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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments Derivatives and Hedging We utilize a combination of cross-currency swaps and foreign exchange collars (together the “Foreign Exchange Collar Contracts”) as a net investment hedge of a portion of our investments in certain international subsidiaries that use the euro as their functional currency in order to reduce the volatility caused by changes in exchange rates. As a result of our acquisition of Howden, we are also a party to foreign currency contracts not designated as hedging instruments (the “Foreign Currency Contracts”) which are used to mitigate the risk associated with cash management activities and customer forward sale agreements denominated in currencies other than the applicable local currency, and to match costs and expected revenues where production facilities have a different currency than the selling currency. Our Foreign Currency Contracts are measured at fair value with changes in fair value recorded within foreign currency (gain) loss. We classify cash flows related to our Foreign Currency Contracts as operating activities within our condensed consolidated statements of cash flows. Our derivative contracts are entered into with major financial institutions in order to reduce credit risk and risk of nonperformance by third parties. We believe the credit risks with respect to the counterparties, and the foreign currency risks that would not be hedged if the counterparties fail to fulfill their obligations under the contract, are not material in view of our understanding of the financial strength of the counterparties. Our derivative contracts are not exchange traded instruments and their fair value is determined using the cash flows of the contracts, discount rates to account for the passage of time, implied volatility, current foreign exchange market data and credit risk, which are all based on inputs readily available in public markets and categorized as Level 2 fair value hierarchy measurements. The following table represents the fair value of our asset and liability derivatives:
| March 31, 2024
| Notional Amount |  | Fair Value Other Current Assets |  | Fair Value Other Assets |  | Fair Value Other Current Liabilities |  | Fair Value Other Long-Term Liabilities
Derivatives designated as net investment hedge |  |  |  |  |  |  |  |  |
Foreign Exchange Collar Contracts (1) | $ | 316.0 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 5.9 |
Derivatives not designated as hedges |  |  |  |  |  |  |  |  |
Foreign Currency Contracts | $ | 428.7 |  |  | $ | 2.4 |  |  | $ | 0.1 |  |  | $ | 3.0 |  |  | $ | 0.1 |
| December 31, 2023
| Notional Amount |  | Fair Value Other Current Assets |  | Fair Value Other Assets |  | Fair Value Other Current Liabilities |  | Fair Value Other Long-Term Liabilities
Derivatives designated as net investment hedge |  |  |  |  |  |  |  |  |
Foreign Exchange Collar Contracts (1) | $ | 320.8 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 6.0 |
Derivatives not designated as hedges |  |  |  |  |  |  |  |  |
Foreign Currency Contracts | $ | 393.5 |  |  | $ | 1.8 |  |  | $ | 0.1 |  |  | $ | 2.7 |  |  | $ | — |
_________ (1)Represents foreign exchange swaps and foreign exchange options. The following table represents the net effect derivative instruments designated in hedging relationships had on accumulated other comprehensive (loss) income on the condensed consolidated statements of operations and comprehensive loss:
| Three Months Ended March 31, |  |
Derivatives designated as net investment hedge | 2024 |  | 2023 |  |  |  |
Foreign Exchange Collar Contracts (1) (2) | $ | 0.1 |  |  | $ | 0.8 |  |  |  |  |
_______________ (1)Our designated derivative instruments are highly effective. As such, there were no gains or losses recognized immediately in income related to hedge ineffectiveness during the three months ended March 31, 2024 and 2023. (2)Represents foreign exchange swaps and foreign exchange options. The following table represents the effect that derivative instruments not designated as hedges had on net income:
|  |  | Three Months Ended March 31, |  |
Derivatives not designated as hedges | Location of loss recognized in income |  | 2024 |  | 2023 |  |  |  |
Foreign Currency Contracts | Other expense, net |  | $ | 3.1 |  |  | $ | 2.5 |  |  |  |  |
The following table represents interest income, included within interest expense, net on the condensed consolidated statements of operations and comprehensive loss related to amounts excluded from the assessment of hedge effectiveness for derivative instruments designated as net investment hedges:
|  | Three Months Ended March 31, |  |
Derivatives designated as net investment hedge |  | 2024 |  | 2023 |  |  |  |
Foreign Exchange Collar Contracts (1) (2) |  | $ | 0.4 |  |  | $ | 0.4 |  |  |  |  |
_______________ (1)Represents amount excluded from effectiveness testing. Our Foreign Exchange Collar Contracts are designated with terms based on the spot rate of the euro. Future changes in the components related to the spot change on the notional will be recorded in other comprehensive income and remain there until the hedged subsidiaries are substantially liquidated. All coupon payments are classified in interest expense, net in the condensed consolidated statements of operations and comprehensive loss, and the initial value of excluded components currently recorded in accumulated other comprehensive loss as a foreign currency translation adjustment are amortized to interest expense, net over the remaining term of the Foreign Exchange Contract. (2)Represents foreign exchange swaps and foreign exchange options.

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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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