v3.25.2
FAIR VALUE OF FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2025
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]  
FAIR VALUE OF FINANCIAL INSTRUMENTS

NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value and carrying value of our long-term debt consisted of the following:

 

 

 

JUNE 30,
2025

 

 

DECEMBER 31,
2024

 

DOLLAR AMOUNTS IN MILLIONS

 

CARRYING
VALUE

 

 

FAIR VALUE
(LEVEL 2)

 

 

CARRYING
VALUE

 

 

FAIR VALUE
(LEVEL 2)

 

Long-term debt (including current maturities) and line of credit:

 

 

 

 

 

 

 

 

 

 

 

 

Fixed rate

 

$

4,620

 

 

$

4,606

 

 

$

4,827

 

 

$

4,757

 

Variable rate

 

 

548

 

 

 

550

 

 

 

249

 

 

 

250

 

Total debt

 

$

5,168

 

 

$

5,156

 

 

$

5,076

 

 

$

5,007

 

 

To estimate the fair value of fixed rate long-term debt, we used the market approach, which is based on quoted market prices we received for the same types and issues of our debt. We believe that our variable-rate long-term debt and line of credit instruments have net carrying values that approximate their fair value with only insignificant differences. The inputs to the valuations of our long-term debt are based on market data obtained from independent sources or information derived principally from observable market data. The difference between the fair value and the carrying value represents the theoretical net premium or discount we would pay or receive to retire all debt at the measurement date.

Fair Value of Derivative Instruments Designated as Cash Flow Hedges

During first quarter 2025, we entered into forward contracts with the risk management objective of reducing foreign exchange risk associated with the variability in cash flows from the settlement of forecasted foreign currency-denominated purchases of equipment. Our forward contracts provide the right to buy specified quantities of euros during predetermined future periods at predetermined future rates. As of June 30, 2025, all forward contracts with an aggregate notional amount of $40 million were designated as cash flow hedging instruments of hedged forecasted foreign-currency denominated purchases of equipment. No comparable activity was present as of and for the year ended December 31, 2024.

Unrealized gains on forward contracts designated as cash flow hedging instruments of $4 million and $6 million were recognized in “Other comprehensive income” in our Consolidated Statement of Comprehensive Income for the quarter and year-to-date period ended June 30, 2025, respectively. The unrealized gain for the year-to-date period of $6 million was recorded in “Accumulated other comprehensive loss” on our Consolidated Balance Sheet as of June 30, 2025.

As of June 30, 2025, the current and noncurrent fair value of forward contracts designated as cash flow hedging instruments in an asset position of $3 million and $1 million are recorded in "Prepaid expenses and other current assets" and "Other assets" on our Consolidated Balance Sheet, respectively.

The Derivative Instruments section of Note 1: Basis of Presentation provides information about how we account for derivative instruments as cash flow hedges.

Fair Value of Other Financial Instruments

We believe that our other financial instruments, including cash and cash equivalents, short-term investments, receivables and payables, have net carrying values that approximate their fair values with only insignificant differences. This is primarily due to the short-term nature of these instruments and the allowance for doubtful accounts.