
(92)
(1,173)
11
31
41
(2,218)
Derivative instruments:
               
Forward transactions
-
150
27
377
15
23
38
630
Cylinder
-
47
10
400
20
-
2
479
SWAPS – U.S. Dollar into Israeli Shekel
-
-
-
701
-
-
-
701
SWAPS – U.S. Dollar into Euro
-
324
-
-
-
-
-
324

SWAPS – U.S. Dollar into British Pound

-
-

63

-
-
-
-

63

Total derivative instruments
-
521
100
1,478
35
23
40
2,197
Net exposure
(937)
422
8
305
46
54
81
(21)
Fair value of financial instruments
The following table details the book value and the fair value of financial instrument groups presented in the financial statements not in accordance with their fair value:
 
 
As of December 31, 2021
As of December 31, 2020
 
Carrying amount
Fair value
Carrying amount
Fair value
 
$ millions
$ millions
$ millions
$ millions
 
Loans bearing fixed interest (1)
407
408
89
96
Debentures bearing fixed interest
       
Marketable (2)
1,524
1,730
1,625
1,870
Non-marketable (3)
195
208
281
296
 
2,126
2,346
1,995
2,262

 
  (1)

The fair value of the Shekel, Euro, Brazilian Real and Yuan loans issued bearing fixed interest is based on calculation of the present value of the cash flows in respect of the principal and the interest and is discounted at the market interest rates on the measurement date for similar loans having similar characteristics and is classified as Level 2 in the fair value hierarchy. The average discount interest as of December 31, 2021, for the Shekel, Euro Brazilian Real and Yuan loans was 1.5%, 1.2%, 13% and 4%, respectively (December 31, 2020, for the Shekel, Euro and Yuan loans 1.6%, 1.4%, and 5.1%, respectively).

 
  (2)
The fair value of the marketable debentures is based on the quoted stock exchange price and is classified as Level 1 in the fair value hierarchy.
 
  (3)
The fair value of the non‑marketable debentures is based on calculation of the present value of the cash flows in respect of the principal and the interest and is discounted at the Libor rate customary in the market for similar loans having similar characteristics and is classified as Level 2 in the fair value hierarchy. The average discount interest as of December 31, 2021, was 2.5% (December 31, 2020 – 2.6%).
Hierarchy of fair value
The following levels were defined:
 
Level 1: Quoted (unadjusted) prices in an active market for identical instruments
 
Level 2: Observed data (directly or indirectly) not included in Level 1 above.
 
Level 1
As of December 31, 2021
As of December 31, 2020
$ millions
$ millions
 
Investments at fair value through other comprehensive income
-
136

 
Level 2
As of December 31, 2021
As of December 31, 2020
$ millions
$ millions
 
Derivatives designated as economic hedge, net
15
(32)
Derivatives designated as cash flow hedge, net
120
87
 
135
55