Derivative and Hedging Instruments

12 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative and Hedging Instruments

Note 13—Derivative and Hedging Instruments

As of September 30, 2024 and 2023, the aggregate notional amount of the Company’s derivative instruments designated as hedging instruments was $11.7 billion and $11.0 billion, respectively. As of September 30, 2024 and 2023, the aggregate notional amount of the derivative instruments not designated as hedging instruments was $1.9 billion and $0.8 billion, respectively.

The following table shows the Company’s derivative instruments at gross fair value:

		September 30,
	Balance Sheet Location	2024		2023
		(in millions)
Assets
Designated as Hedging Instruments:
Foreign exchange forward contracts	Prepaid expenses and other current assets	$	49	$	100
Cross-currency swaps	Other assets	$	36	$	178
Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Prepaid expenses and other current assets	$	18	$	15
Liabilities
Designated as Hedging Instruments:
Foreign exchange forward contracts	Accrued liabilities	$	74	$	66
Cross-currency swaps	Other liabilities	$	2	$	—
Interest rate swaps(1)	Other liabilities	$	133	$	314
Not Designated as Hedging Instruments:
Foreign exchange forward contracts	Accrued liabilities	$	17	$	16

(1)These interest rate swaps were designated as fair value hedges on a portion of the outstanding senior notes. As of September 30, 2024 and 2023, the carrying value of the hedged senior notes was $3.9 billion and $3.7 billion, respectively.

For fiscal 2024, 2023 and 2022, the Company recognized a net increase (decrease) in earnings related to excluded forward points from forward contracts designated as net investment hedges and interest differentials from swap agreements of ($94) million, ($25) million and $151 million, respectively.

Cash flow hedges. For fiscal 2024, 2023 and 2022, the Company recognized pre-tax net gains (losses) in other comprehensive income (loss) related to cash flow hedges of ($38) million, ($126) million and $190 million, respectively.

The amount of pre-tax net gains (losses) related to cash flow hedges recorded in accumulated other comprehensive income (loss) as of September 30, 2024 that is expected to be reclassified into the consolidated statements of operations within the next 12 months is not material.

Net investment hedges. For fiscal 2024, 2023 and 2022, the Company recognized pre-tax net gains (losses) in other comprehensive income (loss) related to net investment hedges of ($321) million, ($445) million and $845 million, respectively. As of September 30, 2024 and 2023, the amount in accumulated other comprehensive income (loss) was $182 million and $433 million, respectively.

Credit and market risks. The Company’s derivative financial instruments are subject to both credit and market risk. The Company monitors the credit worthiness of the financial institutions that are counterparties to its derivative financial instruments and does not consider the risks of counterparty nonperformance to be significant. The Company mitigates this risk by entering into master netting agreements, and such agreements require each party to post collateral against its net liability position with the respective counterparty. As of September 30, 2024, the Company received collateral of $62 million from counterparties, which is included in accrued liabilities on the consolidated balance sheets, and posted collateral of $48 million, which is included in prepaid expenses and other current assets on the consolidated balance sheets. Notwithstanding the Company’s efforts to manage foreign exchange risk, there can be no absolute assurance that its hedging activities will adequately protect against the risks associated with foreign currency fluctuations. As of September 30, 2024, credit and market risks related to derivative instruments were not considered significant.