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DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended
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Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS The Company is exposed to, among other risks, the impact of changes in commodity prices, foreign currency exchange rates, and interest rates in the normal course of business. The Company’s risk management program is designed to manage the exposure and volatility arising from these risks, and utilizes derivative financial instruments to offset a portion of these risks. The Company uses derivative financial instruments only to the extent necessary to hedge identified business risks, and does not enter into such transactions for trading purposes. The Company generally does not require collateral or other security with counterparties to these financial instruments and is therefore subject to credit risk in the event of nonperformance; however, the Company monitors credit risk and currently does not anticipate nonperformance by other parties. Contracts with counterparties generally contain right of offset provisions. These provisions effectively reduce the Company’s exposure to credit risk in situations where the Company has gain and loss positions outstanding with a single counterparty. It is the Company’s policy to offset on the Consolidated Balance Sheets the amounts recognized for derivative instruments with any cash collateral arising from derivative instruments executed with the same counterparty under a master netting agreement. As of December 31, 2022 and 2021, the Company did not have any amounts on deposit with any of its counterparties, nor did any of its counterparties have any amounts on deposit with the Company. Derivative Fair Values Our derivatives consist of natural gas forward swaps, cross-currency swaps, foreign exchange forward contracts and U.S. treasury rate lock agreements, all of which are over-the-counter and not traded through an exchange. The Company uses widely accepted valuation tools to determine fair value, such as discounting cash flows to calculate a present value for the derivatives. The models use Level 2 inputs, such as forward curves and other commonly quoted observable transactions and prices. The fair value of our derivatives and hedging instruments are all classified as Level 2 investments within the three-tier hierarchy. The following table presents the fair value of derivatives and hedging instruments and the respective location on the Consolidated Balance Sheets (in millions):
|  |  | Fair Value at
| Location |  | December 31, 2022 |  | December 31, 2021
Derivative assets designated as hedging instruments: |  |  |  |  |
Net investment hedges: |  |  |  |  |
Cross currency swaps | Other current assets |  | $ | — |  |  | $ | 5 |
Cross currency swaps | Other non-current assets |  | $ | — |  |  | $ | 1 |
Cash flow hedges: |  |  |  |  |
Natural gas forward swaps | Other current assets |  | $ | 2 |  |  | $ | 16 |
Treasury interest rate lock | Other current assets |  | $ | — |  |  | $ | 11 |
Derivative liabilities designated as hedging instruments: |  |  |  |  |
Net investment hedges: |  |  |  |  |
Cross-currency swaps | Other liabilities |  | $ | — |  |  | $ | 1 |
Cash flow hedges: |  |  |  |  |
Natural gas forward swaps | Other current liabilities |  | $ | 32 |  |  | $ | 5 |
Foreign exchange forward contracts | Other current liabilities |  | $ | — |  |  | $ | 2 |
Derivative assets not designated as hedging instruments: |  |  |  |  |
Foreign exchange forward contracts | Other current assets |  | $ | 1 |  |  | $ | 1 |
Derivative liabilities not designated as hedging instruments: |  |  |  |  |
Foreign exchange forward contracts | Other current liabilities |  | $ | 2 |  |  | $ | 6 |
Consolidated Statements of Earnings (Loss) Activity The following table presents the impact and respective location of derivative activities on the Consolidated Statements of Earnings (Loss) (in millions):
|  | Twelve Months Ended December 31,
| Location | 2022 | 2021 | 2020
Derivative activity designated as hedging instruments: |  |  |  |
Natural gas cash flow hedges: |  |  |  |
Amount of (gain) loss reclassified from AOCI (as defined below) into earnings (a) | Cost of sales | $ | (52) |  | $ | (15) |  | $ | 5 |
Cross-currency swap net investment hedges: |  |  |  |
Amount of gain recognized in earnings on derivative amounts excluded from effectiveness testing | Interest expense, net | $ | (1) |  | $ | (5) |  | $ | (8) |
Derivative activity not designated as hedging instruments: |  |  |  |
Foreign currency: |  |  |  |
Amount of (gain) loss recognized in earnings (b) | Other expenses (income), net | $ | (29) |  | $ | (41) |  | $ | 41 |
Treasury interest rate lock: |  |  |  |
Amount of gain recognized in earnings | Other expenses (income), net | $ | (6) |  | $ | — |  | $ | — |
(a)Accumulated Other Comprehensive Earnings (Deficit) (“AOCI”) (b)(Gains)/losses related to foreign currency derivatives were substantially offset by net revaluation impacts on foreign currency denominated balance sheet exposures, which were also recorded in Other expenses (income), net. Please refer to the “Other Derivatives” section below for additional detail. Consolidated Statements of Comprehensive Earnings (Loss) Activity The following table presents the impact of derivative activities on the Consolidated Statements of Comprehensive Earnings (Loss) (in millions):
|  | Amount of (Gain) Loss Recognized in Comprehensive Earnings (Loss)
|  | Twelve Months Ended December 31,
Hedging Type | Derivative Financial Instrument | 2022 | 2021
Net investment hedge | Cross-currency swaps | $ | (5) |  | $ | (12) |
Cash flow hedge | Natural gas forward swaps | $ | 40 |  | $ | (10) |
Cash flow hedge | Treasury interest rate lock | $ | (20) |  | $ | (7) |
Cash flow hedge | Foreign exchange forward contracts | $ | — |  | $ | 2 |
Cash Flow Hedges The Company uses a combination of derivative financial instruments, which qualify as cash flow hedges, and physical contracts to manage forecasted exposure to electricity and natural gas prices. As of December 31, 2022, the notional amounts of these natural gas forward swaps were 8 million MMBTu (or MMBTu equivalent based on U.S. and European indices), compared with the notional amounts of 6 million MMBTu at December 31, 2021. In March 2020, the Company entered into a $175 million forward U.S. Treasury rate lock agreement to manage the U.S. Treasury portion of its interest rate risk associated with the anticipated issuance of certain 10-year fixed rate senior notes. The Company designated this outstanding forward U.S. Treasury rate lock agreement as a cash flow hedge. The locked fixed rate of this agreement was 0.994%. In September 2022, a gain of $6 million was recognized as a result of a change in the forecasted issuance of certain senior notes. On December 15, 2022, the Company received cash of $37 million upon the settlement of the rate lock agreement, of which $31 million will be amortized as a component of interest expense upon the future issuance of senior notes. In June 2021, the Company entered into five currency forward contracts with unrelated counterparties with notional amounts totaling $23 million to mitigate against unwanted or anticipated moves in the European Euro exchange rate against the U.S. Dollar, pertaining to forecasted Euro denominated invoices for capital expenditures. The Company has designated each of the individual contracts as cash flow hedges, with the last hedge maturing in December 2022. Net Investment Hedges The Company has translation exposure resulting from translating the financial statements of foreign subsidiaries into U.S. Dollars, which is recognized in Currency translation adjustment (a component of AOCI). In the second quarter of 2022, the Company terminated the remaining cross-currency forward contracts related to the hedged portions of the net investment in foreign subsidiaries, resulting in cash proceeds of $11 million. Other Derivatives The Company uses forward currency exchange contracts to manage existing exposures to foreign exchange risk related to assets and liabilities recorded on the Consolidated Balance Sheets. As of December 31, 2022, the Company had notional amounts of $474 million for non-designated derivative financial instruments related to foreign currency exposures in U.S. Dollars primarily related to Brazilian Real, Indian Rupee, Chinese Yuan, European Euro, Hong Kong Dollar, and South Korean Won. In addition, the Company had notional amounts of $111 million for non-designated derivative financial instruments related to foreign currency exposures in European Euro primarily related to the Polish Złoty, Norwegian Krone, and Chinese Yuan.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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