Pretax net losses on cash flow hedges expected to be reclassified during the next 12 months

  
The Effect of Risk-Management Instruments on the Consolidated Condensed Statements of OperationsThe following effects of risk-management instruments were recognized in other–net, (income) expense:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |
|  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Fair value hedges: |  |  |  |  |  |  |  |
| Effect from hedged fixed-rate debt | $ | (58.2) |  |  | $ | 31.1  |  |  | $ | (152.8) |  |  | $ | (50.4) |  |
| Effect from interest rate contracts | 58.2  |  |  | (31.1) |  |  | 152.8  |  |  | 50.4  |  |
| Cash flow hedges: |  |  |  |  |  |  |  |
| Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss | 4.1  |  |  | 4.2  |  |  | 8.2  |  |  | 8.3  |  |
| Cross-currency interest rate swaps | 33.6  |  |  | (23.4) |  |  | 41.9  |  |  | 48.1  |  |
| Net (gains) losses on foreign currency exchange contracts not designated as hedging instruments | 151.1  |  |  | (73.2) |  |  | 145.0  |  |  | 59.8  |  |
| Total | $ | 188.8  |  |  | $ | (92.4) |  |  | $ | 195.1  |  |  | $ | 116.2  |  |

During the three and six months ended June 30, 2022 and 2021, the amortization of losses related to the portion of our risk management hedging instruments, fair value hedges, and cash flow hedges that was excluded from the assessment of effectiveness was not material.The Effect of Risk-Management Instruments on Other Comprehensive Income (Loss)The effective portion of risk-management instruments that was recognized in other comprehensive income (loss) is as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended June 30, |  | Six Months Ended June 30, |
|  | 2022 |  | 2021 |  | 2022 |  | 2021 |
| Net investment hedges: |  |  |  |  |  |  |  |
| Foreign currency-denominated notes | $ | 333.3  |  |  | $ | (57.8) |  |  | $ | 387.7  |  |  | $ | 149.9  |  |
| Cross-currency interest rate swaps | 68.5  |  |  | (46.5) |  |  | 79.3  |  |  | 104.1  |  |
| Foreign currency forward contracts | 13.6  |  |  | —  |  |  | 13.6  |  |  | —  |  |
| Cash flow hedges: |  |  |  |  |  |  |  |
| Forward-starting interest rate swaps | 157.7  |  |  | (165.2) |  |  | 280.2  |  |  | 129.9  |  |
| Cross-currency interest rate swaps | 1.4  |  |  | (6.9) |  |  | 18.5  |  |  | 19.4  |  |
|  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |

During the next 12 months, we expect to reclassify $16.6 million of pretax net losses on cash flow hedges from accumulated other comprehensive loss to other–net, (income) expense. During the three and six months ended June 30, 2022 and 2021, the amounts excluded from the assessment of hedge effectiveness recognized in other comprehensive income (loss) were not material.  
22
