v3.26.1
Hedging
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Hedging Hedging
Foreign currency forward contracts - Designated as hedging instruments
We maintain a hedging program intended to mitigate the effect of changes in foreign exchange rates for a portion of our
forecasted product revenues denominated in certain foreign currencies. The program includes foreign currency forward
contracts that are designated as cash flow hedges under U.S. GAAP having contractual durations from one to 36 months. We
recognize realized gains and losses for the effective portion of such contracts in “Product revenues, net” in our condensed
consolidated statements of income in the same period that we recognize the product revenues that were impacted by the
hedged foreign exchange rate changes.
We formally document the relationship between foreign currency forward contracts (hedging instruments) and forecasted
product revenues (hedged items), as well as our risk management objective and strategy for undertaking various hedging
activities, which includes matching all foreign currency forward contracts that are designated as cash flow hedges to
forecasted transactions. Using regression analysis, we assess, both at the hedge’s inception and on an ongoing basis, whether
the foreign currency forward contracts are highly effective in offsetting changes in cash flows of hedged items on a
prospective and retrospective basis. As of March 31, 2026, all hedges were determined to be highly effective.
We consider the impact of our counterparties’ credit risk on the fair value of the foreign currency forward contracts. As
of March 31, 2026 and December 31, 2025, credit risk did not change the fair value of our foreign currency forward
contracts.
The following table summarizes the notional amount in U.S. dollars of our outstanding foreign currency forward
contracts designated as cash flow hedges under U.S. GAAP:
As of March 31, 2026
As of December 31, 2025
Foreign Currency
(in millions)
Euro
$4,112.0
$4,677.9
Canadian dollar
445.2
516.1
British pound sterling
423.7
492.6
Australian dollar
231.5
267.5
Swiss franc
109.2
126.0
Total foreign currency forward contracts
$5,321.6
$6,080.1
Foreign currency forward contracts - Not designated as hedging instruments
We enter into foreign currency forward contracts, typically with contractual maturities of approximately one month,
which are designed to mitigate the effect of changes in foreign exchange rates on monetary assets and liabilities, including
intercompany balances. These contracts are not designated as hedging instruments under U.S. GAAP. We recognize realized
gains and losses for such contracts in “Other expense, net” in our condensed consolidated statements of income each period.
As of March 31, 2026 and December 31, 2025, the notional amount of our outstanding foreign currency forward contracts
where hedge accounting under U.S. GAAP was not applied was $868.0 million and $612.6 million, respectively.
During the three months ended March 31, 2026 and 2025, we recognized the following related to foreign currency
forward contracts in our condensed consolidated statements of income:
Three Months Ended March 31,
2026
2025
(in millions)
Designated as hedging instruments - Reclassified from AOCI
Product revenues, net
$(25.5)
$24.1
Not designated as hedging instruments
Other expense, net
$2.9
$(1.2)
Total reported in the Condensed Consolidated Statements of Income
Product revenues, net
$2,986.9
$2,760.2
Other expense, net
$—
$(17.6)
The following table summarizes the fair value of our outstanding foreign currency forward contracts designated as cash
flow hedges under U.S. GAAP included on our condensed consolidated balance sheets:
As of March 31, 2026
Assets
Liabilities
Classification
Fair Value
Classification
Fair Value
(in millions)
Prepaid expenses and other current assets
$36.1
Other current liabilities
$(50.1)
Other assets
39.4
Other long-term liabilities
(28.1)
Total assets
$75.5
Total liabilities
$(78.2)
As of December 31, 2025
Assets
Liabilities
Classification
Fair Value
Classification
Fair Value
(in millions)
Prepaid expenses and other current assets
$6.2
Other current liabilities
$(79.4)
Other assets
12.7
Other long-term liabilities
(51.0)
Total assets
$18.9
Total liabilities
$(130.4)
As of March 31, 2026, we expect the amounts that are related to foreign currency forward contracts designated as cash
flow hedges under U.S. GAAP recorded in “Prepaid expenses and other current assets” and “Other current liabilities” to be
reclassified to earnings within twelve months.
We present the fair value of our foreign currency forward contracts on a gross basis within our condensed consolidated
balance sheets. The following table summarizes the potential effect of offsetting derivatives by type of financial instrument
designated as cash flow hedges under U.S. GAAP on our condensed consolidated balance sheets:
As of March 31, 2026
Gross
Amounts
Recognized
Gross
Amounts
Offset
Gross
Amounts
Presented
Gross
Amounts
Not Offset
Legal Offset
Foreign currency forward contracts
(in millions)
Total assets
$75.5
$—
$75.5
$(75.5)
$—
Total liabilities
(78.2)
—
(78.2)
75.5
(2.7)
As of December 31, 2025
Gross
Amounts
Recognized
Gross
Amounts
Offset
Gross
Amounts
Presented
Gross
Amounts
Not Offset
Legal Offset
Foreign currency forward contracts
(in millions)
Total assets
$18.9
$—
$18.9
$(18.9)
$—
Total liabilities
(130.4)
—
(130.4)
18.9
(111.5)