Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)

v3.20.2
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)
 6 Months Ended
Jun. 30, 2020
Derivative Instruments, Gain (Loss) [Line Items]  
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location [Table Text Block]
The following table indicates the amount of gains and (losses) that have been recognized in the income statement for the fair value and cash flow hedges, as well as the associated gain or (loss) for the underlying hedged item for fair value hedges for the three and six months ended June 30, 2020 and 2019 (in millions):


 Three Months Ended
June 30,
Location and Amount of Gain (Loss) Recognized in Income
on Fair Value and Cash Flow Hedging Relationships		 2020 2019
Revenue Interest Expense Revenue Interest Expense
Gain or (loss) on fair value hedging relationships:
Interest Contracts:
Hedged items $ —    $ 2    $ —    $ (30)  
Derivatives designated as hedging instruments —    (2)   —    30   
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income —    (3)   —    (3)  
Foreign Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income 71    —    39    —   
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded $ 71    $ (3)   $ 39    $ (3)  
Six Months Ended
June 30,


2020 2019
Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Revenue Interest Expense Revenue Interest Expense
Gain or (loss) on fair value hedging relationships:
Interest Contracts:
Hedged items $ —    $ (34)   $ —    $ (45)  
Derivatives designated as hedging instruments —    34    —    45   
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income —    (6)   —    (9)  
Foreign Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income 135    —    62    —   
Total amounts of income and expense line items presented in the statement of income in which the effects of fair value or cash flow hedges are recorded $ 135    $ (6)   $ 62    $ (9)  
Schedule of Notional Amounts of Outstanding Derivative Positions
As of June 30, 2020 and December 31, 2019, the notional amounts of our outstanding derivative positions were as follows (in millions):
  June 30, 2020 December 31, 2019
Currency hedges:
Euro EUR 3,781    EUR 4,571   
British Pound Sterling GBP 1,308    GBP 1,494   
Canadian Dollar CAD 1,279    CAD 1,402   
Hong Kong Dollar HKD 3,464    HKD 3,327   
Interest rate hedges:
Fixed to Floating Interest Rate Swaps USD 3,250    USD 3,674   
Floating to Fixed Interest Rate Swaps USD 778    USD 778   
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
Fair Value Hierarchy Level Gross Amounts Presented in Consolidated Balance Sheets Net Amounts if Right of
Offset had been Applied
Asset Derivatives Balance Sheet Location June 30,
2020		 December 31,
2019		 June 30,
2020		 December 31,
2019
Derivatives designated as hedges:
Foreign exchange contracts Other current assets Level 2 $ 202    $ 138    $ 201    $ 131   
Interest rate contracts Other current assets Level 2 20    2    20    2   
Foreign exchange contracts Other non-current assets Level 2 300    252    299    236   
Interest rate contracts Other non-current assets Level 2 37    21    33    20   
Derivatives not designated as hedges:
Foreign exchange contracts Other current assets Level 2 3    7    3    7   
Interest rate contracts Other current assets Level 2 12    —    10    —   
Interest rate contracts Other non-current assets Level 2 —    12    —    11   
Total Asset Derivatives $ 574    $ 432    $ 566    $ 407   

Fair Value Hierarchy Level Gross Amounts Presented in
Consolidated Balance Sheets		 Net Amounts if Right of
Offset had been Applied
Liability Derivatives Balance Sheet Location June 30,
2020		 December 31,
2019		 June 30,
2020		 December 31,
2019
Derivatives designated as hedges:
Foreign exchange contracts Other current liabilities Level 2 $ 1    $ 7    $ —    $ —   
Foreign exchange contracts Other non-current liabilities Level 2 1    16    —    —   
Interest rate contracts Other non-current liabilities Level 2 14    11    10    10   
Derivatives not designated as hedges:
Interest rate contracts Other current liabilities Level 2 8    —    6    —   
Interest rate contracts Other non-
current liabilities		 Level 2 —    3    —    2   
Total Liability Derivatives $ 24    $ 37    $ 16    $ 12   
The following table indicates the amounts that were recorded in the consolidated balance sheets related to cumulative basis adjustments for fair value hedges as of June 30, 2020 and December 31, 2019 (in millions):
Line Item in the Consolidated Balance Sheets in Which the Hedged Item is Included Carrying Amount
of Hedged Liabilities		 Cumulative Amount
of Fair Value Hedge
Adjustments		 Carrying Amount
of Hedged Liabilities		 Cumulative Amount
of Fair Value Hedge
Adjustments
June 30, 2020 June 30, 2020 December 31, 2019 December 31, 2019
Long-term debt and finance leases $ 2,840    $ 68    $ 3,234    $ 40   
Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)
The following table indicates the amount of gains and (losses) that have been recognized in AOCI for the three and six months ended June 30, 2020 and 2019 for those derivatives designated as cash flow hedges (in millions):

Three Months Ended June 30:
Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives
2020 2019
Interest rate contracts $ (2)   $ (2)  
Foreign exchange contracts (80)   22   
Total $ (82)   $ 20   
Six Months Ended June 30:
Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives
2020 2019
Interest rate contracts $ (3)   $ 11   
Foreign exchange contracts 267    126   
Total $ 264    $ 137   
The following table indicates the amount of gains and (losses) that have been recognized in AOCI within foreign currency translation adjustment for the three and six months ended June 30, 2020 and 2019 for those instruments designated as net investment hedges (in millions):
Three Months Ended June 30:
Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt
2020 2019
Foreign denominated debt $ (103)   $ (67)  
Total $ (103)   $ (67)  
Six Months Ended June 30:
Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt
2020 2019
Foreign denominated debt $ 47    $ 6   
Total $ 47    $ 6   
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
The following is a summary of the amounts recorded in the statements of consolidated income related to fair value changes and settlements of these interest rate swaps, foreign currency forward and investment market price forward contracts not designated as hedges for the three and six months ended June 30, 2020 and 2019 (in millions):
Derivative Instruments Not Designated in
Hedging Relationships		 Location of Gain (Loss)
Recognized in Income		 Amount of Gain (Loss) Recognized in Income
2020 2019
Three Months Ended June 30:
Interest rate contracts Interest expense $ (2)   $ (2)  
Foreign exchange contracts Investment income and other 2    (19)  
Total $ —    $ (21)  
Six Months Ended June 30:
Interest rate contracts Interest expense $ (4)   $ (4)  
Foreign exchange contracts Investment income and other (49)   (20)  
Total $ (53)   $ (24)