v3.26.1
Derivative Financial Instruments and Hedging Activities
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments and Hedging Activities Derivative Financial Instruments and Hedging Activities
The Company uses derivative and non-derivative instruments to manage foreign exchange risk related to its ongoing business operations with the primary objective of reducing earnings and cash flow volatility associated with fluctuations in foreign exchange rates.
The Company also uses derivative instruments to manage interest rate risk, with the primary objective of reducing its exposure to changes in the fair value of its fixed-rate debt attributable to changes in the benchmark interest rate.

Notional Amount of Derivative Contracts
The net notional amounts of the Company’s outstanding derivative instruments were as follows:
As of 
June 30,
2026		December 31,
2025
(in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts
Cash flow hedges
$23,238,784 $21,066,760 
Fair value hedges
2,934,991 2,884,792 
Interest rate contracts
Fair value hedges
1,400,000 — 
Derivatives not designated as hedging instruments:
Foreign exchange contracts1,317,395 1,555,502 
Total
$28,891,170 $25,507,054 
Foreign Exchange Contracts
As of both June 30, 2026 and December 31, 2025, approximately $1.9 billion of the Company’s Euro-denominated Senior Notes were designated as hedges of the foreign exchange risk of the Company’s net investment in certain foreign subsidiaries.
As of June 30, 2026 and December 31, 2025, the carrying amount of the Company’s Euro-denominated Senior Notes (included in “Short-term debt” and “Long-term debt” on the Company’s Consolidated Balance Sheets), which was designated as the hedged items in fair value hedges, was approximately $2.8 billion and $2.9 billion, respectively.
See Note 7 Debt for further information on the Company’s debt obligations.
Interest Rate Contracts
As of June 30, 2026, the carrying amount of the Company’s Senior Notes (included in “Long-term debt” on the Company’s Consolidated Balance Sheets), which was designated as the hedged items in fair value hedges of interest rate risk was approximately $1.4 billion. The related cumulative fair value hedging adjustments included in the carrying amount of the hedged Senior Notes was approximately $(14) million. No Senior Notes were designated as the hedged items in fair value hedges of interest rate risk as of December 31, 2025.
Fair Value of Derivative Contracts
The fair value of the Company’s outstanding derivative instruments was as follows:

 As of June 30, 2026
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$343,187 $268,219 $320,393 $86,175 
Interest rate contracts236 1,124 — 14,934 
Derivatives not designated as hedging instruments:
Foreign exchange contracts19,949 — 12,361 — 
Total$363,372 $269,343 $332,754 $101,109 
 As of December 31, 2025
Derivative AssetsDerivative Liabilities
 Other current assetsOther non-current assetsAccrued expenses and other liabilitiesOther non-current liabilities
 (in thousands)
Derivatives designated as hedging instruments:
Foreign exchange contracts$192,828 $88,985 $426,341 $214,574 
Interest rate contracts— — — — 
Derivatives not designated as hedging instruments:
Foreign exchange contracts3,463 — 11,704 — 
Total$196,291 $88,985 $438,045 $214,574 
The Company classifies derivative instruments in the Level 2 category within the fair value hierarchy. These instruments are valued using industry standard valuation models that use observable inputs such as interest rate yield curves, and forward and spot prices for currencies.
As of June 30, 2026, the pre-tax net accumulated gain on our foreign currency cash flow hedges included in accumulated other comprehensive income (“AOCI”) on the Consolidated Balance Sheets expected to be recognized in earnings within the next 12 months is $159 million.
Master Netting Agreements
In order to mitigate counterparty credit risk, the Company enters into master netting agreements with its counterparties for its foreign currency exchange contracts and interest rate contracts, which permit the parties to settle amounts on a net basis under certain conditions. The Company has elected to present its derivative assets and liabilities on a gross basis on its Consolidated Balance Sheets.
The Company also enters into collateral security arrangements with its counterparties that require the parties to post cash collateral when certain contractual thresholds are met. Cash collateral received is presented in “Accrued expenses and other liabilities” representing the Company’s obligation to return counterparty cash collateral. Cash collateral posted is presented in “Other current assets,” representing the Company’s right to reclaim the cash collateral. The Company does not offset the fair value of its derivative instruments against the fair value of cash collateral posted or received.
The potential offsetting effect to the Company’s derivative assets and liabilities under its master netting agreements and collateral security agreements were as follows:

 As of June 30, 2026
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$632,715 $— $632,715 $(425,802)$— $206,913 
Derivative liabilities433,863 — 433,863 (425,802)— 8,061 

 As of December 31, 2025
Gross Amount Not Offset in the Consolidated Balance Sheets
 Gross Amount Recognized in the Consolidated Balance SheetsGross Amount Offset in the Consolidated Balance SheetsNet Amount Presented in the Consolidated Balance SheetsFinancial InstrumentsCollateral Received and PostedNet Amount
 (in thousands)
Derivative assets$285,276 $— $285,276 $(282,469)$— $2,807 
Derivative liabilities652,619 — 652,619 (282,469)— 370,150 

Effect of Derivative and Non-Derivative Instruments on Consolidated Financial Statements
The pre-tax gains (losses) on the Company’s cash flow hedges, fair value hedges, and net investment hedges recognized in AOCI were as follows:
Three Months EndedSix Months Ended
June 30,
2026		June 30,
2025		June 30,
2026		June 30,
2025
(in thousands)
Cash flow hedges:
Foreign exchange contracts
Amount included in the assessment of effectiveness$120,138 $(1,222,145)$505,368 $(1,709,112)
Fair value hedges:
Foreign exchange contracts
Amount excluded from the assessment of effectiveness(5,261)(18,099)(17,355)(36,130)
Net investment hedges:
Foreign currency-denominated debt
Amount included in the assessment of effectiveness14,083 (93,400)50,586 (138,000)
Total$128,960 $(1,333,644)$538,599 $(1,883,242)
The following tables present the effects of the Company’s derivative instruments and related hedged items on the Consolidated Statements of Operations:
Three Months Ended
June 30, 2026
RevenuesCost of RevenuesInterest ExpenseInterest and Other Income (Expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$12,559,938 $6,036,965 $(175,685)$51,661 
Losses on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of losses reclassified from AOCI(47,630)(891)— — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — — 21,567 
Derivatives designated as hedging instruments— — — (17,903)
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — — (11,384)
Interest rate contracts
Hedged items— — 13,809 — 
Derivatives designated as hedging instruments— — (13,809)— 
Amount recognized in earnings on net periodic settlements— — 236 — 
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts— — — (8,454)
Three Months Ended
June 30, 2025
RevenuesCost of RevenuesInterest ExpenseInterest and Other Income (Expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$11,079,166 $5,325,311 $(182,649)$39,630 
Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI(37,385)344 — — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — — (311,562)
Derivatives designated as hedging instruments— — — 316,192 
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — — (14,802)
Interest rate contracts
Hedged items— — — — 
Derivatives designated as hedging instruments— — — — 
Amount recognized in earnings on net periodic settlements— — — — 
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts— — — (50,021)
Six Months Ended
June 30, 2026
RevenuesCost of RevenuesInterest ExpenseInterest and Other Income (Expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$24,809,695 $11,925,203 $(437,762)$2,903,827 
Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI(180,147)13 — — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — — 77,468 
Derivatives designated as hedging instruments— — — (76,988)
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — — (24,647)
Interest rate contracts
Hedged items— — 13,809 — 
Derivatives designated as hedging instruments— — (13,809)— 
Amount recognized in earnings on net periodic settlements— — 236 — 
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts— — — (319)
Six Months Ended
June 30, 2025
RevenuesCost of RevenuesInterest ExpenseInterest and Other Income (Expense)
(in thousands)
Total amounts presented in the Consolidated Statements of Operations$21,621,967 $10,588,458 $(366,821)$90,529 
Gains (losses) on derivatives in cash flow hedging relationship
Foreign exchange contracts
Amount of gains (losses) reclassified from AOCI127,411 (1,995)— — 
Gains (losses) on derivatives in fair value hedging relationship
Foreign exchange contracts
Hedged items— — — (465,387)
Derivatives designated as hedging instruments— — — 473,627 
Amount excluded from assessment of effectiveness and recognized in earnings based on amortization approach— — — (29,371)
Interest rate contracts
Hedged items— — — — 
Derivatives designated as hedging instruments— — — — 
Amount recognized in earnings on net periodic settlements— — — — 
Losses on derivatives not designated as hedging instruments
Foreign exchange contracts— — — (70,971)