v3.26.1
Financial Instruments
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments Financial Instruments
Interest Rate Risk Management
We use interest rate swap and interest rate cap agreements to manage our interest rate exposure and to achieve a desired proportion of variable and fixed rate debt. These derivatives may be designated as fair value hedges or cash flow hedges, or non-designated hedges depending on the nature of the risk being hedged. We had no fair value hedges for the three and six months ended June 30, 2026 and 2025, respectively.
Foreign Exchange Risk Management
We are a global company and we are exposed to foreign currency exchange rate fluctuations in the normal course of our business. As a part of our foreign exchange risk management strategy, we use derivative instruments, primarily forward contracts and purchased option contracts, to hedge the following foreign currency exposures, thereby reducing volatility of earnings or protecting fair values of assets and liabilities:
•Foreign currency-denominated assets and liabilities
•Forecasted purchases and sales in foreign currency
At June 30, 2026 and December 31, 2025, we had outstanding forward exchange and purchased option contracts with gross notional values of $2,509 and $2,656 respectively, with terms of less than 12 months. At June 30, 2026, approximately 93% of the contracts mature within three months, 3% mature in three to six months and 4% in six to twelve months.
Foreign Currency Cash Flow Hedges
We designate a portion of our foreign currency derivative contracts as cash flow hedges of our foreign currency-denominated inventory purchases and certain revenue transactions that have a high probability of occurring. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. The amount of ineffectiveness recorded in the Condensed Consolidated Statements of Income (Loss) for these designated cash flow hedges was not material for the three and six months ended June 30, 2026 and 2025, respectively. The net asset (liability) fair value of these contracts was $3 and $(4) as of June 30, 2026 and December 31, 2025, respectively. The related cash flow impacts of all of our derivative activities are reflected as cash flows from operating activities.
Summary of Derivative Instruments Gains (Losses)
Derivative gains and (losses) affect the income statement based on whether such derivatives are designated as hedges of underlying exposures. The following is a summary of derivative gains (losses).
Designated Derivative Instruments Gains (Losses)
The following table provides a summary of gains (losses) on derivative instruments in cash flow hedging relationships:
Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Derivative Loss Recognized in OCI (Effective Portion)
Foreign exchange contracts - forwards and options$2 $(5)$3 $(5)
Interest rate contracts— (1)— (4)
Total$2 $(6)$3 $(9)
Location of Derivative Gains (Losses) Reclassified from AOCL to Income (Effective Portion)
Cost of sales$(2)$(1)$(5)$(1)
Total$(2)$(1)$(5)$(1)
At June 30, 2026, net after-tax gain of $4 was recorded in Accumulated other comprehensive loss associated with our cash flow hedging activity.
Refer to Note 14 - Fair Value of Financial Assets and Liabilities for additional information related to the fair value of our derivative instruments.
Credit Support Annex
The Company may enter into derivative contracts with derivative counterparties that contain a provision to post collateral to the counterparties when these contracts are in a net liability position. At June 30, 2026, the Company had collateral of $1 posted due to this provision.
Non-Designated Derivative Instruments Gains (Losses)
Non-designated derivative instruments are primarily instruments used to hedge foreign currency-denominated assets and liabilities. They are not designated as hedges since there is a natural offset for the remeasurement of the underlying foreign currency-denominated asset or liability. The net (liability) asset fair value of these contracts was $(14) and $2 as of June 30, 2026 and December 31, 2025, respectively.

The following table provides a summary of gains and (losses) on non-designated derivative instruments:
Derivatives NOT Designated as Hedging InstrumentsLocation of Derivative Gain (Loss)Three Months Ended
June 30,		Six Months Ended
June 30,
2026202520262025
Foreign exchange contracts – forwardsOther expenses (income), net – Currency (losses) gains, net$(18)$3 $(33)$9 
Currency losses, net were $8 and $1 for the three months ended June 30, 2026 and 2025, respectively and $13 and $1 for the six months ended June 30, 2026 and 2025, respectively. Net currency gains and losses include the mark-to-market adjustments of the derivatives not designated as hedging instruments and the related cost of those derivatives as well as the remeasurement of foreign currency-denominated assets and liabilities and are included in Other expenses (income), net.