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Derivative Instruments | 3 Months Ended
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Mar. 31, 2025
Derivative Instruments |
Derivative Instruments | ​ 5. Derivative Instruments The Company has certain derivative assets and liabilities, which consist of natural gas forwards and collars, foreign exchange option and forward contracts, interest rate swaps and cross-currency swaps. The valuation of these instruments is determined primarily using the income approach, including discounted cash flow analysis on the expected cash flows of each derivative. Natural gas prices, foreign exchange rates and interest rates are the significant inputs into the valuation models. The Company also evaluates counterparty risk in determining fair values. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. Estimates of the fair value of foreign currency and commodity derivative instruments are determined using exchange traded prices and rates. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. These inputs are observable in active markets over the terms of the instruments the Company holds, and, accordingly, the Company classifies its derivative assets and liabilities as Level 2 in the hierarchy. Commodity Forward Contracts and Collars Designated as Cash Flow Hedges The Company has entered into commodity forward contracts and collars related to forecasted natural gas requirements, the objective of which are to limit the effects of fluctuations in future market prices of natural gas and the related volatility in cash flows. An unrecognized gain of $1 million at March 31, 2025 and unrecognized losses of $2 million and $8 million at December 31, 2024 and March 31, 2024, respectively, related to the commodity forward contracts and collars was included in Accumulated other comprehensive income (loss) (“Accumulated OCI”), and will be reclassified into earnings over the next 12 months. Cash Flow Hedges of Foreign Exchange Risk The Company has variable-interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in the currency of the borrowing against the subsidiaries’ functional currency. The Company uses derivatives to manage these exposures and designates these derivatives as cash flow hedges of foreign currency exchange risk. No unrecognized gains related to cross-currency swaps were included in Accumulated OCI at March 31, 2025, December 31, 2024 and March 31, 2024. ​ Fair Value Hedges of Foreign Exchange Risk The Company has fixed and variable interest rate borrowings denominated in currencies other than the functional currency of the borrowing subsidiaries. As a result, the Company is exposed to fluctuations in the currency of the borrowing against the subsidiaries’ functional currency. The Company uses derivatives to manage these exposures and designates these derivatives as fair value hedges of foreign currency exchange risk. Approximately $2 million, $12 million and $5 million of the components were excluded from the assessment of effectiveness and are included in Accumulated OCI at March 31, 2025, December 31, 2024 and March 31, 2024, respectively. Net Investment Hedges The Company is exposed to fluctuations in foreign exchange rates on investments it holds in non-U.S. subsidiaries and uses cross-currency swaps to partially hedge this exposure. Foreign Exchange Derivative Contracts Not Designated as Hedging Instruments The Company uses short-term forward exchange or option agreements to purchase foreign currencies at set rates in the future. These agreements are used to limit exposure to fluctuations in foreign currency exchange rates for significant planned purchases of fixed assets or commodities that are denominated in currencies other than the subsidiaries’ functional currency. The Company also uses foreign exchange agreements to offset the foreign currency exchange rate risk for receivables and payables, including intercompany receivables, payables, and loans, not denominated in, or indexed to, their functional currencies. Balance Sheet Classification The following table shows the amount and classification (as noted above) of the Company’s derivatives at March 31, 2025, December 31, 2024 and March 31, 2024: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Fair Value of | ​ | Fair Value of
​ | ​ | Hedge Assets | ​ | Hedge Liabilities
​ | ​ | March 31, | ​ | December 31, | ​ | March 31, | ​ | March 31, | ​ | December 31, | ​ | March 31,
​ |  | 2025 |  | 2024 |  | 2024 |  | 2025 |  | 2024 |  | 2024
Derivatives designated as hedging instruments: | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |
Commodity forward contracts and collars (a) | ​ | $ | 1 | ​ | $ | — | ​ | $ | — | ​ | $ | 2 | ​ | $ | 6 | ​ | $ | 15
Fair value hedges of foreign exchange risk (b) | ​ | ​ | 3 | ​ | ​ | 8 | ​ | ​ | 6 | ​ | ​ | 90 | ​ | ​ | 69 | ​ | ​ | 92
Net investment hedges (c) | ​ | ​ | 11 | ​ | ​ | 7 | ​ | ​ | 3 | ​ | ​ | 73 | ​ | ​ | 29 | ​ | ​ | 41
Total derivatives accounted for as hedges | ​ | $ | 15 | ​ | $ | 15 | ​ | $ | 9 | ​ | $ | 165 | ​ | $ | 104 | ​ | $ | 148
Derivatives not designated as hedges: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign exchange derivative contracts (d) | ​ | ​ | 10 | ​ | ​ | 2 | ​ | ​ | 1 | ​ | ​ | 13 | ​ | ​ | 10 | ​ | ​ | 9
Total derivatives | ​ | $ | 25 | ​ | $ | 17 | ​ | $ | 10 | ​ | $ | 178 | ​ | $ | 114 | ​ | $ | 157
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Current | ​ | $ | 25 | ​ | $ | 17 | ​ | $ | 10 | ​ | $ | 60 | ​ | $ | 12 | ​ | $ | 17
Noncurrent | ​ | ​ | ​ | ​ | ​ | — | ​ | ​ | ​ | ​ | ​ | 118 | ​ | ​ | 102 | ​ | ​ | 140
Total derivatives | ​ | $ | 25 | ​ | $ | 17 | ​ | $ | 10 | ​ | $ | 178 | ​ | $ | 114 | ​ | $ | 157
(a) | The notional amount of the commodity forward contracts and collars was approximately 8 million, 28 million, and 35 million British Thermal Units at March 31, 2025, December 31, 2024, and March 31, 2024, respectively. The maximum maturity dates are in 2027 at March 31, 2025, December 31, 2024, and March 31, 2024.
(b) | The notional amounts of the fair value hedges of foreign exchange risk were $816 million at March 31, 2025, $816 million at December 31, 2024 and $833 million at March 31, 2024. The maximum maturity dates are in 2030 at March 31, 2025, December 31, 2024 and March 31, 2024.
(c) | The notional amounts of the net investment hedges were €969 million at March 31, 2025, €483 million at December 31, 2024 and €483 million at March 31, 2024. The maximum maturity dates are in 2028 at March 31, 2025 and in 2026 at December 31, 2024 and March 31, 2024.
(d) | The notional amounts of the foreign exchange derivative contracts were $957 million, $680 million and $453 million at March 31, 2025, December 31, 2024 and March 31, 2024, respectively. The maximum maturity dates are in 2026 at March 31, 2025, and in 2025 at December 31, 2024 and March 31, 2024.
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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Gain (Loss) Recognized in OCI (Effective Portion) | ​ | ​ | Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) (1) | ​
​ | ​ | Three months ended March 31, | ​ | ​ | Three months ended March 31, | ​
Derivatives designated as hedging instruments: |  | 2025 | ​ | 2024 | ​ | ​ | 2025 | ​ | 2024 | ​
Cash Flow Hedges |  | ​ | ​ |  | ​ | ​ |  |  | ​ | ​ |  | ​ | ​ |
Commodity forward contracts and collars (a) | ​ | $ | 6 | ​ | $ | (4) | ​ | ​ | $ | — | ​ | $ | (3) | ​
Net Investment Hedges | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Net Investment Hedges (b) | ​ | ​ | (37) | ​ | ​ | 15 | ​ | ​ | ​ | 3 | ​ | ​ | 2 | ​
​ | ​ | $ | (31) | ​ | $ | 11 | ​ | ​ | $ | 3 | ​ | $ | (1) | ​
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Amount of Gain (Loss) Recognized in Other expense, net | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended March 31, | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Derivatives not designated as hedges: |  | 2025 | ​ | 2024 | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign exchange derivative contracts |  | $ | 5 |  | $ | (4) |  | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(1) Gains and losses reclassified from Accumulated OCI and recognized in income are recorded to (a) cost of goods sold or (b) interest expense, net.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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