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Financial Instruments and Fair Value Measurements | 3 Months Ended
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Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments and Fair Value Measurements | NOTE 9. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS Derivative Financial Instruments In the normal course of business, our operations are exposed to market risks, including the effect of changes in foreign currency exchange rates and interest rates. We may enter into derivative financial instruments to offset these underlying market risks. There have been no significant changes in our policy and strategy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. The following table presents the fair value of our derivative financial instruments recognized within Other Assets and Other Liabilities in the Consolidated Balance Sheets (in thousands):
|  | March 31, 2026 |  |  | December 31, 2025 |
|  | Asset |  |  | Liability |  |  | Asset |  |  | Liability |
Undesignated derivatives |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency contracts |  |  |  |  |  |  |  |  |  |  |  |
Forwards |  |  |  |  |  |  |  |  |  |  |  |
Brazilian real |  | $ | - |  |  | $ | 648 |  |  | $ | - |  |  | $ | 394 |
British pound sterling |  |  | 5,720 |  |  |  | 4,477 |  |  |  | 164 |  |  |  | 11,688 |
Canadian dollar |  |  | 7,758 |  |  |  | - |  |  |  | 5,680 |  |  |  | 214 |
Euro |  |  | 3,952 |  |  |  | 7,978 |  |  |  | 1,660 |  |  |  | 17,571 |
Japanese yen |  |  | 53,713 |  |  |  | - |  |  |  | 54,147 |  |  |  | 22 |
Swedish krona |  |  | 303 |  |  |  | 3,680 |  |  |  | 198 |  |  |  | 5,352 |
Options |  |  |  |  |  |  |  |  |  |  |  |
Mexican peso |  |  | 3,120 |  |  |  | - |  |  |  | 14,733 |  |  |  | - |
Designated derivatives |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency contracts |  |  |  |  |  |  |  |  |  |  |  |
Net investment hedges |  |  |  |  |  |  |  |  |  |  |  |
British pound sterling |  |  | 7,936 |  |  |  | 462 |  |  |  | 841 |  |  |  | 4,279 |
Canadian dollar |  |  | 4,299 |  |  |  | - |  |  |  | 1,866 |  |  |  | 968 |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  |  |  |  |  |  |  |  |  |  |  |
Canadian dollar (1) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Euro |  |  | 3,339 |  |  |  | - |  |  |  | - |  |  |  | - |
Japanese yen |  |  | 809 |  |  |  | - |  |  |  | - |  |  |  | - |
U.S. dollar |  |  | 5,918 |  |  |  | - |  |  |  | 1,480 |  |  |  | - |
Total fair value of derivatives |  | $ | 96,867 |  |  | $ | 17,245 |  |  | $ | 80,769 |  |  | $ | 40,488 |
(1) On March 31, 2026, we entered into a Canadian dollar interest rate contract to hedge a future Canadian debt issuance. At that time, there was no asset or liability value. Undesignated Derivative Financial Instruments Foreign Currency Contracts The following table summarizes the activity of our undesignated foreign currency contracts for the three months ended March 31 (in millions, except for weighted average forward rates and number of active contracts):
| 2026 |  |  | 2025 |
| CAD |  |  | EUR |  |  | GBP |  |  | JPY |  |  | Other |  |  | Total |  |  | CAD |  |  | EUR |  |  | GBP |  |  | JPY |  |  | Other |  |  | Total |
Notional amounts at January 1 ($) |  | 296 |  |  |  | 587 |  |  |  | 385 |  |  |  | 335 |  |  |  | (202 | ) |  |  | 1,401 |  |  |  | 254 |  |  |  | 526 |  |  |  | 386 |  |  |  | 312 |  |  |  | (27 | ) |  |  | 1,451 |
New contracts ($) |  | - |  |  |  | 21 |  |  |  | 106 |  |  |  | 12 |  |  |  | 31 |  |  |  | 170 |  |  |  | - |  |  |  | 85 |  |  |  | 10 |  |  |  | 46 |  |  |  | 18 |  |  |  | 159 |
Matured, expired or settled contracts ($) |  | (18 | ) |  |  | (32 | ) |  |  | (25 | ) |  |  | (21 | ) |  |  | 141 |  |  |  | 45 |  |  |  | (20 | ) |  |  | (29 | ) |  |  | (18 | ) |  |  | (17 | ) |  |  | (4 | ) |  |  | (88 | )
Notional amounts at March 31 ($) |  | 278 |  |  |  | 576 |  |  |  | 466 |  |  |  | 326 |  |  |  | (30 | ) |  |  | 1,616 |  |  |  | 234 |  |  |  | 582 |  |  |  | 378 |  |  |  | 341 |  |  |  | (13 | ) |  |  | 1,522 |
Weighted average forward rate at March 31 |  | 1.33 |  |  |  | 1.18 |  |  |  | 1.31 |  |  |  | 126.32 |  |  |  |  |  |  |  |  |  | 1.31 |  |  |  | 1.15 |  |  |  | 1.28 |  |  |  | 121.88 |  |  |  |  |  |  |
Active contracts at March 31 |  | 106 |  |  |  | 130 |  |  |  | 118 |  |  |  | 102 |  |  |  |  |  |  |  |  |  | 93 |  |  |  | 109 |  |  |  | 83 |  |  |  | 93 |  |  |  |  |  |  |
The following table summarizes the undesignated derivative financial instruments exercised and associated realized and unrealized gains (losses), respectively, in Foreign Currency, Derivative and Other Gains (Losses) and Other Income (Expense), Net in the Consolidated Statements of Income (in millions, except for number of exercised contracts):
|  | Three Months Ended March 31, |
|  | 2026 |  |  | 2025 |
Exercised contracts |  |  | 29 |  |  |  | 26 |
Realized gains (losses) on the matured, expired or settled contracts |  | $ | 15 |  |  | $ | 9 |
Unrealized gains (losses) on the change in fair value of outstanding contracts |  | $ | 19 |  |  | $ | (40 | )
Designated Derivative Financial Instruments Changes in the fair value of derivatives that are designated as net investment hedges ("NIHs") of our foreign operations and cash flow hedges ("CFHs") are recorded in Accumulated Other Comprehensive Income (Loss) (“AOCI/L”) in the Consolidated Balance Sheets and reflected within the AOCI/L table below. Foreign Currency Contracts The following table summarizes the activity of our foreign currency contracts designated as NIHs for the three months ended March 31 (in millions, except for weighted average forward rates and number of active contracts):
|  | 2026 |  |  | 2025 |
|  | CAD |  |  | GBP |  |  | Total |  |  | CAD |  |  | GBP |  |  | Total |
Notional amounts at January 1 ($) |  |  | 200 |  |  |  | 683 |  |  |  | 883 |  |  |  | 163 |  |  |  | 432 |  |  |  | 595 |
New contracts ($) |  |  | - |  |  |  | 125 |  |  |  | 125 |  |  |  | - |  |  |  | - |  |  |  | - |
Matured, expired or settled contracts ($) |  |  | - |  |  |  | (125 | ) |  |  | (125 | ) |  |  | (163 | ) |  |  | - |  |  |  | (163 | )
Notional amounts at March 31 ($) |  |  | 200 |  |  |  | 683 |  |  |  | 883 |  |  |  | - |  |  |  | 432 |  |  |  | 432 |
Weighted average forward rate at March 31 |  |  | 1.36 |  |  |  | 1.34 |  |  |  |  |  |  | - |  |  |  | 1.26 |  |  |  |
Active contracts at March 31 |  |  | 2 |  |  |  | 6 |  |  |  |  |  |  | - |  |  |  | 4 |  |  |  |
Interest Rate Contracts The following table summarizes the activity of our interest rate contracts designated as CFHs for the three months ended March 31 (in millions):
| 2026 |  |  | 2025 |
| CAD |  |  | EUR |  |  | JPY |  |  | USD |  |  | Total |  |  | CAD |  |  | USD |  |  | Total |
Notional amounts at January 1 ($) |  | - |  |  |  | - |  |  |  | - |  |  |  | 425 |  |  |  | 425 |  |  |  | - |  |  |  | 280 |  |  |  | 280 |
New contracts ($) |  | 72 |  |  |  | 272 |  |  |  | 190 |  |  |  | 425 |  |  |  | 959 |  |  |  | 139 |  |  |  | 325 |  |  |  | 464 |
Matured, expired or settled contracts ($) |  | - |  |  |  | - |  |  |  | - |  |  |  | (425 | ) |  |  | (425 | ) |  |  | (139 | ) |  |  | (180 | ) |  |  | (319 | )
Notional amounts at March 31 ($) |  | 72 |  |  |  | 272 |  |  |  | 190 |  |  |  | 425 |  |  |  | 959 |  |  |  | - |  |  |  | 425 |  |  |  | 425 |
Designated Nonderivative Financial Instruments The following table summarizes our debt and accrued interest, designated as a hedge of our net investment in international subsidiaries at the quarter ended (in millions):
|  | March 31, 2026 |  |  | December 31, 2025 |
British pound sterling |  | $ | 1,883 |  |  | $ | 1,837 |
Canadian dollar |  | $ | 1,822 |  |  | $ | 1,793 |
Chinese renminbi |  | $ | 98 |  |  | $ | - |
The following table summarizes the unrealized gains (losses) in Foreign Currency, Derivative and Other Gains (Losses) and Other Income (Expense), Net in the Consolidated Statements of Income on the remeasurement of the unhedged portion of our foreign denominated debt and accrued interest (in millions):
|  | Three Months Ended March 31, |
|  | 2026 |  |  | 2025 |
Unrealized gains (losses) on the unhedged portion |  | $ | (5 | ) |  | $ | (22 | )
Accumulated Other Comprehensive Income (Loss) ("AOCI/L") The change in AOCI/L in the Consolidated Statements of Equity during the periods presented was due to the following: (i) the currency translation adjustments ("CTA") that we recognize due to the translation of the financial statements of our consolidated subsidiaries, whose functional currency is not the U.S. dollar, into U.S. dollars; and (ii) the change in the fair value of the effective portion of our derivative financial instruments that have been designated as NIHs and CFHs and the translation of the hedged portion of our debt. The following tables present these changes in AOCI/L (in thousands):
|  | Unrealized gains (losses) on CFHs (1) |  |  | Our share of derivatives from unconsolidated entities |  |  | Derivative NIHs |  |  | Debt designated as nonderivative NIHs (2) |  |  | CTA |  |  | Total AOCI/L |
Balance at January 1, 2026 |  | $ | (9,332 | ) |  | $ | 18,532 |  |  | $ | 310,320 |  |  | $ | 106,834 |  |  | $ | (1,102,630 | ) |  | $ | (676,276 | )
Other comprehensive income (loss), net |  |  | 8,255 |  |  |  | 2,371 |  |  |  | 14,623 |  |  |  | 68,474 |  |  |  | 103,056 |  |  |  | 196,779 |
Balance at March 31, 2026 |  | $ | (1,077 | ) |  | $ | 20,903 |  |  | $ | 324,943 |  |  | $ | 175,308 |  |  | $ | (999,574 | ) |  | $ | (479,497 | )
|  | Unrealized gains (losses) on CFHs |  |  | Our share of derivatives from unconsolidated entities |  |  | Derivative NIHs |  |  | Debt designated as nonderivative NIHs (2) |  |  | CTA |  |  | Total AOCI/L |
Balance at January 1, 2025 |  | $ | (11,659 | ) |  | $ | 12,652 |  |  | $ | 341,852 |  |  | $ | 327,897 |  |  | $ | (790,957 | ) |  | $ | (120,215 | )
Other comprehensive income (loss), net |  |  | (5,752 | ) |  |  | 2,874 |  |  |  | (14,788 | ) |  |  | (61,215 | ) |  |  | (150,492 | ) |  |  | (229,373 | )
Balance at March 31, 2025 |  | $ | (17,411 | ) |  | $ | 15,526 |  |  | $ | 327,064 |  |  | $ | 266,682 |  |  | $ | (941,449 | ) |  | $ | (349,588 | )
(1) We estimate an additional expense of $1.1 million will be reclassified to Interest Expense in the Consolidated Statements of Income over the next 12 months from March 31, 2026, due to the amortization of settled derivatives designated as cash flow hedges. (2) Reclassification of amounts out of AOCI/L due to the remeasurement of the unhedged portion of our euro-denominated and Chinese renminbi-denominated debt and accrued interest is included within other comprehensive income (loss), net. Fair Value Measurements There have been no significant changes in our policy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025. Fair Value Measurements on a Recurring Basis At March 31, 2026 and December 31, 2025, other than the derivatives discussed previously, we had no significant financial assets or financial liabilities that were measured at fair value on a recurring basis in the Consolidated Financial Statements. All of our derivatives held at March 31, 2026 and December 31, 2025, were classified as Level 2 of the fair value hierarchy. Fair Value Measurements on Nonrecurring Basis Acquired properties, assets we expect to sell or contribute and assets subject to impairment charges are significant nonfinancial assets that met the criteria to be measured at fair value on a nonrecurring basis. At March 31, 2026 and December 31, 2025, we estimated the fair value of our properties using Level 2 or Level 3 inputs from the fair value hierarchy. See more information on our acquired properties in Note 2 and assets held for sale or contribution in Note 4. Fair Value of Financial Instruments At March 31, 2026 and December 31, 2025, the carrying amounts of certain financial instruments, including cash and cash equivalents, accounts and notes receivable, accounts payable and accrued expenses were representative of their fair values. The differences in the fair value of our debt from the carrying value in the table below were the result of differences in interest rates or borrowing spreads that were available to us at March 31, 2026 and December 31, 2025, as compared with those in effect when the debt was issued or assumed, including lower borrowing spreads due to our credit ratings. See Note 5 for more information on our debt activity. The following table reflects the carrying amounts and estimated fair values of our debt (in thousands):
|  | March 31, 2026 |  |  | December 31, 2025 |
|  | Carrying Value |  |  | Fair Value |  |  | Carrying Value |  |  | Fair Value |
Credit facilities and commercial paper |  | $ | 553,865 |  |  | $ | 553,865 |  |  | $ | 44,679 |  |  | $ | 44,679 |
Senior notes |  |  | 31,987,819 |  |  |  | 29,569,104 |  |  |  | 32,887,971 |  |  |  | 30,950,062 |
Term loans and unsecured other |  |  | 1,913,648 |  |  |  | 1,862,863 |  |  |  | 1,908,723 |  |  |  | 1,862,065 |
Secured mortgage |  |  | 214,260 |  |  |  | 204,017 |  |  |  | 195,700 |  |  |  | 185,965 |
Total |  | $ | 34,669,592 |  |  | $ | 32,189,849 |  |  | $ | 35,037,073 |  |  | $ | 33,042,771 |

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