v3.26.1
Financial Instruments and Commodity Contracts
 3 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
10. FINANCIAL INSTRUMENTS AND COMMODITY CONTRACTS
10. FINANCIAL INSTRUMENTS AND COMMODITY CONTRACTS
The following tables summarize the gross fair values of our financial instruments and commodity contracts as of the periods presented:
June 30, 2026
AssetsLiabilitiesNet Fair Value
in millionsCurrent
Noncurrent(1)
Current
Noncurrent(1)
Assets / (Liabilities)
Derivatives designated as hedging instruments:
Cash flow hedges
Metal contracts$185 $— $(77)$(1)$107 
Currency exchange contracts11 1 (27)(1)(16)
Energy contracts5 — (2)— 3 
Interest rate swap contracts— — (1)— (1)
Net investment hedges
Currency exchange contracts— 5 — — 5 
Total derivatives designated as hedging instruments$201 $6 $(107)$(2)$98 
Derivatives not designated as hedging instruments:
Metal contracts$195 $— $(189)$(3)$3 
Currency exchange contracts18 — (34)(5)(21)
Energy contracts4 — — — 4 
Total derivatives not designated as hedging instruments$217 $— $(223)$(8)$(14)
Total derivative fair value$418 $6 $(330)$(10)$84 
March 31, 2026
AssetsLiabilitiesNet Fair Value
Current
Noncurrent(1)
Current
Noncurrent(1)
Assets / (Liabilities)
Derivatives designated as hedging instruments:
Cash flow hedges
Metal contracts$5 $1 $(445)$(2)$(441)
Currency exchange contracts10 1 (22)— (11)
Energy contracts8 — (3)— 5 
Interest rate swap contracts— — (3)— (3)
Net investment hedges
Currency exchange contracts— 4 — — 4 
Total derivatives designated as hedging instruments$23 $6 $(473)$(2)$(446)
Derivatives not designated as hedging instruments:
Metal contracts$187 $4 $(320)$— $(129)
Currency exchange contracts15 1 (31)(4)(19)
Energy contracts9 — — — 9 
Total derivatives not designated as hedging instruments$211 $5 $(351)$(4)$(139)
Total derivative fair value$234 $11 $(824)$(6)$(585)
____________________
(1)The noncurrent portions of derivative assets and liabilities are included in other long-term assets and other long-term liabilities, respectively, in the accompanying condensed consolidated balance sheets.
Metal
We use derivative instruments to preserve our conversion margins and manage the timing differences associated with metal price lag. We use over-the-counter derivatives indexed to the LME (referred to as our "aluminum derivative forward contracts") to reduce our exposure to fluctuating metal prices associated with the period of time between the pricing of our purchases of inventory and the pricing of the sale of that inventory to our customers, which is known as "metal price lag." We also purchase forward LME aluminum contracts simultaneously with our sales contracts with customers that contain fixed metal prices. These LME aluminum forward contracts directly hedge the economic risk of future metal price fluctuations to better match the selling price of the metal with the purchase price of the metal. The volatility in LMPs also results in metal price lag.
Price risk arises due to fluctuating aluminum prices between the time the sales order is committed and the time the order is shipped. We identify and designate certain LME aluminum forward purchase contracts as cash flow hedges of the metal price risk associated with our future metal purchases that vary based on changes in the price of aluminum. These contracts are generally undesignated, with an average duration of one year.
Price risk exposure arises due to the timing lag between the LME based pricing of raw material aluminum purchases and the LME based pricing of finished product sales. We identify and designate certain LME aluminum forward sales contracts as cash flow hedges of the metal price risk associated with our future metal sales that vary based on changes in the price of aluminum. Generally, such designated exposures do not extend beyond three years in length. The average duration of those contracts is less than one year.
In addition to aluminum, we enter into LME copper and zinc forward contracts. As of June 30, 2026, we had a notional amount of 5 kt, the fair value of these contracts represented an asset of $4 million. As of March 31, 2026 we had a notional amount of 6 kt and the fair value of these contracts represented an asset of less than $1 million. These contracts are not designated as cash flow hedges, with an average duration of one year.
We also use LMP forward contracts to manage our exposure to fluctuating LMP. Currently, we enter into Midwest Premium ("MWP") contracts in North America and Europe Duty Premium contracts in Europe. As of June 30, 2026, we had a notional of less than 1 kt MWP hedges not designated as cash flow hedges, representing a liability of $17 million. As of March 31, 2026, we had a notional not designated as cash flow hedges of 12 kt, representing a liability of $14 million. The average duration of these undesignated contracts is less than one year. We identify and designate certain MWP sales contracts as cash flow hedges of LMP risk associated with future sales. As of June 30, 2026, the notional designated was 77 kt, representing a liability of $10 million. As of March 31, 2026, the notional designated as cash flow hedges was 105 kt, representing a liability of $69 million. The average duration of these contracts is less than one year. For Europe Premium Duty Paid ("ECDP"), as of June 30, 2026, we had a notional of 20 kt not designated as cash flow hedges, representing a liability of $3 million. As of March 31, 2026, we had a notional 53 kt outstanding, representing a liability of $12 million. The average duration of these not designated contracts is less than one year. We identify and designate certain ECDP sales contracts as cash flow hedges of LMP risk associated with future sales. As of June 30, 2026, the notional designated as cash flow hedges was 33 kt, representing a liability of $6 million. As of March 31, 2026, we had 47 kt notional outstanding, representing a liability of $8 million. The average duration of these contracts is less than one year.
The following table summarizes our notional amount:
in ktJune 30,
2026		March 31,
2026
Hedge type
Purchase (sale)
Cash flow sales(1,035)(1,141)
Not designated(186)(234)
Total, net(1,221)(1,375)
Foreign Currency
We use foreign exchange forward contracts and cross-currency swaps to manage our exposure to changes in exchange rates. These exposures arise from recorded assets and liabilities, firm commitments, and forecasted cash flows denominated in currencies other than the functional currency of certain operations.
We use foreign currency contracts to hedge expected future foreign currency transactions, which include capital expenditures. These contracts cover the same periods as known or expected exposures. We had total notional amounts of $1.2 billion and $1.1 billion in outstanding foreign currency forwards designated as cash flow hedges as of June 30, 2026, and March 31, 2026, respectively.
We enter into forward contracts to hedge our investments in our European operations. The effective portion of changes in the fair value of the derivative is included in Other comprehensive income under Currency translation adjustments. The excluded portion of gain or loss on derivatives is included in other expenses (income), net. We had a total notional amount of $127 million and $128 million in outstanding foreign currency forwards designated as net investment hedges as of June 30, 2026, and March 31, 2026, respectively.
As of June 30, 2026, and March 31, 2026, we had outstanding foreign currency exchange contracts with a total notional amount of $1.8 billion, and $1.6 billion, respectively, to primarily hedge balance sheet remeasurement risk, which were not designated as hedges. Contracts representing the majority of this notional amount will mature by the third quarter of fiscal 2027 and offset the remeasurement impact.
Interest rate
We use interest rate swaps to partially manage our exposure to changes in the SOFR interest rate, which impacts our variable-rate debt. As of June 30, 2026, and March 31, 2026, we had interest rate swaps in place to convert $400 million of our variable rate exposure to a weighted average fixed rate of 4.4%. These interest rate swaps, designated as cash flow hedges, are effective from September 2023 through March 31, 2027.
Energy
We use natural gas and crude oil forward purchase contracts to manage our exposure to fluctuating energy prices in North America and South America. In North America, we had a notional amount of 5 million MMBtu designated as cash flow hedges as of June 30, 2026, and the fair value was a liability of $2 million. There was a notional amount of 6 million MMBtu of natural gas forward purchase contracts designated as cash flow hedges as of March 31, 2026, and the fair value was a liability of $2 million. As of June 30, 2026, we had a notional amount of less than 1 million MMBtu forward contracts that were not designated as hedges, and the fair value was a liability of less than $1 million. As of March 31, 2026, we had a notional amount of less than 1 million MMBtu and the fair value was a liability of less than $1 million. In South America, we had no undesignated cash flow hedges as of June 30, 2026 and March 31, 2026. We had a notional of 67 thousand barrels of forward contracts that were designated as cash flow hedges, representing an asset of less than $1 million as of June 30, 2026. As of March 31, 2026, we had 60 thousand barrels of natural gas forward purchase contracts designated as cash flow hedges representing an asset of $1 million. The average for all natural gas contracts is one year in length.
We use diesel fuel forward purchase contracts to manage our exposure to fluctuating fuel prices in North America and Europe. In North America, we had a notional amount of 5 million gallons designated as cash flow hedges as of June 30, 2026, and the fair value was an asset of $5 million. There was a notional amount of 6 million gallons designated as cash flow hedges as of March 31, 2026, and the fair value was an asset of $7 million. As of June 30, 2026, and March 31, 2026 there was no notional amount remaining that was not designated as hedges. In Europe, as of June 30, 2026, we had a notional amount of less than 1 million metric tonnes not designated as hedges, and the fair value was an asset of $4 million. As of March 31, 2026, we had a notional amount of less than 1 million metric tonnes of forward contracts that were not designated as hedges, and the fair value was an asset of $9 million. The average duration for all diesel fuel contracts is one year in length.
(Gain) Loss Recognition
The following table summarizes the (gains) losses associated with the change in fair value of derivative instruments not designated as hedges and the excluded portion of designated derivatives recognized in other expenses (income), net. (Gains) losses recognized in other line items in the condensed consolidated statement of operations are separately disclosed within this footnote.
Three Months Ended
June 30
in millions20262025
Derivative instruments not designated as hedges
Metal contracts$26 $(13)
Currency exchange contracts16 (38)
Energy contracts(1)
1 1 
Loss (gain) recognized in other expenses (income), net
43 (50)
Derivative instruments designated as hedges
Loss (gain) recognized in other expenses (income), net(1)
7 (3)
Total loss (gain) recognized in other expenses (income), net
$50 $(53)
Losses (gains) recognized on balance sheet remeasurement currency exchange contracts, net
$13 $(41)
Realized losses (gains) on change in fair value of derivative instruments, net
115 (20)
Unrealized (gains) losses on change in fair value of derivative instruments, net
(78)8 
Total loss (gain) recognized in other expenses (income), net
$50 $(53)
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(1)Amount includes forward market premium/discount excluded from hedging relationship and releases to income from accumulated other comprehensive loss on balance sheet remeasurement contracts.
The following tables summarize the impact on accumulated other comprehensive loss and earnings of derivative instruments designated as cash flow and net investment hedges. Within the next 12 months, we expect to reclassify $64 million of gains from accumulated other comprehensive loss to earnings, before taxes.
Amount of Gain (Loss) Recognized in Other comprehensive income (Effective Portion)
Amount of Gain (Loss)
Recognized in 
Other expenses (income), net 
(Excluded Portion)
Three Months Ended June 30,
Three Months Ended June 30,
in millions2026202520262025
Cash flow hedging derivatives
Metal contracts$249 $(4)$(7)$— 
Currency exchange contracts(6)64 — — 
Energy contracts— (5)— — 
Interest rate swap contracts1 (1)— — 
Total cash flow hedging derivatives$244 $54 $(7)$— 
Net investment derivatives
Currency exchange contracts1 (17)— 2 
Total$245 $37 $(7)$2 
Gain (Loss) Reclassification
Amount of Gain (Loss) Reclassified from Accumulated other comprehensive loss into Income/(Expense) (Effective Portion)
Three Months Ended
June 30,
Location of Gain (Loss) Reclassified 
from Accumulated other comprehensive loss into Earnings
in millions20262025
Cash flow hedging derivatives
Metal contracts$(336)$99 Net sales
Currency exchange contracts4 (2)
Cost of goods sold (exclusive of depreciation and amortization)
Currency exchange contracts3 — Net sales
Currency exchange contracts(1)(1)Depreciation and amortization
Interest rate swap contracts(1)— Interest expense and amortization of debt issuance costs
Total$(331)$96 
Income before income tax provision
89 (26)
Income tax provision (benefit)
$(242)$70 
Net income from continuing operations
The entire change in the fair value of the hedging instrument included in the assessment of hedge effectiveness is included in other comprehensive (loss) income and reclassified to earnings in the period in which earnings are impacted by the hedged items or in the period that the transaction becomes probable of not occurring. The exceptions to this however, are our Net Investment, Capital Expenditures and Midwest Premium hedge programs in which forward points are excluded from assessment of effectiveness. See Impact on AOCI and earnings table above for amounts excluded from assessment of effectiveness.