Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESFor further information on the Company’s derivative and hedge accounting policies, see Note 1—General and Summary of Significant Accounting Policies—Derivative Instruments and Hedging Activities of Item 8.—Financial Statements and Supplementary Data in the 2019 Form 10-K.

Volume of Activity — The following tables present the Company’s maximum notional (in millions) over the remaining contractual period by type of derivative as of September 30, 2020, regardless of whether they are in qualifying cash flow hedging relationships, and the dates through which the maturities for each type of derivative range:

Interest Rate and Foreign Currency Derivatives	Maximum Notional Translated to USD		Latest Maturity
Interest rate (LIBOR and EURIBOR)	$	4,750	2047
Cross-currency swaps (Chilean Unidad de Fomento and Chilean peso)	191		2029
Foreign Currency:
Argentine peso	103		2026
Chilean peso	129		2022
Colombian peso	133		2022
Mexican peso	217		2020
Euro	131		2023
Others, primarily with weighted average remaining maturities of a year or less	34		2022

Commodity Derivatives	Maximum Notional	Latest Maturity
Natural Gas (in MMBtu)	30	2021
Power (in MWhs)	10	2024
Coal (in Tons or Metric Tons)	9	2027

Accounting and Reporting — Assets and Liabilities — The following tables present the fair value of assets and liabilities related to the Company’s derivative instruments as of the periods indicated (in millions):

Fair Value	September 30, 2020						December 31, 2019
Assets	Designated		Not Designated		Total		Designated		Not Designated		Total
Interest rate derivatives	$	3	$	—	$	3	$	31	$	—	$	31
Foreign currency derivatives	20		80		100		31		79		110
Commodity derivatives	—		22		22		—		30		30
Total assets	$	23	$	102	$	125	$	62	$	109	$	171
Liabilities
Interest rate derivatives	$	673	$	9	$	682	$	323	$	5	$	328
Cross-currency derivatives	27		—		27		21		—		21
Foreign currency derivatives	14		23		37		22		22		44
Commodity derivatives	—		24		24		2		29		31
Total liabilities	$	714	$	56	$	770	$	368	$	56	$	424

	September 30, 2020				December 31, 2019
Fair Value	Assets		Liabilities		Assets		Liabilities
Current	$	68	$	335	$	72	$	126
Noncurrent	57		435		99		298
Total	$	125	$	770	$	171	$	424

Credit Risk-Related Contingent Features (1)	September 30, 2020
Present value of liabilities subject to collateralization	$	19
Cash collateral held by third parties or in escrow	19

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(1)     Based on the credit rating of certain subsidiaries

Earnings and Other Comprehensive Income (Loss) — The following table presents the pre-tax gains (losses) recognized in AOCL and earnings related to all derivative instruments for the periods indicated (in millions):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cash flow hedges
Gains (losses) recognized in AOCL
Interest rate derivatives	$	20	$	(186)	$	(532)	$	(450)
Equity in earnings	—		—		(43)		—
Cross-currency derivatives	11		(19)		(25)		(10)
Foreign currency derivatives	—		(20)		(14)		(14)
Commodity derivatives	—		3		4		2
Total	$	31	$	(222)	$	(610)	$	(472)
Gains (losses) reclassified from AOCL into earnings
Interest rate derivatives	$	(38)	$	(8)	$	(83)	$	(25)
Cross-currency derivatives	4		(11)		(11)		(5)
Foreign currency derivatives	(3)		(4)		(16)		(15)
Commodity derivatives	—		—		2		—
Total	$	(37)	$	(23)	$	(108)	$	(45)
Gains reclassified from AOCL to earnings due to discontinuance of hedge accounting (1)	$	—	$	—	$	—	$	2
Gains (losses) recognized in earnings related to
Not designated as hedging instruments:
Interest rate derivatives	$	—	$	(2)	$	(1)	$	(6)
Foreign currency derivatives	8		(39)		30		(33)
Commodity derivatives and other	(56)		(2)		(50)		2
Total	$	(48)	$	(43)	$	(21)	$	(37)

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(1)     Cash flow hedge was discontinued on a cross-currency swap because the underlying debt was prepaid.

AOCL is expected to decrease pre-tax income from continuing operations for the twelve months ended September 30, 2021 by $108 million, primarily due to interest rate derivatives.