v3.26.1
Fair Value Measurements and Financial Instruments
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Financial Instruments
8. Fair Value Measurements and Financial Instruments

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The levels of inputs used to measure fair value are:

•Level 1—Quoted prices for identical instruments in active markets;
•Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs are observable in active markets; and
•Level 3—Valuations based on inputs that are unobservable, generally utilizing pricing models or other valuation techniques that reflect management’s judgment and estimates.

Assets and Liabilities

The Company bases its fair value estimates on market assumptions and available information. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and current maturities of long-term debt approximated their fair values as of June 30, 2026 and December 31, 2025, due to their short-term nature.
Debt

The fair value of debt was    as follows:
June 30, 2026December 31, 2025
(In millions)LevelFair
Value		Carrying
Value		Fair
Value		Carrying
Value
Unsecured notes due 20262$400 $400 $394 $400 
Unsecured notes due 20292620 595 631 594 
Unsecured notes due 20312355 398 358 398 
Unsecured notes due 20342525 491 540 491 
Euro unsecured notes due 20302569 565 586 580 
Five-Year Term Loan due 2027
2273 275 272 275 

Financial Instruments

The Company directly manages its exposure to risks arising from business operations and economic factors, including fluctuations in interest rates and foreign currencies. The Company uses derivative instruments to manage the volatility related to these exposures.

The notional amount and fair value of derivative instruments were as follows:

June 30, 2026December 31, 2025Balance Sheet Location
(In millions)
Notional
Amount
Fair
Value
Notional
Amount
Fair
Value
Derivatives designated as net investment hedges:
Cross-currency swaps$600 $50 $422 $33 
Other current liabilities
Cross-currency swaps1,222 83 1,400 143 Other long-term liabilities
Derivatives designated as fair value hedges:
Cross-currency swaps$236 $5 $— $— Other long-term assets
Cross-currency swaps— — 236 1 Other long-term liabilities
Derivatives not designated as hedges:
Foreign currency option contracts$217 $3 $308 $3 Other current assets
Foreign currency option contracts223 1 316 4 Other current liabilities
Foreign currency forward contracts137 — — — Other current assets
Foreign currency forward contracts3 — 231 1 Other current liabilities

As of June 30, 2026 and December 31, 2025, the derivatives were classified as Level 2 within the fair value hierarchy. The derivatives are valued using inputs other than quoted prices such as foreign exchange rates and yield curves.
The effect of hedges on AOCIL and in the Condensed Consolidated Statements of Operations was as follows:

Three Months Ended June 30, 2026Six Months Ended June 30, 2026
(In millions)Amount of Gain (Loss) Recognized in Other Comprehensive Income on DerivativeGain (Loss) Reclassified from AOCIL into Net IncomeGain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)Amount of Gain (Loss) Recognized in Other Comprehensive Income on DerivativeGain (Loss) Reclassified from AOCIL into Net IncomeGain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)
Net investment hedges
Cross-currency swaps(1)
$6 $1 $1 $45 $— $2 
Cash flow hedges
Interest rate swaps(1)
— 1 — — 1 — 
Fair value hedges
Cross-currency swaps(2)
(3)— — (1)1 — 
(1) Amounts reclassified to Net income are reported in Interest expense, net in the Condensed Consolidated Statements of Operations.
(2) Amounts reclassified to Net income are reported in Other income, net in the Condensed Consolidated Statements of Operations.

Three Months Ended June 30, 2025Six Months Ended June 30, 2025
(In millions)Amount of Gain (Loss) Recognized in Other Comprehensive Income on DerivativeGain (Loss) Reclassified from AOCIL into Net IncomeGain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)Amount of Gain (Loss) Recognized in Other Comprehensive Income on DerivativeGain (Loss) Reclassified from AOCIL into Net IncomeGain (Loss) Recognized in Net Income on Derivative (Excluded from effectiveness testing)
Net investment hedges
Cross-currency swaps(1)
$(195)$— $1 $(271)$(3)$2 
Cash flow hedges
Interest rate swaps(1)
(1)— — (2)— — 
(1) Amounts reclassified to Net income are reported in Interest expense, net in the Condensed Consolidated Statements of Operations.

Derivatives Not Designated as Hedges

Gains and losses recognized in Other income (expense), net in the Condensed Consolidated Statements of Operations for foreign currency options and forward contracts were as follows:

Three Months Ended June 30, Six Months Ended June 30,
(In millions)2026202520262025
Foreign currency gain (loss) on foreign currency contracts$2 $(6)$5 $(14)