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Financial Instruments
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments Disclosure
NOTE 13: FINANCIAL INSTRUMENTS
We enter into derivative instruments primarily for risk management purposes, including derivatives designated as hedging instruments and those utilized as economic hedges. We operate internationally and in the normal course of business, are exposed to fluctuations in interest rates, foreign exchange rates, and commodity prices. These fluctuations can increase the costs of financing, investing, and operating the business. We have used derivative instruments, including swaps, forward contracts, and options, to manage certain foreign currency, interest rate, and commodity price exposures.
The present value of the aggregate notional principal of our outstanding foreign currency hedges was $17 billion and $16 billion at December 31, 2024 and 2023, respectively. At December 31, 2024, all derivative contracts accounted for as cash flow hedges will mature by May 2036. Additional information pertaining to foreign exchange and hedging activities is included in “Note 1: Basis of Presentation and Summary of Accounting Principles.”
The following table summarizes the fair value and presentation in the Consolidated Balance Sheet for derivative instruments as of December 31:
(dollars in millions)Balance Sheet Location20242023
Derivatives designated as hedging instruments:
Foreign exchange contractsOther assets, current$177 $225 
Other accrued liabilities350 143 
Derivatives not designated as hedging instruments:
Foreign exchange contractsOther assets, current$10 $83 
Other accrued liabilities101 37 
The effect of cash flow hedging relationships on Accumulated other comprehensive loss and on the Consolidated Statement of Operations in 2024 and 2023 are presented in “Note 18: Equity.” The amounts of gain or loss are attributable to foreign exchange contract activity and are primarily recorded as a component of Products sales when reclassified from Accumulated other comprehensive loss.
The Company utilizes the critical terms match method in assessing derivatives for hedge effectiveness. Accordingly, the hedged items and derivatives designated as hedging instruments are highly effective.
As of December 31, 2024 and 2023, we had €320 million and €500 million, respectively, of our €500 million principal value of euro-denominated long-term debt designated as a net investment hedge against our investments in European businesses, which is deemed to be effective. These hedging gains and losses are recorded in other comprehensive income (loss) and will be reclassified to earnings when the hedged net investment is sold or liquidated. During the fourth quarter of 2024, we de-designated €180 million of our euro-denominated debt and recorded the effects within Other income (expense), net.
The effect of derivatives not designated as hedging instruments is included within Other income (expense), net, on the Consolidated Statement of Operations and is not significant.