v3.26.1
Derivatives and Hedging Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES AND HEDGING INSTRUMENTS
10. DERIVATIVES AND HEDGING INSTRUMENTS
We are exposed to a wide variety of risks arising from both our business operations and economic conditions which we manage principally through management of our core business activities. Where deemed appropriate, to manage the impact of these exposures on earnings and/or cash flows, we may enter into a variety of derivative financial instruments. We do not hold or issue derivative financial instruments for trading or speculative purposes.
Foreign Currency Exchange Risk A substantial portion of our operations are located outside the U.S. and, as such, our results can be significantly impacted, both positively and negatively, by changes in foreign currency exchange rates.
Our risk management strategy may include hedging, on behalf of certain subsidiaries, a portion of our forecasted, foreign currency denominated cash flows. We generally designate and account for foreign currency exchange contracts as cash flow hedges of forecasted transactions when they are determined to be highly effective.
We may also utilize forward foreign currency exchange contracts to hedge exposures of assets and liabilities denominated in foreign currencies. We recognize the gains and losses on these types of hedges in earnings as exchange rates change.
Interest Rate Risk We may elect to manage interest rate risk associated with our vault cash rental obligations and floating- rate debt through the use of derivative financial instruments.
To manage differences in the amount, timing and duration of known or expected cash payments related to our floating-rate debt and vault cash agreements, we have entered into interest rate swap contracts. We designate these contracts as cash
flow hedges of forecasted transactions when they are determined to be highly effective. Payments and receipts related to interest rate swap contracts are included in Operating Activities in the Condensed Consolidated Statements of Cash Flows.
In 2025, we terminated certain interest rate swap contracts associated with our floating-rate debt and U.S. Dollar vault cash agreements for cash proceeds of $13 million. The related deferred gains recorded in AOCI are being reclassified to Cost of services and Interest expense through December 31, 2027, consistent with the original hedge terms.
As of June 30, 2026, we had interest rate swap contracts with aggregate notional amounts of $2.0 billion and fixed rates ranging from 4.294% to 4.306%, with maturities through March 31, 2027. These contracts are designated as cash flow hedges of the floating-rate interest associated with our U.S. Dollar vault cash agreements. Amounts recorded in AOCI will be reclassified to Cost of services as payments are made on our vault cash rental obligations. As of June 30, 2026 and December 31, 2025, the AOCI balance related to interest rate derivatives was a net loss of $4 million and $16 million, respectively.
The following table indicates the location and fair value of derivative assets and liabilities reported in our Condensed Consolidated Balance Sheets, as well as the applicable fair value hierarchy levels. There were no changes in valuation techniques and no transfers between levels 1, 2, or 3 during the periods presented.
Fair Values of Derivative Instruments
June 30, 2026December 31, 2025
In millions
Balance Sheet
Location
Fair Value HierarchyNotional
Amount		Fair
Value		Notional
Amount		Fair
Value
Derivatives designated as hedging instruments
Liabilities:
Interest rate swap contractsOther current liabilitiesLevel 2$(7)$(17)
Interest rate swap contracts Other liabilitiesLevel 2— (7)
Total liabilities$2,000 $(7)$2,000 $(24)
Derivatives not designated as hedging instruments
Foreign currency exchange contracts Other current assetsLevel 2$74 $— $252 $1 
Foreign currency exchange contracts Other current liabilitiesLevel 2$320 $(2)$124 $(1)
As of June 30, 2026, there were $2 million of pre-tax losses related to cash flow hedges deferred in AOCI that are expected to be reclassified to income over the 12-month period ending June 30, 2027. The actual amounts that will be reclassified to income over the next 12 months will vary from this amount as a result of changes in market conditions.
Gains and losses reclassified from AOCI into the Condensed Consolidated Statements of Operations are recorded within Cost of services and Interest expense. The effects of derivative instruments on the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2026 and 2025 were as follows:
Amount of (Loss) Gain Recognized in Other Comprehensive Income (Loss) on Derivative ContractsAmount of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statement of Operations
In millionsThree months ended June 30,Three months ended June 30,
Derivatives in Cash Flow Hedging Relationships20262025Location of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statements of Operations20262025
Interest rate swap contracts $4 $(4)Cost of Services$3 $(3)
Interest rate swap contracts$— $— Interest expense$(1)$— 
Amount of (Loss) Gain Recognized in Other Comprehensive Income (Loss) on Derivative ContractsAmount of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statement of Operations
In millionsSix months ended June 30,Six months ended June 30,
Derivatives in Cash Flow Hedging Relationships20262025Location of (Gain) Loss Reclassified from AOCI into the Condensed Consolidated Statements of Operations20262025
Interest rate swap contracts $11 $(16)Cost of Services$6 $(15)
Interest rate swap contracts$— 1 Interest Expense$(1)$(1)
Amounts recorded in our Condensed Consolidated Statements of Operations related to fair value changes and settlements of foreign currency forward contracts not designated as hedges for the three and six months ended June 30, 2026 and 2025, were as follows:
Amount of Gain (Loss) Recognized in the Condensed Consolidated Statements of Operations
In millionsThree months ended June 30,Six months ended June 30,
Derivatives not Designated as Hedging InstrumentsLocation of Gain (Loss) Recognized in the Condensed Consolidated Statements of Operations2026202520262025
Foreign exchange contractsOther income (expense), net$9 $(9)$4 $(12)
Concentration of Credit Risk
We may be subject to concentrations of credit risk on accounts receivable, financial instruments such as hedging instruments, and cash and cash equivalents. Credit risk includes the risk of nonperformance by counterparties and the maximum potential loss may exceed the amount recognized in our Condensed Consolidated Balance Sheets. Exposure to credit risk is managed through credit approvals, credit limits, the selection of major financial institutions as counterparties to hedging transactions and monitoring procedures. As of June 30, 2026 and December 31, 2025 we did not have any major concentration of credit risk related to financial instruments.
Our business often involves large transactions with customers, and if one or more of those customers were to default on its obligations under applicable contractual arrangements, we could be exposed to potentially significant losses. We believe that our reserves for potential losses are adequate.