We are exposed to various market risks relating to our ongoing business operations. The primary market risks, which are managed using derivative instruments, are foreign currency exchange rate risk and interest rate risk. In certain circumstances, we enter into cross-currency swaps and foreign currency forward exchange contracts (“forward contracts”) to reduce the effects of fluctuating foreign currency exchange rates on our cash flows denominated in foreign currencies. Our exposure to market risk for changes in interest rates relates primarily to our long-term debt obligations. We have historically managed interest rate risk through the use of a combination of fixed and variable rate borrowings.

We use cross-currency swaps, forward contracts and a portion of our foreign currency denominated debt, a non-derivative financial instrument, to protect the value of our net investments in certain of our foreign subsidiaries. For derivative instruments that are designated and qualify as hedges of our net investments in foreign operations, the changes in fair values of the derivative instruments are recognized in foreign currency translation adjustments, a component of accumulated other comprehensive loss (“AOCL”), to offset the changes in the values of the net investments being hedged. For non-derivative financial instruments that are designated and qualify as hedges of net investments in foreign operations, the change in the carrying value of the designated portion of the non-derivative financial instrument due to changes in foreign currency exchange rates is recorded in foreign currency translation adjustments.

The €400.0 ($411.8) notes due June 2027 and the €500.0 ($516.6) notes due June 2026 were designated as a hedge of our net investment in our foreign subsidiaries with a Euro-functional currency as of December 31, 2024.

In September 2022, we entered into a new cross-currency swap agreement that converts fixed-rate Swiss franc ("CHF") payments to fixed-rate United States dollar payments. This swap was designated as a net investment hedge of our foreign subsidiaries with CHF functional currency.

The effect of our net investment hedges on AOCL for the year ended December 31, 2024, and 2023 was as follows:


	Gain (Loss) Recognized in Other Comprehensive Income
	Year Ended December 31,


Instrument	2024		2023


Euro Notes	$	61.5	$	(30.0	)

Cross-currency swaps		36.2		(47.7	)

We use forward currency exchange contracts to hedge the changes in cash flows of certain operational expenses denominated in foreign currency due to changes in foreign currency exchange rates. The changes in fair value of the forward currency exchange contracts derivatives are recorded in AOCL and reclassified into earnings when the underlying operating expense is recognized in earnings.

On June 9, 2022, we entered into a forward starting interest rate swap agreement with a notional amount of €300.0 and a fixed rate of 1.936%, which was accounted for as a cash flow hedge, to hedge the interest rate exposure related to our anticipated issuance of €400.0 notes to repay our existing €400.0 notes maturing in September 2022. Upon the issuance of the notes on June 30, 2022, we settled this forward starting interest rate swap, resulting in a gain of $2.0, which was recorded in accumulated other comprehensive income and is amortized over the term of the notes as an offset to interest expense.

The following table presents the impact that changes in the fair values of derivatives designated as cash flow hedges had on OCI, AOCL and earnings for the year ended December 31, 2024, and 2023:


						Gain (Loss) Reclassified
	Gain (Loss) Recognized in OCI					from AOCL into Income


	Year Ended December 31,				Location of Gain Reclassified	Year Ended December 31,


Instrument	2024		2023		from AOCL into Income	2024		2023

Forward starting interest swap		—		—	Interest and other expenses, net		0.3		0.3

We expect the net amount of pre-tax derivative gains and losses included in AOCL on December 31, 2024 to be reclassified into earnings over the next 12 months will not be significant. The actual amount that will be reclassified to earnings will vary due to future currency exchange rates.

We account for derivatives as fair value hedges when the hedged item is a recognized asset, liability, or firm commitment. We use cross currency swaps to hedge the changes in cash flows of certain of our foreign currency denominated intercompany notes due to changes in foreign currency exchange rates. We record the change in carrying value of the foreign currency denominated notes due to changes in exchange rates into earnings each period. The changes in fair value of the cross-currency swap derivatives are recorded in other comprehensive income (“OCI”) with an immediate reclassification into earnings for the change in fair value attributable to fluctuations in foreign currency exchange rates.

In March 2022, we entered into a cross currency swap agreement to hedge an intercompany fixed-rate CHF denominated note, including the annual interest payment, to a fixed-rate Euro denominated note. In April 2024, we settled the swaps at maturity for a net cash inflow of $14.9 and entered into a new cross currency swap with a maturity date of April 2027. The cross currency swaps convert our intercompany fixed-rate CHF denominated note, including the annual interest payment and the payment of remaining principal at maturity, to a fixed-rate Euro denominated note. The economic effect of the swaps is to eliminate the uncertainty of cash flows in CHF associated with the note by fixing the principal at €236.9 with a fixed annual interest rate of 3.45%.

In September 2022, we entered into a cross currency swap agreement to hedge an intercompany fixed-rate CHF denominated note, including the annual interest payment, to a fixed-rate Euro denominated note. On September 26, 2024, we settled the swaps at maturity for a net cash inflow of $1.6 and entered into a new cross currency swap with a maturity date of September 2027. The economic effect of the swaps is to eliminate the uncertainty of cash flows in CHF associated with the note by fixing the principal at €63.6 with a fixed annual interest rate of 3.27%.

The following tables present the impact that the fair value hedges had on our Consolidated Statement of Operations for the year ended December 31, 2024 and 2023:


	Gain (Loss) Recognized in OCI						Gain (Loss) Recognized in Income
	Year Ended December 31,					Location of Gain (Loss)	Year Ended December 31,
Instrument	2024		2023			Recognized in Income	2024			2023
Intercompany CHF notes	$	—	$	—		Interest and other expenses, net	$	3.8		$	(21.0	)
Cross-currency swaps		0.9		(3.8	)	Interest and other expenses, net		(3.8	)		21.0

We also use certain derivatives, which are not designated as hedging instruments, as economic hedges of foreign currency and interest rate exposure. For our forward contracts that are not designated as hedges, any gain or loss resulting from the change in fair value is recognized in current period earnings. These gains or losses are offset by the exposure related to receivables and payables with our foreign subsidiaries and to interest due on our Euro-denominated notes, which is paid annually in June. The effect of our forward contracts that are not designated as hedging instruments on the consolidated statements of operations for the year ended December 31, 2024 was as follows:

The following tables present the fair value of derivative and non-derivative assets and liabilities on the Consolidated Balance Sheets as of December 31, 2024, and 2023:


	Assets
		December 31,		December 31,
	Balance Sheet Location	2024		2023

Instruments designated as fair value hedges:
Cross-currency swaps	Accounts Receivable, net		10.3		31.7
Instruments designated as net investment hedges:
Cross-currency swaps	Accounts Receivable, net		7.8		—
Instruments not designated as hedges:
Foreign currency forward contracts	Accounts Receivable, net		—		6.7
Total instruments		$	18.1	$	38.4


	Liabilities
		December 31,		December 31,
	Balance Sheet Location	2024		2023

Instruments designated as net investment hedges:
Euro Notes due in 2026	Long-term debt		516.6		550.0
Euro Notes due in 2027	Long-term debt		411.8		438.2
Cross-currency swaps	Accrued liabilities		44.8		73.3
Instruments not designated as hedges:
Foreign currency forward contracts	Accrued liabilities		0.7		2.3
Total instruments		$	973.9	$	1,063.8

The fair value measurements of these items recorded in our Consolidated Balance Sheets for the years ended December 31, 2024 and 2023 are disclosed in Note 1 to the Consolidated Financial Statements.