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.

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 March 31, 2024, we held the following material net positions:


	Net Notional Amount Bought (Sold)
(In millions)		USD Equivalent
Euro	1,150.0	1,243.0
Norwegian krone	5,120.0	473.0
Brazilian real	2,194.0	439.0
Australian dollar	285.0	186.0
Singapore dollar	118.0	87.0
Malaysian ringgit	229.0	48.0
Czech koruna	383.0	16.0
Swedish krona	103.0	10.0
Canadian dollar	12.0	9.0
Indian rupee	607.0	7.0
Polish zloty	22.0	6.0
Indonesian rupiah	(723,464.0)	(46.0)
British pound	(264.0)	(334.0)
U.S. dollar	(2,367.0)	(2,367.0)

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 March 31, 2024, our portfolio of these instruments included the following material net positions:


	Net Notional Amount Bought (Sold)
(In millions)		USD Equivalent
Brazilian real	33.4	6.7
Norwegian krone	9.6	0.9
Euro	(10.7)	(11.5)
U.S. dollar	4.4	4.4

Fair value amounts for all outstanding derivative instruments have been determined using available market information and commonly accepted valuation methodologies. See Note 18 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.


	March 31, 2024				December 31, 2023
(In millions)	Assets		Liabilities		Assets		Liabilities
Derivatives designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments	$	119.5	$	139.9	$	183.5	$	167.9
Long-term - Derivative financial instruments	18.5		42.2		30.4		24.8
Total derivatives designated as hedging instruments	138.0		182.1		213.9		192.7
Derivatives not designated as hedging instruments
Foreign exchange contracts
Current - Derivative financial instruments	(0.2)		15.4		(0.1)		12.0
Long-term - Derivative financial instruments	—		2.2		—		—
Total derivatives not designated as hedging instruments	(0.2)		17.6		(0.1)		12.0
Total derivatives	$	137.8	$	199.7	$	213.8	$	204.7

Cash flow hedges of forecasted transactions, net of tax, which qualify for hedge accounting, resulted in accumulated other comprehensive loss of $16.8 million and accumulated other comprehensive income of $19.5 million as of March 31, 2024 and December 31, 2023, respectively. We expect to transfer an approximate $4.8 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 second half of 2027.

The following table represents the effect of cash flow hedge accounting in the condensed consolidated statements of income for the three months ended March 31, 2024 and 2023:


(In millions)	Three Months Ended March 31, 2024				Three Months Ended March 31, 2023
Total amount of income (expense) presented in the condensed consolidated statements of income associated with hedges and derivatives	Revenue		Cost of sales		Other income (expense), net		Revenue		Cost of sales		Other income (expense), net
Cash Flow hedge gain (loss) recognized in income
Foreign Exchange Contracts
Amounts reclassified from accumulated OCI to income (loss)	$	0.9	$	0.6	$	2.8	$	(1.7)	$	3.5	$	(4.1)
Amounts excluded from effectiveness testing	7.0		4.9		(4.9)		1.7		(8.4)		40.1
Total cash flow hedge gain (loss) recognized in income	7.9		5.5		(2.1)		—		(4.9)		36.0

Gain (loss) recognized in income on derivatives not designated as hedging instruments	0.2		—		(21.4)		(0.1)		0.3		8.8
Total(a)	$	8.1	$	5.5	$	(23.5)	$	(0.1)	$	(4.6)	$	44.8

(a) The total effect of cash flow hedge accounting on selling, general and administrative expense is not material for the three months ended March 31, 2024 and 2023.

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 March 31, 2024 and December 31, 2023, we had no collateralized derivative contracts. The following tables present both gross and net information of recognized derivative instruments:


	March 31, 2024						December 31, 2023
(In millions)	Gross Amount Recognized		Gross Amounts Not Offset, Permitted Under Master Netting Agreements		Net Amount		Gross Amount Recognized		Gross Amounts Not Offset, Permitted Under Master Netting Agreements		Net Amount
Derivative assets	$	137.8	$	(91.9)	$	45.9	$	213.8	$	(103.4)	$	110.4
Derivative liabilities	$	199.7	$	(91.9)	$	107.8	$	204.7	$	(103.4)	$	101.3