Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)

v3.20.2
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)
 9 Months Ended
Sep. 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 nine months ended September 30, 2020 and 2019 (in millions):


 Three Months Ended
September 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 $ —  $ 13  $ —  $ (2)
Derivatives designated as hedging instruments —  (13) —  2 
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 38  —  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 $ 38  $ (3) $ 62  $ (3)
Nine Months Ended
September 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 $ —  $ (21) $ —  $ (47)
Derivatives designated as hedging instruments —  21  —  47 
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income —  (9) —  (12)
Foreign Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income 173  —  124  — 
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 $ 173  $ (9) $ 124  $ (12)
Schedule of Notional Amounts of Outstanding Derivative Positions
As of September 30, 2020 and December 31, 2019, the notional amounts of our outstanding derivative positions were as follows (in millions):
  September 30, 2020 December 31, 2019
Currency hedges:
Euro EUR 3,711  EUR 4,571 
British Pound Sterling GBP 1,345  GBP 1,494 
Canadian Dollar CAD 1,269  CAD 1,402 
Hong Kong Dollar HKD 3,479  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 September 30,
2020		 December 31,
2019		 September 30,
2020		 December 31,
2019
Derivatives designated as hedges:
Foreign exchange contracts Other current assets Level 2 $ 121  $ 138  $ 116  $ 131 
Interest rate contracts Other current assets Level 2 11  2  11  2 
Foreign exchange contracts Other non-current assets Level 2 138  252  124  236 
Interest rate contracts Other non-current assets Level 2 33  21  30  20 
Derivatives not designated as hedges:
Foreign exchange contracts Other current assets Level 2 2  7  2  7 
Interest rate contracts Other current assets Level 2 7  —  6  — 
Interest rate contracts Other non-current assets Level 2 —  12  —  11 
Total Asset Derivatives $ 312  $ 432  $ 289  $ 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 September 30,
2020		 December 31,
2019		 September 30,
2020		 December 31,
2019
Derivatives designated as hedges:
Foreign exchange contracts Other current liabilities Level 2 $ 5  $ 7  $ —  $ — 
Foreign exchange contracts Other non-current liabilities Level 2 14  16  —  — 
Interest rate contracts Other non-current liabilities Level 2 14  11  11  10 
Derivatives not designated as hedges:
Foreign exchange contracts Other current liabilities Level 2 1  —  1  — 
Interest rate contracts Other current liabilities Level 2 4  —  3  — 
Interest rate contracts Other non-
current liabilities		 Level 2 —  3  —  2 
Total Liability Derivatives $ 38  $ 37  $ 15  $ 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 September 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
September 30, 2020 September 30, 2020 December 31, 2019 December 31, 2019
Long-term debt and finance leases $ 2,828  $ 55  $ 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 nine months ended September 30, 2020 and 2019 for those derivatives designated as cash flow hedges (in millions):

Three Months Ended September 30:
Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives
2020 2019
Interest rate contracts $ (3) $ (1)
Foreign exchange contracts (218) 331 
Total $ (221) $ 330 
Nine Months Ended September 30:
Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives
2020 2019
Interest rate contracts $ (6) $ 10 
Foreign exchange contracts 49  457 
Total $ 43  $ 467 
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 nine months ended September 30, 2020 and 2019 for those instruments designated as net investment hedges (in millions):
Three Months Ended September 30:
Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt
2020 2019
Foreign denominated debt $ (139) $ 191 
Total $ (139) $ 191 
Nine Months Ended September 30:
Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt
2020 2019
Foreign denominated debt $ (92) $ 197 
Total $ (92) $ 197 
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 nine months ended September 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 September 30:
Interest rate contracts Interest expense $ (2) $ (2)
Foreign exchange contracts Investment income and other 34  (39)
Total $ 32  $ (41)
Nine Months Ended September 30:
Interest rate contracts Interest expense $ (6) $ (6)
Foreign exchange contracts Investment income and other (15) (59)
Total $ (21) $ (65)