Financial Instruments and Derivative Financial Instruments

12 Months Ended

Dec. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments and Derivative Financial Instruments

Concentrations of Credit Risks: We sell our products primarily to gas producers, distributors, and end-users across energy, industrial, power, HVAC and refining applications in countries throughout the world. 60%, 59%, and 42% of sales were to customers in foreign countries in 2024, 2023, and 2022, respectively.

In 2024, 2023, and 2022, no single customer accounted for more than 10% of consolidated sales. Sales to our top ten customers accounted for 26%, 25% and 38% of consolidated sales in 2024, 2023, and 2022, respectively. Our sales to particular customers fluctuate from period to period, but our large industrial gas producer and distributor customers tend to be a consistently substantial source of revenue for us.

We are subject to concentrations of credit risk with respect to our cash and cash equivalents, restricted cash and restricted cash equivalents and forward foreign currency exchange contracts. To minimize credit risk from these financial instruments, we enter into arrangements with major banks and other quality financial institutions and invest only in high-quality instruments. We do not expect any counterparties to fail to meet their obligations.

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 other expense (income), net. We classify cash flows related to our Foreign Currency Contracts as operating activities within our 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:


	December 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)	$	307.5	$	—	$	—	$	—	$	4.4

Derivatives not designated as hedges
Foreign Currency Contracts	$	603.3	$	3.2	$	0.2	$	9.7	$	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	$	—

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(1)Represents foreign exchange swaps and foreign exchange options.

The effect of derivative instruments, both designated and not designated in hedging relationships, on the consolidated statements of income and consolidated statements of comprehensive income (loss) was not material for the years ended December 31, 2024, December 31, 2023 and December 31, 2022.