During the normal course of operations, we are exposed to market risks including interest rates, foreign currency exchange rates and commodity prices. From time to time, we use derivative instruments to balance the cost and risk of such exposures. We do not use derivative instruments for trading or other speculative purposes.

In March 2023, we issued $550.0 million of 5.80% fixed-rate debt maturing in March 2026. Concurrently, we entered into fixed-to-floating interest rate swap agreements designated as fair value hedges in the amount of $550.0 million. Under these swap agreements, we receive a fixed interest rate of 5.80% (matches the fixed rate we pay on the $550.0 million of debt) and pay daily compound Secured Overnight Financing Rate (SOFR) plus 0.241%.

The changes in the fair value of these swaps designated as fair value hedges are recorded in interest expense and are perfectly offset by changes in the fair value of the related debt also recorded in interest expense. These swaps are recognized at fair value in the accompanying Condensed Consolidated Balance Sheets as follows:



		Fair Value ¹
		March 31	December 31	March 31
in thousands	Balance Sheet Location	2023	2022	2022
Fair Value Hedges
Interest rate swaps	Other current assets	$ 3.8	$ 0.0	$ 0.0
Interest rate swaps	Other noncurrent liabilities	0.8	0.0	0.0
Interest rate swaps net asset		$ 3.0	$ 0.0	$ 0.0

In 2007, 2018 and 2020, we entered into interest rate locks of future debt issuances to hedge the risk of higher interest rates. These interest rate locks were designated as cash flow hedges. The gain/loss upon settlement of these cash flow hedges is deferred (recorded in accumulated other comprehensive income (AOCI)) and amortized to interest expense over the term of the related debt.

This amortization was reflected in the accompanying Condensed Consolidated Statements of Comprehensive Income as follows:



		Three Months Ended
	Income Statement	March 31
in millions	Location	2023	2022
Cash Flow Hedges
Loss reclassified from AOCI	Interest expense	$ (0.5)	$ (0.5)

For the twelve-month period ending March 31, 2024, we estimate that $2.2 million of the $20.6 million net of tax loss in AOCI will be reclassified to interest expense.