XML 28 R13.htm IDEA: XBRL DOCUMENT
v3.25.1

DERIVATIVE FINANCIAL INSTRUMENTS | 3 Months Ended
--- | ---
Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Our operations in foreign countries expose us to market risk associated with foreign currency exchange rate fluctuations between the U.S. dollar and various foreign currencies, primarily the Euro. To manage this risk, we hedge a portion of our foreign currency exposures related to outstanding monetary assets and liabilities as well as forecasted product sales using foreign currency exchange forward contracts. In general, the market risk related to these contracts is offset by corresponding gains and losses on the hedged transactions. The credit risk associated with these contracts is driven by changes in interest and currency exchange rates and, as a result, varies over time. By working only with major banks and closely monitoring current market conditions, we seek to limit the risk that counterparties to these contracts may be unable to perform. We also seek to limit our risk of loss by entering into contracts that permit net settlement at maturity. Therefore, our overall risk of loss in the event of a counterparty default is limited to the amount of any unrealized gains on outstanding contracts (i.e., those contracts that have a positive fair value) at the date of default. We do not enter into derivative contracts for trading purposes. The derivative instruments we use to hedge our exposures for certain monetary assets and liabilities that are denominated in a non-functional currency are not designated as hedges. The derivative instruments we use to hedge our exposures for forecasted product sales are designated as cash flow hedges and have maturities of 18 months or less. We held foreign currency exchange contracts with outstanding notional amounts of $3.4 billion and $2.9 billion as of March 31, 2025 and December 31, 2024, respectively. While all our derivative contracts allow us the right to offset assets and liabilities, we have presented amounts on our Condensed Consolidated Balance Sheets on a gross basis. The following table summarizes the classification and fair values of derivative instruments, including the potential effect of offsetting:
|  | March 31, 2025
(in millions) |  | Prepaid and other current assets |  | Other long-term assets |  | Total Derivative Assets |  | Other current liabilities |  | Other long-term liabilities |  | Total Derivative Liabilities
Foreign currency exchange contracts designated as hedges |  | $ | 40 |  |  | $ | 1 |  |  | $ | 41 |  |  | $ | 13 |  |  | $ | 5 |  |  | $ | 18 |
Foreign currency exchange contracts not designated as hedges |  | 3 |  |  | — |  |  | 3 |  |  | 10 |  |  | — |  |  | 10 |
Total derivatives presented gross on the Condensed Consolidated Balance Sheets |  |  |  |  |  | $ | 44 |  |  |  |  |  |  | $ | 28 |
Gross amounts not offset on the Condensed Consolidated Balance Sheets: |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  |  |  | $ | (25) |  |  |  |  |  |  | $ | (25) |
Cash collateral received / pledged |  |  |  |  |  | — |  |  |  |  |  |  | — |
Net amount (legal offset) |  |  |  |  |  | $ | 19 |  |  |  |  |  |  | $ | 3 |
|  | December 31, 2024
(in millions) |  | Prepaid and other current assets |  | Other long-term assets |  | Total Derivative Assets |  | Other current liabilities |  | Other long-term liabilities |  | Total Derivative Liabilities
Foreign currency exchange contracts designated as hedges |  | $ | 90 |  |  | $ | 10 |  |  | $ | 100 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign currency exchange contracts not designated as hedges |  | 28 |  |  | — |  |  | 28 |  |  | 3 |  |  | — |  |  | 3 |
Total derivatives presented gross on the Condensed Consolidated Balance Sheets |  |  |  |  |  | $ | 128 |  |  |  |  |  |  | $ | 3 |
Gross amounts not offset on the Condensed Consolidated Balance Sheets: |  |  |  |  |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  |  |  | $ | (3) |  |  |  |  |  |  | $ | (3) |
Cash collateral received / pledged |  |  |  |  |  | — |  |  |  |  |  |  | — |
Net amount (legal offset) |  |  |  |  |  | $ | 125 |  |  |  |  |  |  | $ | — |
The following table summarizes the effect of our derivative contracts on our Condensed Consolidated Financial Statements:
|  | Three Months Ended |  |
|  | March 31, |  |
(in millions) |  | 2025 |  | 2024 |  |  |  |
Derivatives designated as hedges: |  |  |  |  |  |  |  |
Net (loss) gain recognized in Accumulated other comprehensive income |  | $ | (45) |  |  | $ | 61 |  |  |  |  |
Net gain reclassified from Accumulated other comprehensive income into Product sales |  | $ | 21 |  |  | $ | — |  |  |  |  |
Derivatives not designated as hedges: |  |  |  |  |  |  |  |
Net (loss) gain recognized in Other (income) expense, net |  | $ | (5) |  |  | $ | 23 |  |  |  |  |
The majority of gains and losses related to the hedged forecasted transactions reported in Accumulated other comprehensive income as of March 31, 2025 are expected to be reclassified to Product sales within 12 months. There were no discontinuances of cash flow hedges for the three months ended March 31, 2025 and 2024. The cash flow effects of our derivative contracts for the three months ended March 31, 2025 and 2024 were included within Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration