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DERIVATIVE FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
For purposes of mitigating the effect of changes in exchange rates, we hold derivative financial instruments to hedge the risks of certain identifiable and anticipated transactions and recorded assets and liabilities in our condensed consolidated balance sheets. The types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates. Our policy is to hold derivatives only for the purpose of hedging risks associated with anticipated foreign currency purchases and sales created in the normal course of business.
Generally, we enter into hedging relationships such that changes in the fair values or cash flows of the transactions being hedged are expected to be offset by corresponding changes in the fair value of the derivatives. For derivative instruments that qualify as a cash flow hedge, the effective portion of the gain or loss of the derivative, which does not include the time value component of a forward currency rate, is reported as a component of other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, any change in the fair value of those instruments is reflected in earnings in the period such change occurs.
We hold the following types of derivative instruments:
Foreign exchange rate forward contracts - The purpose of these instruments is to hedge the risk of changes in future cash flows of anticipated purchase or sale commitments denominated in foreign currencies and recorded assets and liabilities in our condensed consolidated balance sheets. As of June 30, 2026, we held the following material net positions:
Net Notional Amount
Bought (Sold)
(In millions)USD Equivalent
Euro983.9 1,121.2 
British pound874.0 1,155.0 
Norwegian krone9,290.0 936.2 
Australian dollar490.7 337.9 
Malaysian ringgit251.1 61.5 
Singapore dollar75.6 58.4 
Brazilian real(149.1)(28.8)
Indian rupee2,068.2 21.8 
Indonesian rupiah744,211.8 41.6 
Canadian dollar(76.7)(53.9)
U.S. dollar(3,787.5)3,787.5 
Foreign exchange rate instruments embedded in purchase and sale contracts - The purpose of these instruments is to match offsetting currency payments and receipts for particular projects or comply with government restrictions on the currency used to purchase goods in certain countries. As of June 30, 2026, our portfolio of these instruments included the following material net positions:
Net Notional Amount
Bought (Sold)
(In millions)USD Equivalent
Brazilian real48.9 9.4 
Euro(9.5)(10.8)
Fair value amounts for all outstanding derivative instruments have been determined using available market information and commonly accepted valuation methodologies. See Note 12 for further details. Accordingly, the estimates presented may not be indicative of the amounts we would realize in a current market exchange and may not be indicative of the gains or losses we may ultimately incur when these contracts are settled.
The following table presents the location and fair value amounts of derivative instruments reported in the condensed consolidated balance sheets:
June 30, 2026December 31, 2025
(In millions)AssetsLiabilitiesAssetsLiabilities
Derivatives designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments$242.2 $246.3 $404.4 $354.7 
Long-term - Derivative financial instruments162.2 181.8 179.2 202.4 
Total derivatives designated as hedging instruments404.4 428.1 583.6 557.1 
Derivatives not designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments$9.4 $49.5 $37.7 $3.6 
Long-term - Derivative financial instruments— — 7.9 — 
Total derivatives not designated as hedging instruments9.4 49.5 45.6 3.6 
Total derivatives$413.8 $477.6 $629.2 $560.7 
Cash flow hedges of forecasted transactions, net of tax, which qualify for hedge accounting, resulted in accumulated other comprehensive losses of $33.5 million and $44.0 million, as of June 30, 2026 and December 31, 2025, respectively. We expect to transfer an approximate $93.2 million loss from accumulated OCI to earnings during the next 12 months when the anticipated transactions actually occur. All anticipated transactions currently being hedged are expected to occur by the second half of 2029.
The following table presents the gains recognized in OCI related to derivative instruments designated as cash flow hedges:
Gain Recognized in OCI
Three Months Ended June 30,Six Months Ended June 30,
(In millions)2026202520262025
Foreign exchange contracts$6.2 $47.0 $33.5 $104.1 
The following table represents the effect of cash flow hedge accounting in the condensed consolidated statements of income for the three and six months ended June 30, 2026 and 2025:

(In millions)Three Months Ended June 30, 2026Three Months Ended June 30, 2025
Total amount of income (expense) presented in the condensed consolidated statements of income associated with hedges and derivativesRevenueCost of salesOther income (expense), netRevenueCost of salesOther income (expense), net
Amounts reclassified from accumulated OCI to income (loss)$15.4 $(8.2)$12.2 $(14.0)$13.0 $(6.1)
Amounts excluded from effectiveness testing26.4 (14.4)(41.7)5.8 1.1 (9.1)
Total cash flow hedge gain (loss) recognized in income41.8 (22.6)(29.5)(8.2)14.1 (15.2)
Gain (loss) recognized in income on derivatives not designated as hedging instruments0.4 15.5 1.2 (0.4)— 13.2 
Total(a)
$42.2 $(7.1)$(28.3)$(8.6)$14.1 $(2.0)

(In millions)Six Months Ended June 30, 2026Six Months Ended June 30, 2025
Total amount of income (expense) presented in the condensed consolidated statements of income associated with hedges and derivativesRevenueCost of salesOther income (expense), netRevenueCost of salesOther income (expense), net
Amounts reclassified from accumulated OCI to income (loss)$15.7 $10.4 $11.8 $(22.8)$25.5 $(9.1)
Amounts excluded from effectiveness testing41.5 (34.8)(35.9)8.0 5.1 (20.1)
Total cash flow hedge gain (loss) recognized in income57.2 (24.4)(24.1)(14.8)30.6 (29.2)
Gain (loss) recognized in income on derivatives not designated as hedging instruments1.9 (1.1)7.3 (1.6)0.1 31.9 
Total(a)
$59.1 $(25.5)$(16.8)$(16.4)$30.7 $2.7 
(a) The total effect of cash flow hedge accounting on selling, general and administrative expense is not material for the three and six months ended June 30, 2026 and 2025.

Balance Sheet Offsetting - We execute derivative contracts with counterparties that consent to a master netting agreement, which permits net settlement of the gross derivative assets against gross derivative liabilities. Each instrument is accounted for individually, and assets and liabilities are not offset. As of June 30, 2026 and December 31, 2025, we had no collateralized derivative contracts. The following tables present both gross and net information of recognized derivative instruments:

June 30, 2026December 31, 2025
(In millions)Gross Amount RecognizedGross Amounts Not Offset, Permitted Under Master Netting AgreementsNet AmountGross Amount RecognizedGross Amounts Not Offset, Permitted Under Master Netting AgreementsNet Amount
Derivative assets$413.8 $(214.0)$199.8 $629.2 $(227.1)$402.1 
Derivative liabilities$477.6 $(214.0)$263.6 $560.7 $(227.1)$333.6