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DERIVATIVE FINANCIAL INSTRUMENTS
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
In the normal course of business, the Company is exposed to foreign currency exchange rate market risk and interest rate fluctuations. As part of its risk management strategy, the Company uses derivative financial instruments, primarily foreign currency forward contracts, fixed-to-fixed currency swaps, total return swaps and interest rate swaps, to hedge certain foreign currency, market value and interest rate exposures. The Company’s objective is to reduce earnings volatility by offsetting gains and losses resulting from these exposures with losses and gains on the derivative contracts used to hedge them. The Company does not enter into or hold derivative financial instruments for speculative trading purposes.
There were no amounts eligible to be offset under master netting agreements as of March 31, 2024 and December 31, 2023. The fair value of the Company’s derivative financial instruments was determined using a market-based approach (Level 2). The following table summarizes the impact of derivative financial instruments on the Company’s consolidated balance sheets (in millions).
March 31, 2024December 31, 2023
Fair ValueFair Value
NotionalPrepaid expenses and other current assetsOther non-
current assets		Accounts payable and accrued liabilitiesOther non-
current liabilities		NotionalPrepaid expenses and other current assetsOther non-
current assets		Accounts payable and accrued liabilitiesOther non-
current liabilities
Cash flow hedges:
Foreign exchange$1,249 $24 $7 $34 $4 $1,484 $40 $8 $37 $8 
Net investment hedges: (a)
Cross-currency swaps1,361 22 13 7 24 1,779 23 12 7 42 
Fair value hedges:
Interest rate swaps1,500 9 — — 7 1,500 7 — — 5 
No hedging designation:
Foreign exchange1,089 25 4 4 96 1,058 1 1 1 83 
Interest rate swaps3,250 23 — — — — — — — — 
Total return swaps420 10 — — — 395 19 — — — 
Total$113 $24 $45 $131 $90 $21 $45 $138 
(a) Excludes £400 million and £402 million of sterling notes ($506 million and $513 million equivalent at March 31, 2024 and December 31, 2023, respectively) designated as a net investment hedge. (See Note 8.)
Derivatives Designated for Hedge Accounting
Cash Flow Hedges
The Company uses foreign exchange forward contracts to mitigate the foreign currency risk related to revenues, production rebates and production expenses and fixed-to-fixed cross-currency swaps to mitigate foreign currency risk associated with its British Pound Sterling denominated debt. As production spend occurs or when rebate receivables are recognized, foreign forward exchange contracts designated as cash flow hedges are de-designated. Upon de-designation, gains and losses on these derivatives directly impact earnings in the same line as the hedged risk.
In April 2023, the Company unwound cross-currency swaps related to its Sterling debt and recognized a gain of $76 million as an adjustment to other comprehensive income. The Sterling debt was subsequently re-designated as a net investment hedge effective May 2023.
The following table presents the pre-tax impact of derivatives designated as cash flow hedges on income and other comprehensive loss (in millions).
 Three Months Ended March 31,
 20242023
Gains (losses) recognized in accumulated other comprehensive loss:
Foreign exchange - derivative adjustments
$16 $1 
Gains (losses) reclassified into income from accumulated other comprehensive loss:
Foreign exchange - distribution revenue
2 (1)
Foreign exchange - costs of revenues
11 2 
Interest rate - interest expense, net(1)1 
If current fair values of designated cash flow hedges as of March 31, 2024 remained static over the next twelve months, the amount the Company would reclassify from accumulated other comprehensive loss into income in the next twelve months would not be material for the current fiscal year. The maximum length of time the Company is hedging exposure to the variability in future cash flows is 31 years.
Net Investment Hedges
The Company uses fixed-to-fixed cross currency swaps to mitigate foreign currency risk associated with the net assets of non-USD functional entities.
The following table presents the pre-tax impact of derivatives designated as net investment hedges on other comprehensive loss (in millions). Other than amounts excluded from effectiveness testing, there were no other material gains (losses) reclassified from accumulated other comprehensive loss to income during the three months ended March 31, 2024 and 2023.
Three Months Ended March 31,
Amount of gain (loss) recognized in AOCILocation 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)
2024202320242023
Cross currency swaps$25 $22 Interest expense, net$6 $5 
Euro-denominated notes (foreign denominated debt)— 5 N/A— — 
Sterling notes (foreign denominated debt)4 — N/A— — 
Total$29 $27 $6 $5 
Fair Value Hedges
During the three months ended March 31, 2023, the Company issued $1.5 billion of 6.412% fixed rate senior notes due March 2026. Simultaneously, the Company entered into a fixed-to-floating interest rate swap designated as a fair value hedge to allow the Company to mitigate the variability in the fair value of its senior notes due to fluctuations in the benchmark interest rate. Changes in the fair value of the senior note and the interest rate swap are recorded in interest expense, net.
The following table presents fair value hedge adjustments to hedged borrowings (in millions).
Carrying Amount of
Hedged Borrowings		Cumulative Amount of Fair Value Hedging Adjustments Included in Hedged Borrowings
Balance Sheet LocationMarch 31, 2024December 31, 2023March 31, 2024December 31, 2023
Noncurrent portion of debt$1,502 $1,502 $2 $2 
The following table presents the pretax impact of derivatives designated as fair value hedges on income, including offsetting changes in fair value of the hedged items (in millions).
Three Months Ended March 31,
20242023
Gain (loss) on changes in fair value of hedged fixed rate debt (1)
$— $(12)
(Loss) gain on changes in the fair value of derivative contracts (1)
— 12 
Total in interest expense, net$— $— 
(1) Accrued interest expense related to the hedged debt and derivative contracts is excluded from the amounts above and was not material as of March 31, 2024.
Derivatives Not Designated for Hedge Accounting
The Company has deferred compensation plans that have risk related to the fair value gains and losses on these investments and entered into total return swaps to mitigate this risk. The gains and losses associated with these swaps are recorded to selling, general and administrative expenses, offsetting the deferred compensation investment gains and losses.
The Company is exposed to risk of secured overnight financing rate changes in connection with securitization interest paid on the receivables securitization program. To mitigate this risk, the Company entered into $3.0 billion notional of non-designated interest rate swaps. The gains and losses on these derivatives are recorded to selling, general and administrative expenses, offsetting securitization interest expense.
The following table presents the pretax gains (losses) on derivatives not designated as hedges and recognized in selling, general and administrative expense and other income (expense), net in the consolidated statements of operations (in millions).
Three Months Ended March 31,
20242023
Interest rate swaps$21 $— 
Total return swaps19 18 
Total in selling, general and administrative expense40 18 
Interest rate swaps2 — 
Foreign exchange derivatives (8)3 
Total in other income (expense), net
(6)3 
Total$34 $21