v3.26.1
Derivative Instruments
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
During the year ended December 31, 2024, the Company executed HKD/USD Swaps, designated as hedges of portions of the cash flows related to the SCL senior notes due 2027 through 2031 (the “SCL Swaps”). As of March 31, 2026, the SCL Swaps had a total notional value of $3.41 billion and expire in line with the maturity dates of the related hedged cash flows.
During the year ended December 31, 2025, the Company executed SGD/USD Swaps, designated as hedges of the Company’s net investment in MBS (the “MBS Net Investment Hedges”), and HKD/USD Forwards, designated as hedges of the Company’s net investment in SCL (the “SCL Net Investment Hedges,” and together with the “MBS Net Investment Hedges,” the “Net Investment Hedges”). As of March 31, 2026, the MBS Net Investment Hedges had a total notional value of $1.80 billion and expire on various dates beginning March 2028 through December 2030, and the SCL Net Investment Hedges had a total notional value of $387 million and expire in June and September 2026.
During the three months ended March 31, 2026, the Company executed additional HKD/USD Forwards, designated as hedges of portions of the cash flows related to the SCL senior notes due 2028 through 2031 (the “SCL Forwards”). As of March 31, 2026, the SCL Forwards had a total notional value of $527 million and expire in line with the maturity dates of the related hedged cash flows.
For each reporting period, the fair value of each hedging derivative is recorded as an asset or liability with the offset recorded to “Accumulated other comprehensive income” (“AOCI”) in the accompanying condensed consolidated balance sheets. Refer to “Note 8 — Fair Value Disclosures” for further details. All amounts recorded in AOCI related to the Net Investment Hedges will remain in AOCI until derecognition of the investment. Portions of the amounts recorded in AOCI related to the fair value of the SCL Swaps and SCL Forwards are reclassified to “Other income (expense)” in the same period the hedged cash flows affect earnings. Additionally, upon execution of the SCL Forwards, there is an immediate foreign currency gain or loss resulting from the difference between the contractual forward exchange rate and the spot exchange rate on the execution date. This initial income or cost is reclassified from AOCI to “Other income (expense)” and “Interest expense, net of amounts capitalized” over the duration of the Forward using an appropriate amortization methodology dependent on the hedged item.
The following table presents the net changes in AOCI associated with each year’s hedging activities, net of tax:
Three Months Ended March 31,
20262025
Cash Flow HedgesNet Investment HedgesCash Flow HedgesNet Investment Hedges
(In millions)
Net loss from hedge adjustments recognized in AOCI as of January 1
$(48)$15 $(32)$— 
Hedge adjustments recognized during the current period
6 5 18 — 
Net (gain) loss reclassified from AOCI into earnings
(27)— (8)— 
Net gain (loss) from hedge adjustments recognized in AOCI as of March 31
$(69)$20 $(22)$— 
As of March 31, 2026, approximately $40 million of the net loss deferred in AOCI related to the SCL Swaps and SCL Forwards is expected to be reclassified from AOCI into “Other income (expense)” over the 12-month period ending March 31, 2027. The actual amounts that will be reclassified over the next twelve months may vary from this amount as a result of changes in market conditions.
The cash flow impact is included in operating activities for the SCL Swaps and SCL Forwards, and in investing activities for the Net Investment Hedges in the accompanying condensed consolidated statements of cash flows.