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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 3 Months Ended
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
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.
Derivatives and non-derivative instruments designated as accounting hedges:
Fair Value Hedges
Interest Rate Swaps
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, 6-month LIBOR, and SOFR. 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 ItemNature of Swap
As of
March 31, 2022
As of
December 31, 2021
Floating Interest Rate
2017 Senior Notes due 2023Pay Floating/Receive Fixed$250 $250 3-month USD LIBOR
2017 Senior Notes due 2028Pay Floating/Receive Fixed$500 $500 3-month USD LIBOR
2020 Senior Notes due 2025Pay Floating/Receive Fixed$300 $300 6-month USD LIBOR
2014 Senior Notes due 2044Pay Floating/Receive Fixed$300 $300 3-month USD LIBOR
2018 Senior Notes due 2048Pay Floating/Receive Fixed$300 $300 3-month USD LIBOR
2019 Senior Notes due 2029 (1)
Pay Floating/Receive Fixed$400 $— SOFR
Total$2,050 $1,650 
(1) Executed in the first quarter of 2022.
Refer to Note 14 for information on the cumulative amount of fair value hedging adjustments included in the carrying amount of the above hedged items.
The following table summarizes the impact to the statements of operations of the Company’s interest rate swaps designated as fair value hedges:
Total amounts of financial statement line item presented in the statements of operations in which the effects of fair value hedges are recordedAmount of income/(loss) recognized in the consolidated statements of operations
Three Months Ended March 31,
20222021
Interest expense, net$(53)$(7)

Descriptions		Location on Consolidated Statements of Operations
Net interest settlements and accruals on interest rate swaps
Interest expense, net
$6 $5 
Fair value changes on interest rate swapsInterest expense, net$(85)$(24)
Fair value changes on hedged debtInterest expense, net$85 $24 
Net investment hedges
Debt designated as net investment hedges
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.
Cross currency swaps designated as net investment hedges
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:
March 31, 2022
PayReceive
Nature of SwapNotional AmountWeighted Average Interest RateNotional AmountWeighted Average Interest Rate
Pay Fixed/Receive Fixed€909 2.16%$1,050 4.45%
Pay Floating/Receive Floating1,179 Based on 3-month EURIBOR1,350 Based on 3-month USD LIBOR
Pay Floating/Receive Floating351 Based on 3-month EURIBOR400 Based on SOFR
Total€2,439 $2,800 
December 31, 2021
PayReceive
Nature of SwapNotional AmountWeighted Average Interest RateNotional AmountWeighted Average Interest Rate
Pay Fixed/Receive Fixed€909 2.16%$1,050 4.45%
Pay Floating/Receive Floating1,179 Based on 3-month EURIBOR1,350 Based on 3-month USD LIBOR
Total€2,088 $2,400 
As of March 31, 2022 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,
2023€442 
2024€443 
2026€450 
2027€246 
2028€507 
2029€351 
Total€2,439 
Cash Flow Hedges
Interest Rate Forward Contracts
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 $68 million, which was recognized in AOCL. The loss on the Treasury rate lock will be reclassified from AOCL to earnings in the same period that the hedged transaction (i.e. interest payments on the 3.25% 2020 Senior Notes, due 2050) impacts earnings.
The following tables provide information on the gains/(losses) on the Company’s net investment and cash flow hedges:
Derivative and Non-Derivative Instruments in Net Investment Hedging RelationshipsAmount of Gain/(Loss) Recognized in AOCL on Derivative, net of TaxAmount of Gain/(Loss) Reclassified from AOCL into Income, net of TaxGain/(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
Three Months Ended
March 31,		Three Months Ended
March 31,		Three Months Ended
March 31,
202220212022202120222021
FX forward contracts$— $16 $— $1 $— $— 
Cross currency swaps24 72 — — 10 10 
Long-term debt23 45 — — — — 
Total net investment hedges$47 $133 $— $1 $10 $10 
Derivatives in Cash Flow Hedging Relationships
Interest rate contracts$— $— $(1)$(1)$— $— 
Total cash flow hedges$— $— $(1)$(1)$— $— 
Total$47 $133 $(1)$— $10 $10 
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
March 31, 2022December 31, 2021
Net investment hedges
Cross currency swaps$43 $19 
FX forwards29 29 
Long-term debt(4)(27)
Total net investment hedges$68 $21 
Cash flow hedges
Interest rate contracts$(48)$(49)
Cross currency swaps2 2 
Total cash flow hedges(46)(47)
Total net gain (loss) in AOCL$22 $(26)
Derivatives not designated as accounting hedges:
Foreign exchange forwards
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 July 2022.
The following table summarizes the notional amounts of the Company’s outstanding foreign exchange forwards:
March 31, 2022December 31, 2021
Notional amount of currency pair:SellBuySellBuy
Contracts to sell USD for GBP$183 £135 $126 £92 
Contracts to sell USD for Japanese yen$22 ¥2,500 $22 ¥2,500 
Contracts to sell USD for Canadian dollars$106 C$133 $120 C$150 
Contracts to sell USD for Singapore dollars$74 S$100 $67 S$90 
Contracts to sell USD for euros$431 €380 $364 €315 
Contracts to sell USD for Russian ruble$26 ₽2,400 $16 ₽1,200 
Contracts to sell USD for Indian rupee$24 ₹1,800 $7 ₹500 
Contracts to sell GBP for USD£— $— £172 $231 
NOTE: € = euro, £ = British pound, $ = U.S. dollar, ¥ = Japanese yen, C$ = Canadian dollar, S$= Singapore dollars, ₽= Russian ruble, ₹= Indian rupee
The following table summarizes the impact to the consolidated statements of operations relating to the net losses on the Company’s derivatives which are not designated as hedging instruments:
Derivatives not designated as accounting hedgesLocation on Consolidated Statements of OperationsThree Months Ended
March 31,
20222021
FX forwardsOther non-operating income, net$(19)$(6)
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 LocationMarch 31, 2022December 31, 2021
Assets:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedgesOther current assets$9 $— 
Cross-currency swaps designated as net investment hedgesOther assets66 53 
Interest rate swaps designated as fair value hedgesOther current assets2 — 
Interest rate swaps designated as fair value hedgesOther assets— 13 
Total derivatives designated as accounting hedges77 66 
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesOther current assets1 1 
Total assets$78 $67 
Liabilities:
Derivatives designated as accounting hedges:
Cross-currency swaps designated as net investment hedgesOther liabilities$6 $17 
Interest rate swaps designated as fair value hedgesOther liabilities97 23 
Total derivatives designated as accounting hedges103 40 
Non-derivatives designated as accounting hedges:
Long-term debt designated as net investment hedgeLong-term debt1,391 1,421 
Derivatives not designated as accounting hedges:
FX forwards on certain assets and liabilitiesAccounts payable and accrued liabilities22 12 
Total liabilities$1,516 $1,473