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Accounting for Derivative Instruments and Hedging Activities (Notes)
 9 Months Ended
Sep. 30, 2019
Accounting for Derivative Instruments and Hedging Activities [Abstract]  
Accounting for Derivative Instruments and Hedging Activities Accounting for Derivative Instruments and Hedging Activities

The Company uses derivative instruments to manage foreign exchange risk on the Sterling Notes, and does not hold or issue derivative instruments for speculative trading purposes.

Cross-currency derivative instruments are used to effectively convert £1.275 billion aggregate principal amount of fixed-rate British pound sterling denominated debt, including annual interest payments and the payment of principal at maturity, to fixed-rate U.S. dollar denominated debt. The cross-currency swaps have maturities of June 2031 and July 2042. The Company is required to post collateral on the cross-currency derivative instruments when the derivative contracts are in a liability position. In April 2019, the Company entered into a collateral holiday agreement for 60% of both the 2031 and 2042 cross-currency swaps, which eliminates the requirement to post collateral for three years, as well as a ten year collateral cap on the remaining 40% of the cross-currency swaps which limits the required collateral posting on that 40% of the cross-currency swaps to $150 million. The fair value of the Company's cross-currency derivatives was $409 million and $237 million and is included in other long-term liabilities on its consolidated balance sheets as of September 30, 2019 and December 31, 2018, respectively.

The Company’s derivative instruments are not designated as hedges and are marked to fair value each period, with the impact recorded as a gain or loss on financial instruments, net in the consolidated statements of operations. While these derivative instruments are not designated as hedges for accounting purposes, management continues to believe such instruments are closely correlated with the respective debt, thus managing associated risk.

The effect of financial instruments on the consolidated statements of operations is presented in the table below.
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2019
 
2018
 
2019
 
2018
Gain (Loss) on Financial Instruments, Net:
 
 
 
 
 
 
 
Change in fair value of cross-currency derivative instruments
$
(86
)
 
$
(10
)
 
$
(172
)
 
$
(63
)
Foreign currency remeasurement of Sterling Notes to U.S. dollars
52

 
22

 
56

 
63

 
$
(34
)
 
$
12

 
$
(116
)
 
$
—