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Financial Instruments | 9 Months Ended
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Sep. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Note 8. Financial Instruments Derivatives and Hedging Activities Derivative instruments and corresponding hedge type were recorded at fair value in the condensed consolidated balance sheets as follows:
|  |  | As of September 30, 2025 |  | As of December 31, 2024
|  |  | Asset Derivatives |  | Liability Derivatives |  | Asset Derivatives |  | Liability Derivatives
| Type of Hedge (1) |  | (in millions)
Derivatives designated as accounting hedges (2): |  |  |  |  |  |  |  |  |
Foreign currency contracts | NIH |  | $ | 1 |  |  | $ | 284 |  |  | $ | 5 |  |  | $ | 5 |
Interest rate contracts | CF |  | 1 |  |  | 3 |  |  | 2 |  |  | 11 |
Cross-currency swap contracts | CF/NIH |  | 239 |  |  | 326 |  |  | 382 |  |  | 69 |
|  |  | $ | 241 |  |  | $ | 613 |  |  | $ | 389 |  |  | $ | 85 |
Derivatives not designated as accounting hedges: |  |  |  |  |  |  |  |  |
Foreign currency contracts |  |  | $ | 150 |  |  | $ | 206 |  |  | $ | 302 |  |  | $ | 118 |
Commodity contracts |  |  | 430 |  |  | 671 |  |  | 2,205 |  |  | 1,522 |
Interest rate contracts |  |  | 3 |  |  | 1 |  |  | 3 |  |  | — |
|  |  | $ | 583 |  |  | $ | 878 |  |  | $ | 2,510 |  |  | $ | 1,640 |
Total fair value |  |  | $ | 824 |  |  | $ | 1,491 |  |  | $ | 2,899 |  |  | $ | 1,725 |
(1)Derivative contracts designated as either cash flow ("CF") or net investment hedging ("NIH") instruments. (2)We designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 7, Debt and Borrowing Arrangements. Non-U.S. dollar denominated debt designated as net investment hedges is also disclosed in the Notional Amounts of Derivatives and Other Hedging Instruments table and the Hedges of Net Investments in International Operations section appearing later in this footnote. We recorded the fair value of our derivative instruments in the condensed consolidated balance sheets as follows:
| As of September 30, 2025 | As of December 31, 2024 |
| (in millions) |
Other current assets | $ | 657 |  |  | $ | 2,545 |  |
Other assets | 167 |  |  | 354 |  |
Other current liabilities | 1,046 |  |  | 1,641 |  |
Other liabilities | 445 |  |  | 84 |  |
Certain exchange-traded commodity contracts require us to receive from or pay to a broker an amount of cash related to the daily fluctuation in value of the futures contract. Such cash collateral held or placed is known as variation margin and is recorded as other current assets and liabilities. The net asset variation margin balances for futures contracts were $230 million and $263 million as of September 30, 2025 and December 31, 2024, respectively. These balances are excluded from the table above. Our over-the-counter ("OTC") derivative transactions are governed by International Swap Dealers Association agreements and other standard industry contracts. Under these agreements, we do not post nor require collateral from our counterparties. The majority of our derivative contracts do not have a legal right of set-off. We manage the credit risk in connection with these and all our derivatives by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure with each counterparty and monitoring the financial condition of our counterparties. Fair Value Measurements of Derivative Instruments Level 1 fair value measurements use quoted prices in active markets for identical assets or liabilities. Level 1 financial assets and liabilities consist of exchange-traded commodity futures and listed options. The fair value of these instruments is determined based on quoted market prices on commodity exchanges. Level 2 fair value measurements use quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets with insufficient volume or infrequent transactions, or model-based valuations in which significant inputs are observable in the market. Level 2 financial assets and liabilities consist primarily of OTC foreign currency forwards and options; commodity forwards and options; interest rate swaps; and cross-currency swaps. Our foreign currency contracts are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices. Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk. Level 3 fair value measurements use unobservable inputs and include the use of judgment by management about the assumptions market participants use in pricing the asset or liability. The fair value measurements (asset/(liability)) of our derivative instruments were classified in the fair value hierarchy as follows:
| As of September 30, 2025
| Total Fair Value of Net Asset/(Liability) |  | Quoted Prices in Active Markets for Identical Assets/(Liabilities) (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (in millions)
Foreign currency contracts | $ | (339) |  |  | $ | — |  |  | $ | (339) |  |  | $ | — |
Commodity contracts | (241) |  |  | (70) |  |  | (171) |  |  | — |
Interest rate contracts | — |  |  | — |  |  | — |  |  | — |
Cross-currency swap contracts | (87) |  |  | — |  |  | (87) |  |  | — |
Total derivatives | $ | (667) |  |  | $ | (70) |  |  | $ | (597) |  |  | $ | — |
| As of December 31, 2024
| Total Fair Value of Net Asset/(Liability) |  | Quoted Prices in Active Markets for Identical Assets/(Liabilities) (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3)
| (in millions)
Foreign currency contracts | $ | 184 |  |  | $ | — |  |  | $ | 184 |  |  | $ | — |
Commodity contracts | 683 |  |  | (111) |  |  | 794 |  |  | — |
Interest rate contracts | (6) |  |  | — |  |  | (6) |  |  | — |
Cross-currency swap contracts | 313 |  |  | — |  |  | 313 |  |  | — |
Total derivatives | $ | 1,174 |  |  | $ | (111) |  |  | $ | 1,285 |  |  | $ | — |
Notional Amounts of Derivatives and Other Hedging Instruments The gross notional values of our derivative instruments, as well as non-U.S. dollar debt designated as net investment hedging instruments, were:
| Notional Amount
| As of September 30, 2025 | As of December 31, 2024
| (in millions)
Foreign currency contracts | $ | 19,956 |  |  | $ | 13,724 |
Commodity contracts | 12,322 |  |  | 16,210 |
Interest rate contracts | 2,732 |  |  | 4,189 |
Cross-currency swap contracts | 6,912 |  |  | 9,608 |
Non-U.S. dollar debt designated as net investment hedges: |  |  |
Euro notes | 3,737 |  |  | 3,298 |
Swiss franc notes | 251 |  |  | 220 |
Canadian dollar notes | 467 |  |  | 869 |
Cash Flow Hedges Our derivative instruments designated as cash flow hedges include interest rate swaps and cross-currency swaps. As of September 30, 2025, the aggregate notional value of those derivatives was $1.0 billion. Cash flow hedge activity, net of taxes, is recorded within accumulated other comprehensive earnings/(losses). Refer to Note 12, Accumulated Other Comprehensive Earnings/(Losses) for additional information on current period activity. Based on current market conditions, $27 million of gains, net of taxes, included in accumulated other comprehensive earnings/(losses) from cash flow hedges as of September 30, 2025 are expected to be recognized into earnings during the next 12 months. As of September 30, 2025, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 3 years, 3 months. Hedges of Net Investments in International Operations Net investment hedge ("NIH") derivative contracts We enter into foreign currency contracts and cross-currency swaps to hedge certain investments in our non-U.S. operations against movements in exchange rates. As of September 30, 2025, the aggregate notional value of those derivatives was $9.5 billion. Net investment hedge derivative contract pre-tax impacts on other comprehensive earnings/(losses) and net earnings were:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
| (in millions)
Gain/(loss) on NIH contracts (1) | $ | 107 |  |  | $ | (327) |  |  | $ | (893) |  |  | $ | (85) |  |  |  |  |
Amounts excluded from the assessment of hedge effectiveness (2) | 70 |  |  | 45 |  |  | 194 |  |  | 132 |  |  |  |  |
(1)Amounts recorded for unsettled and settled NIH derivative contracts are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses). (2)We assess the effectiveness of NIH relationships based on spot rates and amortize the initial value attributable to the excluded component to earnings over the life of the hedging instrument within interest and other expense, net. Non-U.S. dollar debt designated as net investment hedges Pre-tax gains/(losses) related to non-U.S. dollar debt designated as hedges of net investments in international operations, which are recorded within the cumulative translation adjustment section of other comprehensive earnings/(losses), were:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
| (in millions)
Euro notes | $ | 18 |  |  | $ | (133) |  |  | $ | (439) |  |  | $ | (30) |  |  |  |  |
Swiss franc notes | 1 |  |  | (24) |  |  | (31) |  |  | 1 |  |  |  |  |
Canadian notes | 10 |  |  | (11) |  |  | (15) |  |  | 3 |  |  |  |  |
Derivatives Not Designated as Accounting Hedges For derivatives not designated as accounting hedges ("economic hedges"), we classify gains and losses in the income statement based on the classification of the item economically hedged. Pre-tax gains/(losses) recorded in net earnings for economic hedges were:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30, |  |
| 2025 |  | 2024 |  | 2025 |  | 2024 |  |  |  |
| (in millions)
Foreign currency contracts: |  |  |  |  |  |  |  |  |  |  |
Cost of sales | $ | (62) |  |  | $ | (13) |  |  | $ | (227) |  |  | $ | 10 |  |  |  |  |
Selling, general and administrative expenses | — |  |  | 1 |  |  | (6) |  |  | 2 |  |  |  |  |
Interest and other expense, net | (10) |  |  | (65) |  |  | 17 |  |  | — |  |  |  |  |
Commodity contracts - Cost of sales | (338) |  |  | 14 |  |  | (728) |  |  | 943 |  |  |  |  |
Interest rate contracts - Interest and other expense, net | — |  |  | (3) |  |  | 1 |  |  | (2) |  |  |  |  |
Total | $ | (410) |  |  | $ | (66) |  |  | $ | (943) |  |  | $ | 953 |  |  |  |  |
Fair Value of Contingent Consideration Contingent consideration liabilities, which reflect earn-out arrangements from business combinations, are recorded at fair value each period, with changes in fair value reported in earnings. The fair values of our contingent consideration liabilities were $155 million and $179 million as of September 30, 2025 and December 31, 2024, respectively. Contingent consideration liabilities are primarily recorded in Other liabilities in the condensed consolidated balance sheets and changes in their fair values are primarily recorded in Selling, general and administrative expenses in the condensed consolidated statements of earnings. The estimated fair values of our contingent consideration liabilities were primarily determined using Monte Carlo simulations. Significant assumptions used in assessing the fair value of the liabilities include financial projections for net revenue, gross profit and EBITDA, as well as discount and volatility rates. Fair value measurements of contingent consideration liabilities are classified as Level 3 in the fair value hierarchy because they use significant unobservable inputs. Contingent consideration liabilities include an earn-out arrangement related to the acquisition of Clif Bar & Company (“Clif Bar”) in 2022. The possible payments under that arrangement range from zero to a maximum total of $2.4 billion, with higher payouts requiring the achievement of targets that generate rates of returns in excess of our base financial projections for the business. The following is a summary of our contingent consideration liability activity:
| For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
| (in millions) |  | (in millions)
Liability at beginning of period | $ | 142 |  |  | $ | 661 |  |  | $ | 179 |  |  | $ | 680 |
Changes in fair value | 13 |  |  | (350) |  |  | (26) |  |  | (315) |
Payments | — |  |  | (93) |  |  | — |  |  | (147) |
Currency | — |  |  | — |  |  | 2 |  |  | — |
Liability at end of period | $ | 155 |  |  | $ | 218 |  |  | $ | 155 |  |  | $ | 218 |

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