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DERIVATIVE FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
For purposes of mitigating the effect of changes in exchange rates, we hold derivative financial instruments to hedge the risks of certain identifiable and anticipated transactions and recorded assets and liabilities in our condensed consolidated balance sheets. The types of risks hedged are those relating to the variability of future earnings and cash flows caused by movements in foreign currency exchange rates. Our policy is to hold derivatives only for the purpose of hedging risks associated with anticipated foreign currency purchases and sales created in the normal course of business, and not for speculative purposes.
Generally, we enter into hedging relationships such that changes in the fair values or cash flows of the transactions being hedged are expected to be offset by corresponding changes in the fair value of the derivatives. For derivative instruments that qualify as a cash flow hedge, the effective portion of the gain or loss of the derivative, which does not include the time value component of a forward currency rate, is reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. For derivative instruments not designated as hedging instruments, any change in the fair value of those instruments is reflected in earnings in the period such change occurs. Cash flows related to derivatives designated as cash flow and fair value hedges are classified consistently with the cash flows of the associated hedged item.
We hold the following types of derivative instruments:
Foreign exchange rate forward contracts - The purpose of these instruments is to hedge the risk of changes in future cash flows of anticipated purchase or sale commitments denominated in foreign currencies and recorded assets and liabilities in our condensed consolidated balance sheets. As of June 30, 2023, we held the following material net positions:
Net Notional Amount
Bought (Sold)
(In millions)USD Equivalent
 Euro 1,598.2 1,734.7 
 Norwegian krone 4,233.7 392.7 
 Australian dollar 324.7 214.9 
 Indonesian rupiah 1,622,840.0 108.2 
 Singapore dollar 106.5 78.5 
 Canadian dollar 41.7 31.4 
 Indian rupee 712.2 8.7 
 Kuwaiti dinar (0.7)(2.3)
 Malaysian ringgit (115.7)(24.8)
 Brazilian real (929.8)(192.9)
 British pound (298.2)(377.2)
 U.S. dollar (2,098.0)(2,098.0)

Foreign exchange rate instruments embedded in purchase and sale contracts - The purpose of these instruments is to match offsetting currency payments and receipts for particular projects or comply with government restrictions on the currency used to purchase goods in certain countries. As of June 30, 2023, our portfolio of these instruments included the following material net positions:
Net Notional Amount
Bought (Sold)
(In millions)USD Equivalent
Brazilian real42.4 8.8 
Norwegian krone3.2 0.3 
Euro(8.3)(9.0)
U.S. dollar1.0 1.0 
Fair value amounts for all outstanding derivative instruments have been determined using available market information and commonly accepted valuation methodologies. See Note 16 for further details. Accordingly, the estimates presented may not be indicative of the amounts we would realize in a current market exchange and may not be indicative of the gains or losses we may ultimately incur when these contracts are settled.
The following table presents the location and fair value amounts of derivative instruments reported in the condensed consolidated balance sheets:
June 30, 2023December 31, 2022
(In millions)AssetsLiabilitiesAssetsLiabilities
Derivatives designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments$211.9 $239.2 $254.8 $332.5 
Long-term - Derivative financial instruments17.9 22.4 7.2 3.6 
Total derivatives designated as hedging instruments229.8 261.6 262.0 336.1 
Derivatives not designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments29.3 7.1 27.9 14.1 
Long-term - Derivative financial instruments— 0.5 — — 
Total derivatives not designated as hedging instruments29.3 7.6 27.9 14.1 
Total derivatives$259.1 $269.2 $289.9 $350.2 
Cash flow hedges of forecasted transactions, net of tax, which qualify for hedge accounting, resulted in accumulated other comprehensive loss of $34.9 million and accumulated other comprehensive income of $18.5 million as of June 30, 2023 and December 31, 2022, respectively. We expect to transfer an approximate $10.9 million gain from accumulated OCI to earnings during the next 12 months when the anticipated transactions actually occur. All anticipated transactions currently being hedged are expected to occur by the first half of 2026.
The following table presents the gains (losses) recognized in other comprehensive income related to derivative instruments designated as cash flow hedges:
Gain (Loss) Recognized in OCI
Three Months Ended Six Months Ended June 30,
(In millions)2023202220232022
Foreign exchange contracts$(15.3)$(43.9)$(17.7)$(63.7)
The following table represents the effect of cash flow hedge accounting in the condensed consolidated statements of income for the three and six months ended June 30, 2023 and 2022:

(In millions)Three Months Ended June 30, 2023Three Months Ended June 30, 2022
Total amount of income (expense) presented in the consolidated statements of income associated with hedges and derivativesRevenueCost of salesSelling,
general
and
administrative
expense		Other income (expense), netRevenueCost of salesSelling,
general
and
administrative
expense		Other income (expense), net
Amounts reclassified from accumulated OCI to income (loss)$(6.8)$(2.8)$(0.1)$(0.3)$4.1 $(6.6)$(0.2)$(4.9)
Amounts excluded from effectiveness testing6.9 (12.2)(0.5)38.2 2.3 (2.5)0.4 (3.8)
Total cash flow hedge gain (loss) recognized in income0.1 (15.0)(0.6)37.9 6.4 (9.1)0.2 (8.7)
Total hedge gain (loss) recognized in income$0.1 $(15.0)$(0.6)$37.9 $6.4 $(9.1)$0.2 $(8.7)
Loss recognized in income on derivatives not designated as hedging instruments— (0.6)— (12.3)— (1.0)— (15.5)
Total$0.1 $(15.6)$(0.6)$25.6 $6.4 $(10.1)$0.2 $(24.2)

(In millions)Six Months Ended June 30, 2023Six Months Ended June 30, 2022
Total amount of income (expense) presented in the consolidated statements of income associated with hedges and derivativesRevenueCost of salesSelling,
general
and
administrative
expense		Other income (expense), netRevenueCost of salesSelling,
general
and
administrative
expense		Other income (expense), net
Amounts reclassified from accumulated OCI to income (loss)$(8.5)$0.7 $(0.1)$(4.4)$(0.5)$(7.0)$(0.3)$(8.9)
Amounts excluded from effectiveness testing8.6 (20.6)(0.6)78.3 3.0 (3.8)0.5 (19.6)
Total cash flow hedge gain (loss) recognized in income0.1 (19.9)(0.7)73.9 2.5 (10.8)0.2 (28.5)
Total hedge gain (loss) recognized in income0.1 (19.9)(0.7)73.9 2.5 (10.8)0.2 (28.5)
Gain (loss) recognized in income on derivatives not designated as hedging instruments(0.1)(0.3)— (3.5)(0.1)(1.4)— 14.0 
Total$— $(20.2)$(0.7)$70.4 $2.4 $(12.2)$0.2 $(14.5)

Balance Sheet Offsetting - We execute derivative contracts with counterparties that consent to a master netting agreement, which permits net settlement of the gross derivative assets against gross derivative liabilities. Each instrument is accounted for individually and assets and liabilities are not offset. As of June 30, 2023 and December 31, 2022, we had no collateralized derivative contracts. The following tables present both gross information and net information of recognized derivative instruments:
June 30, 2023December 31, 2022
(In millions)Gross Amount RecognizedGross Amounts Not Offset, Permitted Under Master Netting AgreementsNet AmountGross Amount RecognizedGross Amounts Not Offset, Permitted Under Master Netting AgreementsNet Amount
Derivative assets$259.1 $(184.0)$75.1 $289.9 $(142.5)$147.4 
Derivative liabilities$269.2 $(184.0)$85.2 $350.2 $(142.5)$207.7