Meritor Acquisition and 2022 Financial Results
Table of Contents
Fair Value Amount and Location of Derivative Instruments
The following table summarizes the location and fair value of derivative instruments on our Consolidated Balance Sheets:
In millions
Derivatives Designated as Hedging
Instruments
December 31,
Derivatives Not Designated as Hedging
Instruments
December 31,
2022
2021
2022
2021
$
3,051 S
2,558 S
2,900
$
1.888
Notional amount
Derivative assets
Prepaid expenses and other current assets.
$
18 $
15
$
27 $
4
Other assets
80
Total derivative assets(1)
98
$
15
$
27 $
4
Derivative liabilities
Other accrued expenses
Other liabilities
Total derivative liabilities(1)
$
19
$
11
$
3
$
4
151
19
-
$
170
$
30
$
3
$
4
(D) Estimates of the fair value of all derivative assets and liabilities above are derived from Level 2 inputs, which are estimated using actively quoted prices for similar instruments
from brokers and observable inputs where available, including market transactions and third-party pricing services, or net asset values provided to investors. We do not currently
have any Level 3 input measures and there were no transfers into or out of Level 2 or 3 during 2022 or 2021.
We elected to present our derivative contracts on a gross basis in ourConsolidated Balance Sheets. Had we chosen to present on a net basis, we would have derivatives in a net
asset position of $52 million and derivatives in a net liability position of $100 million.
NOTE 23. RUSSIAN OPERATIONS
On March 17, 2022, the Board indefinitely suspended our operations in Russia due to the ongoing conflict in Ukraine. At the time of suspension, our Russian operations
included a wholly-owned distributor in Russia, an Unconsolidated JV with KAMAZ (a Russian truck manufacturer) and direct sales into Russia from our other business
segments. As a result of the suspension of operations, we evaluated the recoverability of assets in Russia and assessed other potential liabilities. We experienced and expect to
continue to experience an inability to collect customer receivables and may be the subject of litigation as a consequence of our suspension of commercial operations in Russia.
We recorded a charge of $111 million during 2022 related to these actions. As of December 31, 2022, we had no inventory and approximately $4 million of receivables in
Russia, all of which are fully reserved. In addition, we have cash balances of $66 million, some of which will be used to fund ongoing employee, tax and contract settlement
obligations. The following summarizes the costs associated with the suspension of our Russian operations in ourConsolidated Statements of Net Income:
In millions
Inventory write-downs
Accounts receivable reserves
Impairment and other joint venture costs
Other
Russian suspension costs, net of recoveries
Year ended
December 31,
2022
Statement of Net Income Location
$
17
Cost of sales
41
Other operating expense, net
31
22
Equity, royalty and interest income from investees
Other operating expense, net
$
111
We will continue to evaluate the situation as conditions evolve and may take additional actions as deemed necessary in future periods.
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