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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

6 Months Ended

Jun. 30, 2020

The following table summarizes the Company’s interest rate swaps designated as fair value hedges:


		Notional Amount
Hedged Item	Nature of Swap	As of June 30, 2020		As of December 31, 2019		Floating Interest Rate
2012 Senior Notes due 2022	Pay Floating/Receive Fixed	$	330	$	330	3-month USD LIBOR
2017 Senior Notes due 2021	Pay Floating/Receive Fixed	$	500	$	500	3-month USD LIBOR
2017 Senior Notes due 2023	Pay Floating/Receive Fixed	$	250	$	250	3-month USD LIBOR
2017 Senior Notes due 2028	Pay Floating/Receive Fixed	$	500	$	—	3-month USD LIBOR
Total		$	1,580	$	1,080

Gains and Losses on Derivatives Designated as Hedging Instruments

The following table summarizes the impact to the statement of operations of the Company’s interest rate swaps designated as fair value hedges:


Total amounts of financial statement line item presented in the statements of operations in which the effects of fair value hedges are recorded				Amount of income/(loss) recognized in the consolidated statements of operations
						Three Months Ended June 30,									Six Months Ended June 30,
						2020			2019			2020			2019
Interest expense, net				$	(60)		$	(51)		$	(100)		$	(103)

Descriptions	Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps	Interest expense, net	$	5	$	—		$	8		$	—
Fair value changes on interest rate swaps	Interest expense, net	$	2	$	20		$	60		$	31
Fair value changes on hedged debt	Interest expense, net	$	(2)	$	(20)		$	(60)		$	(31)

Amount of Gain/(Loss) Recognized in AOCI on Derivative Net Investment Hedging Relationships (Effectiveness Portion)

The following tables provide information on the gains/(losses) on the Company’s net investment and cash flow hedges:


Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax							Amount of Gain/(Loss) Reclassified from AOCI into Income, net of Tax							Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
			Three Months Ended June 30,							Three Months Ended June 30,						Three Months Ended June 30,
	2020			2019		2020		2019			2020		2019

Cross currency swaps	$	(49)		$	(20)	$	—	$	—		$	14	$	14
Long-term debt	(24)			(9)		—		—			—		—
Total net investment hedges	$	(73)		$	(29)	$	—	$	—		$	14	$	14
Derivatives in Cash Flow Hedging Relationships

Interest rate contracts	(14)			—		—		—			—		—
Total cash flow hedges	$	(14)		$	—	$	—	$	—		$	—	$	—
Total	$	(87)		$	(29)	$	—	$	—		$	14	$	14


Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCI on Derivative, net of Tax							Amount of Gain/(Loss) Reclassified from AOCI into Income, net of Tax							Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
			Six Months Ended June 30,							Six Months Ended June 30,						Six Months Ended June 30,
	2020			2019		2020		2019			2020		2019

Cross currency swaps	$	17		$	(5)	$	—	$	—		$	30	$	22
Long-term debt	(1)			—		—		—			—		—
Total net investment hedges	$	16		$	(5)	$	—	$	—		$	30	$	22
Derivatives in Cash Flow Hedging Relationships

Interest rate contracts	(50)			—		(1)		—			—		—
Total cash flow hedges	$	(50)		$	—	$	(1)	$	—		$	—	$	—
Total	$	(34)		$	(5)	$	(1)	$	—		$	30	$	22

Components of Accumulated Other Comprehensive Income

The cumulative amount of net investment hedge and cash flow hedge gains (losses) remaining in AOCI is as follows:


	Cumulative Gains/(Losses), net of tax
	June 30, 2020		December 31, 2019
Net investment hedges
Cross currency swaps	$	58	$	41
FX forwards	26		26
Long-term debt	(14)		(13)
Total net investment hedges	$	70	$	54
Cash flow hedges
Interest rate contracts	$	(51)	$	(2)
Cross currency swaps	2		2
Total cash flow hedges	(49)		—
Total net gain in AOCI	$	21	$	54

The following tables show changes in AOCI by component (net of tax):



	Three Months Ended
	June 30, 2020																		June 30, 2019
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges			Total
Balance March 31,	$	(92)	$	(35)	$	(570)	$	143	$	(554)	$	(69)	$	—	$	(440)	$	54		$	(455)
Other comprehensive income/(loss) before reclassifications	7		(14)		91		(73)		11		(2)		—		39		(29)			8
Amounts reclassified from AOCI	1		—		—		—		1		1		—		—		—			1
Other comprehensive income/(loss)	8		(14)		91		(73)		12		(1)		—		39		(29)			9
Balance June 30,	$	(84)	$	(49)	$	(479)	$	70	$	(542)	$	(70)	$	—	$	(401)	$	25		$	(446)


	Six Months Ended
	June 30, 2020																				June 30, 2019
Gains/(Losses)	Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total		Pension and Other Retirement Benefits		Cash Flow Hedges		Foreign Currency Translation Adjustments		Net Investment Hedges		Total
Balance December 31,	$	(92)	$	—	$	(401)	$	54	$	(439)	$	(53)	$	—	$	(406)	$	33	$	(426)
Other comprehensive income/(loss) before reclassifications	6		(50)		(78)		16		(106)		(1)		—		5		(5)		(1)
Amounts reclassified from AOCI	2		1		—		—		3		1		—		—		—		1
Adoption of ASU 2018-02	—		—		—		—		—		(17)		—		—		(3)		(20)
Other comprehensive income/(loss)	8		(49)		(78)		16		(103)		(17)		—		5		(8)		(20)
Balance June 30,	$	(84)	$	(49)	$	(479)	$	70	$	(542)	$	(70)	$	—	$	(401)	$	25	$	(446)

Summary of Notional Amounts of Outstanding Foreign Exchange Forwards

The following table summarizes the notional amounts of the Company’s outstanding foreign exchange forwards:


	June 30, 2020						December 31, 2019
Notional amount of currency pair:	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	458	£	369	$	235	£	178
Contracts to sell USD for Japanese Yen	$	23	¥	2,500	$	29	¥	3,200
Contracts to sell USD for Canadian dollars	$	93	C$	130	$	83	$	110
Contracts to sell USD for Singapore dollars	$	79	S$	112	$	41	S$	56
Contracts to sell USD for Euros	$	324	€	291	$	421	€	378
Contracts to sell Euros for GBP	€	—	£	—	€	25	£	21
Contracts to sell USD for Russian Ruble	$	8	₽	580	$	—	₽	—
Contracts to sell USD for Indian Rupee	$	15	₹	1,200	$	—	₹	—

NOTE: € = Euro, £ = British pound, $ = U.S. dollar, ¥ = Japanese Yen, C$ = Canadian dollar, S$= Singapore dollars, ₽= Russian Ruble, ₹= Indian Rupee

Gains and Losses Recognized in Consolidated Statement of Operations on Derivatives Not Designated as Hedging instruments

The following table summarizes the impact to the consolidated statements of operations relating to the net losses on the Company’s derivatives which are not designated as hedging instruments:


Derivatives not designated as accounting hedges	Location on Statement of Operations	Three Months Ended June 30,						Six Months Ended June 30,
				2020		2019		2020		2019
Foreign exchange forwards	Other non-operating expense, net	$	5	$	(10)	$	(35)	$	(9)

Fair Value of Derivative Instruments

The table below shows the classification between assets and liabilities on the Company’s consolidated balance sheets for the fair value of the derivative instrument as well as the carrying value of its non-derivative debt instruments designated and qualifying as net investment hedges:


	Derivative and Non-Derivative Instruments
	Balance Sheet Location	June 30, 2020		December 31, 2019
Assets:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges	Other assets	$	92	$	56
Interest rate swaps designated as fair value hedges	Other assets	87		27
Total derivatives designated as accounting hedges		179		83

Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Other current assets	8		9
Total assets		$	187	$	92
Liabilities:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges	Other liabilities	$	13	$	—

Total derivatives designated as accounting hedges		13		—
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedge	Long-term debt	1,404		1,403
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Accounts payable and accrued liabilities	3		—
Total liabilities		$	1,420	$	1,403

Designated as Hedging Instrument

Derivative [Line Items]

Schedule of Interest Rate Swap

The following table provides information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:


June 30, 2020
	Pay					Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,079	1.43%	$	1,220	3.96%
Pay Floating/Receive Floating	1,381		Based on 3-month EURIBOR	1,580		Based on 3-month USD LIBOR
Total	€	2,460		$	2,800


December 31, 2019
	Pay					Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,079	1.43%	$	1,220	3.96%
Pay Floating/Receive Floating	931		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,010		$	2,300

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5624163-113959

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5580258-113959

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41620-113959

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579245-113959

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41638-113959

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=121590274&loc=d3e41641-113959

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=121590274&loc=SL5579240-113959

+ Details