DERIVATIVE INSTRUMENTS

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

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 expenses. 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 received a fixed interest rate of 5.80% (matches the fixed rate we paid on the $550.0 million of debt) and paid daily compound Secured Overnight Financing Rate (SOFR) plus 0.241%. These swap agreements terminated in March 2024, coinciding with the redemption of the debt.

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


in millions	Balance Sheet Location	March 31 2024		December 31 2023		March 31 2023
Fair Value Hedges 1
Interest rate swaps	Other current/noncurrent assets	$	0.0	$	3.9	$	3.8
Interest rate swaps	Other current/noncurrent liabilities	0.0		(4.2)		(0.8)
Interest rate swaps net asset (liability)		$	0.0	$	(0.3)	$	3.0

1See Note 5 for further discussion of fair value determination.

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:


in millions	Income Statement Location	Three Months Ended March 31
		2024		2023
Cash Flow Hedges
Loss reclassified from AOCI	Interest expense	$	(0.5)	$	(0.5)

For the twelve-month period ending March 31, 2025, we estimate that $2.3 million of the $19.0 million net of tax loss in AOCI will be reclassified to interest expense.