Financial Instruments

12 Months Ended

Dec. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial InstrumentsThe Company is exposed to market risk from changes in foreign currency exchange rates and interest rates, which could affect operating results, financial position and cash flows. The Company manages its exposure to these market risks through regular operating and financing activities and, when appropriate, using derivative financial instruments. These derivative financial instruments are utilized to hedge economic exposures, as well as to reduce earnings and cash flow volatility resulting from shifts in market rates. The Company enters limited types of derivative contracts to manage foreign currency exposures that it hedges. The primary foreign currency market exposures include the Philippine Peso and Indian Rupee. The fair market values of all the Company's derivative contracts

change with fluctuations in interest rates or currency exchange rates and are designed so that any changes in their values are offset by changes in the values of the underlying exposures. Derivative financial instruments are held solely as risk management tools and not for trading or speculative purposes. The related cash flow impacts of all derivative activities are reflected as cash flows from operating activities.

The Company does not believe there is significant risk of loss in the event of non-performance by the counterparty associated with its derivative instruments because these transactions are executed with a major financial institution. Further, the Company's policy is to deal only with counterparties having a minimum investment grade or better credit rating. Credit risk is managed through the continuous monitoring of exposures to such counterparties.

Summary of Foreign Exchange Hedging Positions

At December 31, 2022 and 2021, the Company had outstanding forward exchange with gross notional values of $104 million and $150 million, respectively. At December 31, 2022, approximately 68% of these contracts mature within three months, 13% in three to six months, 15% in six to twelve months and 4% in greater than 12 months.

The following is a summary of the primary hedging positions and corresponding fair values:


	December 31, 2022				December 31, 2021
(in millions)	Gross Notional Value		Fair Value Asset (Liability)(1)		Gross Notional Value		Fair Value Asset (Liability)(1)
Currencies Hedged (Buy/Sell)
Philippine Peso/U.S. Dollar	$	50	$	—	$	55	$	(2)
Indian Rupee/U.S. Dollar	37		(1)		47		1
Euro/U.S. Dollar	1		—		18		—

All Other	16		—		30		—
Total Foreign Exchange Hedging	$	104	$	(1)	$	150	$	(1)

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(1)Represents the net receivable (payable) amount included in the Consolidated Balance Sheet.