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Hedging Activities | 6 Months Ended
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Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Hedging Activities | Hedging Activities The Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates and interest rate risk. To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts, interest rate swap agreements, and cross-currency swap agreements. The Company does not hold or enter into derivative financial instruments for trading or speculative purposes. Foreign Exchange Forward Contracts The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain assets and/or liabilities denominated in foreign currencies. These forward contracts are marked-to-market at each reporting date. Changes in the fair value of the underlying instrument and settlements are recognized in earnings in Other (expense) income, net. The fair value of the forward contract is determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments. Open foreign exchange forward contracts as of June 30, 2025 were entered into as hedges of the Japanese yen and Mexican peso against the U.S. dollar and had the following notional U.S. dollar values (in millions):
Currency |  | June 30, 2025
Mexican Peso |  | $ | 12,300 |
Japanese Yen |  | 23,200 |
|  | $ | 35,500 |
In connection with the acquisition of Dipsol as described in Note 2, Business Acquisitions, in March 2025, the Company entered into multiple foreign exchange forward contracts with various financial institutions with an aggregate notional amount totaling $155.3 million to hedge the variability of exchange rate impacts between the U.S. Dollar and Japanese yen. These foreign exchange forward contracts settled on April 1, 2025. The Company recognized a $0.6 million foreign currency gain and a $1.4 million foreign currency loss, respectively, during the three and six months ended June 30, 2025 in Other (expense) income, net relating to the change in fair value of these instruments as of the settlement date. Open foreign exchange forward contracts as of June 30, 2025 had maturities occurring over a period of up to one month. Interest Rate Swaps In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, such as the Secured Overnight Financing Rate (“SOFR”), in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three-year interest rate swaps to convert a portion of the Company’s variable-rate borrowings into a fixed-rate obligation. See Note 14, Debt, for additional information. These interest rate swaps are designated as cash flow hedges and, as such, the contracts are marked-to-market at each reporting date with any unrealized gains or losses included in AOCI to the extent effective and reclassified to interest expense in the period during which the hedged transactions affect earnings or it becomes probable that the forecasted transaction will not occur. Net Investment Hedges In June 2025, the Company entered into a fixed-for-fixed cross currency swap for a notional amount of $75.0 million to hedge the variability of exchange rate impacts between the U.S. Dollar and the European euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $75.0 million at an interest rate of 1.9% for 65.8 million EUR at an interest rate of 0.0%. The cross-currency swap is designated as a net investment hedge on a pre-tax basis and expires in June 2027. In April 2025, the Company entered into fixed-for-fixed cross currency swaps with an aggregate notional amount totaling $100.0 million to hedge the variability of exchange rate impacts between the U.S. Dollar and Japanese yen. Under the terms of the cross-currency swap agreements, the Company notionally exchanged $100.0 million at a weighted average interest rate of 3.1% for 14.3 billion JPY at a weighted average interest rate of 0.0%. The cross-currency swaps are designated as net investment hedges on an after-tax basis and expire in April 2028. The fixed-for-fixed cross-currency swaps are marked to market at each reporting date and any unrealized gains or losses are included in unrealized currency translation adjustments, within AOCI. The Company uses the spot method to evaluate the effectiveness of the net investment hedges. The balance sheet classification and fair values of the Company’s derivative instruments, which are Level 2 measurements, are as follows:
Derivative instruments |  | Condensed Consolidated Balance Sheets Location |  | June 30, 2025 |  | December 31, 2024
Net investment hedges |  | Other non-current assets |  | $ | 1,048 |  |  | $ | — |
Net investment hedges |  | Other non-current liabilities |  | 2,111 |  |  | — |
Interest rate swaps |  | Other non-current assets |  | 722 |  |  | 1,621 |
Foreign currency forward contracts |  | Other accrued liabilities |  | 13 |  |  | 67 |
The following table presents the net unrealized (loss) gain deferred to AOCI:
Derivative instruments: |  | Condensed Consolidated Balance Sheets Location |  | June 30, 2025 |  | December 31, 2024
Net investment hedges |  | AOCI |  | $ | (818) |  |  | $ | — |
Interest rate swaps |  | AOCI |  | 556 |  |  | 1,248 |
The following table presents the location and the amount of net gain (loss) recognized in the Company’s Condensed Consolidated Statements of Operations related to derivative instruments:
|  |  |  | Three Months Ended June 30, |  | Six Months Ended June 30,
Derivative instruments |  | Condensed Consolidated Statements of Operations |  | 2025 |  | 2024 |  | 2025 |  | 2024
Net investment hedges |  | Interest expense |  | $ | 697 |  |  | $ | — |  |  | $ | 697 |  |  | $ | — |
Interest rate swaps |  | Interest expense |  | 518 |  |  | 1,273 |  |  | 1,041 |  |  | 2,559 |
Foreign exchange forward contracts |  | Other (expense) income, net |  | 1,441 |  |  | (1,675) |  |  | (415) |  |  | (732) |
Total |  |  |  | $ | 2,656 |  |  | $ | (402) |  |  | $ | 1,323 |  |  | $ | 1,827 |

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