Financial instruments

6 Months Ended

Jun. 29, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Foreign currency forward contracts

We use derivative instruments for risk management purposes. Foreign currency forward contracts designated as cash flow hedges are used to manage foreign currency transaction exposure. Foreign currency forward contracts not designated as hedges for accounting purposes are used to manage exposure related to near term foreign currency denominated monetary assets and liabilities. We typically enter into the non-designated foreign currency forward contracts for periods consistent with our currency translation exposures, which generally approximate one month. Concurrent with the execution of the agreement to acquire the VI Business as described in Note 4, in February 2025, we also entered into non-designated foreign currency forward contracts with an aggregate notional value of €700 million to hedge economically against the foreign currency exposure associated with the cash consideration required to complete the acquisition. For additional information regarding the foreign currency forward contracts related to the VI Business, see Note 15, Subsequent events. For the three and six months ended June 29, 2025, we recognized gains of $63.8 million and $86.4 million, respectively, from non-designated foreign currency forward contracts within selling, general and administrative expenses. For the three and six months ended June 30, 2024, we recognized a loss of $0.1 million and a gain of $3.5 million, respectively, from non-designated foreign currency forward contracts within selling, general and administrative expenses.

The total notional amount for all open foreign currency forward contracts designated as cash flow hedges as of June 29, 2025 and December 31, 2024 was $322.4 million and $270.9 million, respectively. The total notional amount for all open non-designated foreign currency forward contracts as of June 29, 2025 and December 31, 2024 was $177.5 million and $168.6 million, respectively. All open foreign currency forward contracts as of June 29, 2025 have durations of 12 months or less.

Cross-currency interest rate swaps

On April 25, 2024, we executed two separate term cross-currency swap agreements set to expire on February 26, 2027 and February 28, 2029, respectively, to hedge against the effect of variability in the U.S. dollar to euro exchange rate (the "2024 Cross-currency swap agreements"). Each of the swap agreements had a notional principal amount of $250 million and were designated as a net investment hedge. The cross-currency swap agreements expiring in 2027 include five different financial institution counterparties and notionally exchanged $250 million at an annual interest rate of 4.25% for €233.4 million at an annual interest rate of 2.44%. The cross-currency swap agreements expiring in 2029 include four different financial institution counterparties and notionally exchanged $250 million at an annual interest rate of 4.25% for €233.4 million at an annual interest rate of 2.45%. Both of the 2024 Cross-currency swap agreements are designated as a net investment hedge.

During 2023, we executed cross-currency swap agreements with six different financial institution counterparties to hedge against the effect of variability in the U.S. dollar to euro exchange rate, (the "2023 Cross-currency swaps"). Under the terms of the cross-currency swap agreements, we have notionally exchanged $500 million at an annual interest rate of 4.63% for €474.7 million at an annual interest rate of 3.05%. The swap agreements are designated as net investment hedges and expire on October 4, 2025.

Shortly after the execution of the 2023 Cross-currency swaps, we entered into a zero cost foreign exchange collar contract that aligns with the notional amount and expiration date of the 2023 Cross-currency swaps. We sold a put option with a lower strike price and bought a call option with a higher strike price to manage the foreign exchange risk related to the final settlement of the $500 million notional cross currency swaps. Upon the execution of the zero cost foreign exchange collar contract, we have de-designated the 2023 Cross-currency swaps and re-designated the combined $500 million notional cross currency swaps and zero cost collar into a new hedging instrument. At redesignation, the existing $500 million notional cross-currency swaps were off-market due to changes in foreign exchange rates and interest rates. The off-market value due to interest rates will be amortized ratably into earnings through October 2025 and the off-market value due to foreign exchange rates will remain in accumulated other comprehensive income until the underlying net investment is sold. The combined cross-currency swaps and zero cost collar have been designated as a net investment hedge for accounting purposes.

The swap agreements described above require an exchange of the notional amounts upon expiration or earlier termination of the agreements. We and the counterparties have agreed to effect the exchange through a net settlement.

The cross-currency swaps are marked to market at each reporting date and any changes in fair value are recognized as a component of accumulated other comprehensive income (loss) ("AOCI"). The following table summarizes the foreign exchange gains and losses recognized within AOCI and the interest benefit recognized within interest expense related to cross currency swaps for the three and six months ended June 29, 2025 and June 30, 2024:


	Three Months Ended				Six Months Ended
	June 29, 2025		June 30, 2024		June 29, 2025		June 30, 2024
Foreign exchange (loss) gain	$	(61,063)	$	5,297	$	(83,563)	$	14,190
Interest benefit	3,245		4,280		7,484		8,000

Balance sheet presentation

The following table presents the locations in the condensed consolidated balance sheet and fair value of derivative financial instruments as of June 29, 2025 and December 31, 2024:


	June 29, 2025		December 31, 2024
	Fair Value
Asset derivatives:
Designated foreign currency forward contracts	$	4,192	$	5,780
Non-designated foreign currency forward contracts	83,109		254
Cross-currency interest rate swaps	8,122		15,972
Prepaid expenses and other current assets	95,423		22,006
Cross-currency interest rate swaps	—		5,409
Other assets	—		5,409
Total asset derivatives	$	95,423	$	27,415
Liability derivatives:
Designated foreign currency forward contracts	$	9,785	$	3,078
Non-designated foreign currency forward contracts	253		931
Cross-currency interest rate swaps	54,283		9,575
Other current liabilities	64,321		13,584
Cross-currency interest rate swaps	50,517		—
Other liabilities	50,517		—
Total liability derivatives	$	114,838	$	13,584

See Note 11 for information on the location and amount of gains and losses attributable to derivatives that were reclassified from AOCI to expense (income), net of tax. There was no ineffectiveness related to our cash flow hedges during the three and six months ended June 29, 2025 and June 30, 2024.

Trade receivables

The allowance for credit losses as of June 29, 2025 and December 31, 2024 was $8.6 million and $10.0 million, respectively. The current portion of the allowance for credit losses, which was $4.1 million and $6.1 million as of June 29, 2025 and December 31, 2024, respectively, was recognized as a reduction of accounts receivable, net.