FINANCIAL INSTRUMENTS

Loans and Other Receivables. The Company’s financial assets not carried at fair value primarily consist of loan receivables and

noncurrent customer and other receivables. The net carrying amount was $327 million and $318 million as of September 30, 2025 and

December 31, 2024, respectively. The estimated fair value was $319 million and $315 million as of September 30, 2025 and December 31,

2024, respectively. All of these assets are considered to be Level 3.

Derivatives and Hedging. Our primary objective in executing and holding derivatives is to reduce the earnings and cash flow volatility

associated with fluctuations in foreign currency exchange rates and commodity prices over the terms of our customer contracts. These

hedge contracts reduce, but do not entirely eliminate, the impact of foreign currency exchange rate and commodity price movements. The

Company does not enter into or hold derivative instruments for speculative trading purposes.

We use foreign currency contracts to reduce the volatility of cash flows related to forecasted revenues, expenses, assets, and liabilities.

These contracts are generally one to 11 months in duration but with maximum remaining maturities of up to 14 years as of September 30,

Cash Flow Hedges. The total amount in AOCI related to cash flow hedges was a net $95 million gain and a net $33 million gain as of

September 30, 2025 and December 31, 2024, respectively, of which a net $46 million gain and a net $22 million gain, respectively, related

to our share of AOCI recognized at our non-consolidated joint ventures. We expect to reclassify $8 million of pre-tax net losses associated

with designated cash flow hedges to earnings in the next 12 months, contemporaneously with the earnings effects of the related forecasted

transactions. The Company reclassified net gains (losses) from AOCI into earnings of $(4) million and $2 million for the three months ended

and $(22) million and $(20) million for the nine months ended September 30, 2025 and 2024, respectively. As of September 30, 2025, the

maximum length of time over which we are hedging forecasted transactions was approximately 10 years.

Net Investment Hedges. We enter into foreign exchange forwards designated as the hedging instruments in net investment hedging

relationships in order to mitigate the foreign currency risk attributable to the translation of the Company’s net investment in certain non

USD-functional subsidiaries and equity method investees. The total amount in AOCI related to net investment hedges was a net gain of

$31 million and $33 million as of September 30, 2025 and December 31, 2024, respectively.

The following table presents the gross fair values of our outstanding derivative instruments as of the dates indicated:

GROSS FAIR VALUE OF OUTSTANDING DERIVATIVE INSTRUMENTS


September 30, 2025	Gross Notional	All other current assets	All other assets	All other current liabilities	All other liabilities
Foreign currency exchange contracts accounted for as hedges	$6,718	$89	$122	$35	$56
Foreign currency exchange contracts	33,745	400	174	351	170
Commodity and other contracts	395	30	21	5	5
Derivatives not accounted for as hedges	$34,140	$429	$195	$356	$175
Total gross derivatives	$40,858	$518	$317	$391	$230
Netting adjustment(a)		(291)	(152)	(289)	(152)
Net derivatives recognized in the Consolidated and Combined Statement of Financial Position		$227	$165	$102	$78

(a) The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts

include fair value adjustments related to our own and counterparty non-performance risk.


December 31, 2024	Gross Notional	All other current assets	All other assets	All other current liabilities	All other liabilities
Foreign currency exchange contracts accounted for as hedges	$5,789	$61	$144	$58	$65
Foreign currency exchange contracts	34,244	479	159	483	144
Commodity and other contracts	436	12	20	12	2
Derivatives not accounted for as hedges	$34,681	$491	$179	$495	$146
Total gross derivatives	$40,469	$552	$323	$552	$211
Netting adjustment(a)		(383)	(166)	(381)	(166)
Net derivatives recognized in the Consolidated and Combined Statement of Financial Position		$168	$158	$171	$46

(a) The netting of derivative receivables and payables is permitted when a legally enforceable master netting agreement exists. Amounts

include fair value adjustments related to our own and counterparty non-performance risk.

PRE-TAX GAINS (LOSSES) RECOGNIZED IN AOCI RELATED TO CASH FLOW AND NET INVESTMENT HEDGES


	Three months ended September 30		Nine months ended September 30
	2025	2024	2025	2024
Cash flow hedges	$2	$(17)	$16	$19
Net investment hedges	1	(6)	(2)	(2)

The tables below show the effect of our derivative financial instruments in the Consolidated and Combined Statement of Income (Loss):


Three months ended September 30, 2025	Sales of equipment and services	Cost of equipment and services	Selling, general, and administrative expenses	Other income (expense) – net
Total amount of income and expense in the Consolidated and Combined Statement of Income (Loss)	$9,969	$8,071	$1,221	$221
Effects of cash flow hedges	$15	$18	$—	$—
Foreign currency exchange contracts	3	(1)	4	(17)
Commodity and other contracts	—	(5)	(9)	—
Effect of derivatives not designated as hedges	$3	$(6)	$(5)	$(17)
Three months ended September 30, 2024
Total amount of income and expense in the Consolidated and Combined Statement of Income (Loss)	$8,913	$7,804	$1,226	$71
Effects of cash flow hedges	$2	$—	$—	$—
Foreign currency exchange contracts	6	(16)	(48)	6
Commodity and other contracts	—	(1)	(6)	—
Effect of derivatives not designated as hedges	$6	$(17)	$(55)	$6


Nine months ended September 30, 2025	Sales of equipment and services	Cost of equipment and services	Selling, general, and administrative expenses	Other income (expense) – net
Total amount of income (expense) in the Consolidated and Combined Statement of Income (Loss)	$27,112	$21,899	$3,594	$455
Effects of cash flow hedges	$(4)	$18	$—	$—
Foreign currency exchange contracts	6	(50)	(65)	(8)
Commodity and other contracts	—	(11)	(13)	—
Effect of derivatives not designated as hedges	$6	$(60)	$(78)	$(8)


Nine months ended September 30, 2024
Total amount of income (expense) in the Consolidated and Combined Statement of Income (Loss)	$24,376	$20,415	$3,366	$1,025
Effects of cash flow hedges	$(5)	$14	$—	$—
Foreign currency exchange contracts	—	1	(92)	(7)
Commodity and other contracts	—	(7)	(21)	—
Effect of derivatives not designated as hedges	$—	$(6)	$(113)	$(7)

The amount excluded for cash flow hedges was a gain (loss) of $10 million and $1 million for the three months ended and $30 million and

$12 million for the nine months ended September 30, 2025 and 2024, respectively. These amounts are recognized in Sales of equipment,

Sales of services, Cost of equipment, and Cost of services in our Consolidated and Combined Statement of Income (Loss).