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Derivatives (Notes) | 3 Months Ended
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Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 6. 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 March 31, 2025 and December 31, 2024, we had currency forward contracts outstanding with a total notional amount of $219.9 million and $228.1 million, respectively, that hedge our exposure to changes in foreign currency exchange rates for certain payroll expenses into the fourth quarter of 2027 and the purchase of certain working capital items into the fourth quarter of 2025. In January 2025, in connection with the Business Combination, we entered into a foreign currency forward contract (the Business Combination Derivative) to reduce the variability in cash flows as a result of fluctuations in the foreign currency exchange rate between the U.S. dollar and Pound sterling. This foreign currency forward contract is non-designated and will be recognized at fair value each reporting period up to, and including, the closing of the Business Combination with changes in fair value recognized in Other income (expense) in our Condensed Consolidated Statement of Income. At March 31, 2025, we had a notional amount outstanding under the Business Combination Derivative of £571.0 million, which was equivalent to $737.5 million. Fixed-to-fixed cross-currency swap In the second quarter of 2024, we entered into a 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 March 31, 2025 and December 31, 2024, we had a notional amount outstanding under the fixed-to-fixed cross-currency swap of €175.0 million, which was equivalent to $189.2 million and $181.2 million, respectively. 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 swap In 2023, we entered into a variable-to-fixed interest rate swap to reduce the variability of cash flows associated with interest payments on our variable rate debt. As of March 31, 2025, we have $700.0 million notional amount hedged in relation to our variable-to-fixed interest rate swap 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 (Loss) Expected
|  | of Gain (Loss) |  |  |  | Three Months Ended |  | Statement |  | to be Reclassified
|  | Reclassified into |  |  |  | March 31, |  | Line Item |  | During the
|  | Net Income |  |  |  |  |  | 2025 |  | 2024 |  | 2025 |  | Next 12 Months
|  |  |  |  |  |  |  | (in millions)
Currency forward contracts |  | Cost of Goods Sold |  |  |  |  |  | $ | (4.1) |  |  | $ | 4.7 |  |  | $ | 1,237.4 |  |  | $ | (7.4) |
Fixed-to-fixed cross-currency swap |  | Other Expense, net |  |  |  |  |  | (8.0) |  |  | 5.0 |  |  | (2.9) |  |  | — |
Variable-to-fixed interest rate swap |  | Interest Expense |  |  |  |  |  | 1.0 |  |  | 0.3 |  |  | (42.9) |  |  | 1.7 |
See Note 8 - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (AOCI) for amounts recognized in other comprehensive income (loss) during the three months ended March 31, 2025 and 2024. The following table summarizes the amount and location of gains recognized in the Condensed Consolidated Statements of Income for those derivative instruments not designated as hedging instruments under ASC 815:
|  | Location |  |  |  |  |  | Gain Recognized During |  | Total of Financial
|  | of Gain |  |  |  | Three Months Ended |  | Statement
|  | Recognized in |  |  |  | March 31, |  | Line Item
|  | Net Income |  |  |  |  |  | 2025 |  | 2024 |  | 2025
|  |  |  |  |  |  |  | (in millions)
Currency forward contracts |  | Other Expense, net |  |  |  |  |  | $ | 0.9 |  |  | $ | 1.1 |  |  | $ | (2.9) |
Currency forward contracts |  | Gain on Business Combination Derivative |  |  |  |  |  | 21.9 |  |  | — |  |  | 21.9

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