v3.26.1
Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments     
Risk Management Objective of Using Derivatives
We are exposed to certain risks arising from both our business operations and economic conditions, and we principally manage our exposures to these risks through management of our core business activities. Certain of our foreign operations expose us to fluctuations of foreign interest rates and exchange rates that may impact revenue, expenses, cash receipts, cash payments, and the value of our stockholders' equity. We enter into derivative financial instruments to protect the value or fix the amount of certain cash flows in terms of the functional currency of the business unit with that exposure and also reduce the volatility in stockholders' equity.
Cash Flow Hedges of Foreign Exchange Risk
We are exposed to fluctuations in various foreign currencies against our functional currencies. We use foreign currency derivatives, including currency forward agreements, to manage our exposure to fluctuations in the various exchange rates. Currency forward agreements involve fixing the foreign currency exchange rate for delivery of a specified amount of foreign currency on a specified date.
Certain business units with exposure to foreign currency exchange risks have designated certain currency forward agreements as cash flow hedges of forecasted intercompany inventory purchases and sales. Our principal currency exposures for which we enter into cash flow hedges relate to the Euro, Swedish Krona, British Pound, Canadian Dollar, Polish Zloty, and Australian Dollar. We had foreign exchange contracts with purchased notional amounts totaling $374 million and $759 million as of June 30, 2026 and December 31, 2025, respectively. The most significant foreign currency derivatives are as follows:
(in millions)Notional Value
Sell CurrencyBuy CurrencyJune 30,
2026		December 31,
2025
USDEUR$145 $275 
EURSEK104 226 
GBPEUR58 119 
CADEUR23 44 
CADUSD17 37 
EURPLN13 33 
AUDEUR14 25 
$374 $759 
Hedges of Net Investments in Foreign Operations
We are exposed to changes in foreign currencies impacting our net investments held in foreign subsidiaries.
Cross-Currency Swaps
We have foreign currency exposure in the Euro-U.S. Dollar and Chinese Yuan (CNY) -U.S. Dollar exchange rates, due to our net investment in foreign operations. We use cross-currency swaps to partially mitigate the impact of the foreign currency rate changes on the Company’s net investments denominated in such foreign currencies. The Company’s cross-currency swaps are designated as net investment hedges.
As of June 30, 2026, the total notional amount of derivative instruments designated as net investment hedges was $4,291 million and $3,171 million as of June 30, 2026 and December 31, 2025, respectively.
The table below presents the effect of our derivative financial instruments on the Condensed Consolidated Income Statements and Statements of Comprehensive Income. Items in the table below reflect changes in "Other comprehensive income (loss)" ("OCI/L") within the Statements of Comprehensive Income:
Three Months EndedSix Months Ended
June 30,June 30,
(in millions)2026202520262025
Derivatives in Cash Flow Hedges
Foreign Exchange Contracts
Amount of (loss)/gain recognized in OCI/L$(4)$15 $(12)$30 
Amount of loss/(gain) reclassified from OCI/L into Revenue1 2 (2)5 
Amount of gain reclassified from OCI/L into Cost of revenue(2)(1)(4)(2)
Derivatives Net Investment Hedges
Cross-Currency Swaps
Amount of gain/(loss) recognized in OCI/L$15 $(271)$85 $(355)
Amount of income recognized in Interest expense15 9 28 20 
As of June 30, 2026, $8 million of net loss on cash flow hedges are expected to be reclassified into earnings in the next 12 months.
As of June 30, 2026, no gains or losses on the net investment hedges are expected to be reclassified into earnings over their duration.
The fair values of our derivative assets and liabilities are measured on a recurring basis using Level 2 inputs and are determined through the use of models that consider various assumptions including yield curves, time value and other measurements.
The fair values of our derivative contracts currently included in our hedging program were as follows:
(in millions)June 30,
2026		December 31,
2025
Derivatives designated as hedging instruments
Assets
Cash Flow Hedges
  Prepaid and other current assets$— $7 
Net Investment Hedges
Other non-current assets$6 $— 
Liabilities
Cash Flow Hedges
  Accrued and other current liabilities$(8)$(2)
Net Investment Hedges
Other non-current accrued liabilities$(233)$(317)