Derivative instruments (Tables)

6 Months Ended

Jun. 30, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The notional amounts and interest rates of our cross-currency swaps as of June 30, 2026, were as follows (notional amounts in millions):


	Foreign currency				U.S. dollars
Hedged notes	Notional amounts		Interest rates		Notional amounts		Interest rates


5.50% 2026 pound sterling Notes	£	475	5.5	%	$	747	6.0	%
4.00% 2029 pound sterling Notes	£	700	4.0	%	$	1,111	4.7	%

Schedule of Unrealized Gains and Losses Recognized in AOCI

Unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions):


	Three months ended June 30,				Six months ended June 30,
Derivatives in cash flow hedging relationships	2026		2025		2026		2025
Foreign currency forward contracts	$	83	$	(503)	$	191	$	(715)
Cross-currency swap contracts	30		180		(53)		246
Forward interest rate contracts	—		—		(40)		—
Total unrealized gains (losses)	$	113	$	(323)	$	98	$	(469)

Schedule of Hedged Liabilities and Cumulative Amount

The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Condensed Consolidated Balance Sheets as follows (in millions):


	Carrying amounts of hedged liabilities(1)				Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities(2)
Condensed Consolidated Balance Sheets locations	June 30, 2026		December 31, 2025		June 30, 2026		December 31, 2025
Current portion of long-term debt	$	1,283	$	1,273	$	33	$	23
Long-term debt	$	5,934	$	5,112	$	(250)	$	(184)

____________

(1) Current portion of long-term debt includes $39 million and $47 million of carrying value with discontinued hedging relationships as of June 30, 2026 and December 31, 2025, respectively. Long-term debt includes $167 million and $185 million of carrying value with discontinued hedging relationships as of June 30, 2026 and December 31, 2025, respectively.

(2) Current portion of long-term debt includes $39 million and $47 million of hedging adjustments on discontinued hedging relationships as of June 30, 2026 and December 31, 2025, respectively. Long-term debt includes $67 million and $85 million of hedging adjustments on discontinued hedging relationships as of June 30, 2026 and December 31, 2025, respectively.

Schedule of Income and Expense Line Items

The following tables summarize the amounts recorded in income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions):



	Three months ended June 30, 2026						Six months ended June 30, 2026
	Product sales		Other (expense) income, net		Interest expense, net		Product sales		Other (expense) income, net		Interest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	9,537	$	(73)	$	(673)	$	17,755	$	2	$	(1,330)
The effects of cash flow and fair value hedging:
(Losses) gains on cash flow hedging relationships reclassified out of AOCI:
Foreign currency forward contracts	$	(13)	$	—	$	—	$	(49)	$	—	$	—
Cross-currency swap contracts	$	—	$	9	$	—	$	—	$	(68)	$	—

Gains (losses) on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)	$	—	$	—	$	34	$	—	$	—	$	56
Derivatives designated as hedging instruments	$	—	$	—	$	(22)	$	—	$	—	$	(30)



	Three months ended June 30, 2025						Six months ended June 30, 2025
	Product sales		Other (expense) income, net		Interest expense, net		Product sales		Other (expense) income, net		Interest expense, net
Total amounts recorded in income and (expense) line items presented in the Condensed Consolidated Statements of Income	$	8,771	$	(394)	$	(694)	$	16,644	$	1,124	$	(1,417)
The effects of cash flow and fair value hedging:
Gains on cash flow hedging relationships reclassified out of AOCI:
Foreign currency forward contracts	$	12	$	—	$	—	$	68	$	—	$	—
Cross-currency swap contracts	$	—	$	172	$	—	$	—	$	255	$	—
(Losses) gains on fair value hedging relationships—interest rate swap agreements:
Hedged items(1)	$	—	$	—	$	(61)	$	—	$	—	$	(157)
Derivatives designated as hedging instruments	$	—	$	—	$	75	$	—	$	—	$	187

__________

(1) Gains (losses) on hedged items do not exactly offset losses (gains) on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships and the recognition of gains on terminated hedges when the corresponding hedged item was paid down in the period.

Schedule of Fair Value of Derivatives

The fair values of derivatives included in the Condensed Consolidated Balance Sheets were as follows (in millions):


	Derivative assets			Derivative liabilities
June 30, 2026	Condensed Consolidated Balance Sheets locations	Fair values		Condensed Consolidated Balance Sheets locations	Fair values
Derivatives designated as hedging instruments:
Foreign currency forward contracts	Other current assets/ Other noncurrent assets	$	306	Accrued liabilities/ Other noncurrent liabilities	$	106
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	329
Interest rate swap contracts	Other current assets/ Other noncurrent assets	7		Accrued liabilities/ Other noncurrent liabilities	330

Total derivatives designated as hedging instruments		313			765

Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	—		Accrued liabilities	1
Total derivatives not designated as hedging instruments		—			1
Total derivatives		$	313		$	766


	Derivative assets			Derivative liabilities
December 31, 2025	Condensed Consolidated Balance Sheets locations	Fair values		Condensed Consolidated Balance Sheets locations	Fair values
Derivatives designated as hedging instruments:
Foreign currency forward contracts	Other current assets/ Other noncurrent assets	$	195	Accrued liabilities/ Other noncurrent liabilities	$	213
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	48		Accrued liabilities/ Other noncurrent liabilities	320
Interest rate swap contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	293

Total derivatives designated as hedging instruments		243			826
Derivatives not designated as hedging instruments:
Foreign currency forward contracts	Other current assets	1		Accrued liabilities	1
Total derivatives not designated as hedging instruments		1			1
Total derivatives		$	244		$	827