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FINANCIAL INSTRUMENTS | 12 Months Ended
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Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
FINANCIAL INSTRUMENTS | FINANCIAL INSTRUMENTS Derivatives and Hedging In the normal course of business, the Company is exposed to risks relating to changes in interest rates, foreign currency exchange rates and commodity prices. Derivative financial instruments, such as interest rate swaps, net investment hedges, foreign currency exchange forward contracts and commodities derivative contracts are used to manage the risks associated with changes in the conditions of those markets. The counterparties to the Company’s derivative agreements are primarily major international financial institutions. The Company regularly monitors its derivative positions and the credit ratings of its counterparties and does not anticipate nonperformance on their part. All derivatives are recognized in the Consolidated Balance Sheets at fair value. Realized gains and losses on foreign currency forward contracts, commodity derivative contracts and the net periodic payments from interest rate swaps and cross-currency swaps are reflected as "Cash flows from operating activities" in the Consolidated Statements of Cash Flows. Interest Rate and Cross-Currency Swaps The Company uses interest rate swaps and cross-currency swaps to reduce its exposure to interest rate risk and foreign currency risk. The Company has designated its interest rate swaps as cash flow hedges and its cross-currency swaps as net investment hedges of the foreign currency exposure of a portion of its net investment in euro functional subsidiaries. These swaps effectively convert the Company’s outstanding term loans, which are U.S. dollar denominated debt obligations, into fixed-rate euro-denominated debt through their respective expiration dates. In October 2024, in connection with the funding of the term loans B-3, the Company terminated and monetized $100 million notional of the interest rate swaps and cross-currency swaps related to its term loans that would have matured in January 2025. The Company received cash proceeds of $1.2 million upon the termination of the applicable interest rate swaps and recorded the benefit to "Other (expense) income, net" in the Consolidated Statements of Operations. In addition, the Company received cash proceeds of $4.8 million upon the termination of the applicable cross-currency swaps which will remain in "Accumulated other comprehensive loss" until the hedged net investment is sold or liquidated. In December 2023, in connection with the funding of the term loans B-2, the Company terminated and monetized $865 million notional of the interest rate swaps and cross-currency swaps related to its term loans which were scheduled to mature in 2024 and 2026. The Company received cash proceeds of $7.8 million upon the termination of the applicable interest rate swaps with the benefit being subsequently amortized as a reduction to “Interest expense, net” in the Consolidated Statements of Operations. In addition, the Company received cash proceeds of $18.6 million upon the termination of the applicable cross-currency swaps which will remain in “Accumulated other comprehensive loss” until the hedged net investment is sold or liquidated. In December 2023, simultaneously with the funding of the term loans B-2, the Company entered into interest rate swaps and cross-currency swaps to effectively convert $760 million of its term loans, U.S. dollar denominated debt obligations, into fixed-rate euro-denominated debt through December 2028 while the balance of the term loans remained subject to existing swaps scheduled to mature in 2025. The total notional value of the interest rate swaps and cross-currency swaps was $1.04 billion and $1.15 billion at December 31, 2024 and 2023, respectively. As of December 31, 2024, approximately $286 million in notional value matures in January 2025 and the remaining balance of approximately $753 million in December 2028. The net result of these hedges is an interest rate of approximately 3.0% at December 31, 2024 on the term loans B-3, which could vary in the future due to changes in the euro and the U.S. dollar exchange rate. Changes in the estimated fair value of interest rate swaps are recorded in "Accumulated other comprehensive loss" and reclassified to "Interest expense, net" in the Consolidated Statements of Operations as the underlying hedged item affects earnings. The fair value of the interest rate swaps was a net asset of $8.9 million and $11.9 million at December 31, 2024 and 2023, respectively. Changes in the estimated fair value of cross-currency swaps are recorded in "Foreign currency translation" in "Accumulated other comprehensive loss." The fair value of the cross-currency swaps was a net asset of $54.0 million and $4.8 million at December 31, 2024 and 2023, respectively. During 2024 and 2023, these interest rate swaps and cross-currency swaps were deemed highly effective. The Company expects to reclassify a $4.0 million benefit from "Accumulated other comprehensive loss" to "Interest expense, net" in the Consolidated Statements of Operations within the next twelve months. Subsequent Event In January 2025, upon maturity of $286 million in notional value of its cross-currency swaps, the Company received cash proceeds of $25.5 million which will remain in Accumulated other comprehensive loss until the hedged net investment is sold or liquidated. Subsequently, the Company entered into new interest rate swaps and cross-currency swaps to effectively convert $135 million of the term loans B-3, a U.S. dollar denominated debt obligation, into fixed-rate euro-denominated debt through December 2029. When combined with the $753 million notional value of existing swaps, the result is an interest rate of approximately 4.0% on the hedged portion of the term loans B-3, which could vary in the future due to changes in the euro and the U.S. dollar exchange rate. Foreign Currency The Company conducts a significant portion of its business in currencies other than the U.S. dollar and certain subsidiaries conduct business in currencies other than their functional currency, which is typically their local currency. As a result, the Company’s operating results are impacted by foreign currency exchange rate volatility. At December 31, 2024, the Company held foreign currency forward contracts to purchase and sell various currencies to mitigate foreign currency exposure, primarily with the U.S. dollar, euro and British pound. The Company has not designated any foreign currency exchange forward contracts as eligible for hedge accounting and, as a result, changes in the fair value of foreign currency forward contracts are recorded in the Consolidated Statements of Operations as "Other (expense) income, net." The total notional value of foreign currency exchange forward contracts held at December 31, 2024 and 2023 was approximately $104 million and $93.9 million, respectively, with settlement dates generally within one year. The fair value of the foreign currency forward contracts was a net current asset of $0.9 million and a net current liability of $0.7 million at December 31, 2024 and 2023, respectively. Commodities The Company enters into commodity derivative contracts for the purpose of mitigating its exposure to fluctuations in prices of certain metals used in the production of its finished goods. The Company held derivative contracts to purchase and sell various metals, primarily tin and silver, for a notional amount of $55.3 million and $63.8 million at December 31, 2024 and 2023, respectively. The fair value of the metals derivative contracts was a net current asset of $3.2 million and a net current liability of $1.2 million at December 31, 2024 and 2023, respectively. Substantially all contracts outstanding at December 31, 2024 have delivery dates within one year. The Company has not designated these derivatives as hedging instruments and, accordingly, records changes in their fair values in the Consolidated Statements of Operations as "Other (expense) income, net." Fair Value Measurements The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis:
|  |  |  |  |  | December 31,
(dollars in millions) |  | Balance sheet location |  | Classification |  | 2024 |  | 2023
Asset Category |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current assets |  | Level 2 |  | $ | 1.7 |  |  | $ | 0.2 |
Metals contracts |  | Other current assets |  | Level 2 |  | 3.3 |  |  | 0.5 |
Interest rate swaps |  | Other current assets |  | Level 2 |  | 4.0 |  |  | 19.9 |
Cross-currency swaps |  | Other current assets |  | Level 2 |  | 39.2 |  |  | 5.9 |
Interest rate swaps |  | Other assets |  | Level 2 |  | 4.9 |  |  | 4.3 |
Cross-currency swaps |  | Other assets |  | Level 2 |  | 14.8 |  |  | 9.6 |
Available-for-sale debt securities |  | Other assets |  | Level 3 |  | — |  |  | 14.2 |
Total |  |  |  |  |  | $ | 67.9 |  |  | $ | 54.6 |
Liability Category |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Accrued expenses and other current liabilities |  | Level 2 |  | $ | 0.8 |  |  | $ | 0.9 |
Metals contracts |  | Accrued expenses and other current liabilities |  | Level 2 |  | 0.1 |  |  | 1.7 |
Cross-currency swaps |  | Accrued expenses and other current liabilities |  | Level 2 |  | — |  |  | 0.9 |
Interest rate swaps |  | Other liabilities |  | Level 2 |  | — |  |  | 12.3 |
Cross-currency swaps |  | Other liabilities |  | Level 2 |  | — |  |  | 9.8 |
Total |  |  |  |  |  | $ | 0.9 |  |  | $ | 25.6 |
The fair values of Level 1 and Level 2 derivative assets and liabilities are determined using pricing models based upon observable market inputs, such as market spot and futures prices on over-the-counter derivative instruments, market interest rates and consideration of counterparty credit risk. Level 3 investments are valued using a probability weighted methodology based on possible outcomes of potential liquidity events. Significant assumptions include the enterprise valuation, the timing and type of liquidation events and the risk-free interest rate. There were no significant transfers of financial instruments between the fair value hierarchy levels during 2024. The carrying value and estimated fair value of the Company’s long-term debt totaled $1.82 billion and $1.81 billion, respectively, at December 31, 2024. At December 31, 2023, the carrying value and estimated fair value totaled $1.93 billion and $1.89 billion, respectively. The carrying values noted above include unamortized discounts and debt issuance costs. The estimated fair value of long-term debt is measured using quoted market prices for similar instruments at the reporting date multiplied by the gross carrying amount of the related debt, which excludes unamortized discounts and debt issuance costs. Such instruments are valued using Level 2 inputs. Non-Recurring Fair Value Measurement As a result of the goodwill impairment test conducted in the third quarter of 2023, the Industrial & Specialty segment recorded an impairment charge of $80.0 million to reduce the carrying value of the Graphics Solutions reporting unit to its estimated fair value. This measurement was performed on a non-recurring basis as of August 31, 2023 using significant unobservable inputs (Level 3), including the applicable discount rate (WACC) of 10.5% and the short and long-term projected cash flows, such as future growth rates, of the Graphics Solutions reporting unit. See Note 8, Goodwill and Intangible Assets, Net, to the Consolidated Financial Statements for further information.

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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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