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Financial Instruments and Fair Value Measurements
 9 Months Ended
Sep. 30, 2025
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, 2024.

 

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):

 

 

 

September 30, 2025

 

 

December 31, 2024

 

 

 

Asset

 

 

Liability

 

 

Asset

 

 

Liability

 

Undesignated derivatives

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency contracts

 

 

 

 

 

 

 

 

 

 

 

 

     Forwards

 

 

 

 

 

 

 

 

 

 

 

 

          Brazilian real

 

$

-

 

 

$

762

 

 

$

-

 

 

$

-

 

          British pound sterling

 

 

325

 

 

 

14,857

 

 

 

8,785

 

 

 

422

 

          Canadian dollar

 

 

8,397

 

 

 

17

 

 

 

15,503

 

 

 

-

 

          Euro

 

 

2,046

 

 

 

26,953

 

 

 

32,989

 

 

 

-

 

          Japanese yen

 

 

40,544

 

 

 

3

 

 

 

55,818

 

 

 

-

 

          Swedish krona

 

 

400

 

 

 

5,316

 

 

 

4,642

 

 

 

108

 

     Options

 

 

 

 

 

 

 

 

 

 

 

 

          Mexican peso

 

 

8,733

 

 

 

-

 

 

 

1,814

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Designated derivatives

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency contracts

 

 

 

 

 

 

 

 

 

 

 

 

     Net investment hedges

 

 

 

 

 

 

 

 

 

 

 

 

          British pound sterling

 

 

1,235

 

 

 

10,393

 

 

 

2,837

 

 

 

108

 

          Canadian dollar

 

 

2,891

 

 

 

-

 

 

 

5,454

 

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

 

 

 

 

 

 

 

 

 

 

 

     Cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

          U.S. dollar

 

 

1,018

 

 

 

1,808

 

 

 

9,587

 

 

 

-

 

Total fair value of derivatives

 

$

65,589

 

 

$

60,109

 

 

$

137,429

 

 

$

638

 

 

Undesignated Derivative Financial Instruments

 

Foreign Currency Contracts

 

The following table summarizes the activity of our undesignated foreign currency contracts for the nine months ended September 30 (in millions, except for weighted average forward rates and number of active contracts):

 

 

2025

 

 

2024

 

 

CAD

 

 

EUR

 

 

GBP

 

 

JPY

 

 

Other

 

 

Total

 

 

CAD

 

 

EUR

 

 

GBP

 

 

JPY

 

 

Other

 

 

Total

 

Notional amounts at January 1 ($)

 

254

 

 

 

526

 

 

 

386

 

 

 

312

 

 

 

(27

)

 

 

1,451

 

 

 

213

 

 

 

524

 

 

 

442

 

 

 

384

 

 

 

56

 

 

 

1,619

 

New contracts ($)

 

111

 

 

 

186

 

 

 

100

 

 

 

68

 

 

 

18

 

 

 

483

 

 

 

102

 

 

 

126

 

 

 

109

 

 

 

106

 

 

 

17

 

 

 

460

 

Matured, expired or settled contracts ($)

 

(49

)

 

 

(98

)

 

 

(66

)

 

 

(59

)

 

 

(19

)

 

 

(291

)

 

 

(32

)

 

 

(86

)

 

 

(120

)

 

 

(148

)

 

 

(61

)

 

 

(447

)

Notional amounts at September 30 ($)

 

316

 

 

 

614

 

 

 

420

 

 

 

321

 

 

 

(28

)

 

 

1,643

 

 

 

283

 

 

 

564

 

 

 

431

 

 

 

342

 

 

 

12

 

 

 

1,632

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average forward rate at September 30

 

1.33

 

 

 

1.16

 

 

 

1.29

 

 

 

123.15

 

 

 

 

 

 

 

 

 

1.31

 

 

 

1.15

 

 

 

1.26

 

 

 

120.22

 

 

 

 

 

 

 

Active contracts at September 30

 

120

 

 

 

127

 

 

 

108

 

 

 

93

 

 

 

 

 

 

 

 

 

109

 

 

 

92

 

 

 

96

 

 

 

88

 

 

 

 

 

 

 

 

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
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Exercised contracts

 

 

31

 

 

 

30

 

 

 

83

 

 

 

161

 

Realized gains (losses) on the matured, expired or settled contracts

 

$

3

 

 

$

10

 

 

$

16

 

 

$

50

 

Unrealized gains (losses) on the change in fair value of outstanding contracts

 

$

34

 

 

$

(67

)

 

$

(97

)

 

$

(32

)

 

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 nine months ended September 30 (in millions, except for weighted average forward rates and number of active contracts):

 

 

 

2025

 

 

2024

 

 

 

CAD

 

 

GBP

 

 

Total

 

 

CAD

 

 

GBP

 

 

Total

 

Notional amounts at January 1 ($)

 

 

163

 

 

 

432

 

 

 

595

 

 

 

516

 

 

 

432

 

 

 

948

 

New contracts ($)

 

 

200

 

 

 

549

 

 

 

749

 

 

 

47

 

 

 

397

 

 

 

444

 

Matured, expired or settled contracts ($)

 

 

(163

)

 

 

(305

)

 

 

(468

)

 

 

(399

)

 

 

(399

)

 

 

(798

)

Notional amounts at September 30 ($)

 

 

200

 

 

 

676

 

 

 

876

 

 

 

164

 

 

 

430

 

 

 

594

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average forward rate at September 30

 

 

1.36

 

 

 

1.33

 

 

 

 

 

 

1.36

 

 

 

1.25

 

 

 

 

Active contracts at September 30

 

 

2

 

 

 

6

 

 

 

 

 

 

2

 

 

 

4

 

 

 

 

 

Interest Rate Contracts

 

The following table summarizes the activity of our interest rate contracts designated as CFHs for the nine months ended September 30 (in millions):

 

 

2025

 

 

2024

 

 

CAD

 

 

EUR

 

 

USD

 

 

Total

 

 

EUR

 

 

GBP

 

 

USD

 

 

Total

 

Notional amounts at January 1 ($)

 

-

 

 

 

-

 

 

 

280

 

 

 

280

 

 

 

700

 

 

 

-

 

 

 

550

 

 

 

1,250

 

New contracts ($)

 

139

 

 

 

543

 

 

 

1,250

 

 

 

1,932

 

 

 

-

 

 

 

246

 

 

 

600

 

 

 

846

 

Matured, expired or settled contracts ($)

 

(139

)

 

 

(543

)

 

 

(1,155

)

 

 

(1,837

)

 

 

(700

)

 

 

(246

)

 

 

(1,050

)

 

 

(1,996

)

Notional amounts at September 30 ($)

 

-

 

 

 

-

 

 

 

375

 

 

 

375

 

 

 

-

 

 

 

-

 

 

 

100

 

 

 

100

 

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):

 

 

 

September 30, 2025

 

 

December 31, 2024

 

British pound sterling

 

$

1,858

 

 

$

1,763

 

Canadian dollar

 

$

1,315

 

 

$

758

 

 

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 (in millions):

 

 

 

Three Months Ended
September 30,

 

 

Nine Months Ended
September 30,

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Unrealized gains (losses) on the unhedged portion

 

$

2

 

 

$

(28

)

 

$

(69

)

 

$

(12

)

 

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):

 

Three Months Ended September 30, 2025 and 2024

 

 

 

Unrealized gains (losses)
on CFHs (1)

 

 

Our share of derivatives from unconsolidated co-investment ventures

 

 

Derivative NIHs

 

 

Debt designated as nonderivative NIHs (2)

 

 

CTA

 

 

Total AOCI/L

 

Balance at
     July 1, 2025

 

$

(10,379

)

 

$

12,806

 

 

$

295,707

 

 

$

99,385

 

 

$

(1,163,026

)

 

$

(765,507

)

Other comprehensive
     income (loss), net

 

 

848

 

 

 

2,735

 

 

 

17,627

 

 

 

53,361

 

 

 

(45,164

)

 

 

29,407

 

Balance at
     September 30, 2025

 

$

(9,531

)

 

$

15,541

 

 

$

313,334

 

 

$

152,746

 

 

$

(1,208,190

)

 

$

(736,100

)

 

 

 

Unrealized gains (losses)
on CFHs

 

 

Our share of derivatives from unconsolidated co-investment ventures

 

 

Derivative NIHs

 

 

Debt designated as nonderivative NIHs (2)

 

 

CTA

 

 

Total AOCI/L

 

Balance at
     July 1, 2024

 

$

(18,488

)

 

$

15,834

 

 

$

328,596

 

 

$

272,495

 

 

$

(754,490

)

 

$

(156,053

)

Other comprehensive
     income (loss), net

 

 

(3,488

)

 

 

(4,981

)

 

 

(24,626

)

 

 

(117,782

)

 

 

(265,321

)

 

 

(416,198

)

Balance at
     September 30, 2024

 

$

(21,976

)

 

$

10,853

 

 

$

303,970

 

 

$

154,713

 

 

$

(1,019,811

)

 

$

(572,251

)

 

Nine Months Ended September 30, 2025 and 2024

 

 

 

Unrealized gains (losses) on CFHs (1)

 

 

Our share of derivatives from unconsolidated co-investment ventures

 

 

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

 

 

2,128

 

 

 

2,889

 

 

 

(28,518

)

 

 

(175,151

)

 

 

(417,233

)

 

 

(615,885

)

Balance at
     September 30, 2025

 

$

(9,531

)

 

$

15,541

 

 

$

313,334

 

 

$

152,746

 

 

$

(1,208,190

)

 

$

(736,100

)

 

 

 

Unrealized gains (losses) on CFHs

 

 

Our share of derivatives from unconsolidated co-investment ventures

 

 

Derivative NIHs

 

 

Debt designated as nonderivative NIHs (2)

 

 

CTA

 

 

Total AOCI/L

 

Balance at
     January 1, 2024

 

$

(45,744

)

 

$

8,414

 

 

$

310,526

 

 

$

254,102

 

 

$

(1,041,499

)

 

$

(514,201

)

Other comprehensive
     income (loss), net

 

 

23,768

 

 

 

2,439

 

 

 

(6,556

)

 

 

(99,389

)

 

 

21,688

 

 

 

(58,050

)

Balance at
     September 30, 2024

 

$

(21,976

)

 

$

10,853

 

 

$

303,970

 

 

$

154,713

 

 

$

(1,019,811

)

 

$

(572,251

)

 

(1)
We estimate an additional expense of $1.8 million will be reclassified to Interest Expense in the Consolidated Statements of Income over the next 12 months from September 30, 2025, 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, 2024.

 

Fair Value Measurements on a Recurring Basis

 

At September 30, 2025 and December 31, 2024, 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 September 30, 2025 and December 31, 2024, 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. At September 30, 2025 and December 31, 2024, 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 September 30, 2025 and December 31, 2024, 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 September 30, 2025 and December 31, 2024, 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):

 

 

 

September 30, 2025

 

 

December 31, 2024

 

 

 

Carrying Value

 

 

Fair Value

 

 

Carrying Value

 

 

Fair Value

 

Credit facilities and commercial paper

 

$

224,922

 

 

$

224,922

 

 

$

224,966

 

 

$

224,966

 

Senior notes

 

 

32,777,234

 

 

 

30,942,032

 

 

 

28,322,163

 

 

 

26,095,901

 

Term loans and unsecured other

 

 

1,979,040

 

 

 

1,943,300

 

 

 

2,013,317

 

 

 

1,991,934

 

Secured mortgage

 

 

321,705

 

 

 

311,609

 

 

 

318,817

 

 

 

298,452

 

Total

 

$

35,302,901

 

 

$

33,421,863

 

 

$

30,879,263

 

 

$

28,611,253