v3.26.1
Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments
Note 6. Financial Instruments

Derivatives and Hedging Activities

Derivative instruments and corresponding hedge type were recorded at fair value in the condensed consolidated balance sheets as follows:
 As of June 30, 2026As of December 31, 2025
Asset
Derivatives		Liability
Derivatives		Asset
Derivatives		Liability
Derivatives
 
Type of Hedge (1)
(in millions)
Derivatives designated as
accounting hedges (2):
Foreign currency contracts
NIH
$18 $89 $3 $300 
Interest rate contracts
CF/FV
6 14 1 3 
Cross-currency swap contracts
CF/NIH
178 367 238 370 
$202 $470 $242 $673 
Derivatives not designated as
   accounting hedges:
Foreign currency contracts
$178 $221 $161 $182 
Commodity contracts1,089 1,076 422 924 
Interest rate contracts1 — 1 1 
1,268 1,297 584 1,107 
Total fair value$1,470 $1,767 $826 $1,780 

(1)Derivative contracts designated as either cash flow ("CF"), fair value ("FV") or net investment hedging ("NIH") instruments.
(2)We designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 5, Debt and Borrowing Arrangements. Non-U.S. dollar denominated debt designated as net investment hedges is also disclosed in the Notional Amounts of Derivatives and Other Hedging Instruments table and the Hedges of Net Investments in International Operations section appearing later in this footnote.

We recorded the fair value of our derivative instruments in the condensed consolidated balance sheets as follows:

 As of June 30, 2026As of December 31, 2025
 (in millions)
Other current assets$1,207 $664 
Other assets
263 162 
Other current liabilities
1,275 1,328 
Other liabilities
492 452 

Certain exchange-traded commodity contracts require us to receive from or pay to a broker an amount of cash related to the daily fluctuation in value of the futures contract. Such cash collateral held or placed is known as variation margin and is recorded as other current assets and liabilities. The net asset variation margin balances for futures contracts were $87 million and $364 million as of June 30, 2026 and December 31, 2025, respectively. These balances are excluded from the table above. Our over-the-counter ("OTC") derivative transactions are governed by International Swaps and Derivatives Association agreements and other standard industry contracts. Under these agreements, we do not post nor require collateral from our counterparties. The majority of our derivative contracts do not have a legal right of set-off. We manage the credit risk in connection with these and all our derivatives by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure with each counterparty and monitoring the financial condition of our counterparties.
Fair Value Measurements of Derivative Instruments
Level 1 fair value measurements use quoted prices in active markets for identical assets or liabilities. Level 1 financial assets and liabilities consist of exchange-traded commodity futures and listed options. The fair value of these instruments is determined based on quoted market prices on commodity exchanges.

Level 2 fair value measurements use quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or model-based valuations in which significant inputs are observable in the market. Level 2 financial assets and liabilities consist primarily of OTC foreign currency forwards, options and swaps; OTC commodity options; interest rate swaps; and cross-currency swaps. Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices. Our calculation of the fair value of foreign currency contracts, interest rate swaps, and cross-currency swaps is derived from a discounted cash flow model based on the terms of the contract and the observable market inputs such as interest rate curves and forward rates. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk.

Level 3 fair value measurements use significant unobservable inputs and include the use of judgment by management about the assumptions market participants would use in pricing the asset or liability.

The fair value measurements (asset/(liability)) of our derivative instruments were classified in the fair value hierarchy as follows:
 As of June 30, 2026
 Total
Fair Value of Net
Asset/(Liability)
Quoted Prices in
Active Markets
for Identical
Assets/(Liabilities)
(Level 1)
Significant
Other Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Foreign currency contracts
$(114)$— $(114)$— 
Commodity contracts13 (18)31 — 
Interest rate contracts(7)— (7)— 
Cross-currency swap contracts
(189)— (189)— 
Total derivatives$(297)$(18)$(279)$— 

 As of December 31, 2025
 Total
Fair Value of Net
Asset/(Liability)
Quoted Prices in
Active Markets
for Identical
Assets/(Liabilities)
(Level 1)
Significant
Other Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Foreign currency contracts
$(318)$— $(318)$— 
Commodity contracts(502)(188)(314)— 
Interest rate contracts(2)— (2)— 
Cross-currency swap contracts
(132)— (132)— 
Total derivatives$(954)$(188)$(766)$— 
Notional Amounts of Derivatives and Other Hedging Instruments
The gross notional values of our derivative instruments, as well as non-U.S. dollar debt designated as net investment hedging instruments, were:
 Notional Amount
 As of June 30, 2026As of December 31, 2025
 (in millions)
Foreign currency contracts
$16,974 $19,853 
Commodity contracts
10,897 14,463 
Interest rate contracts2,731 1,932 
Cross-currency swap contracts
9,652 6,912 
Non-U.S. dollar debt designated as net investment hedges:
Euro notes3,638 3,741 
Canadian dollar notes458 474 

Cash Flow Hedges
Our derivative instruments designated as cash flow hedges include interest rate swaps and cross-currency swaps. As of June 30, 2026, the aggregate notional value of those derivatives was $2.1 billion.

Cash flow hedge activity, net of taxes, is recorded within accumulated other comprehensive earnings/(losses) and reclassified to earnings in the periods in which the hedged item affects earnings. Refer to Note 10, Accumulated Other Comprehensive Earnings/(Losses) for additional information on current period activity. Based on current market conditions, less than $1 million, net of taxes, included in accumulated other comprehensive earnings/(losses) from cash flow hedges as of June 30, 2026 are expected to be recognized into earnings during the next 12 months.

As of June 30, 2026, our longest dated cash flow hedge was a cross-currency swap that hedges currency exchange risk on certain debt denominated in a different currency than the functional currency of the borrowing entity over the next 18 years, 9 months.

Fair Value Hedges
Our derivative instruments designated as fair value hedges include interest rate swaps. As of June 30, 2026, the aggregate notional value of those derivatives was $1.6 billion.

Fair value hedge pre-tax gains/(losses) recorded within interest and other expense, net were:
 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2026202520262025
 (in millions)
Interest rate contracts
Hedged items
$(7)$— $2 $— 
Hedging derivatives
8 — (1)— 
Net impact of fair value hedges
$1 $— $1 $— 

Amounts recorded in our condensed consolidated balance sheets related to hedged items in fair value hedging relationships were:
 Carrying Amount of the Hedged ItemsCumulative Fair Value Hedging Adjustments
 As of June 30, 2026As of December 31, 2025As of June 30, 2026As of December 31, 2025
 (in millions)
Long-term debt
$1,591 $— $(2)$— 
Hedges of Net Investments in International Operations

Derivative contracts designated as net investment hedges
Our derivative instruments designated as net investment hedges include foreign currency contracts and cross-currency swaps. As of June 30, 2026, the aggregate notional value of those derivatives was $9.4 billion.

Net investment hedge derivative contract pre-tax impacts on other comprehensive earnings/(losses) and net earnings were:
 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2026202520262025
 (in millions)
(Loss)/gain on NIH contracts (1)
Foreign currency contracts
$10 $(333)$29 $(394)
Cross-currency swap contracts
(20)(466)91 (606)
Total
$(10)$(799)$120 $(1,000)
Amounts excluded from the assessment of hedge effectiveness (2)
Foreign currency contracts
$16 $34 $43 $48 
Cross-currency swap contracts
44 33 84 76 
Total
$60 $67 $127 $124 

(1)Amounts recorded for unsettled and settled NIH derivative contracts are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses).
(2)We assess the effectiveness of NIH relationships based on spot rates and amortize the initial value attributable to the excluded component to earnings over the life of the hedging instrument within interest and other expense, net.

Non-U.S. dollar debt designated as net investment hedges
Pre-tax gains/(losses) related to non-U.S. dollar debt designated as hedges of net investments in international operations, which are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses), were:
 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2026202520262025
 (in millions)
Euro notes$42 $(310)$103 $(457)
Swiss franc notes— (26)— (32)
Canadian dollar notes
9 (25)16 (25)
Total$51 $(361)$119 $(514)
Derivatives Not Designated as Accounting Hedges
Pre-tax gains/(losses) recorded in net earnings for economic hedges were:
 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2026202520262025
 (in millions)
Foreign currency contracts:
Cost of sales
$(22)$(34)$(64)$(165)
Selling, general and administrative expenses
— (6)— (6)
Interest and other expense, net
26 (63)(14)27 
Commodity contracts - Cost of sales
608 19 122 (390)
Interest rate contracts - Interest and other expense, net
— 1 (9)1 
Total$612 $(83)$35 $(533)

Fair Value of Contingent Consideration
Contingent consideration liabilities, which reflect earn-out arrangements from business combinations, are recorded at fair value each period, with changes in fair value reported in earnings. The fair values of our contingent consideration liabilities were $156 million and $149 million as of June 30, 2026 and December 31, 2025, respectively. Contingent consideration liabilities are primarily recorded in other liabilities in the condensed consolidated balance sheets and changes in their fair values are primarily recorded in selling, general and administrative expenses in the condensed consolidated statements of earnings.

The estimated fair values of our contingent consideration liabilities were primarily determined using Monte Carlo simulations. Significant assumptions used in assessing the fair value of the liabilities include financial projections for net revenue, gross profit and EBITDA, as well as discount and volatility rates. Fair value measurements of contingent consideration liabilities are classified as Level 3 in the fair value hierarchy because they use significant unobservable inputs.

Contingent consideration arrangements include an earn-out related to the acquisition of Clif Bar & Company (“Clif Bar”) in 2022. The possible payments under that arrangement range from zero to a maximum total of $2.4 billion, with higher payouts requiring the achievement of targets that generate rates of returns in excess of our base financial projections for the business.

The following is a summary of our contingent consideration liability activity:

 For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
 2026202520262025
 (in millions)
Liability at beginning of period$143 $167 $149 $179 
Changes in fair value
11 (26)3 (38)
Currency
2 1 4 1 
Liability at end of period$156 $142 $156 $142