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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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


		Notional Amount
Hedged Item	Nature of Swap	As of September 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(1)	Pay Floating/Receive Fixed	$	—	$	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
2020 Senior Notes due 2025 (2)	Pay Floating/Receive Fixed	$	300	$	—	6-month USD LIBOR
Total		$	1,380	$	1,080

(1) These interest rates swaps were terminated in conjunction with the repayment of the 2017 Senior Notes due 2021 in the third quarter of 2020.

(2) These interest rate swaps were executed in the third quarter of 2020.

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


September 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	959		Based on 3-month EURIBOR	1,080		Based on 3-month USD LIBOR
Total	€	2,038		$	2,300


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

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 September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019
Interest expense, net		$	(53)	$	(46)	$	(153)	$	(149)

Descriptions	Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps	Interest expense, net	$	6	$	1	$	14	$	1
Fair value changes on interest rate swaps	Interest expense, net	$	(7)	$	2	$	53	$	33
Fair value changes on hedged debt	Interest expense, net	$	7	$	(2)	$	(53)	$	(33)

Summary of Notional Amounts of Outstanding Foreign Exchange Forwards

The following table summarizes the notional amounts of the Company's outstanding forward contract that was designated as a net investment hedge:


	September 30, 2020				December 31, 2019
Notional amount of net investment hedges	Sell		Buy		Sell	Buy
Contract to sell EUR for USD	€	247	$	292	—	—

This forward contract will expire in November 2020.

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


	September 30, 2020				December 31, 2019
Notional amount of currency pair:	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	320	£	254	$	235	£	178
Contracts to sell USD for Japanese Yen	$	10	¥	1,000	$	29	¥	3,200
Contracts to sell USD for Canadian dollars	$	105	C$	140	$	83	C$	110
Contracts to sell USD for Singapore dollars	$	58	S$	79	$	41	S$	56
Contracts to sell USD for Euros	$	530	€	452	$	421	€	378
Contracts to sell Euros for GBP	€	53	£	48	€	25	£	21
Contracts to sell USD for Russian Ruble	$	9	₽	670	$	—	₽	—
Contracts to sell USD for Indian Rupee	$	18	₹	1,350	$	—	₹	—

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

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 AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Three Months Ended September 30,				Three Months Ended September 30,				Three Months Ended September 30,
	2020		2019		2020		2019		2020		2019
FX forward contracts	$	1	$	5	$	—	$	1	$	—	$	—
Cross currency swaps	(98)		79		—		—		10		15
Long-term debt	(46)		18		—		—		—		—
Total net investment hedges	$	(143)	$	102	$	—	$	1	$	10	$	15
Derivatives in Cash Flow Hedging Relationships

Interest rate contracts	(1)		—		(1)		—		—		—
Total cash flow hedges	$	(1)	$	—	$	(1)	$	—	$	—	$	—
Total	$	(144)	$	102	$	(1)	$	1	$	10	$	15


Derivative and Non-Derivative Instruments in Net Investment Hedging Relationships	Amount of Gain/(Loss) Recognized in AOCL on Derivative, net of Tax				Amount of Gain/(Loss) Reclassified from AOCL into Income, net of Tax				Gain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	Nine Months Ended September 30,				Nine Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019		2020		2019
FX forward contracts	$	1	$	5	$	—	$	1	$	—	$	—
Cross currency swaps	(81)		75		—		—		40		37
Long-term debt	(47)		17		—		—		—		—
Total net investment hedges	$	(127)	$	97	$	—	$	1	$	40	$	37
Derivatives in Cash Flow Hedging Relationships

Interest rate contracts	(51)		—		(2)		—		—		—
Total cash flow hedges	$	(51)	$	—	$	(2)	$	—	$	—	$	—
Total	$	(178)	$	97	$	(2)	$	1	$	40	$	37

Components of Accumulated Other Comprehensive Income

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


	Cumulative Gains/(Losses), net of tax
	September 30, 2020		December 31, 2019
Net investment hedges
Cross currency swaps	$	(40)	$	41
FX forwards	27		26
Long-term debt	(60)		(13)
Total net investment hedges	$	(73)	$	54
Cash flow hedges
Interest rate contracts	$	(51)	$	(2)
Cross currency swaps	2		2
Total cash flow hedges	(49)		—
Total net (loss) gain in AOCL	$	(122)	$	54

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



	Three Months Ended
	September 30, 2020										September 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 June 30,	$	(84)	$	(49)	$	(479)	$	70	$	(542)	$	(70)	$	—	$	(401)	$	25	$	(446)
Other comprehensive income/(loss) before reclassifications	(7)		—		186		(143)		36		—		—		(193)		102		(91)
Amounts reclassified from AOCL	2		—		—		—		2		1		—		—		(1)		—
Other comprehensive income/(loss)	(5)		—		186		(143)		38		1		—		(193)		101		(91)
Balance September 30,	$	(89)	$	(49)	$	(293)	$	(73)	$	(504)	$	(69)	$	—	$	(594)	$	126	$	(537)


	Nine Months Ended
	September 30, 2020										September 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	(1)		(50)		108		(127)		(70)		(1)		—		(188)		97		(92)
Amounts reclassified from AOCL	4		1		—		—		5		2		—		—		(1)		1
Adoption of ASU 2018-02	—		—		—		—		—		(17)		—		—		(3)		(20)
Other comprehensive income/(loss)	3		(49)		108		(127)		(65)		(16)		—		(188)		93		(111)
Balance September 30,	$	(89)	$	(49)	$	(293)	$	(73)	$	(504)	$	(69)	$	—	$	(594)	$	126	$	(537)

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 September 30,				Nine Months Ended September 30,
		2020		2019		2020		2019
Foreign exchange forwards	Other non-operating income, net	$	36	$	(26)	$	1	$	(35)

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	September 30, 2020		December 31, 2019
Assets:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges	Other assets	$	9	$	56
Interest rate swaps designated as fair value hedges	Other assets	63		27
FX forwards designated as net investment hedges	Other current assets	2		—
Total derivatives designated as accounting hedges		74		83

Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Other current assets	5		9
Total assets		$	79	$	92
Liabilities:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedges	Other liabilities	$	63	$	—
Interest rate swaps designated as fair value hedges	Other liabilities	1		—
Total derivatives designated as accounting hedges		64		—
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedge	Long-term debt	1,465		1,403
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilities	Accounts payable and accrued liabilities	5		—
Total liabilities		$	1,534	$	1,403

- 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
-Paragraph 2
-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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-Section 50
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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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-Topic 815
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Reference 7: 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=d3e41641-113959

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
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-Topic 815
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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