Derivative Financial Instruments

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

We primarily invest in the following types of derivative financial instruments: interest rate swaps, futures, forward contracts, put and call options, collars, swaptions, embedded derivatives and warrants. We also enter into master netting agreements which reduce credit risk by permitting net settlement of transactions. At December 31, 2022 and 2021, we had received collateral of $57 and $18, respectively, related to our derivative financial instruments.

A summary of the aggregate contractual or notional amounts and estimated fair values related to derivative financial instruments at December 31, 2022 and 2021 is as follows:


	Contractual/ Notional Amount		Balance Sheet Location	Estimated Fair Value
				Asset		(Liability)
December 31, 2022
Hedging instruments
Interest rate swaps - fixed to floating	$	1,125	Other assets/other liabilities	$	3	$	(60)

Non-hedging instruments
Derivatives embedded in convertible fixed maturity securities	18		Fixed Maturity Securities	4		—
Interest rate swaps	5		Equity securities/other assets/other liabilities	—		—
Options	—		Other assets/other liabilities	1		—
Collars	19		Equity securities	23		(9)
Futures	358		Equity securities	2		(2)
Subtotal non-hedging	400		Subtotal non-hedging	30		(11)
Total derivatives	$	1,525	Total derivatives	33		(71)
			Amounts netted	(12)		12
			Net derivatives	$	21	$	(59)

December 31, 2021
Hedging instruments
Interest rate swaps - fixed to floating	$	825	Other assets/other liabilities	$	23	$	(5)

Non-hedging instruments
Interest rate swaps	119		Equity securities/other assets/other liabilities	—		(5)
Options	100		Other assets/other liabilities	—		—
Collars	19		Equity securities	21		(17)
Futures	344		Equity securities	3		(2)
Subtotal non-hedging	582		Subtotal non-hedging	24		(24)
Total derivatives	$	1,407	Total derivatives	47		(29)
			Amounts netted	(21)		21
			Net derivatives	$	26	$	(8)

Fair Value Hedges

We have entered into various interest rate swap contracts to convert a portion of our interest rate exposure on our long-term debt from fixed rates to floating rates. The floating rates payable on all of our fair value hedges are benchmarked to the LIBOR or the Secured Overnight Financing Rate. A summary of our outstanding fair value hedges at December 31, 2022 and 2021 is as follows:


Type of Fair Value Hedges	Year Entered Into	Outstanding Notional Amount				Interest Rate Received		Expiration Date
		2022		2021
Interest rate swap	2022	$	150	$	—	5.500	%	April 15, 2032
Interest rate swap	2022	75		—		4.101		September 1, 2027
Interest rate swap	2022	75		—		2.250		November 15, 2029
Interest rate swap	2021	150		150		2.550		September 15, 2030
Interest rate swap	2021	100		100		2.250		November 15, 2029
Interest rate swap	2020	75		75		4.101		September 1, 2027
Interest rate swap	2018	50		50		4.101		September 1, 2027
Interest rate swap	2018	450		450		3.300		January 15, 2023
Total notional amount outstanding		$	1,125	$	825

The following amounts were recorded on our consolidated balance sheets related to cumulative basis adjustments for fair value hedges at December 31, 2022 and 2021:


Balance Sheet Classification in Which Hedged Item is Included	Carrying Amount of Hedged Liability				Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
	2022		2021		2022		2021
Long-term debt	$	22,349	$	21,157	$	(57)	$	18

Cash Flow Hedges

We have entered into a series of forward starting pay fixed interest rate swaps with the objective of eliminating the variability of cash flows in the interest payments on future financings that were anticipated at the time of entering into the swaps. During 2022 and 2021, swaps in the notional amount of $700 and $450, respectively, were terminated.

The unrecognized loss for all expired and terminated cash flow hedges included in accumulated other comprehensive loss, net of tax, was $229 and $239 at December 31, 2022 and 2021, respectively. As of December 31, 2022, the total amount of amortization over the next twelve months for all cash flow hedges is estimated to increase interest expense by approximately $13. No amounts were excluded from effectiveness testing.

Non-Hedging Derivatives

A summary of the effect of non-hedging derivatives on our consolidated statements of income for the years ended December 31, 2022, 2021 and 2020 is as follows:

Type of Non-hedging Derivatives

Income Statement Location of
Gain (Loss) Recognized

Derivative
(Loss) Gain
Recognized

Year ended December 31, 2022

Derivatives embedded in convertible securities