Our credit, market, and foreign currency risk management policies are described in Note 19, Financial Instruments and Fair Value Measures, to the Consolidated Financial Statements for the year ended December 31, 2024 included in our 2024 Form 10-K. As of June 30, 2025 and December 31, 2024, we had contracts with aggregate gross notional amounts of $973 million and $928 million, respectively, to hedge foreign currencies, principally the U.S. Dollar, Swiss Franc, British Pound, Euro, Chinese Yuan, Japanese Yen, Mexican Peso, New Romanian Leu, Czech Koruna, Australian Dollar, and Korean Won.

The FASB’s accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). Financial and nonfinancial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2025 and December 31, 2024:


					Fair Value
	Notional Amounts				Assets					Liabilities
	June 30, 2025		December 31, 2024		June 30, 2025		December 31, 2024			June 30, 2025		December 31, 2024
Designated instruments:
Designated forward currency exchange contracts	$	520	$	331	$	15	$	4	(a)	$	13	$	6	(c)
Designated cross-currency swaps	2,040		1,515		2		82		(b)	173		—		(d)
Designated interest-rate swaps	675		—		—		—			16		—		(d)
Total designated instruments	3,235		1,846		17		86			202		6
Undesignated instruments:
Undesignated interest rate swaps	—		470		—		9		(b)	—		3		(d)
Undesignated forward currency exchange contracts	453		597		1		9		(a)	9		2		(c)
Total undesignated instruments	453		1,067		1		18			9		5
Total designated and undesignated instruments	$	3,688	$	2,913	$	18	$	104		$	211	$	11

During 2023, the Company entered into float-to-fixed interest rate swap contracts with an aggregate notional amount of $200 million and maturities in July 2024 and October 2024. The Company also entered into a float-to-fixed cross-currency swap contract comprised of an amortizing swap with an aggregate notional amount of €280 million ($300 million) and notional exchanges in June 2026, June 2027, and June 2028. The interest rate swap and cross-currency swap contracts were early settled in the second quarter of 2024, resulting in net gains of $18 million recorded to Interest expense and a $4 million loss recorded to Non-operating expense in the Consolidated Interim Statement of Operations.

During 2025, the Company entered into float-to-fixed interest rate swap contracts with an aggregate notional amount of $675 million and maturities in January 2027, January 2028, January 2029, January 2030 and January 2031. Changes in the fair value of the interest rate swap contracts are recorded in Accumulated Other Comprehensive Income ("AOCI") and will be reclassified to Interest expense in the Consolidated Interim Statement of Operations upon maturity.

The Company also has outstanding forward currency exchange contracts with maturities up to 18 months and an aggregate notional amount of $520 million and $331 million as of June 30, 2025 and December 31, 2024, respectively. These forward currency exchange contracts have been designated as cash flow hedges to mitigate foreign currency exposures primarily on our inventory purchases and manufacturing costs. The gains and losses on the forward currency exchange contracts are recorded in AOCI and reclassified to Cost of goods sold in the Consolidated Interim Statement of Operations when the underlying transactions are recognized in earnings.

In order to mitigate foreign currency risk on its 2032 Senior Notes, the Company entered into fixed-to-fixed cross-currency swap contracts with an aggregate notional amount of €507 million ($550 million) and notional exchanges occurring in May 2027, May 2028, May 2029, and May 2030. Changes in the fair value of the cross-currency swap contracts are recognized in AOCI and reclassified to Non-operating (income) expense in the Consolidated Interim Statement of Operations, based upon changes in the spot rate remeasurement of the underlying debt. The net interest settlements on the cross-currency swap contracts are recorded in Interest expense in the Consolidated Interim Statements of Operations.

The Company has designated cross-currency swaps with aggregate notional amounts of €1,381 million ($1,490 million) and €858 million ($965 million) as of June 30, 2025 and December 31, 2024, respectively, as net investment hedges of its Euro-denominated operations. Changes in the fair value of the net investment hedges are recorded in AOCI until the net investment is liquidated or sold. The fair values of the net investment hedges were a net liability of $123 million and a net asset of $70 million as of June 30, 2025 and December 31, 2024, respectively. No ineffectiveness has been recorded on the net investment hedges.

As of December 31, 2024, the Company had outstanding float-to-fixed interest rate swap contracts with an aggregate notional amount of €450 million ($470 million) and maturities of April 2025, April 2026, April 2027, and April 2028. Changes in the fair value of the undesignated interest rate swap contracts are recorded in Interest expense in the Consolidated Interim Statements of Operations. These interest rate swap contracts were early settled in 2025.

The Company also has outstanding forward currency exchange contracts with maturities generally up to 3 months and an aggregate notional amount of $453 million and $597 million as of June 30, 2025 and December 31, 2024, respectively. Changes in the fair value of the forward currency exchange contracts are recorded in Non-operating (income) expense in the Consolidated Interim Statements of Operations.

The following tables present the pretax impact that changes in the fair values of derivatives designated as cash flow hedges and net investment hedges had on OCI, AOCI and earnings:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
	(Dollars in millions)
Cash flow hedges
Gain (loss) reclassified from AOCI to income:
Cost of goods sold	$	—	$	(2)	$	—	$	(4)
Interest expense (1)	(4)		1		(4)		(1)
Non-operating income (2)	45		(6)		64		(13)
Gain (loss) recognized in other comprehensive income (loss)	(8)		(3)		(8)		2

Net investment hedges
Gain (loss) recognized in other comprehensive income (loss)	(134)		10		(178)		33

The following table summarizes the pretax gain (loss) that changes in the fair values of derivatives not designated as hedging instruments had on earnings:


		Three Months Ended June 30,				Six Months Ended June 30,
		2025		2024		2025		2024
Contract Type	Location	(Dollars in millions)
Interest rate swaps	Interest expense (1)	$	—	$	5	$	—	$	13
Forward currency exchange contracts	Non-operating income	(20)		4		(26)		13

(1) Includes settlement gain of $21 million and interest income of $8 million, partially offset by marked-to-market remeasurement losses of $24 million, for the three months ended June 30, 2024. Includes settlement gain of $21 million and interest income of $16 million, partially offset by marked-to-market remeasurement losses of $24 million, for the six months ended June 30, 2024.

The foreign currency exchange, interest rate swap and cross-currency swap contracts are valued using market observable inputs. As such, these derivative instruments are classified within Level 2. The assumptions used in measuring the fair value of the cross-currency swap are considered Level 2 inputs, which are based upon market-observable interest rate curves, cross-currency basis curves, credit default swap curves, and foreign exchange rates.

The carrying value of Cash, cash equivalents, and restricted cash, Account receivables and Notes and Other receivables contained in the Consolidated Interim Balance Sheet approximates fair value.


	June 30, 2025				December 31, 2024
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(Dollars in millions)
Term Loan Facilities	$	676	$	693	$	680	$	693
2032 Senior Notes	790		833		790		810

The Company determined the fair value of its Term Loan Facilities and related current maturities utilizing transactions in the listed markets for similar liabilities. As such, the fair value of the Term Loan Facilities and related