Quarterly report pursuant to Section 13 or 15(d)

DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)

v3.23.3
DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)
 9 Months Ended
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Notional Amounts of Outstanding Derivative Positions As of September 30, 2023 and December 31, 2022, the notional amounts of our outstanding derivative positions were as follows (in millions):
  September 30,
2023		 December 31,
2022
Currency hedges:
Euro EUR 3,837  4,115 
British Pound Sterling GBP 682  856 
Canadian Dollar CAD 1,518  1,598 
Hong Kong Dollar HKD 2,669  4,261 
Interest rate hedges:
Floating to Fixed Interest Rate Swaps USD —  28 
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value
The following table indicates the location in the consolidated balance sheets where our derivative assets and liabilities have been recognized, the fair value hierarchy level applicable to each derivative type and the related fair values of those derivatives.
We have master netting arrangements with substantially all of our counterparties giving us the right of offset for our derivative positions. However, we have not elected to offset the fair value positions of our derivative contracts recorded in the consolidated balance sheets. The columns labeled Net Amounts if Right of Offset had been Applied indicate the potential net fair value positions by type of contract and location in the consolidated balance sheets had we elected to apply the right of offset as of September 30, 2023 and December 31, 2022 (in millions):
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,
2023		 December 31,
2022		 September 30,
2023		 December 31,
2022
Derivatives designated as hedges:
Foreign currency exchange contracts Other current assets Level 2 $ 171  $ 174  $ 166  $ 171 
Foreign currency exchange contracts Other non-current assets Level 2 172  250  161  226 
Derivatives not designated as hedges:
Foreign currency exchange contracts Other current assets Level 2 —  1  —  1 
Total Asset Derivatives $ 343  $ 425  $ 327  $ 398 
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,
2023		 December 31,
2022		 September 30,
2023		 December 31,
2022
Derivatives designated as hedges:
Foreign currency exchange contracts Other current liabilities Level 2 $ 5  $ 3  $ —  $ — 
Foreign currency exchange contracts Other non-current liabilities Level 2 11  24  —  — 
Interest rate contracts Other non-current liabilities Level 2 —  5  —  5 
Total Liability Derivatives $ 16  $ 32  $ —  $ 5 
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, 2023 and December 31, 2022 (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, 2023 September 30, 2023 December 31, 2022 December 31, 2022
Long-term debt and finance leases $ 280  $ 5  $ 280  $ 5 
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location The following table indicates the amount of gains (losses) that have been recognized in the statements of consolidated income for fair value and cash flow hedges, as well as the associated gain (loss) for the underlying hedged item for fair value hedges for the three and nine months ended September 30, 2023 and 2022 (in millions):


 Three Months Ended September 30,
Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships 2023 2022
Revenue Interest Expense Investment Income and Other Revenue Interest Expense Investment Income and Other
Gain or (loss) on fair value hedging relationships:
Interest Contracts:
Hedged items $ —  $ —  $ —  $ —  $ (1) $ — 
Derivatives designated as hedging instruments —  —  —  —  1  — 
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income —  (6) —  —  (4) — 
Foreign Currency Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income 41  —  —  94  —  — 
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 $ 41  $ (6) $ —  $ 94  $ (4) $ — 
Nine Months Ended September 30,

2023 2022
Location and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships Revenue Interest Expense Investment Income and Other Revenue Interest Expense Investment Income and Other
Gain (loss) on fair value hedging relationships:
Interest Rate Contracts:
Hedged items $ —  $ —  $ —  $ —  $ 10  $ — 
Derivatives designated as hedging instruments —  —  —  —  (10) — 
Gain (loss) on cash flow hedging relationships:
Interest Rate Contracts:
Amount of gain (loss) reclassified from accumulated other comprehensive income —  (9) —  —  (9) — 
Foreign Currency Exchange Contracts:
Amount of gain (loss) reclassified from accumulated other comprehensive income 160  —  —  202  —  — 
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 $ 160  $ (9) $ —  $ 202  $ (9) $ — 
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The following table indicates the amount of gains (losses) that have been recognized in AOCI for the three and nine months ended September 30, 2023 and 2022 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
2023 2022
Interest rate contracts $ —  $ 1 
Foreign currency exchange contracts 182  459 
Total $ 182  $ 460 
Nine Months Ended September 30:
Derivative Instruments in Cash Flow Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Derivatives
2023 2022
Interest rate contracts $ —  $ 5 
Foreign currency exchange contracts 91  922 
Total $ 91  $ 927 
Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss)
The following table indicates the amount of gains (losses) that have been recognized in AOCI within foreign currency translation adjustment for the three and nine months ended September 30, 2023 and 2022 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
2023 2022
Foreign currency denominated debt $ 103  $ 209 
Total $ 103  $ 209 
Nine Months Ended September 30:
Non-derivative Instruments in Net Investment Hedging Relationships Amount of Gain (Loss) Recognized in AOCI on Debt
2023 2022
Foreign currency denominated debt $ 5  $ 436 
Total $ 5  $ 436 
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance
Amounts recorded in the statements of consolidated income related to fair value changes and settlements of interest rate swaps and foreign currency forward contracts not designated as hedges for the three and nine months ended September 30, 2023 and 2022 (in millions) were as follows:
Derivative Instruments Not Designated in
Hedging Relationships		 Location of Gain (Loss)
Recognized in Income		 Amount of Gain (Loss) Recognized in Income
2023 2022
Three Months Ended September 30:
Foreign currency exchange contracts Investment income and other $ (4) $ (45)
Total $ (4) $ (45)
Nine Months Ended September 30:
Foreign currency exchange contracts Investment income and other $ (1) $ (131)
Total $ (1) $ (131)