v2.4.0.8
Financial Instruments, Derivatives and Fair Value Measures (Tables)
 6 Months Ended
Jun. 30, 2014
Financial Instruments, Derivatives and Fair Value Measures  
Summary of the amounts and location of certain derivative financial instruments

 

 

 

Fair Value - Assets

 

Fair Value - Liabilities

 

(in millions)

 

June 30,
2014

 

Dec. 31,
2013

 

Balance Sheet Caption

 

June 30,
2014

 

Dec. 31,
2013

 

Balance Sheet Caption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps designated as fair value hedges

 

$

106

 

$

87

 

Deferred income taxes and other assets

 

$

—

 

$

—

 

Post-employment obligations, deferred income taxes and other long-term liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts:

 

 

 

 

 

 

 

 

 

 

 

 

 

Hedging instruments

 

4

 

14

 

Prepaid expenses, deferred income taxes, and other receivables

 

—

 

—

 

Other accrued liabilities

 

Others not designated as hedges

 

67

 

70

 

Prepaid expenses, deferred income taxes, and other receivables

 

24

 

75

 

Other accrued liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt designated as a hedge of net investment in a foreign subsidiary

 

—

 

—

 

n/a

 

523

 

505

 

Short-term borrowings

 

 

 

$

177

 

$

171

 

 

 

$

547

 

$

580

 

 

 
Schedule of derivatives gain (loss) in OCI and earnings

 

 

 

Gain (loss) Recognized in Other
Comprehensive Income (loss)

 

Income (expense) and Gain (loss)
Reclassified into Income

 

 

 

 

 

Three Months
Ended June 30

 

Six Months
 Ended June 30

 

Three Months
Ended June 30

 

Six Months
 Ended June 30

 

Income Statement

 

(in millions)

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

2014

 

2013

 

Caption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts designated as cash flow hedges

 

$

(3

)

$

14

 

$

(1

)

$

31

 

$

3

 

$

11

 

$

6

 

$

14

 

Cost of products sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt designated as a hedge of net investment in a foreign subsidiary

 

(7

)

25

 

(18

)

75

 

n/a

 

n/a

 

n/a

 

n/a

 

n/a

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate swaps designated as fair value hedges

 

n/a

 

n/a

 

n/a

 

n/a

 

8

 

(71

)

19

 

(81

)

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency forward exchange contracts not designated as hedges

 

n/a

 

n/a

 

n/a

 

n/a

 

(10

)

50

 

(23

)

140

 

Net foreign exchange loss (gain)

 
Schedule of carrying values and fair values of certain financial instruments

 

 

 

June 30, 2014

 

December 31, 2013

 

(in millions)

 

Carrying
Value

 

Fair
Value

 

Carrying
Value

 

Fair
Value

 

 

 

 

 

 

 

 

 

 

 

Long-term Investment Securities:

 

 

 

 

 

 

 

 

 

Equity securities

 

$

95

 

$

95

 

$

93

 

$

93

 

Other

 

35

 

31

 

26

 

24

 

Total Long-term Debt

 

(3,412

)

(4,033

)

(3,397

)

(3,930

)

Foreign Currency Forward Exchange Contracts:

 

 

 

 

 

 

 

 

 

Receivable position

 

71

 

71

 

84

 

84

 

(Payable) position

 

(24

)

(24

)

(75

)

(75

)

Interest Rate Hedge Contracts:

 

 

 

 

 

 

 

 

 

Receivable position

 

106

 

106

 

87

 

87

 
Schedule of assets and liabilities measured at fair value on a recurring basis

 

 

 

 

Basis of Fair Value Measurement

 

(in millions)

 

Outstanding
Balances

 

Quoted
Prices in
Active
Markets

 

Significant
Other
Observable
Inputs

 

Significant
Unobservable
Inputs

 

June 30, 2014:

 

 

 

 

 

 

 

 

 

Equity securities

 

$

19

 

$

19

 

$

—

 

$

—

 

Interest rate swap derivative financial instruments

 

106

 

—

 

106

 

—

 

Foreign currency forward exchange contracts

 

71

 

—

 

71

 

—

 

Total Assets

 

$

196

 

$

19

 

$

177

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Fair value of hedged long-term debt

 

$

1,642

 

$

—

 

$

1,642

 

$

—

 

Foreign currency forward exchange contracts

 

24

 

—

 

24

 

—

 

Contingent consideration related to business combinations

 

75

 

—

 

—

 

75

 

Total Liabilities

 

$

1,741

 

$

—

 

$

1,666

 

75

 

 

 

 

 

 

 

 

 

 

 

December 31, 2013:

 

 

 

 

 

 

 

 

 

Equity securities

 

$

26

 

$

26

 

$

—

 

$

—

 

Interest rate swap derivative financial instruments

 

87

 

—

 

87

 

—

 

Foreign currency forward exchange contracts

 

84

 

—

 

84

 

—

 

Total Assets

 

$

197

 

$

26

 

$

171

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Fair value of hedged long-term debt

 

$

1,623

 

$

—

 

$

1,623

 

$

—

 

Foreign currency forward exchange contracts

 

75

 

—

 

75

 

—

 

Contingent consideration related to business combinations

 

208

 

—

 

—

 

208

 

Total Liabilities

 

$

1,906

 

$

—

 

$

1,698

 

$

208