The Company has foreign currency exposures throughout Europe, Greater Asia, Canada and Latin America. Transactional currency exposures that arise from entering into transactions, generally on an intercompany basis, in non-hyperinflationary countries that are denominated in currencies other than the functional currency are mitigated primarily through the use of forward contracts. In order to mitigate foreign currency exposure relating to its investments in certain foreign subsidiaries, the Company has hedged the currency risk associated with those investments with certain instruments such as foreign currency-denominated debt and cross-currency swaps, which are designated as net investment hedges, as well as currency exchange contracts.


(Millions of dollars)	Hedge Designation	2021		2020
Foreign exchange contracts (a)	Undesignated	$	2,735	$	2,519
Foreign currency-denominated debt (b)	Net investment hedges	2,543		1,522
Cross-currency swaps (c)	Net investment hedges	1,958		2,971

(a)Represent hedges of transactional foreign exchange exposures resulting primarily from intercompany payables and receivables. Gains and losses on these instruments are recognized immediately in income. These gains and losses are largely offset by gains and losses on the underlying hedged items, as well as the hedging costs associated with the derivative instruments. Net amounts recognized in Other (expense) income, net, during the years ending September 30, 2021, 2020 and 2019 are detailed in Note 18.

(b)Represents foreign currency-denominated long-term notes outstanding which were effective as economic hedges of net investments in certain of the Company's foreign subsidiaries.

Net gains or losses relating to the net investment hedges, which are attributable to changes in the foreign currencies to U.S. dollar spot exchange rates, are recorded as accumulated foreign currency translation in Other comprehensive income (loss). Upon the termination of a net investment hedge, any net gain or loss included in Accumulated other comprehensive income (loss) relative to the investment hedge remains until the foreign subsidiary investment is disposed of or is substantially liquidated.

Net gains (losses) recorded to Accumulated other comprehensive income (loss) relating to the Company's net investment hedges as of September 30, 2021, 2020 and 2019 were as follows:


(Millions of dollars)	2021		2020		2019
Foreign currency-denominated debt	$	32	$	(106)	$	138
Cross-currency swaps (a)	(21)		(109)		73
Foreign currency forward contract (b)	—		—		(9)

The Company uses a mix of fixed and variable rate debt, which is further discussed in Note 15, to manage its interest rate exposure, and periodically uses interest rate swaps to manage such exposures. Under these interest rate swaps, the Company exchanges, at specified intervals, the difference between fixed and floating

Changes in the fair value of the interest rate swaps designated as cash flow hedges (i.e., hedging the exposure to variability in expected future cash flows that is attributable to a particular risk) are recorded in Other comprehensive income (loss). If interest rate derivatives designated as cash flow hedges are terminated, the balance in Accumulated other comprehensive income (loss) attributable to those derivatives is reclassified into earnings over the remaining life of the hedged debt. The net realized loss related to terminated interest rate swaps expected to be reclassified and recorded in Interest expense within the next 12 months is $1 million, net of tax. The amounts reclassified from accumulated other comprehensive income relating to cash flow hedges during 2021, 2020 and 2019 were not material to the Company's consolidated financial results.

The Company recorded net after-tax gains (losses) of $72 million and $(75) million in Other comprehensive income (loss) relating to interest rate-related cash flow hedges during the years ended September 30, 2021 and 2020, respectively. The amounts recognized in other comprehensive income relating to interest rate hedges during the year ended 2019 were immaterial.

For interest rate swaps designated as fair value hedges (i.e., hedges against the exposure to changes in the fair value of an asset or a liability or an identified portion thereof that is attributable to a particular risk), changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates. The amounts recorded during the years ended September 30, 2021 and 2020 for changes in the fair value of these hedges were immaterial to the Company's consolidated financial results.


(Millions of dollars)	Hedge Designation	2021		2020
Interest rate swaps (a)	Fair value hedges	$	700	$	375
Forward starting interest rate swaps (b)	Cash flow hedges	1,000		1,500

(a)Represents fixed-to-floating interest rate swap agreements the Company entered into to convert the interest payments on certain long-term notes from the fixed rate to a floating interest rate based on LIBOR. In fiscal year 2021, certain interest rate swaps were terminated at an immaterial net gain, concurrently with the redemption of the 3.125% notes due November 8, 2021.

(b)Represents interest rate derivatives entered into to mitigate exposure to interest rate risk related to future debt issuances. Concurrently with the issuance of senior unsecured U.S. notes in the second quarter of fiscal year 2021, the notional amount of $500 million of the Company's outstanding forward starting interest rate swaps were terminated at an immaterial net loss.

The Company purchases resins, which are oil-based components used in the manufacture of certain products. Significant increases in world oil prices that lead to increases in resin purchase costs could impact future operating results. From time to time, the Company has managed price risks associated with these commodity purchases through commodity derivative forward contracts. The Company had no outstanding commodity derivative forward contracts at September 30, 2021 and 2020.