We use derivative financial instruments in the normal course of business to hedge foreign currency exchange rate risk. We do not use derivative financial instruments for trading or speculative purposes.

We enter into cross-currency swaps to hedge the foreign currency exposure arising from our net investments in foreign operations. These swaps are designated as net investment hedges. The resulting gains and losses from these derivatives offset the foreign currency translation gains and losses on the associated net investments, both recorded as a component of AOCI.

The initial value of any excluded components from the assessment of effectiveness are recognized using a systematic and rational method over the life of the hedging instrument. The interest accrual component of cross-currency swaps is reported directly in earnings.

We enter into foreign currency forward contracts to manage our currency exchange rate risk related to intercompany lending and cash management practices. These derivatives do not qualify for hedge accounting treatment. Gains and losses from the revaluation of these contracts are recognized as a component of Operating, administrative and other expense and are offset by the gains and losses recognized on the revaluation of intercompany loans and other foreign currency balances. The impact to net income was not significant for the six months ended June 30, 2026 and 2025.

We are exposed to credit risk in the event of nonperformance of the counterparties under the derivative contracts. We manage this risk by entering transactions with major financial institutions, monitoring their credit ratings and diversifying our positions across counterparties. Our derivatives are subject to master netting arrangements that allow for net settlement of contracts with the same counterparties. There are currently no requirements for the Company to post collateral.

In October 2025, we entered into cross-currency swaps designated as net investment hedges to hedge the net investments of euro, Japanese yen, Swiss franc and Canadian dollar functional currency foreign subsidiaries. The total notional of these swaps is $805.8 million, which will mature between 2030 and 2035.

During the six months ended June 30, 2026, we entered into forward contracts to hedge foreign currency risk that were not designated as hedges which generally have a maturity of less than 90 days. The following table details the gross notional value and net basis of these contracts.


(in billions)	June 30, 2026		December 31, 2025
Foreign currency forward contracts, gross notional value	$	1.63	2.04
Foreign currency forward contracts, net basis	1.08		1.23

The following table summarizes the asset and liability positions of our derivatives on a gross basis and the net asset or net liability position with the financial institutions from which we purchase these contracts.



	Fair Value Asset			Fair Value Liability
	June 30, 2026		December 31, 2025	June 30, 2026		December 31, 2025
(in millions)
Derivatives designated as hedging instruments:
Net investment hedges:
Gross amount of derivative	$	8.7	3.6	$	2.3	10.0
Offsetting derivative	(1.7)		(1.1)	(1.7)		(1.1)
Net amount of net investment hedges	$	7.0	2.5	$	0.6	8.9

Derivatives not designated as hedging instruments:
Foreign currency forward contracts:
Gross amount of derivative	$	6.1	2.2	$	12.6	4.2
Offsetting derivative	(1.8)		(0.6)	(1.8)		(0.6)
Net amount of foreign currency forward contracts	$	4.3	1.6	$	10.8	3.6
Total derivatives at fair value	$	11.3	4.1	$	11.4	12.5

Derivatives designated as hedging instruments are presented in Other long-term assets or Other long-term liabilities. Those not designated as hedging instruments are presented in Restricted cash, prepaid and other current assets or Other current liabilities.

The following table summarizes the pre-tax impact of the outstanding derivatives on the Consolidated Statements of Comprehensive Income.


	Three Months Ended June 30,			Six Months Ended June 30,
(in millions)	2026		2025	2026		2025
Derivatives designated as hedging instruments:
Interest income	$	2.6	—	$	5.1	—
(Loss) gain recognized in Accumulated other comprehensive loss	(10.4)		—	12.8		—
Derivatives not designated as hedging instruments:
Gain (loss) recognized in Operating, administrative and other	$	1.2	(0.4)	$	(4.5)	6.9

We did not enter into any net investment hedges for the six months ended June 30, 2025. As such, there was no impact to the comparative periods.