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Derivatives (Notes) | 6 Months Ended
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Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 5. DERIVATIVES Our business and financial results are affected by fluctuations in global financial markets, including currency exchange rates and interest rates. Our hedging policy has been developed to manage these risks to an acceptable level based on management’s judgment of the appropriate trade-off between risk, opportunity and cost. We do not hold financial instruments for trading or speculative purposes. Currency derivative contracts From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates relating to certain foreign currencies. As of June 30, 2024 and December 31, 2023, we had currency forward contracts outstanding with a total notional amount of $281.7 million and $206.9 million, respectively, that hedge our exposure to changes in foreign currency exchange rates for certain payroll expenses into the first quarter of 2027 and the purchase of certain direct and indirect inventory and other working capital items into the fourth quarter of 2025. Fixed-to-fixed cross-currency swap In the second quarter of 2024, we discontinued our existing €200.0 million fixed-to-fixed cross-currency swap that was designated as a cash flow hedge and entered into a new fixed-to-fixed cross-currency swap that is designated as a fair value hedge. The fixed-to-fixed cross currency swap reduces the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. At June 30, 2024, we had a notional amount outstanding under the fixed-to-fixed cross-currency swap of €175.0 million, which was equivalent to $187.5 million. The fixed-to-fixed cross-currency swap hedges our exposure to changes in exchange rates on the intercompany loans through the second quarter of 2027. Variable-to-fixed interest rate swaps In 2023, we entered into variable-to-fixed interest rate swaps to reduce the variability of cash flows associated with interest payments on our variable rate debt. As of June 30, 2024, we have $700.0 million notional amount hedged in relation to our variable-to-fixed interest rate swaps into the third quarter of 2027, $200.0 million of which continues into the fourth quarter of 2029. The following table summarizes the reclassification of pre-tax derivative gains and losses into net income from accumulated other comprehensive income (loss) for those derivative instruments designated as cash flow and fair value hedges under Accounting Standards Codification (ASC) 815 - Derivatives and Hedging:
|  | Location |  | Gain (Loss) Reclassified During |  | Total of Financial |  | Gain Expected
|  | of Gain (Loss) |  | Three Months Ended |  | Six Months Ended |  | Statement |  | to be Reclassified
|  | Reclassified into |  | June 30, |  | June 30, |  | Line Item |  | During the
|  | Net Income |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024 |  | Next 12 Months
|  |  |  | (in millions)
Currency forward contracts |  | Cost of Goods Sold |  | $ | 5.7 |  |  | $ | 5.5 |  |  | $ | 10.4 |  |  | $ | 8.8 |  |  | $ | 2,823.4 |  |  | $ | 3.6 |
Fixed-to-fixed cross-currency swap |  | Other Income (Expense), net |  | 2.0 |  |  | (1.3) |  |  | 7.0 |  |  | (4.0) |  |  | (8.8) |  |  | — |
Variable-to-fixed interest rate swap |  | Interest Expense |  | 1.1 |  |  | 0.2 |  |  | 1.4 |  |  | 0.8 |  |  | (96.9) |  |  | 5.0 |
See Note 7 - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (AOCI) for amounts recognized in other comprehensive income during the three and six months ended June 30, 2024 and 2023. The following table summarizes the amount and location of gains and losses recognized in the Condensed Consolidated Statements of Income for those derivative instruments not designated as hedging instruments under ASC 815:
|  | Location |  | Gain (Loss) Recognized During |  | Total of Financial
|  | of Gain (Loss) |  | Three Months Ended |  | Six Months Ended |  | Statement
|  | Recognized in |  | June 30, |  | June 30, |  | Line Item
|  | Net Income |  | 2024 |  | 2023 |  | 2024 |  | 2023 |  | 2024
|  |  |  | (in millions)
Currency forward contracts |  | Other Income (Expense), net |  | $ | (2.8) |  |  | $ | 1.6 |  |  | $ | (1.7) |  |  | $ | 3.7 |  |  | $ | (8.8) |

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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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