Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

The following table summarizes the impact of derivative financial instruments on the Company's consolidated balance sheets (in millions). There were no amounts eligible to be offset under master netting agreements as of September 30, 2020 and December 31, 2019. The fair value of the Company's derivative financial instruments at September 30, 2020 and December 31, 2019 was determined using a market-based approach (Level 2).

	September 30, 2020										December 31, 2019
			Fair Value										Fair Value
	Notional		Prepaid expenses and other current assets		Other non- current assets		Accrued liabilities		Other non- current liabilities		Notional		Prepaid expenses and other current assets		Other non- current assets		Accrued liabilities		Other non- current liabilities
Cash flow hedges:
Foreign exchange	$	1,109	$	9	$	21	$	10	$	—	$	1,631	$	29	$	7	$	5	$	16
Interest rate swaps	2,000		—		—		—		173		400		—		38		—		—
Net investment hedges: (a)
Cross-currency swaps	3,444		35		59		—		89		3,535		37		70		7		94
Foreign exchange	52		—		7		—		—		52		—		4		—		—
No hedging designation:
Foreign exchange	1,044		—		—		2		71		1,177		—		—		13		50
Cross-currency swaps	139		3		—		—		5		279		3		—		—		5
Equity (Lionsgate Collar)	—		—		—		—		—		65		19		18		—		—
Total			$	47	$	87	$	12	$	338			$	88	$	137	$	25	$	165

(a) Excludes £400 million of sterling notes ($514 million equivalent at September 30, 2020) designated as a net investment hedge. (See Note 7.)

Schedule of Derivative Instruments Designated as Cash Flow Hedges, Effect on Income and Other Comprehensive Income (Loss)

The following table presents the pretax impact of derivatives designated as cash flow hedges on income and other comprehensive income (loss) (in millions).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Gains (losses) recognized in accumulated other comprehensive loss:
Foreign exchange - derivative adjustments	$	(19)	$	41	$	50	$	15
Interest rate - derivative adjustments	53		—		(219)		(18)
Gains (losses) reclassified into income from accumulated other comprehensive loss:
Foreign exchange - advertising revenue	—		1		1		4
Foreign exchange - distribution revenue	5		(5)		25		1
Foreign exchange - costs of revenues	—		3		2		1
Foreign exchange - other expense, net (dedesignated portion)	—		3		—		3
Interest rate - interest expense	—		(1)		1		(1)

Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss)

The following table presents the pretax impact of derivatives designated as net investment hedges on other comprehensive income (loss) (in millions). Other than amounts excluded from effectiveness testing, there were no other gains (losses) reclassified from accumulated other comprehensive loss to income during the three and nine months ended September 30, 2020 and 2019.

	Three Months Ended September 30,
	Amount of gain (loss) recognized in AOCI				Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
	2020		2019			2020		2019
Cross currency swaps	$	(78)	$	82	Interest expense, net	$	10	$	16
Foreign exchange contracts	(1)		3		Other expense, net	—		—
Sterling notes (foreign denominated debt)	(23)		16		N/A	—		—
Total	$	(102)	$	101		$	10	$	16

	Nine Months Ended September 30,
	Amount of gain (loss) recognized in AOCI				Location of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income on derivative (amount excluded from effectiveness testing)
	2020		2019			2020		2019
Cross currency swaps	$	26	$	128	Interest expense, net	$	33	$	33
Foreign exchange contracts	3		2		Other expense, net	—		—
Sterling notes (foreign denominated debt)	10		15		N/A	—		—
Total	$	39	$	145		$	33	$	33

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location

The following table presents the pretax impact of derivatives not designated as hedges and recognized in other expense, net in the consolidated statements of operations (in millions).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Interest rate swaps	$	—	$	1	$	—	$	1
Cross-currency swaps	(8)		1		(1)		2
Equity	—		6		7		16
Foreign exchange derivatives	27		(30)		(10)		(64)
Total in other expense, net	$	19	$	(22)	$	(4)	$	(45)