v3.26.1
Fair Value of Financial Instruments
 3 Months Ended
Mar. 31, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
16. FAIR VALUE OF FINANCIAL INSTRUMENTS
Fair Value Measurements on a Recurring Basis
Derivative instruments—All derivative instruments are required to be reported on the balance sheet at fair value unless the transactions qualify and are designated as normal purchases or sales. Changes in fair value are reported currently through earnings unless they meet hedge accounting criteria. Versigent’s derivative exposures are with counterparties with long-term investment grade credit ratings. Versigent estimates the fair value of its derivative contracts using an income approach based on valuation techniques to convert future amounts to a single, discounted amount. Estimates of the fair value of foreign currency and commodity derivative instruments are determined using exchange traded prices and rates. Versigent also considers the risk of non-performance in the estimation of fair value, and includes an adjustment for non-performance risk in the measure of fair value of derivative instruments. The non-performance risk adjustment reflects the credit default spread (“CDS”) applied to the net commodity by counterparty and foreign currency exposures by counterparty. When Versigent is in a net derivative asset position, the counterparty CDS rates are applied to the net derivative asset position. When Versigent is in a net derivative liability position, estimates of peer companies’ CDS rates are applied to the net derivative liability position.
In certain instances where market data is not available, Versigent uses management judgment to develop assumptions that are used to determine fair value. This could include situations of market illiquidity for a particular currency or commodity or where observable market data may be limited. In those situations, Versigent generally surveys investment banks and/or brokers and utilizes the surveyed prices and rates in estimating fair value.
As of March 31, 2026, Versigent was in a net derivative asset position of $97 million, and no significant adjustments were recorded based on the evaluation of our own nonperformance risk and because Versigent’s exposures were to counterparties with investment grade credit ratings. Refer to Note 15. Derivatives and Hedging Activities for further information regarding derivatives.
As of March 31, 2026, Versigent had the following assets measured at fair value on a recurring basis:
TotalQuoted Prices in Active Markets
Level 1		Significant Other Observable Inputs
Level 2		Significant Unobservable Inputs
Level 3
 (in millions)
As of March 31, 2026:
Commodity derivatives$42 $— $42 $— 
Foreign currency derivatives55 — 55 — 
Total$97 $— $97 $— 
    Non-derivative financial instruments—Versigent’s non-derivative financial instruments include cash and cash equivalents, accounts and notes receivable, accounts payable, as well as debt, which may consist of accounts receivable factoring arrangements, finance leases and other debt issued by Versigent’s non-U.S. subsidiaries, the Credit Facilities and all series of outstanding senior notes. The fair value of debt is developed using observable values for similar debt instruments, which are considered Level 2 inputs as defined by ASC Topic 820. As of March 31, 2026, total debt was recorded at $2,141 million which approximated fair value. For all other financial instruments recorded at March 31, 2026, fair value approximates book value.
Fair Value Measurements on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, Versigent also has items in its balance sheet that are measured at fair value on a nonrecurring basis. As these items are not measured at fair value on a recurring basis, they are not included in the tables above. Financial and nonfinancial assets and liabilities that are measured at fair value on a nonrecurring basis include long-lived assets, intangible assets, equity investments without readily determinable fair values and liabilities for exit or disposal activities measured at fair value upon initial recognition. Versigent recorded non-cash long-lived
asset impairment charges of $7 million during the three months ended March 31, 2026 within cost of sales, primarily related to the declines in the fair value of certain fixed assets and a planned site exit. Fair value of long-lived and other assets is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved and a review of appraisals or other market indicators and management estimates. As such, Versigent has determined that the fair value measurements of long-lived and other assets principally fall in Level 3 of the fair value hierarchy.