v3.26.1
Derivatives
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
The fair values of the Company’s derivative instruments and the line items on the accompanying condensed consolidated balance sheets to which they were recorded are summarized in the following table:
(in millions)Balance Sheet ClassificationMarch 31, 2026December 31, 2025
AssetsLiabilitiesNotionalAssetsLiabilitiesNotional
Derivatives designated as hedging instruments:
Interest rate swapsOther current liabilities$— $32 $1,466 $— $45 $1,470 
Cross-currency swaps Other current liabilities— 258 2,716 — 322 2,720 
Foreign exchange forward contractsOther current liabilities— 3 130 — — 127 
Total derivatives$— $293 $— $367 
The pre-tax effect of the Company’s cash flow hedging instruments on other comprehensive income is summarized in the following table:
Three Months Ended March 31,
(in millions)20262025
Interest rate swaps$13 $(26)
Foreign exchange forward contracts(3)5 
Total$10 $(21)
The Company expects approximately $3 million of pre-tax unrealized gains related to its foreign exchange contracts and interest rate derivatives included in accumulated other comprehensive (loss) income (“AOCI”) as of March 31, 2026 to be reclassified into earnings within the next twelve months. For the three months ended March 31, 2026 and 2025, the total amount, net of income taxes, of the cash flow hedge effect on the accompanying condensed consolidated statements of income was $(7) million and $(1) million, respectively.
As of March 31, 2026 and 2025, the Company's cross-currency swaps were designated as a hedge of its net investment in certain foreign subsidiaries. For the three months ended March 31, 2026 and 2025, the Company recorded a $64 million gain and $(133) million loss, respectively, within AOCI as a result of these cross-currency swaps. The Company recognized approximately $10 million and $12 million related to the excluded component as a reduction of interest expense for the three months ended March 31, 2026 and 2025, respectively.
As of March 31, 2026, the portion of the Company's foreign currency denominated debt balance (net of original issue discount) designated as a hedge of its net investment in certain foreign subsidiaries totaled €2,575 million ($2,962 million). The amount of foreign exchange gains (losses) related to the net investment hedge included in the cumulative translation adjustment component of AOCI for the three months ended March 31, 2026 and 2025 was $60 million and $(144) million, respectively.