Annual report pursuant to Section 13 and 15(d)

DERIVATIVE INSTRUMENTS AND HEDGING

v3.24.0.1
DERIVATIVE INSTRUMENTS AND HEDGING
 12 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging
NOTE 15 - DERIVATIVE INSTRUMENTS AND HEDGING
We are exposed to fluctuations in market prices of raw materials and energy sources. We may use cash-settled commodity swaps to hedge the market risk associated with the purchase of certain of our raw materials and energy requirements. Our hedging strategy is to reduce the effect on earnings from the price volatility of these various commodity exposures, including timing differences between when we incur raw material commodity costs and when we receive sales surcharges from our customers
based on those raw materials. Independent of any hedging activities, price changes in any of these commodity markets could negatively affect operating costs.
Our commodity contracts are designated as cash flow hedges for accounting purposes, and we record the gains and losses for the derivatives in Accumulated other comprehensive income until we reclassify them into Cost of goods sold when we recognize the associated underlying operating costs. Refer to NOTE 17 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) for further information.
Our commodity contracts are classified as Level 2 as values were determined using a market approach based upon quoted prices for similar assets in active markets or other inputs that were observable.
The following table presents the notional amount of our outstanding hedge contracts:
Notional Amount
December 31,
Commodity Contracts Unit of Measure Maturity Dates 2023 2022
Natural Gas MMBtu January 2024 - August 2026 168,590,000 127,790,000
Electricity Megawatt hours January 2024 - October 2026 3,501,898 432,043
At December 31, 2023, we expect to reclassify $155 million of net losses related to our hedge contracts from Accumulated other comprehensive income into Cost of goods sold during the next 12 months.
The following table presents the fair value of our cash flow hedges and the classification on the Statements of Consolidated Financial Position:
December 31,
Balance Sheet Location (In millions) 2023 2022
Other current assets $ —  $ 15 
Other non-current assets 1  30 
Other current liabilities (105) (87)
Other non-current liabilities (52) (10)