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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments Derivatives recorded on the Condensed Consolidated Balance Sheet: The following table is a summary of the fair value of derivatives outstanding at March 31, 2023 and December 31, 2022:
| Fair Value
| March 31, 2023 |  | December 31, 2022
| Assets(a) |  | Accrued Liabilities |  | Assets(a) |  | Accrued Liabilities
Derivatives Designated as Cash Flow Hedges |  |  |  |  |  |  |
Interest Rate Swaps | $ | 25 |  |  | $ | — |  |  | $ | 30 |  |  | $ | — |
Natural Gas Hedges | $ | — |  |  | $ | 4 |  |  | $ | 1 |  |  | $ | 2 |
Total Hedges | $ | 25 |  |  | $ | 4 |  |  | $ | 31 |  |  | $ | 2 |
Derivatives Not Designated as Cash Flow Hedges |  |  |  |  |  |  |
Currency Contracts | $ | — |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | — |
Total Derivatives | $ | 25 |  |  | $ | 6 |  |  | $ | 32 |  |  | $ | 2 |
(a) At March 31, 2023 and December 31, 2022, current assets of $25 million and $32 million, respectively, are recorded in prepaid and other current assets on the Condensed Consolidated Balance Sheets. Derivatives' Impact on the Condensed Consolidated Statement of Income: The following table summarizes the impact of the Company's derivatives on the unaudited Condensed Consolidated Statement of Income:
| Amount of Pre-Tax Gain (Loss) Recognized in Earnings |  | Amount of Pre-Tax Gain (Loss) Recognized in Earnings
| Revenue |  | Cost of Goods Sold |  | Other Income (Expense), net |  | Revenue |  | Cost of Goods Sold |  | Other Income (Expense), net
| Three Months Ended March 31, 2023 |  | Three Months Ended March 31, 2022
Derivatives Not Designated as Hedging Instruments
Currency Contracts | $ | — |  |  | $ | — |  |  | $ | (7) |  |  | $ | — |  |  | $ | — |  |  | $ | 7 |
Derivatives Designated as Hedging Instruments
Currency Contracts | $ | — |  |  | $ | (2) |  |  | $ | — |  |  | $ | 3 |  |  | $ | 9 |  |  | $ | — |
Natural Gas Hedges | $ | — |  |  | $ | (1) |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |
Total Derivatives | $ | — |  |  | $ | (3) |  |  | $ | (7) |  |  | $ | 3 |  |  | $ | 10 |  |  | $ | 7 |
Interest Rate Risk During the second quarter of 2019, we entered into three interest-rate swap agreements with an aggregate notional value of $750 million, representing a portion of our Term Loan Facility, which effectively converted the variable rate to a fixed rate for that portion of the loan. The agreements were to expire in September 2024. On March 27, 2023, the Company entered into amendments with two of our existing interest rate swap agreements with the counterparty banks. As a result of these amendments, the Company terminated two of our existing interest rate swap contracts which were indexed to LIBOR with an aggregate notional value of $500 million which had maturity dates of September 2024. At the time of these amendments, the Company determined that the interest payments hedged are still probable to occur, therefore, the gains accumulated of $11 million on the interest rate swaps prior to the amendments are being amortized into interest expense through September 22, 2024, the original maturity of the interest rate swap agreements. We simultaneously entered into two SOFR-indexed forward starting interest rate swaps with the same counterparty banks with no change to the aggregate notional value. The forward starting swaps will be effective from June 2023 and will mature in March 2028 which will align with the maturity date of the Term Loan Facility. Indexing forward starting swaps to SOFR will also ensure that the reference rates in our hedge instruments will align with the interest rate terms of the Term Loan Facility which is expected to change from LIBOR to SOFR effective June 30, 2023 in anticipation of Reference Rate Reform and pursuant to the loan agreement. We elected to apply the hedge accounting expedients in ASC Topic 848, Reference Rate Reform on Financial Reporting related to the following: 1) the assertion that the future forecasted transaction is still probable of occurring despite reference rate changes and 2) the assumption that the index of the future hedged transactions will match the index of the corresponding hedge instruments for the assessment of effectiveness. Additionally, on March 27, 2023, the Company entered into a new interest rate swap with a $200 million notional value which matures in March 2028 and effectively converts the variable rate to a fixed rate for that portion of the 2022 Term Loan Facility. As of March 31, 2023, the Company maintains a total of $950 million of interest rate swaps with the objective in using the interest-rate swap agreements to add stability to interest expense and to manage the Company's exposure to interest rate movements. These interest rate swaps have been designated as cash flow hedges and involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Fair value gains or losses on these cash flow hedges are recorded in accumulated other comprehensive loss and are subsequently reclassified into interest expense in the same periods during which the hedged transactions affect earnings. At March 31, 2023 and December 31, 2022, the net unrealized gain of $25 million and the unrealized gain of $30 million, respectively, was recorded in "Accumulated other comprehensive loss" on the unaudited Condensed Consolidated Balance Sheet. For both the three months ended March 31, 2023 and 2022, the amounts recorded in interest expense related to the interest-rate swap agreements were $4 million. Foreign Currency Risk From time to time, we enter into foreign currency contracts used to hedge forecasted third party non-functional currency sales for our South African subsidiaries and forecasted non-functional currency cost of goods sold for our Australian subsidiaries. Historically, we have used a combination of zero-cost collars or forward contracts to reduce the exposure. These foreign currency contracts are designated as cash flow hedges. Changes to the fair value of these foreign currency contracts are recorded as a component of other comprehensive (loss) income, if these contracts remain highly effective, and are recognized in net sales or costs of goods sold in the period in which the forecasted transaction affects earnings or are recognized in other income (expense), net when the transactions are no longer probable of occurring. As of March 31, 2023, we had no outstanding amounts to reduce the exposure of our Australian subsidiaries’ cost of sales to fluctuations in currency rates or to reduce the exposure of our South African subsidiaries' third party sales to fluctuations in currency rates. At March 31, 2023 and December 31, 2022, there was an unrealized net loss of $2 million and an unrealized net loss of $4 million, respectively, recorded in "Accumulated other comprehensive loss" on the unaudited Condensed Consolidated Balance Sheet, of which $2 million is expected to be recognized in earnings in the remainder of 2023. From time to time, we enter into foreign currency contracts for the South African Rand, Australian Dollar, Euro, Pound Sterling, and Saudi Riyal to reduce exposure of our subsidiaries’ balance sheet accounts not denominated in our subsidiaries’ functional currency to fluctuations in foreign currency exchange rates. Historically, we have used forward contracts to reduce the exposure. For accounting purposes, these foreign currency contracts are not considered hedges. The change in fair value associated with these contracts is recorded in “Other expense, net” within the unaudited Condensed Consolidated Statement of Income and partially offsets the change in value of third party and intercompany-related receivables not denominated in the functional currency of the subsidiary. At March 31, 2023, there was (i) 1.1 billion South African Rand (or approximately $62 million at March 31, 2023 exchange rate), (ii) 216 million Australian dollars (or approximately $144 million at the March 31, 2023 exchange rate), (iii) 16 million Pound Sterling (or approximately $19 million at the March 31, 2023 exchange rate), (iv) 33 million Euro (or approximately $36 million at the March 31, 2023 exchange rate), and (v) 46 million Saudi Riyal (or approximately $12 million at the March 31, 2023 exchange rate) of notional amounts of outstanding foreign currency contracts. At December 31, 2022, there was (i) 1.2 billion South African Rand (or approximately $68 million at the March 31, 2023 exchange rate), (ii) 197 million Australian dollars (or approximately $132 million at the March 31, 2023 exchange rate), (iii) 20 million Pound Sterling (or approximately $25 million at the March 31, 2023 exchange rate, and (iv) 44 million Euro (or approximately $48 million at the March 31, 2023 exchange rate) of notional amounts of outstanding foreign currency contracts.

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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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