The Company’s activities expose it to a variety of market risks, which primarily include the risks related to the effects of changes in foreign currency exchange rates and interest rates. These financial exposures are monitored and managed by the Company as part of its overall risk management program. The objective of this risk management program is to reduce the volatility that these market risks may have on the Company’s operating results and cash flows. The Company employs derivative financial instruments to hedge certain anticipated transactions, firm commitments, or assets and liabilities denominated in foreign currencies. Additionally, the Company utilizes interest rate swaps to convert fixed rate debt into variable rate debt or vice versa. The Company does not hold derivative instruments for trading or speculative purposes.

The following summarizes the notional amounts of hedges of net investments, fair value hedges, and derivative instruments not designated as hedges for accounting purposes by derivative instrument type at March 31, 2025 and the notional amounts expected to mature during the next 12 months.


(in millions)	Aggregate Notional Amount		Aggregate Notional Amount Maturing within 12 Months







Hedges of Net Investments
Foreign exchange forward contracts	$	830	$	200
Cross currency basis swaps	289		—
Total derivative instruments designated as hedges of net investments	$	1,119	$	200

Fair Value Hedges
Interest rate swaps	$	150	$	—
Foreign exchange forward contracts	—		—
Total derivative instruments designated as fair value hedges	$	150	$	—

Derivative Instruments not Designated as Hedges
Foreign exchange forward contracts	$	732	$	732
Total derivative instruments not designated as hedges	$	732	$	732

The Company enters into interest rate swap contracts to manage interest rate risk on long-term debt instruments and not for speculative purposes. Any cash flows associated with these instruments are included in operating activities in the Consolidated Statements of Cash Flows.

On May 26, 2020, the Company paid $31 million to settle the $150 million notional Treasury rate lock contract, which partially hedged the interest rate risk of the $750 million Senior Notes due June 2030. This loss is amortized over the ten-year life of the notes. As of both March 31, 2025 and December 31, 2024, $16 million of this loss is remaining to be amortized from AOCI in future periods.

Overall, the derivatives designated as cash flow hedges are considered to be highly effective for accounting purposes. At March 31, 2025, the Company expects to reclassify $3 million of deferred net losses on cash flow hedges recorded in AOCI in the Consolidated Statements of Operations during the next 12 months. For the rollforward of derivative instruments designated as cash flow hedges in AOCI, see Note 4, Comprehensive Loss.

The Company has significant investments in foreign subsidiaries. The net assets of these subsidiaries are exposed to volatility in foreign currency exchange rates. The Company employs both derivative and non-derivative financial instruments to hedge a portion of these exposures. The derivative instruments consist of foreign exchange forward contracts and cross-currency basis swaps. The non-derivative instruments consist of foreign currency denominated debt held at the parent company level. Translation gains and losses related to the net assets of the foreign subsidiaries are offset by gains and losses in the aforementioned instruments, which are designated as hedges of net investments, and the intrinsic value changes in these instruments are recorded on AOCI, net of tax effects. The time-value component of the fair value of the derivative instrument is amortized on a straight-line basis in Other (income) expense, net in the Consolidated Statements of Operations in the applicable period. Any cash flows associated with these instruments are included in investing activities in the Consolidated Statements of Cash Flows, except for derivative instruments that include an other-than-insignificant financing element, for which all cash flows are classified as financing activities in the Consolidated Statements of Cash Flows.

The fair value of the foreign currency exchange forward contracts and cross-currency basis swaps is the estimated amount the Company would receive or pay at the reporting date, taking into account the effective interest rates and foreign exchange rates. The effective portion of the change in the value of these derivatives is recorded in AOCI, net of tax effects.

On February 13, 2024, the Company paid $9 million to settle the variable interest rate swap with a notional amount of $100 million which was originally set to mature on June 1, 2026. This closure of the interest rate swap will result in a loss of $8 million being amortized over the remaining life of the Senior Notes due June 2030.

The Company enters into derivative instruments with the intent to partially mitigate the foreign exchange revaluation risk associated with recorded assets and liabilities that are denominated in a non-functional currency. The Company primarily uses foreign exchange forward contracts to hedge these risks. The gains and losses on these derivative transactions offset the gains and losses generated by the revaluation of the underlying non-functional currency balances and are recorded in Other (income) expense, net in the Consolidated Statements of Operations. Any cash flows associated with these instruments are included in operating activities in the Consolidated Statements of Cash Flows.


	Three Months Ended March 31,
	2025						2024
(in millions)	Cost of products sold		Interest expense, net		Other (income) expense, net		Cost of products sold		Interest expense, net		Other (income) expense, net

Total amounts of line items presented in the Statement of Operations in which the effects of cash flow, net investment or fair value hedges are recorded	$	413	$	19	$	—	$	447	$	18	$	(7)

(Gain) loss on Cash Flow Hedges reclassified from AOCI into income
Foreign exchange forward contracts	$	—	$	—	$	—	$	—	$	—	$	—
Interest rate swaps	—		1		—		—		—		—

(Gain) loss on Hedges of Net Investment
Cross currency basis swaps	$	—	$	—	$	—	$	—	$	—	$	(1)
Foreign exchange forward contracts	—		—		(6)		—		—		(6)

(Gain) loss on Fair Value Hedges:
Interest rate swaps	$	—	$	1	$	—	$	—	$	2	$	—
Foreign exchange forward contracts	—		—		—		—		—		(1)

(Gain) loss on Derivative Instruments not Designated as Hedges
Foreign exchange forward contracts	$	—	$	—	$	—	$	—	$	—	$	(1)


	Amount of Gain or (Loss) Recognized in AOCI					Amount of Gain or (Loss) Reclassified from AOCI into Income
	Three Months Ended March 31,				Consolidated Statements of Operations Location	Three Months Ended March 31,
(in millions)	2025		2024			2025		2024







Hedges of Net Investments
Cross currency basis swaps	$	(5)	$	4	Other expense (income), net	$	—	$	—

Foreign exchange forward contracts	(16)		38		Other expense (income), net	—		—


	March 31, 2025
(in millions)	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Accrued Liabilities		Other Noncurrent Liabilities

Designated as Hedges:
Foreign exchange forward contracts	$	3	$	1	$	—	$	3
Interest rate swaps	—		—		5		12
Cross currency basis swaps	3		10		—		—
Total	$	6	$	11	$	5	$	15

Not Designated as Hedges:
Foreign exchange forward contracts	$	14	$	—	$	11	$	—
Total	$	14	$	—	$	11	$	—

	December 31, 2024
(in millions)	Prepaid Expenses and Other Current Assets		Other Noncurrent Assets		Accrued Liabilities		Other Noncurrent Liabilities

Designated as Hedges:
Foreign exchange forward contracts	$	5	$	9	$	—	$	1
Interest rate swaps	—		—		4		17
Cross currency basis swaps	4		14		—		—
Total	$	9	$	23	$	4	$	18

Not Designated as Hedges:
Foreign exchange forward contracts	$	4	$	—	$	8	$	—
Total	$	4	$	—	$	8	$	—

Substantially all of the Company’s derivative contracts are subject to netting arrangements, whereby the right to offset occurs in the event of default or termination in accordance with the terms of the arrangements with the counterparty. While these contracts contain the enforceable right to offset through netting arrangements with the same counterparty, the Company elects to present them on a gross basis in the Consolidated Balance Sheets.

Offsetting of financial assets and liabilities under netting arrangements at March 31, 2025 were as follows:


							Gross Amounts Not Offset in the Consolidated Balance Sheets
(in millions)	Gross Amounts Recognized		Gross Amount Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received/Pledged		Net Amount

Assets
Foreign exchange forward contracts	$	18	$	—	$	18	$	(13)	$	—	$	5


Cross currency basis swaps	13		—		13		(6)		—		7

Total assets	$	31	$	—	$	31	$	(19)	$	—	$	12

Liabilities
Foreign exchange forward contracts	$	14	$	—	$	14	$	(9)	$	—	$	5

Interest rate swaps	17		—		17		(10)		—		7


Total liabilities	$	31	$	—	$	31	$	(19)	$	—	$	12



							Gross Amounts Not Offset in the Consolidated Balance Sheets
(in millions)	Gross Amounts Recognized		Gross Amount Offset in the Consolidated Balance Sheets		Net Amounts Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received/Pledged		Net Amount

Assets
Foreign exchange forward contracts	$	18	$	—	$	18	$	(5)	$	—	$	13


Cross currency basis swaps	18		—		18		(6)		—		12
Total assets	$	36	$	—	$	36	$	(11)	$	—	$	25

Liabilities
Foreign exchange forward contracts	$	9	$	—	$	9	$	(4)	$	—	$	5

Interest rate swaps	21		—		21		(7)		—		14


Total liabilities	$	30	$	—	$	30	$	(11)	$	—	$	19