v3.26.1
Derivatives
 6 Months Ended
Jun. 27, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
Derivative Contracts
The following table provides the aggregate notional value of outstanding derivative contracts.
(In millions)June 27, 2026December 31, 2025
Notional amount
Cross-currency interest rate swaps designated as net investment hedge - euro$— $1,000 
Cross-currency interest rate swaps designated as net investment hedge - Japanese yen1,100 4,650 
Cross-currency interest rate swaps designated as net investment hedge - Swiss franc11,800 5,000 
Currency exchange contracts1,496 2,248 
While certain derivatives are subject to netting arrangements with counterparties, the company does not offset derivative assets and liabilities within the balance sheet. The following tables present the fair value of derivative instruments in the accompanying balance sheets and statements of income.
 Fair value – assetsFair value – liabilities
 June 27,December 31,June 27,December 31,
(In millions)2026202520262025
Derivatives designated as hedging instruments
Cross-currency interest rate swaps
$267 $684 $666 $504 
Derivatives not designated as hedging instruments
Currency exchange contracts
1 2 1 2 
Total derivatives$268 $685 $667 $506 
The following table provides information on the company’s derivative positions subject to master netting arrangements, presented on a net basis, had the company elected to offset the asset and liability balances of its positions in the consolidated balance sheets:
 Fair value – assetsFair value – liabilities
 June 27,December 31,June 27,December 31,
(In millions)2026202520262025
Gross amounts recognized in the consolidated balance sheets$268 $685 $667 $506 
Gross amounts subject to offset in master netting arrangements not offset in the consolidated balance sheets(189)(319)(189)(319)
Total derivatives, net$79 $366 $478 $187 
The fair value of the cross-currency interest rate swaps is included in the accompanying balance sheets under the caption other current assets, other assets, other current liabilities, or other long-term liabilities. The fair value of the currency exchange contracts is included in the accompanying balance sheets under the captions other current assets or other accrued expenses.
 Gain/(loss) recognized
Three months endedSix months ended
June 27,June 28,June 27,June 28,
(In millions)2026202520262025
Derivatives designated as cash flow hedges
Interest rate swaps
Amount reclassified from accumulated other comprehensive income/(loss) to interest expense$(1)$(1)$(2)$(2)
Financial instruments designated as net investment hedges
Foreign currency-denominated debt and other payables
Included in cumulative translation adjustment within other comprehensive income/(loss)
119 (788)341 (1,238)
Cross-currency interest rate swaps
Included in cumulative translation adjustment within other comprehensive income/(loss)
(43)(515)(98)(634)
Included in interest expense
99 67 196 134 
Derivatives not designated as hedging instruments
Currency exchange contracts
Included in cost of product revenues
— (3)1 (2)
Included in other income/(expense)
(7)3 (1)13 
Gains and losses recognized on currency exchange contracts are included in the accompanying statements of income together with the corresponding, offsetting losses and gains on the underlying hedged transactions.
See Note 1 to the consolidated financial statements for 2025 included in the company’s Annual Report on Form 10-K for additional information on the company’s risk management objectives and strategies.