We use derivatives as part of our normal business operations to manage our exposure to fluctuations in interest rates, foreign currency, commodity price risk and for other strategic purposes related to our core business. We have established policies and procedures that govern the risk management of these exposures. Our primary objective in managing these exposures is to decrease the volatility of cash flows affected by changes in the underlying rates and prices.

To achieve our objectives, we enter into a variety of financial derivatives, including foreign currency exchange, commodity, interest rate, cross currency swaps as well as options. We also enter into physical hedging agreements directly with our suppliers to manage our exposure to certain commodities.

While, by policy, the counterparties to any of the financial derivatives we enter into are major institutions with minimum investment grade credit ratings of BBB- by Standard & Poor's (or the equivalent) or Baa3 by Moody's, we are exposed to credit-related losses in the event of non-performance by counterparties. This credit risk is generally limited to the unrealized gains in such contracts, should any of these counterparties fail to perform as contracted.

We have established a counterparty credit policy and guidelines that are monitored and reported to management to assist in managing this risk. As an additional measure, we utilize a portfolio of institutions either headquartered or operating in the same countries that we conduct our business. In calculating the fair value of our derivative balances, we also record an adjustment to recognize the risk of counterparty credit and our own non-performance risk, as appropriate.

We base the fair value of our derivative instruments upon market rates and prices. The volatility of these rates and prices are dependent on many factors that cannot be forecasted with reliable accuracy. The current fair values of our contracts could differ significantly from the cash settled values with our counterparties. As such, we are exposed to price risk related to unfavorable changes in the fair value of our derivative contracts.

We may be forced to cash settle all or a portion of our derivative contracts before the expected settlement date upon the occurrence of certain contractual triggers including a change of control, termination event or other breach of agreement. This could have a negative impact on our liquidity. For derivative contracts that we have designated as hedging instruments, early cash settlement would result in the timing of our hedge settlement not being matched to the cash settlement of the forecasted transaction or firm commitment. We may also decide to cash settle all or a portion of our derivative contracts before the expected settlement date through negotiations with our counterparties, which could also impact our cash position.

Due to the nature of our counterparty agreements, we are not able to net positions with the same counterparty across business units. Thus, in the event of default, we may be required to early settle all out-of-the-money contracts, without the benefit of netting the fair value of any in-the-money positions against this exposure.

We do not receive and are not required to post collateral unless a change of control event occurs. This termination event would give either party the right to early terminate all outstanding swap transactions in the event that the other party consolidates, merges with, or transfers all or substantially all of its assets to, another entity, and the creditworthiness of the surviving entity that has assumed such party's obligations is materially weaker than that of such party. As of December 31, 2024, we did not have any collateral posted with any of our counterparties.

Our forward starting interest rate swaps and most of our foreign currency forwards are designated in hedging relationships as cash flow hedges. In certain situations, we may execute derivatives that do not qualify for, or we do not otherwise seek, hedge accounting but are determined to be important for managing risk. For example, our commodity swaps and commodity options are not designated in hedge accounting relationships. These outstanding economic hedges are measured at fair value on our consolidated balance sheets with changes in fair value recorded in earnings. We have historically elected to apply the NPNS exemption to certain contracts, as applicable. These contracts are typically transacted with our suppliers and include risk management features that allow us to fix the price on specific volumes of purchases for specified delivery periods. We also consider whether any provisions in our contracts represent embedded derivative instruments as defined in authoritative accounting guidance and apply the appropriate accounting.

We formally document all relationships receiving hedge accounting treatment between hedging instruments and hedged items, as well as the risk-management objective and strategy for undertaking hedge transactions pursuant to prescribed guidance. We also formally assess effectiveness both at the hedge's inception and on an ongoing basis, specifically whether the derivatives that are used in hedging transactions have been highly effective in mitigating the risk designated as being hedged and whether those hedges may be expected to remain highly effective in future periods. Specific to net investment hedges, we have elected to use the spot-to-spot methodology to assess effectiveness.

We discontinue hedge accounting prospectively when (i) the derivative is no longer highly effective in offsetting changes in the cash flows of a forecasted future transaction; (ii) the derivative expires or is sold, terminated, or exercised; (iii) it is no longer probable that the forecasted transaction will occur; (iv) management determines that designating the derivative as a hedging instrument is no longer appropriate; or (v) management decides to cease hedge accounting.

When we discontinue hedge accounting prospectively, but it continues to be probable that the forecasted transaction will occur in the originally expected period, the existing gain or loss on the derivative remains in AOCI for cash flow hedges and net investment hedges or in the carrying value of the hedged item for fair value hedges and is reclassified into earnings when the forecasted transaction affects earnings. However, if it is probable that a forecasted transaction will no longer occur by the end of the originally specified time period or within an additional two-month period of time thereafter, the gains and losses in AOCI are recognized immediately in earnings. In all situations in which hedge accounting is discontinued and the derivative remains outstanding, we carry the derivative at its fair value on the consolidated balance sheets until maturity, recognizing future changes in the fair value in current period earnings.

On May 29, 2024, we issued EUR 800 million 3.8% senior notes maturing June 15, 2032. Concurrent with the issuance of these senior notes, we designated the principal of the senior notes as a net investment hedge of our investment in a EUR functional currency subsidiary in order to hedge a portion of the related foreign currency translational impacts and, accordingly, we have and will continue to record the changes in the carrying value due to fluctuations in the spot rate to AOCI. See Note 9, "Debt" for further discussion of the EUR 800 million 3.8% senior notes.

In 2016, we issued EUR 800 million 1.25% senior notes which matured on July 15, 2024, to partially fund the MillerCoors acquisition. Concurrent with the issuance of these senior notes, we designated the principal of the senior notes as a net investment hedge of our investment in our Europe business in order to hedge a portion of the foreign currency translational impacts and, accordingly, recorded the changes in the carrying value due to fluctuations in the spot rate to AOCI until it was de-designated on May 29, 2024. Upon de-designation, the associated net investment hedge was discontinued. The accumulated gains and losses associated with the settled net investment hedge will remain in AOCI until a liquidation or deconsolidation event at which point the accumulated gains and losses will be reclassified into earnings.

During 2018, we entered into forward starting interest rate swaps with a notional amount totaling $1.5 billion with termination dates of July 2021, May 2022 and July 2026. The swaps had effective dates mirroring the terms of the forecasted debt issuances. Under the agreements, we are required to early terminate these swaps at the time we expect to issue the related forecasted debt. We designated these contracts as cash flow hedges. As a result, the unrealized mark-to-market gains or losses are recorded to AOCI until termination at which point the realized gain or loss of these swaps at issuance of the hedged debt are reclassified from AOCI and amortized to interest expense over the term of the hedged debt.

In June 2021, we early terminated our $250.0 million forward starting interest rate swap that was originally set to terminate in July 2021. This forward starting interest rate swap was rolled forward to May 2022 through a cashless settlement. The new May 2022 forward starting interest rate swap was incremental to our existing May 2022 forward starting interest rate swap that was executed in 2018, both of which were hedging our forecasted debt issuance expected to occur during 2022. In late April 2022, the forward starting interest rate swaps associated with the $500 million 3.5% senior 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.

In 2015, we entered into forward starting interest rate swaps with a notional of CAD 600 million in order to manage our exposure to the volatility of interest rates associated with the future interest payments on the forecasted CAD debt issuances. The swaps had a termination date of September 2025 mirroring the terms of initially forecasted CAD debt issuances. Under these agreements, we were required to early terminate these swaps at the approximate time we issued the previously forecasted debt. We designated these swaps as cash flow hedges and accordingly, a portion of the CAD 39.2 million ($29.5 million at settlement) loss on the swaps was reclassified from AOCI and amortized to interest expense over the remaining term of the 2026 CAD senior notes up to the full 10-year term of the swaps. Additionally, in 2023 we repaid our CAD 500 million 2.84% senior notes upon maturity which resulted in an acceleration of amortization of the loss for an immaterial amount. The remaining unamortized portion of the loss in AOCI as of December 31, 2024, was $2.4 million.

We have financial foreign exchange forward contracts in place to manage our exposure to foreign currency fluctuations. We hedge foreign currency exposure related to certain royalty agreements, exposure associated with the purchase of production inputs and imports that are denominated in currencies other than the entity's functional currency and certain other foreign exchanges exposures. These contracts have been designated as cash flow hedges of forecasted foreign currency transactions. We use foreign currency forward contracts to hedge these future forecasted transactions up to a 60 month horizon.

In the second quarter of 2023, we entered into approximately CAD 260 million (approximately $195 million USD) of foreign exchange forward contracts to manage our exposure to foreign currency fluctuations related to the repayment of our CAD 500 million 2.84% senior notes that matured on July 15, 2023. These contracts were not designated in hedge accounting relationships; as such, changes in the fair value were recorded in other non-operating income (expense), net in the consolidated statements of operations. These contracts settled on July 12, 2023 in advance of the senior notes repayment for an immaterial amount.

We have financial commodity swap and option contracts in place to hedge changes in the prices of natural gas, aluminum, including surcharges relating to our aluminum exposures, barley and diesel. These contracts allow us to swap our floating exposure to changes in these commodity prices for a fixed rate. These contracts are not designated in hedge accounting relationships. As such, changes in fair value of these derivatives are recorded in cost of goods sold in the consolidated statements of operations. We hedge forecasted purchases of natural gas, aluminum and diesel each up to 60 months out in the future for use in our supply chain, in line with our risk management policy. Further, we hedge forecasted purchases of barley based on crop year and physical inventory management. For purposes of measuring segment operating performance, the unrealized changes in fair value of the swaps not designated in hedge accounting relationships are reported in Unallocated outside of the segment specific operating results until such time that the exposure we are managing is realized. At that time, we reclassify the gain or loss from Unallocated to the respective operating segment, allowing our operating segments to realize the economic effects of the derivative without the resulting unrealized mark-to-market volatility.

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 December 31, 2024 and December 31, 2023. See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies" for further discussion related to measuring the fair value of derivative instruments. Fair value for all derivative contracts as of December 31, 2024 and 2023 were valued using significant other observable inputs, also known as Level 2 inputs.


	As of
	December 31, 2024		December 31, 2023
	(In millions)
Forward starting interest rate swaps	$	96.3	$	41.6
Foreign currency forwards	10.6		(1.4)
Commodity swaps and options	3.7		(30.4)
Total	$	110.6	$	9.8

The following tables include the year-to-date results of our derivative activity in our consolidated balance sheets as of December 31, 2024 and December 31, 2023, and our consolidated statements of operations for the years ended December 31, 2024, December 31, 2023 and December 31, 2022.

Fair Value of Derivative Instruments in the Consolidated Balance Sheets (in millions):


	December 31, 2024
			Asset derivatives			Liability derivatives
	Notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
Derivatives designated as hedging instruments

Forward starting interest rate swaps	$	1,000.0	Other non-current assets	$	96.3	Other liabilities	$	—
Foreign currency forwards	$	196.2	Other current assets	7.7		Accounts payable and other current liabilities	—
			Other non-current assets	2.9		Other liabilities	—
Total derivatives designated as hedging instruments				$	106.9		$	—
Derivatives not designated as hedging instruments
Commodity swaps(1)	$	376.4	Other current assets	$	15.1	Accounts payable and other current liabilities	$	(10.5)
			Other non-current assets	1.5		Other liabilities	(2.4)
Commodity options(1)	$	24.6	Other current assets	0.3		Accounts payable and other current liabilities	(0.3)


Total derivatives not designated as hedging instruments				$	16.9		$	(13.2)


	December 31, 2023
			Asset derivatives			Liability derivatives
	Notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
Derivatives designated as hedging instruments

Forward starting interest rate swaps	$	1,000.0	Other non-current assets	$	41.6	Other liabilities	$	—
Foreign currency forwards	$	219.4	Other current assets	1.1		Accounts payable and other current liabilities	(1.2)
			Other non-current assets	—		Other liabilities	(1.3)
Total derivatives designated as hedging instruments				$	42.7		$	(2.5)
Derivatives not designated as hedging instruments
Commodity swaps(1)	$	653.5	Other current assets	$	11.1	Accounts payable and other current liabilities	$	(42.0)
			Other non-current assets	6.6		Other liabilities	(6.1)
Commodity options(1)	$	21.7	Other current assets	0.2		Accounts payable and other current liabilities	(0.2)
Total derivatives not designated as hedging instruments				$	17.9		$	(48.3)

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 relationships	Amount 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
For the year ended December 31, 2024
Forward starting interest rate swaps	$	54.8	Interest income (expense), net	$	(3.4)
Foreign currency forwards	15.8		Cost of goods sold	4.4
			Other non-operating income (expense), net	(0.7)
Total	$	70.6		$	0.3
For the year ended December 31, 2023
Forward starting interest rate swaps	$	1.6	Interest income (expense), net	$	(5.2)
Foreign currency forwards	(5.2)		Cost of goods sold	4.9
			Other non-operating income (expense), net	(1.0)
Total	$	(3.6)		$	(1.3)
For the year ended December 31, 2022
Forward starting interest rate swaps	$	198.9	Interest income (expense), net	$	(14.3)
Foreign currency forwards	10.8		Cost of goods sold	1.8
			Other non-operating income (expense), net	(0.4)
Total	$	209.7		$	(12.9)


Net investment hedge relationships	Amount of gain (loss) recognized in OCI(1)
For the year ended December 31, 2024

EUR 800 million 1.25% senior notes due 2024	$	14.5
EUR 800 million 3.8% senior notes due 2032	$	40.1
Total	$	54.6
For the year ended December 31, 2023
EUR 800 million 1.25% senior notes due 2024	$	(26.5)

For the year ended December 31, 2022
EUR 800 million 1.25% senior notes due 2024	$	53.2

(1)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 years ended December 31, 2024, December 31, 2023 and December 31, 2022, we did not reclassify any amounts related to net investment hedges from AOCI into earnings whether due to ineffectiveness, a sale or liquidation.

As of December 31, 2024, we expect net gains of approximately $4 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 December 31, 2024, is approximately 2 years.

Derivatives not in hedging relationship

Location of gain (loss) recognized
in income on derivative

Amount of gain (loss) recognized
in income on derivative

For the year ended December 31, 2024

Commodity swaps

Cost of goods sold

(7.8)

For the year ended December 31, 2023

Commodity swaps

Cost of goods sold

(61.7)

Foreign currency swaps

Other non-operating income (expense), net

2.7

Total

(59.0)

For the year ended December 31, 2022

Commodity swaps

Cost of goods sold

42.6