Financial Instruments and Fair Value Measurements

12 Months Ended

Dec. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments and Fair Value Measurements

NOTE 15. 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. See Note 2 for our derivative financial instruments policy.

The following table presents the fair value of our derivative financial instruments recognized within Other Assets and Other Liabilities in the Consolidated Balance Sheets at December 31 (in thousands):

	2024				2023
	Asset		Liability		Asset		Liability
Undesignated derivatives
Foreign currency contracts
Forwards
Brazilian real	$	-	$	-	$	-	$	291
British pound sterling		8,785		422		9,608		9,862
Canadian dollar		15,503		-		4,480		1,225
Chinese renminbi		-		-		1,630		50
Euro		32,989		-		19,252		8,229
Japanese yen		55,818		-		45,149		589
Swedish krona		4,642		108		3,304		2,279
Options
Mexican peso		1,814		-		1,263		-
Designated derivatives
Foreign currency contracts
Net investment hedges
British pound sterling		2,837		108		1,759		7,030
Canadian dollar		5,454		-		756		5,608
Interest rate contracts
Cash flow hedges
Euro		-		-		118		27,034
U.S. dollar		9,587		-		-		31,964
Total fair value of derivatives	$	137,429	$	638	$	87,319	$	94,161

Undesignated Derivative Financial Instruments

Foreign Currency Contracts

The following table summarizes the activity of our undesignated foreign currency contracts for the years ended December 31 (in millions, except for weighted average forward rates and number of active contracts):

	2024						2023						2022
	CAD	EUR	GBP	JPY	Other	Total	CAD	EUR	GBP	JPY	Other	Total	CAD	EUR	GBP	JPY	Other	Total
Notional amounts at January 1 ($)	213	524	442	384	56	1,619	283	601	349	331	81	1,645	175	749	383	250	105	1,662
New contracts ($)	102	165	334	107	(74)	634	15	173	192	140	(10)	510	172	658	264	181	92	1,367
Matured, expired or settled      contracts ($)	(61)	(163)	(390)	(179)	(9)	(802)	(85)	(250)	(99)	(87)	(15)	(536)	(64)	(806)	(298)	(100)	(116)	(1,384)
Notional amounts at      December 31 ($)	254	526	386	312	(27)	1,451	213	524	442	384	56	1,619	283	601	349	331	81	1,645
Weighted average forward rate at      December 31	1.31	1.15	1.28	120.37			1.30	1.16	1.27	115.40			1.29	1.18	1.31	109.79
Active contracts at December 31	101	86	82	77			74	72	96	96			103	97	90	96

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 for the years ended December 31 (in millions, except for number of exercised contracts):

	2024		2023			2022
Exercised contracts		254		218			158
Realized gains on the matured, expired or settled contracts	$	53	$	60		$	145
Unrealized gains (losses) on the change in fair value of outstanding contracts	$	53	$	(58	)	$	39

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 years ended December 31 (in millions, except for weighted average forward rates and number of active contracts):

	2024									2023												2022
	CAD			GBP			Total			CAD			CNH			GBP			Total			CAD			GBP			Total
Notional amounts at January 1 ($)		516			432			948			534			-			440			974			535			432			967
New contracts ($)		163			523			686			467			100			343			910			964			440			1,404
Matured, expired or settled contracts ($)		(516	)		(523	)		(1,039	)		(485	)		(100	)		(351	)		(936	)		(965	)		(432	)		(1,397	)
Notional amounts at December 31 ($)		163			432			595			516			-			432			948			534			440			974
Weighted average forward rate at December 31		1.37			1.26						1.33			-			1.26						1.29			1.28
Active contracts at December 31		2			4						6			-			4						6			4

Interest Rate Contracts

The following table summarizes the activity of our interest rate contracts designated as CFHs for the years ended December 31 (in millions):

	2024												2023									2022
	EUR			USD			GBP			Total			EUR			USD			Total			EUR			USD			CAD			JPY			Total
Notional amounts at January 1 ($)		700			550			-			1,250			447			150			597			165			-			-			-			165
New contracts ($)		-			780			246			1,026			1,113			2,300			3,413			1,004			400			184			104			1,692
Matured, expired or settled      contracts ($)		(700	)		(1,050	)		(246	)		(1,996	)		(860	)		(1,900	)		(2,760	)		(722	)		(250	)		(184	)		(104	)		(1,260	)
Notional amounts at      December 31 ($)		-			280			-			280			700			550			1,250			447			150			-			-			597

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 December 31 (in millions):

	2024		2023		2022
British pound sterling	$	1,763	$	1,305	$	1,237
Canadian dollar	$	758	$	373	$	370

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 euro-denominated and Chinese renminbi-denominated debt and accrued interest, for the years ended December 31 (in millions):

	2024		2023			2022
Unrealized gains (losses) on the unhedged portion	$	34	$	(23	)	$	44

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 table presents these changes in AOCI/L for the years ended December 31 (in thousands):

	Unrealized gains (losses) on CFHs (1)			Our share of derivatives from unconsolidated ventures			Derivative NIHs			Debt designated as nonderivative NIHs (2)			CTA			Total AOCI/L
Balance at      January 1, 2022	$	(14,042	)	$	(2,748	)	$	237,961		$	194,563		$	(1,293,987	)	$	(878,253	)
Other comprehensive      income (loss), net		44,587			25,332			95,012			135,420			134,293			434,644
Balance at      December 31, 2022	$	30,545		$	22,584		$	332,973		$	329,983		$	(1,159,694	)	$	(443,609	)
Other comprehensive      income (loss), net		(76,289	)		(14,170	)		(22,447	)		(75,881	)		118,195			(70,592	)
Balance at      December 31, 2023	$	(45,744	)	$	8,414		$	310,526		$	254,102		$	(1,041,499	)	$	(514,201	)
Other comprehensive      income (loss), net		34,085			4,238			31,326			73,795			250,542			393,986
Balance at      December 31, 2024	$	(11,659	)	$	12,652		$	341,852		$	327,897		$	(790,957	)	$	(120,215	)

(1)We estimate an additional expense of $2.7 million will be reclassified to Interest Expense in the Consolidated Statements of Income over the next 12 months from December 31, 2024, 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

We have estimated the fair value of our financial instruments using available market information and valuation methodologies we believe to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that we would realize on disposition. See Note 2 for more information on our fair value measurements policy.

Fair Value Measurements on a Recurring Basis

At December 31, 2024 and 2023, 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 December 31, 2024 and 2023 were classified as Level 2 of the fair value hierarchy.

Fair Value Measurements on Nonrecurring Basis

Acquired properties and assets we expect to sell or contribute are significant nonfinancial assets that met the criteria to be measured at fair value on a nonrecurring basis, as detailed in our accounting policy in Note 2. At December 31, 2024 and 2023, 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 Notes 3 and 4 and assets held for sale or contribution in Note 6.

Fair Value of Financial Instruments

At December 31, 2024 and 2023, 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 December 31, 2024 and 2023, as compared with those in effect when the debt was issued or assumed, including lower borrowing spreads due to our credit ratings. See Note 8 for more information on our debt activity.

The following table reflects the carrying amounts and estimated fair values of our debt at December 31 (in thousands):

	2024				2023
	Carrying Value		Fair Value		Carrying Value		Fair Value
Credit facilities and commercial paper	$	224,966	$	224,966	$	979,313	$	979,313
Senior notes		28,322,163		26,095,901		25,311,647		23,121,936
Term loans and unsecured other		2,013,317		1,991,934		2,330,520		2,322,827
Secured mortgage		318,817		298,452		379,021		357,731
Total	$	30,879,263	$	28,611,253	$	29,000,501	$	26,781,807