v3.26.1
Derivatives
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Note 16. Derivatives
The Company executes derivative transactions to manage exposures arising in the normal course of
business. The Company does not enter into derivative transactions for trading or speculative purposes. From
time to time, the Company executes currency forward contracts to mitigate its currency risk and commodity
swaps to mitigate exposure to energy prices. All derivatives are recorded at fair value on the balance sheet.
Each derivative is designated as either a cash flow hedge, a fair value hedge, or remains undesignated.
Changes in the fair value of derivatives that are designated and effective as cash flow hedges are recorded in
other comprehensive income and reclassified to the income statement when the effects of the item being
hedged are recognized in the income statement. Changes in the fair value of undesignated hedges are
recognized currently in the income statement. All ineffective changes in derivative fair values are recognized
currently in net income. The notional value of undesignated foreign currency contracts was $500 million at
June 30, 2026, while the notional value of commodity swaps designated as cash flow hedges was $66 million
at June 30, 2026 and $51 million at December 31, 2025. The fair value of derivatives was categorized as
Level 2 in the fair value hierarchy.
The fair value of the derivative instruments entered into by the Company were as follows:
Balance
As of
As of
(in millions)
Sheet Location
June 30, 2026
December 31, 2025
Assets:
Commodity swaps
Prepaid expenses and
other current assets
$9
$—
Commodity swaps
Other noncurrent
assets
2
—
Liabilities:
Commodity swaps
Other current liabilities
1
1
Foreign currency contracts
Other noncurrent
liabilities
21
—
The pretax impact on earnings that changes in the fair values of derivative instruments entered into the
Company were as follows:
Location of Gain (Loss)
For the three months ended
(in millions)
Recognized in Income
June 30, 2026
June 30, 2025
Commodity swaps — Recognized in OCI
OCI (pretax)
$(15)
$3
Commodity swaps — Reclassified from OCI
Cost of revenues
(8)
2
Foreign currency contracts
Interest expense, net
(21)
—
Location of Gain (Loss)
For the six months ended
(in millions)
Recognized in Income
June 30, 2026
June 30, 2025
Commodity swaps — Recognized in OCI
OCI (pretax)
$—
$13
Commodity swaps — Reclassified from OCI
Cost of revenues
(10)
4
Foreign currency contracts
Interest expense, net
(21)
—