The Company is exposed to global market risks, including risks from changes in FX rates and changes in interest rates. Accordingly, the Company uses derivatives in certain instances to manage the aforementioned financial exposures that occur in the normal course of business. The Company does not hold or issue derivatives for speculative purposes.

The Company has entered into interest rate swaps to convert the fixed interest rate on certain of its long-term debt to a floating interest rate based on the 3-month LIBOR and 6-month LIBOR. The purpose of these hedges is to mitigate the risk associated with changes in the fair value of the long-term debt, thus the Company has designated these swaps as fair value hedges. The fair value of the swaps is adjusted quarterly with a corresponding adjustment to the carrying value of the debt. The changes in the fair value of the swaps and the underlying hedged item generally offset and the net cash settlements on the swaps are recorded each period within interest expense, net in the Company’s consolidated statements of operations.

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, 2021		As of December 31, 2020		Floating Interest Rate
2012 Senior Notes due 2022	Pay Floating/Receive Fixed	$	330	$	330	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	$	500	3-month USD LIBOR
2020 Senior Notes due 2025	Pay Floating/Receive Fixed	$	300	$	300	6-month USD LIBOR
2014 Senior Notes due 2044	Pay Floating/Receive Fixed	$	300	$	—	3-month USD LIBOR
2018 Senior Notes due 2048	Pay Floating/Receive Fixed	$	300	$	—	3-month USD LIBOR
Total		$	1,980	$	1,380

The following table summarizes the impact to the statements 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,
		2021		2020		2021		2020
Interest expense, net		$	(53)	$	(53)	$	(109)	$	(153)

Descriptions	Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps	Interest expense, net	$	6	$	6	$	17	$	14
Fair value changes on interest rate swaps	Interest expense, net	$	(16)	$	(7)	$	(40)	$	53
Fair value changes on hedged debt	Interest expense, net	$	16	$	7	$	40	$	(53)

The Company has designated €500 million of the 2015 Senior Notes Due 2027 and €750 million of the 2019 Senior Notes due 2030 as net investment hedges to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. These hedges are designated as accounting hedges under the applicable sections of ASC Topic 815 and will end upon the repayment of the notes in 2027 and 2030, respectively, unless terminated early at the discretion of the Company.

The Company enters into cross-currency swaps to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD exchange rates. The following table provides information on the cross-currency swaps designated as net investment hedges under ASC Topic 815:


September 30, 2021
	Pay			Receive
Nature of Swap	Notional Amount		Weighted Average Interest Rate	Notional Amount		Weighted Average Interest Rate
Pay Fixed/Receive Fixed	€	1,060	2.15%	$	1,220	4.45%
Pay Floating/Receive Floating	1,466		Based on 3-month EURIBOR	1,680		Based on 3-month USD LIBOR
Total	€	2,526		$	2,900


December 31, 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

As of September 30, 2021 these hedges will expire and the notional amounts will be settled as follows unless terminated early at the discretion of the Company:


Years Ending December 31,

2022	€	438
2023	€	442
2024	€	443
2026	€	450
2027	€	246
2028	€	507
Total	€	2,526

The Company also entered into forward contracts to mitigate FX exposure related to a portion of the Company’s euro net investment in certain foreign subsidiaries against changes in euro/USD and GBP/euro exchange rates. The following table summarizes the notional amounts of the Company's outstanding forward contracts that were designated as net investment hedges:


Notional amount of net investment hedges	September 30, 2021				December 31, 2020
	Sell		Buy		Sell		Buy
Contract to sell EUR for USD	€	—	$	—	€	524	$	627
Contract to sell GBP for EUR	£	—	€	—	£	134	€	148

In January 2020, the Company entered into $300 million notional amount treasury rate locks with an average locked-in U.S. 30-year Treasury rate of 2.0103%, which were designated as cash flow hedges and used to manage the Company’s interest rate risk during the period prior to an anticipated issuance of 30-year debt. The treasury lock interest rate forward contracts matured on April 30, 2020, resulting in a cumulative loss of $68 million, which was recognized in AOCL. The loss on the Treasury rate lock will be reclassified from AOCL to earnings in the same period that the hedged transaction (i.e. interest payments on the 3.25% 2020 Senior Notes, due 2050) impacts earnings.

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,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	2	$	1	$	—	$	—	$	—	$	—
Cross currency swaps	44		(98)		—		—		8		10
Long-term debt	26		(46)		—		—		—		—
Total net investment hedges	$	72	$	(143)	$	—	$	—	$	8	$	10
Derivatives in Cash Flow Hedging Relationships

Interest rate contracts	1		(1)		(1)		(1)		—		—

Total cash flow hedges	1		(1)		(1)		(1)		—		—
Total	$	73	$	(144)	$	(1)	$	(1)	$	8	$	10


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,
	2021		2020		2021		2020		2021		2020
FX forward contracts	$	18	$	1	$	1	$	—	$	—	$	—
Cross currency swaps	98		(81)		—		—		27		40
Long-term debt	61		(47)		—		—		—		—
Total net investment hedges	$	177	$	(127)	$	1	$	—	$	27	$	40
Derivatives in Cash Flow Hedging Relationships

Interest rate contracts	—		(51)		(2)		(2)		—		—

Total cash flow hedges	—		(51)		(2)		(2)		—		—
Total	$	177	$	(178)	$	(1)	$	(2)	$	27	$	40


	Cumulative Gains/(Losses), net of tax
	September 30, 2021		December 31, 2020
Net investment hedges
Cross currency swaps	$	(26)	$	(124)
FX forwards	29		12
Long-term debt	(47)		(108)
Total net investment hedges	$	(44)	$	(220)
Cash flow hedges
Interest rate contracts	$	(49)	$	(51)
Cross currency swaps	2		2
Total cash flow hedges	(47)		(49)
Total net loss in AOCL	$	(91)	$	(269)

The Company also enters into foreign exchange forward contracts to mitigate the change in fair value on certain assets and liabilities denominated in currencies other than a subsidiary’s functional currency. These forward contracts are not designated as accounting hedges under the applicable sections of Topic 815 of the ASC. Accordingly, changes in the fair value of these contracts are recognized immediately in other non-operating income, net in the Company’s consolidated statements of operations along with the FX gain or loss recognized on the assets and liabilities denominated in a currency other than the subsidiary’s functional currency. These contracts have expiration dates at various times through January 2022.

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


	September 30, 2021				December 31, 2020
Notional amount of currency pair:	Sell		Buy		Sell		Buy
Contracts to sell USD for GBP	$	190	£	138	$	295	£	222
Contracts to sell USD for Japanese yen	$	18	¥	2,000	$	15	¥	1,600
Contracts to sell USD for Canadian dollars	$	120	C$	150	$	107	C$	140
Contracts to sell USD for Singapore dollars	$	66	S$	90	$	59	S$	79
Contracts to sell USD for euros	$	282	€	240	$	447	€	376
Contracts to sell Euros for GBP	€	—	£	—	€	135	£	121
Contracts to sell USD for Russian ruble	$	13	₽	1,000	$	13	₽	1,000
Contracts to sell USD for Indian rupee	$	18	₹	1,350	$	18	₹	1,350

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 Consolidated Statements of Operations	Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020
Foreign exchange forwards	Other non-operating income, net	$	(18)	$	36	$	(25)	$	1
Foreign exchange forwards relating to RMS acquisition(1)	Other non-operating income, net	$	(13)	$	—	$	(13)	$	—

(1) The Company entered into a forward contract to sell $1,675 million for €1,200 to hedge a portion of the GBP denominated RMS purchase price. The contract was terminated on September 14, 2021 and resulted in a $13 million loss.