The Company uses cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in foreign currency exchange rates. The changes in the fair values of these cash flow hedges are recorded in accumulated other comprehensive loss and are subsequently reclassified into “Cost of goods sold” during the period the sales and purchases are recognized. These amounts offset the effect of the changes in foreign currency rates on the related sale and purchase transactions.

During 2023 and 2022, the Company designated certain foreign currency contracts as cash flow hedges of expected future sales and purchases. The total notional value of derivatives that were designated as cash flow hedges was approximately $242.2 million and $364.8 million as of March 31, 2023 and December 31, 2022, respectively.

During 2023 and 2022, the Company designated certain steel commodity contracts as cash flow hedges of expected future purchases of steel. The total notional value of derivatives that were designated as cash flow hedges was approximately $7.2 million and $0.9 million as of March 31, 2023 and December 31, 2022, respectively.

The following tables summarize the after-tax impact that changes in the fair value of derivatives designated as cash flow hedges had on accumulated other comprehensive loss and net income during the three months ended March 31, 2023 and 2022 (in millions):


			Recognized in Net Income
Three Months Ended March 31,	Gain (Loss) Recognized in Accumulated Other Comprehensive Loss		Classification of Gain (Loss)	Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income		Total Amount of the Line Item in the Condensed Consolidated Statements of Operations Containing Hedge Gains (Losses)
2023
Foreign currency contracts(1)	$	(1.9)	Cost of goods sold	$	(1.8)	$	2,478.6
Commodity contracts(2)	0.9		Cost of goods sold	0.3		$	2,478.6
Total	$	(1.0)		$	(1.5)
2022
Foreign currency contracts	$	(3.8)	Cost of goods sold	$	(0.1)	$	2,054.4
Commodity contracts	1.4		Cost of goods sold	1.0		$	2,054.4
Total	$	(2.4)		$	0.9

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The following table summarizes the activity in accumulated other comprehensive loss related to the derivatives held by the Company during the three months ended March 31, 2023 (in millions):


	Before-Tax Amount		Income Tax		After-Tax Amount
Accumulated derivative net losses as of December 31, 2022	$	(1.0)	$	(0.1)	$	(0.9)
Net changes in fair value of derivatives	(1.4)		(0.4)		(1.0)
Net losses reclassified from accumulated other comprehensive loss into income	1.8		0.3		1.5
Accumulated derivative net losses as of March 31, 2023	$	(0.6)	$	(0.2)	$	(0.4)

As of March 31, 2023, approximately $0.5 million and $0.1 million of derivative realized net losses, before taxes, remain in accumulated other comprehensive loss related to foreign currency contracts and commodity contracts, respectively, associated with inventory that had not yet been sold.

The Company uses non-derivative and derivative instruments to hedge a portion of its net investment in foreign operations against adverse movements in exchange rates. For instruments that are designated as hedges of net investments in foreign operations, changes in the fair value of the derivative instruments are recorded in foreign currency translation adjustments, a component of accumulated other comprehensive loss, to offset changes in the value of the net investments being hedged. When the net investment in foreign operations is sold or substantially liquidates, the amounts recorded in accumulated other comprehensive loss are reclassified to earnings. To the extent foreign currency denominated debt is de-designated from a

net investment hedge relationship, changes in the value of the foreign currency denominated debt are recorded in earnings through the maturity date.

On January 29, 2021, the Company entered into a new cross currency swap contract as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment. The cross currency swap has an expiration date of January 29, 2028. At maturity of the cross currency swap contract, the Company will deliver the notional amount of approximately €247.9 million (or approximately $270.0 million as of March 31, 2023) and will receive $300.0 million from the counterparties. The Company will receive quarterly interest payments from the counterparties based on a fixed interest rate until the maturity of the cross currency swap.

During the three months ended March 31, 2023, the Company designated €150.0 million (or approximately $163.4 million as of March 31, 2023) of its multi-currency revolving credit facility with a maturity date of May 25, 2023 as a hedge of its net investment in foreign operations to offset foreign currency translation gains or losses on the net investment.

The following table summarizes the changes in the fair value of the cross currency swap contract designated as a net investment hedge during the three months ended March 31, 2023 and 2022 (in millions):


	Cross currency swap contract						Foreign currency denominated debt
	Gain (Loss) Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended						Gain Recognized in Accumulated Other Comprehensive Loss for the Three Months Ended
	Before-Tax Amount		Income Tax		After-Tax Amount		Before-Tax Amount		Income Tax		After-Tax Amount
March 31, 2023	$	(1.0)	$	0.2	$	(0.8)	$	0.9	$	—	$	0.9
March 31, 2022	4.2		(1.1)		3.1		—		—		—

During 2023 and 2022, the Company entered into foreign currency contracts to economically hedge receivables and payables on the Company and its subsidiaries’ balance sheets that are denominated in foreign currencies other than the functional currency. These contracts were classified as non-designated derivative instruments. Gains and losses on such contracts are substantially offset by losses and gains on the remeasurement of the underlying asset or liability being hedged and are immediately recognized into earnings. As of March 31, 2023 and December 31, 2022, the Company had outstanding foreign currency contracts with a notional amount of approximately $3.9 billion and $3.7 billion, respectively.

The following table summarizes the impact that changes in the fair value of derivatives not designated as hedging instruments had on net income (in millions):


		Gain (Loss) Recognized in Net Income for the Three Months Ended
	Classification of Gain (Loss)	March 31, 2023		March 31, 2022
Foreign currency contracts	Other expense, net	$	11.2	$	(13.8)


	Asset Derivatives as of March 31, 2023			Liability Derivatives as of March 31, 2023
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments designated as hedging instruments:
Foreign currency contracts	Other current assets	$	3.0	Other current liabilities	$	3.5
Commodity contracts	Other current assets	1.0		Other current liabilities	0.5

Cross currency swap contract	Other noncurrent assets	32.0		Other noncurrent liabilities	—
Derivative instruments not designated as hedging instruments:
Foreign currency contracts(1)	Other current assets	7.8		Other current liabilities	14.6
Total derivative instruments		$	43.8		$	18.6

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	Asset Derivatives as of December 31, 2022			Liability Derivatives as of December 31, 2022
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivative instruments designated as hedging instruments:
Foreign currency contracts	Other current assets	$	1.3	Other current liabilities	$	1.3
Commodity contracts	Other current assets	—		Other current liabilities	—
Cross currency swap contract	Other noncurrent assets	33.0		Other noncurrent liabilities	—
Derivative instruments not designated as hedging instruments:
Foreign currency contracts(1)	Other current assets	6.6		Other current liabilities	39.1
Total derivative instruments		$	40.9		$	40.4

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