v3.26.1
Financial Instruments and Fair Value Measures (Tables)
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of financial assets and liabilities accounted for at fair value on recurring basis The following table sets forth the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, 2026 and December 31, 2025:
Fair Value
Notional AmountsAssetsLiabilities
March 31,
2026
December 31, 2025
March 31,
2026
December 31, 2025
March 31,
2026
December 31, 2025
Designated instruments:
Designated forward currency exchange contracts$1,235 $637 $24 $15 (a)$11 $8 (c)
Designated cross-currency swaps1,775 1,775 — — (b)114 169 (d)
Designated interest-rate swaps625 625 — — (b)11 16 (d)
Total designated instruments3,635 3,037 24 15 136 193 
Undesignated instruments:
Undesignated forward currency exchange contracts937 737 1 2 (a)4 3 (c)
Total undesignated instruments937 737 1 2 4 3 
Total designated and undesignated instruments$4,572 $3,774 $25 $17 $140 $196 
(a) Recorded within Other current assets and Other assets
(b) Recorded within Other assets
(c) Recorded within Accrued liabilities and Other liabilities
(d) Recorded within Other liabilities
Effect of derivatives on the income statement
The following tables present the pretax impact that changes in the fair values of derivatives designated as cash flow hedges and net investment hedges had on OCI, AOCI and earnings:
Three Months Ended March 31,
20262025
(Dollars in millions)
Cash flow hedges
  Gain (loss) reclassified from AOCI to income:
     Cost of goods sold$(3)$— 
     Interest expense — — 
     Non-operating (expense) income (12)19 
  Gain (loss) recognized in other comprehensive income (loss)18 17 
Net investment hedges
  Gain (loss) recognized in other comprehensive income (loss)39 (44)
Derivatives not designated as hedging instruments
The following table summarizes the pretax gain (loss) that changes in the fair values of derivatives not designated as hedging instruments had on earnings:
Three Months Ended March 31,
20262025
Contract TypeLocation(Dollars in millions)
Interest rate swaps
Interest expense (1)
$— $— 
Forward currency exchange contractsNon-operating income9 (10)

(1) Includes interest income of $6 million, partially offset by marked-to-market remeasurement losses of $6 million, for the three months ended March 31, 2025. There were no undesignated interest rate swaps outstanding during 2026.
Summary of financial assets and liabilities not carried at fair value
The following table sets forth the Company’s financial assets and liabilities that were not carried at fair value:
March 31, 2026
December 31, 2025
Carrying ValueFair ValueCarrying ValueFair Value
(Dollars in millions)
Term Loan Facilities
$624 $635 $626 $639 
  2032 Senior Notes791 828 790 850