v3.25.2
Financial Instruments
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments
Note 8. Financial Instruments

Derivatives and Hedging Activities

Fair Value of Derivative Instruments
Derivative instruments and corresponding hedge type were recorded at fair value in the condensed consolidated balance sheets as follows:
 As of June 30, 2025As of December 31, 2024
Asset
Derivatives		Liability
Derivatives		Asset
Derivatives		Liability
Derivatives
 
Type of Hedge (1)
(in millions)
Derivatives designated as
accounting hedges (2):
Foreign currency contracts
NIH
$— $344 $5 $5 
Interest rate contracts
CF
— 3 2 11 
Cross-currency swap contracts
CF/NIH
212 554 382 69 
$212 $901 $389 $85 
Derivatives not designated as
   accounting hedges:
Foreign currency contracts
$190 $192 $302 $118 
Commodity contracts794 718 2,205 1,522 
Interest rate contracts3 — 3 — 
$987 $910 $2,510 $1,640 
Total fair value$1,199 $1,811 $2,899 $1,725 

(1)Derivative contracts designated as either cash flow ("CF") or net investment hedging ("NIH") instruments.
(2)We designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 7, Debt and Borrowing Arrangements. Non-U.S. dollar denominated debt designated as net investment hedges is also disclosed in the Notional Amounts of Derivatives and Other Hedging Instruments table and the Hedges of Net Investments in International Operations section appearing later in this footnote.

We recorded the fair value of our derivative instruments in the condensed consolidated balance sheets as follows:

 As of June 30, 2025As of December 31, 2024
 (in millions)
Other current assets
$1,008 $2,545 
Other assets
191 354 
Other current liabilities
1,202 1,641 
Other liabilities
609 84 

The fair values (asset/(liability)) of our derivative instruments were determined using:
 As of June 30, 2025
 Total
Fair Value of Net
Asset/(Liability)		Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant
Other Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Foreign currency contracts
$(346)$— $(346)$— 
Commodity contracts76 28 48 — 
Interest rate contracts— — — — 
Cross-currency swap contracts
(342)— (342)— 
Total derivatives$(612)$28 $(640)$— 
 As of December 31, 2024
 Total
Fair Value of Net
Asset/(Liability)		Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant
Other Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Foreign currency contracts
$184 $— $184 $— 
Commodity contracts683 (111)794 — 
Interest rate contracts(6)— (6)— 
Cross-currency swap contracts
313 — 313 — 
Total derivatives$1,174 $(111)$1,285 $— 

Level 1 fair value measurements use quoted prices in active markets for identical assets or liabilities. Level 1 financial assets and liabilities consist of exchange-traded commodity futures and listed options. The fair value of these instruments is determined based on quoted market prices on commodity exchanges.

Level 2 fair value measurements use quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or model-based valuations in which significant inputs are observable in the market. Level 2 financial assets and liabilities consist primarily of over-the-counter (“OTC”) foreign currency forwards and options; commodity forwards and options; interest rate swaps; and cross-currency swaps. Our foreign currency contracts are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices. Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk. Our OTC derivative transactions are governed by International Swap Dealers Association agreements and other standard industry contracts. Under these agreements, we do not post nor require collateral from our counterparties. The majority of our derivative contracts do not have a legal right of set-off. We manage the credit risk in connection with these and all our derivatives by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure with each counterparty and monitoring the financial condition of our counterparties.

Level 3 fair value measurements use unobservable inputs and include the use of judgment by management about the assumptions market participants use in pricing the asset or liability. Level 3 financial liabilities consist of contingent consideration arrangements, which are presented in the Fair Value of Contingent Consideration section appearing later in this footnote.

Notional Amounts of Derivatives and Other Hedging Instruments
The gross notional values of our derivative instruments, as well as non-U.S. dollar debt designated as net investment hedging instruments, were:
 Notional Amount
 As of June 30,
2025		As of December 31, 2024
 (in millions)
Foreign currency contracts
$20,667 $13,724 
Commodity contracts
13,973 16,210 
Interest rate contracts2,089 4,189 
Cross-currency swap contracts
7,219 9,608 
Non-U.S. dollar debt designated as net investment hedges:
Euro notes3,755 3,298 
Swiss franc notes252 220 
Canadian dollar notes478 869 
Cash Flow Hedges
Our derivative instruments designated as cash flow hedges include interest rate swaps and cross-currency swaps. As of June 30, 2025, the aggregate notional value of those derivatives was $1.6 billion.

Cash flow hedge activity, net of taxes, is recorded within accumulated other comprehensive earnings/(losses). Refer to Note 12, Reclassifications from Accumulated Other Comprehensive Income for additional information on current period activity. Based on current market conditions, $57 million of losses, net of taxes, included in accumulated other comprehensive earnings/(losses) from cash flow hedges as of June 30, 2025 are expected to be recognized into earnings during the next 12 months.

As of June 30, 2025, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 3 years, 6 months.

Hedges of Net Investments in International Operations

Net investment hedge ("NIH") derivative contracts
We enter into foreign currency contracts and cross-currency swaps to hedge certain investments in our non-U.S. operations against movements in exchange rates. As of June 30, 2025, the aggregate notional value of those derivatives was $9.3 billion.

Net investment hedge derivative contract pre-tax impacts on other comprehensive earnings/(losses) and net earnings were:
 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2025202420252024
 (in millions)
(Loss)/gain on NIH contracts (1)
$(799)$22 $(1,000)$242 
Amounts excluded from the assessment of hedge effectiveness (2)
67 46 124 87 

(1)Amounts recorded for unsettled and settled NIH derivative contracts are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses).
(2)We assess the effectiveness of NIH relationships based on spot rates and amortize the initial value attributable to the excluded component to earnings over the life of the hedging instrument within interest and other expense, net.

Non-U.S. dollar debt designated as net investment hedges
Pre-tax gains/(losses) related to non-U.S. dollar debt designated as hedges of net investments in international operations, which are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses), were:

 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2025202420252024
 (in millions)
Euro notes$(310)$24 $(457)$103 
Swiss franc notes(26)(1)(32)25 
Canadian notes(25)4 (25)14 
Derivatives Not Designated as Accounting Hedges
For derivatives not designated as accounting hedges ("economic hedges"), we classify gains and losses in the income statement based on the classification of the item economically hedged. Pre-tax gains/(losses) recorded in net earnings for economic hedges were:

 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2025202420252024
 (in millions)
Foreign currency contracts:
Cost of sales
$(34)$(2)$(165)$23 
Selling, general and administrative expenses
(6)(6)(6)1 
Interest and other expense, net
(63)9 27 65 
Commodity contracts - Cost of sales
19 (255)(390)929 
Interest rate contracts - Interest and other expense, net
1 1 1 1 
Total$(83)$(253)$(533)$1,019 

Fair Value of Contingent Consideration
Contingent consideration liabilities, which reflect earn-out arrangements from business combinations, are recorded at fair value each period, with changes in fair value reported in earnings. The fair values of our contingent consideration liabilities were $142 million and $179 million as of June 30, 2025 and December 31, 2024, respectively. Contingent consideration liabilities are primarily recorded in Other liabilities in the condensed consolidated balance sheets and changes in their fair values are primarily recorded in Selling, general and administrative expenses in the condensed consolidated statements of earnings.

The estimated fair values of our contingent consideration liabilities were primarily determined using Monte Carlo simulations. Significant assumptions used in assessing the fair value of the liabilities include financial projections for net revenue, gross profit and EBITDA, as well as discount and volatility rates. Fair value measurements of contingent consideration liabilities are classified as Level 3 in the fair value hierarchy because they use unobservable inputs.

Contingent consideration liabilities include an earn-out arrangement related to the acquisition of Clif Bar & Company (“Clif Bar”) in 2022. The possible payments under that arrangement range from zero to a maximum total of $2.4 billion, with higher payouts requiring the achievement of targets that generate rates of returns in excess of the base financial projections.

The following is a summary of our contingent consideration liability activity:

 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2025202420252024
 (in millions)(in millions)
Liability at beginning of period$167 $703 $179 $680 
Changes in fair value
(26)12 (38)35 
Payments
— (54)— (54)
Currency
1 — 1 — 
Liability at end of period$142 $661 $142 $661