DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position

The following table indicates the amount of gains and (losses) that have been recognized in the statements of consolidated income for 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 years ended December 31, 2021 and 2020 (in millions):

	2021						2020
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 or (loss) on fair value hedging relationships:
Interest Contracts:
Hedged items	$	—	$	20	$	—	$	—	$	(8)	$	—
Derivatives designated as hedging instruments	—		(20)		—		—		8		—
Gain or (loss) on cash flow hedging relationships:
Interest Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	—		(11)		—		—		(8)		—
Foreign Currency Exchange Contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income	83		—		—		196		—		—
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	$	83	$	(11)	$	—	$	196	$	(8)	$	—

Notional Amounts of Outstanding Derivative Positions

The notional amounts of our outstanding derivative positions as of December 31, 2021 and 2020 were as follows (in millions):

		2021	2020
Currency hedges:
Euro	EUR	4,257	4,197
British Pound Sterling	GBP	1,402	1,400
Canadian Dollar	CAD	1,633	1,576
Hong Kong Dollar	HKD	4,033	3,717
Interest rate hedges:
Fixed to Floating Interest Rate Swaps	USD	1,000	3,250
Floating to Fixed Interest Rate Swaps	USD	28	778

Balance sheet location of derivative assets and liabilities and their related fair values

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 December 31, 2021 and December 31, 2020 (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		2021		2020		2021		2020
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	$	100	$	56	$	82	$	45
Interest rate contracts	Other current assets	Level 2	11		2		11		2
Foreign currency exchange contracts	Other non-current assets	Level 2	123		35		90		4
Interest rate contracts	Other non-current assets	Level 2	—		29		—		26
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other current assets	Level 2	2		4		2		4
Total Asset Derivatives			$	236	$	126	$	185	$	81

		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		2021		2020		2021		2020
Derivatives designated as hedges:
Foreign currency exchange contracts	Other current liabilities	Level 2	$	19	$	34	$	1	$	23
Foreign currency exchange contracts	Other non-current liabilities	Level 2	33		142		—		111
Interest rate contracts	Other non-current liabilities	Level 2	10		13		10		10
Derivatives not designated as hedges:
Foreign currency exchange contracts	Other current liabilities	Level 2	—		2		—		2
Interest rate contracts	Other current liabilities	Level 2	—		1		—		1
Total Liability Derivatives			$	62	$	192	$	11	$	147

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 December 31, 2021 and 2020 (in millions):

	2021				2020
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
Long-Term Debt and Finance Leases	$	1,290	$	16	$	2,816	$	42

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 years ended December 31, 2021 and 2020 for those derivatives designated as cash flow hedges (in millions):

Derivative Instruments in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Derivatives
	December 31, 2021		December 31, 2020
Interest rate contracts	$	2	$	—
Foreign currency exchange contracts	341		(253)
Total	$	343	$	(253)

The following table indicates the amount of gains and (losses) that have been recognized in AOCI within foreign currency translation adjustment for the years ended December 31, 2021 and 2020 for those instruments designated as net investment hedges (in millions):

Non-derivative Instruments in Net Investment Hedging Relationships	Amount of Gain (Loss) Recognized in AOCI on Debt
	2021		2020
Foreign denominated debt	$	225	$	(265)
Total	$	225	$	(265)

Not Designated as Hedging Instrument

Amount and Location in the Income Statement for Derivatives Designated as Fair Value Hedges

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 years ended December 31, 2021 and 2020 (in millions):

Derivative Instruments Not Designated in Hedging Relationships	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income
		2021		2020
Interest rate contracts	Interest expense	$	—	$	(9)
Foreign currency exchange contracts	Investment income and other	(28)		27
Total		$	(28)	$	18