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 $173 million and $229 million as of June 30, 2026 and December

31, 2025, respectively. The estimated fair value was $173 million and $225 million as of June 30, 2026 and December 31, 2025,

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 13 months in duration but with maximum remaining maturities of up to 13 years as of June 30, 2026.

Cash Flow Hedges. The total amount in AOCI related to cash flow hedges was a net $19 million gain and a net $100 million gain as of

June 30, 2026 and December 31, 2025, respectively, of which a net $3 million gain and a net $26 million gain, respectively, related to our

share of AOCI recognized at our non-consolidated joint ventures. We expect to reclassify $5 million of pre-tax net gains 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 $1 million and $(10) million for the three months

ended and $22 million and $(19) million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, the maximum

length of time over which we are hedging forecasted transactions was approximately 9 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-U.S.

dollar functional equity method investees. The total amount in AOCI related to net investment hedges was a net gain of $33 million and

$31 million as of June 30, 2026 and December 31, 2025, 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


June 30, 2026	Gross Notional	All other current assets	All other assets	All other current liabilities	All other liabilities
Foreign currency exchange contracts accounted for as hedges(a)	$7,593	$60	$164	$61	$73
Foreign currency exchange contracts(a)	38,061	511	131	446	154
Commodity and other contracts	570	45	28	6	7
Derivatives not accounted for as hedges	$38,631	$555	$159	$452	$161
Total gross derivatives	$46,224	$616	$323	$513	$234
Netting adjustment(b)		(337)	(156)	(334)	(156)
Net derivatives recognized in the Consolidated Statement of Financial Position		$279	$167	$179	$78


December 31, 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(a)	$6,547	$72	$147	$28	$23
Foreign currency exchange contracts(a)	38,005	382	161	316	156
Commodity and other contracts	389	52	32	1	2
Derivatives not accounted for as hedges	$38,393	$434	$193	$317	$158
Total gross derivatives	$44,940	$506	$340	$345	$181
Netting adjustment(b)		(274)	(118)	(271)	(118)
Net derivatives recognized in the Consolidated Statement of Financial Position		$233	$223	$74	$63

(a) Total gross notional amount of foreign currency exchange contracts represents the volume of derivatives activity. When foreign currency

exchange contracts with the same currency pair and maturity date are netted across different counterparties, the notional amount

reduces to approximately $24,607 million and $24,740 million as of June 30, 2026 and December 31, 2025, respectively.

(b) 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

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


Three months ended June 30, 2026	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 Statement of Income (Loss)	$11,104	$8,744	$1,372	$80
Effects of cash flow hedges	$—	$—	$—	$1
Foreign currency exchange contracts	(1)	50	4	(2)
Commodity and other contracts	—	(9)	(15)	—
Effect of derivatives not designated as hedges	$(1)	$41	$(11)	$(2)
Three months ended June 30, 2025
Total amount of income and expense in the Consolidated Statement of Income (Loss)	$9,111	$7,266	$1,185	$115
Effects of cash flow hedges	$(10)	$—	$—	$—
Foreign currency exchange contracts	2	(46)	(31)	7
Commodity and other contracts	—	2	(9)	—
Effect of derivatives not designated as hedges	$2	$(44)	$(40)	$7


Six months ended June 30, 2026	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 Statement of Income (Loss)	$20,442	$16,302	$2,670	$4,842
Effects of cash flow hedges	$13	$(9)	$—	$1
Foreign currency exchange contracts	—	109	(10)	4
Commodity and other contracts	—	(10)	(10)	—
Effect of derivatives not designated as hedges	$—	$99	$(20)	$4
Six months ended June 30, 2025
Total amount of income and expense in the Consolidated Statement of Income (Loss)	$17,143	$13,828	$2,373	$234
Effects of cash flow hedges	$(19)	$—	$—	$—
Foreign currency exchange contracts	3	(49)	(69)	9
Commodity and other contracts	—	(6)	(4)	—
Effect of derivatives not designated as hedges	$3	$(55)	$(73)	$9

The amount excluded for cash flow hedges was a gain (loss) of $7 million and $12 million for the three months ended and $16 million and

$20 million for the six months ended June 30, 2026 and 2025, respectively. These amounts are recognized in Sales of equipment, Sales of

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