XML 31 R15.htm IDEA: XBRL DOCUMENT v3.23.1
Derivative Instruments and Hedging Activities
 3 Months Ended
Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities
Our risk management and derivative accounting policies are presented within Part II—Item 8 Financial Statements, Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" and Note 10, "Derivative Instruments and Hedging Activities" in our Annual Report and did not significantly change during the three months ended March 31, 2023. As noted in Note 10 of the Notes included in our Annual Report, due to the nature of our counterparty agreements, and the fact that we are not subject to master netting arrangements, we are not able to net positions with the same counterparty and, therefore, present our derivative positions on a gross basis in our unaudited condensed consolidated balance sheets. Except as noted below, our significant derivative positions have not changed considerably since December 31, 2022.
Forward Starting Interest Rate Swaps
In late April 2022, the forward starting interest rate swaps associated with the $500 million 3.5% notes that we repaid upon maturity on May 1, 2022 were terminated and settled. The immaterial loss on settlement of the swaps was recorded through interest expense during the second quarter of 2022.
Derivative Fair Value Measurements
We utilize market approaches to estimate the fair value of our derivative instruments by discounting anticipated future cash flows derived from the derivative's contractual terms and observable market interest, foreign exchange and commodity rates. The fair values of our derivatives also include credit risk adjustments to account for our counterparties' credit risk, as well as our own non-performance risk, as appropriate.
The table below summarizes our derivative assets and liabilities that were measured at fair value as of March 31, 2023 and December 31, 2022.
 Fair value measurements as of March 31, 2023
 As of March 31, 2023Quoted prices in
active markets
(Level 1)		Significant other
observable inputs
(Level 2)		Significant
unobservable
inputs (Level 3)
 (In millions)
Forward starting interest rate swaps$15.6 $— $15.6 $— 
Foreign currency forwards6.3 — 6.3 — 
Commodity swaps and options17.1 — 17.1 — 
Total$39.0 $— $39.0 $— 
 Fair value measurements as of December 31, 2022
 As of December 31, 2022Quoted prices in
active markets
(Level 1)		Significant other
observable inputs
(Level 2)		Significant
unobservable
inputs (Level 3)
 (In millions)
Forward starting interest rate swaps$40.0 $— $40.0 $— 
Foreign currency forwards7.6 — 7.6 — 
Commodity swaps and options69.0 — 69.0 — 
Total$116.6 $— $116.6 $— 
As of March 31, 2023 and December 31, 2022, we had no significant transfers between Level 1 and Level 2. New derivative contracts transacted during the three months ended March 31, 2023 were all included in Level 2.
Results of Period Derivative Activity
The tables below include the results of our derivative activity in our unaudited condensed consolidated balance sheets as of March 31, 2023 and December 31, 2022, and our unaudited condensed consolidated statements of operations for the three months ended March 31, 2023 and March 31, 2022.
Fair Value of Derivative Instruments in the Unaudited Condensed Consolidated Balance Sheets (in millions):
 As of March 31, 2023
  Derivative AssetsDerivative Liabilities
 Notional amountBalance sheet locationFair valueBalance sheet locationFair value
Derivatives designated as hedging instruments
Forward starting interest rate swaps$1,000.0 Other non-current assets$15.6 Other liabilities $— 
Foreign currency forwards$218.2 Other current assets5.3 Accounts payable and other current liabilities(0.1)
 Other non-current assets1.2 Other liabilities (0.1)
Total derivatives designated as hedging instruments$22.1  $(0.2)
Derivatives not designated as hedging instruments
Commodity swaps(1)
$636.7 Other current assets$50.6 Accounts payable and other current liabilities$(25.3)

Other non-current assets4.2 Other liabilities (12.4)
Commodity options(1)
$19.7 Other current assets1.0 Accounts payable and other current liabilities(1.0)
Total derivatives not designated as hedging instruments$55.8  $(38.7)
 As of December 31, 2022
  Derivative AssetsDerivative Liabilities
 Notional amountBalance sheet locationFair valueBalance sheet locationFair value
Derivatives designated as hedging instruments
Forward starting interest rate swaps$1,000.0 Other non-current assets$40.0 Other liabilities$— 
Foreign currency forwards$176.6 Other current assets6.2 Accounts payable and other current liabilities(0.1)
Other non-current assets1.6 Other liabilities(0.1)
Total derivatives designated as hedging instruments$47.8 $(0.2)
Derivatives not designated as hedging instruments
Commodity swaps(1)
$525.2 Other current assets$86.1 Accounts payable and other current liabilities$(14.1)
Other non-current assets7.4 Other liabilities(10.4)
Commodity options(1)
$19.7 Other current assets0.8 Accounts payable and other current liabilities(0.8)
Total derivatives not designated as hedging instruments$94.3 $(25.3)
(1)Notional includes offsetting buy and sell positions, shown in terms of absolute value. Buy and sell positions are shown gross in the asset and/or liability position, as appropriate.
The Pretax Effect of Cash Flow Hedge Accounting on Other Comprehensive Income (Loss), Accumulated Other Comprehensive Income (Loss) and Income (Loss) (in millions):
Derivatives in cash flow hedge relationshipsAmount of gain
(loss) recognized
in OCI on derivatives		Location of gain (loss)
reclassified from AOCI into
income		Amount of gain
(loss) recognized
from AOCI into income on
derivative
Three Months Ended March 31, 2023
Forward starting interest rate swaps$(24.4)Interest income (expense), net$(2.5)
Foreign currency forwards(0.1)Cost of goods sold1.5 
Other non-operating income (expense), net(0.2)
Total$(24.5)$(1.2)
Three Months Ended March 31, 2022
Forward starting interest rate swaps$80.3 Interest income (expense), net$(0.8)
Foreign currency forwards(1.5)Cost of goods sold(0.3)
Other non-operating income (expense), net0.1 
Total$78.8 $(1.0)
The Pretax Effect of Net Investment Hedge Accounting on Other Comprehensive Income (Loss), Accumulated Other Comprehensive Income (Loss) and Income (Loss) (in millions):
Net investment hedge relationshipsAmount of gain
(loss) recognized
in OCI		Location of gain (loss) recognized in income (amount excluded from effectiveness testing)
Amount of gain (loss) recognized in income (amount excluded from effectiveness testing) (1)
Three Months Ended March 31, 2023
EUR 800 million notes due 2024
(10.7)Other non-operating income (expense), net— 
Total$(10.7)$— 
Three Months Ended March 31, 2022
EUR 800 million notes due 2024
24.2 Other non-operating income (expense), net— 
Total$24.2 $— 
(1)Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and period amortization is recorded in other comprehensive income.
The cumulative translation adjustments related to our net investment hedges remain in AOCI until the respective underlying net investment is sold or liquidated. During the three months ended March 31, 2023 and March 31, 2022, respectively, we did not reclassify any amounts related to net investment hedges from AOCI into earnings.
As of March 31, 2023, we expect net gains of approximately $1 million (pretax) recorded in AOCI will be reclassified into earnings within the next 12 months. For derivatives designated in cash flow hedge relationships, the maximum length of time over which forecasted transactions are hedged as of March 31, 2023 is approximately 3 years, as well as those related to our remaining forecasted debt issuances in 2026.
The Effect of Derivatives Not Designated as Hedging Instruments on the Unaudited Condensed Consolidated Statements of Operations (in millions):
Derivatives not in hedging relationshipsLocation of gain (loss) recognized in
income on derivative		Amount of gain (loss) recognized in
income on derivative
Three Months Ended March 31, 2023
Commodity swapsCost of goods sold(28.5)
Total $(28.5)
Three Months Ended March 31, 2022
Commodity swapsCost of goods sold238.6 
Total$238.6