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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 | FINANCIAL INSTRUMENTS The Company uses derivative financial instruments, from time to time, to manage its exposure to market risks for changes in interest rates and foreign currencies. This strategy includes the use of interest rate swap agreements, forward-starting interest rate swap agreements, interest rate lock agreements and foreign currency forward contracts to manage its exposure to movements in interest and currency rates. The Company has established policies and procedures for risk assessment and the approval, reporting and monitoring of derivative financial instrument activities. These policies prohibit holding or issuing derivative financial instruments for speculative purposes. The Company does not enter into derivative financial instruments that contain credit-risk-related contingent features or requirements to post collateral. Interest Rate Risk The Company is exposed to interest rate risk on its cash and cash equivalents and its debt obligations. Interest income earned on cash and cash equivalents may fluctuate as interest rates change; however, due to their relatively short maturities, the Company does not hedge these assets or their investment cash flows and the impact of interest rate risk is not material. The Company's debt obligations consist of fixed-rate and, from time to time, variable-rate debt instruments. The Company's primary objective is to achieve the lowest overall cost of funding while managing the variability in cash outflows within an acceptable range. In order to achieve this objective, the Company has historically entered into interest rate swap agreements. Interest rate swaps involve the periodic exchange of payments without the exchange of underlying principal or notional amounts. Net settlements between the counterparties are recognized as an adjustment to interest expense, net. Interest Rate Derivatives – Cash Flow Hedges From time to time, the Company has entered into various interest rate lock agreements and forward-starting interest rate swap agreements to hedge part of the Company's interest rate exposure associated with the variability in future cash flows attributable to changes in interest rates. Interest Rate Derivatives – Fair Value Hedges The Company maintains various fixed-to-variable interest rate swaps to convert a portion of the Company's long-term debt into variable interest rate debt. A summary of the notional amounts of these interest rate swap agreements as of September 30, 2025 and December 31, 2024 was as follows:
|  | Notional Amount
Debt Instrument |  | September 30, 2025 |  | December 31, 2024
5.00% Senior Notes due December 2034 |  | $ | 850 |  |  | $ | 700 |
2.80% Senior Notes due June 2031 |  | 550 |  |  | — |
6.40% Senior Notes due November 2033 |  | 400 |  |  | — |
Total notional amounts |  | $ | 1,800 |  |  | $ | 700 |
The fixed-to-variable interest rate swap agreements in the table above have variable interest rates ranging from SOFR minus 1.36% to SOFR plus 2.48%. As of September 30, 2025 and December 31, 2024, the following amounts were recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges included in the carrying amount of long-term debt:
| Carrying Amount of Hedged Long-Term Debt |  | Hedge Accounting Basis Adjustment (a) |  | Carrying Amount of Hedged Long-Term Debt |  | Hedge Accounting Basis Adjustment (a)
Balance Sheet Classification | September 30, 2025 |  | September 30, 2025 |  | December 31, 2024 |  | December 31, 2024
Long-term debt | $ | 1,803 |  |  | $ | 20 |  |  | $ | 658 |  |  | $ | (29) |
(a) The balance includes $2 million and $5 million of remaining unamortized hedging adjustments on discontinued relationships as of September 30, 2025 and December 31, 2024, respectively. The following table presents the effect of fair value hedge accounting on the consolidated statement of operations for the three and nine months ended September 30, 2025:
|  |  | Three Months Ended September 30, 2025 |  | Nine Months Ended September 30, 2025 |  |
|  | Interest Expense, Net |  | Interest Expense, Net |  |
Total for line item in which the effects of fair value hedges are recorded |  | $ | (66) |  |  | $ | (200) |  |  |
Gain (loss) on fair value hedging relationships: |  |  |  |  |  |
Hedged items (Long-term debt) |  | $ | (1) |  |  | $ | (52) |  |  |
Derivatives designated as hedging instruments |  | $ | 1 |  |  | $ | 52 |  |  |
A summary of the fair values of derivative instruments in the consolidated balance sheets was as follows:
| September 30, 2025 |  | December 31, 2024
| Balance Sheet Classification |  | Fair Value |  | Balance Sheet Classification |  | Fair Value
Derivatives Designated as Hedging Instruments |  |  |  |  |  |  |
Fixed-to-variable interest rate swap agreements | Other assets |  | $ | 18 |  |  | Other liabilities |  | $ | 34 |
A detailed description regarding the Company's use of derivative financial instruments is contained in Note 15 to the audited consolidated financial statements in the Company's 2024 Annual Report on Form 10-K.

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