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Derivative Financial Instruments and Hedging Activities | 12 Months Ended
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Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments and Hedging Activities | 22. Derivative Financial Instruments and Hedging Activities The Company uses forward foreign currency exchange contracts (derivatives) to reduce the exchange rate risk of specific foreign currency denominated transactions. These derivatives typically require the exchange of a foreign currency for U.S. dollars at a fixed rate at a future date. At times, the Company has designated these hedges as either cash flow hedges or fair value hedges under FASB ASC Topic 815, Derivatives and Hedging, as follows: Fair Value Hedging Strategy: The Company enters into forward foreign exchange contracts to hedge firm commitments denominated in foreign currencies. The purpose of the Company’s foreign currency hedging activities is to protect the Company from risk that the eventual U.S. dollar-equivalent cash flows from the sale of products to international customers will be adversely affected by changes in exchange rates. Cash Flow Hedging Strategy: To protect against the impact of movements in foreign exchange rates on forecasted purchases or sales transactions denominated in foreign currency, the Company has a foreign currency cash flow hedging program. The Company hedges portions of its forecasted transactions denominated in foreign currency with forward contracts. At December 31, 2023, the total notional U.S. dollar equivalent of outstanding forward foreign exchange contracts designated as hedges in accordance with ASC Topic 815 was $46.6 million. Net gains or losses related to these contracts are recorded within the same line item in the Consolidated Statements of Income impacted by the hedged item. The maximum length of time the Company is hedging its exposure to the variability in future cash flows is two years. The Company enters into forward foreign currency exchange contracts to create economic hedges to manage foreign exchange risk exposure associated with non-functional currency denominated receivables and payables resulting from global sales and sourcing activities. The Company has not designated these derivative contracts as hedge transactions under FASB ASC Topic 815, and accordingly, the mark-to-market impact of these derivatives is recorded each period in current earnings within “Miscellaneous, net” in the Consolidated Statements of Income. The fair value of foreign currency related derivatives is included in the Consolidated Balance Sheets in “Other current assets” and “Other current liabilities.” At December 31, 2023, the U.S. dollar equivalent of these outstanding forward foreign exchange contracts totaled $148.9 million in notional amounts covering a variety of foreign currency exposures. The fair values of all open derivative instruments were as follows (in millions):
|  | December 31, 2023 |
|  | Other Current Assets |  |  | Other Long Term Assets |  |  | Other Current Liabilities |  |  | Other Long Term Liabilities |
Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | — |  |  | $ | — |  |  | $ | 0.7 |  |  | $ | — |
Not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  |  | 0.5 |  |  |  | — |  |  |  | 2.5 |  |  |  | 0.2 |
|  | $ | 0.5 |  |  | $ | — |  |  | $ | 3.2 |  |  | $ | 0.2 |
|  | December 31, 2022 |
|  | Other Current Assets |  |  | Other Long Term Assets |  |  | Other Current Liabilities |  |  | Other Long Term Liabilities |
Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 11.1 |  |  | $ | — |  |  | $ | 0.3 |  |  | $ | — |
Not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  |  | 1.5 |  |  |  | 0.1 |  |  |  | 1.3 |  |  |  | — |
|  | $ | 12.6 |  |  | $ | 0.1 |  |  | $ | 1.6 |  |  | $ | — |
The pre-tax effects of derivative instruments consisted of the following (in millions):
|  | Classification of |  | Year Ended December 31, |  |  | (transition period) Three Months Ended December 31, |  |  | Year Ended September 30, |
|  | Gains (Losses) |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2021 |
Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Net Sales |  | $ | 9.6 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign exchange contracts |  | Cost of sales |  |  | 2.3 |  |  |  | 1.4 |  |  |  | 0.3 |  |  |  | (0.7 | )
Not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Miscellaneous, net |  |  | 2.7 |  |  |  | 0.9 |  |  |  | (0.1 | ) |  |  | 0.2 |
|  |  |  | $ | 14.6 |  |  | $ | 2.3 |  |  | $ | 0.2 |  |  | $ | (0.5 | )

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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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