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Derivative Financial Instruments | 12 Months Ended
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Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | (12) Derivative Financial Instruments 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. Net Investment Hedges 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 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 2022 €400.0 ($468.3) notes due June 2027 and the 2018 €500.0 ($586.9) no tes 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, 2025. The 2025 €500.0 notes were designated as a hedge of our net investment in subsidiaries with a Euro-functional currency upon the redemption of the 2018 €500.0 notes due June 2026. On September 10, 2025, we de-designated our previous cross-currency swap and entered into a new agreement under which we pay fixed-rate Swiss franc (“CHF”) and receive fixed-rate United States dollar (“USD”) payments. The new swap, designated as a net investment hedge of our foreign subsidiary with a CHF functional currency, includes modified terms such as a reset of the USD fixed rate and an extension of maturity. The notional amount of the swap is $413.8 and consists of three tranches, each representing one-third of the total notional amount, with staggered maturities on September 10, 2026, September 10, 2027 and September 11, 2028. The swap contains a significant financing component. Accordingly, future cash settlements related to the swap will be classified within financing activities in the Consolidated Statements of Cash Flows. The new swap was designated as a net investment hedge under the spot method. At the time of de-designation, the total mark-to-market loss on the original swap was $99.6, of which $82.2 was related to currency effects and was recorded in foreign currency translation within AOCL. The remaining $17.4 represents the excluded component, which is being amortized into interest expense over the life of the new swap. The effect of our net investment hedges on AOCL for the year ended December 31, 2025, and 2024 was as follows:
|  | Gain (Loss) Recognized in Other Comprehensive Income
|  | Year Ended December 31, |  |
Instrument |  | 2025 |  |  | 2024 |  |
Euro Notes |  | $ | (125.3 | ) |  | $ | 61.5 |  |
Cross-currency swaps |  |  | 12.0 |  |  |  | 36.2 |  |
Cash Flow Hedges 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. In 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 manage interest rate exposure related to our anticipated issuance of 2022 €400.0 notes. Upon the issuance of the notes, the swap was settled, resulting in a gain of $2.0, which was recorded in AOCL 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, 2025, and 2024:
|  |  |  |  |  |  | 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 |  | 2025 |  |  | 2024 |  |  | from AOCL into Income |  | 2025 |  |  | 2024 |
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, 2025 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. Fair Value Hedges 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/loss with an immediate reclassification into earnings for the change in fair value attributable to fluctuations in foreign currency exchange rates. In April 2024, we settled our previous cross-currency 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 swaps hedge an intercompany fixed-rate CHF denominated note, including annual interest payments and the payment of remaining principal at maturity, by converting it 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 2024, we settled our previous cross-currency 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 swaps hedge an intercompany fixed-rate CHF denominated note, including the annual interest payments and the payment of remaining principal at maturity, by converting it 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 €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 Statements of Operations for the year ended December 31, 2025 and 2024:
|  | Gain (Loss) Recognized in OCI |  |  |  |  | Gain (Loss) Recognized in Income |
|  | Year Ended December 31, |  |  | Location of Gain (Loss) |  | Year Ended December 31, |
Instrument |  | 2025 |  |  | 2024 |  |  | Recognized in Income |  | 2025 |  |  | 2024 |
Intercompany CHF notes |  | $ | — |  |  | $ | — |  |  | Interest and other expenses, net |  | $ | (3.5 | ) |  | $ | 3.8 |
Cross-currency swaps |  |  | (0.3 | ) |  |  | 0.9 |  |  | Interest and other expenses, net |  |  | 3.5 |  |  |  | (3.8 | )
Non-Designated Instruments 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, 2025 was as follows:
|  | Location of Gain |  | Gain (Loss) Recognized in Income |
Instrument |  | Recognized in Income |  | Year Ended December 31, |
|  |  |  | 2025 |  |  | 2024 |
Foreign currency forward contracts |  | Interest and other expenses, net |  | $ | 1.5 |  |  | $ | (1.7 | )
Derivative and Non-Derivative Assets and Liabilities The following tables present the fair value of derivative and non-derivative assets and liabilities on the Consolidated Balance Sheets as of December 31, 2025, and 2024:
|  | Assets |
|  |  |  | December 31, |  |  | December 31, |
|  | Balance Sheet Location |  | 2025 |  |  | 2024 |
Instruments designated as fair value hedges: |  |  |  |  |  |  |  |
Cross-currency swaps |  | Accounts receivable, net |  | $ | — |  |  | $ | 10.3 |
Cross-currency swaps |  | Other assets |  |  | 14.6 |  |  |  | — |
Instruments designated as net investment hedges: |  |  |  |  |  |  |  |
Cross-currency swaps |  | Accounts receivable, net |  |  | — |  |  |  | 7.8 |
Total instruments |  |  |  | $ | 14.6 |  |  | $ | 18.1 |
|  | Liabilities |
|  |  |  | December 31, |  |  | December 31, |
|  | Balance Sheet Location |  | 2025 |  |  | 2024 |
Instruments designated as net investment hedges: |  |  |  |  |  |  |  |
Euro Notes due in 2026 |  | Short-term borrowings and current maturities of long-term debt |  | $ | 586.9 |  |  | $ | — |
Euro Notes due in 2026 |  | Long-term debt |  |  | — |  |  |  | 516.6 |
Euro Notes due in 2027 |  | Long-term debt |  |  | 468.3 |  |  |  | 411.8 |
Cross-currency swaps |  | Accrued liabilities |  |  | 33.1 |  |  |  | 44.8 |
Cross-currency swaps |  | Other long-term liabilities |  |  | 69.8 |  |  |  | — |
Instruments not designated as hedges: |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | Accrued liabilities |  |  | 0.8 |  |  |  | 0.7 |
Euro Notes due in 2030 |  | Long-term debt |  |  | 583.8 |  |  |  | — |
Total instruments |  |  |  | $ | 1,742.7 |  |  | $ | 973.9 |
The fair value measurements of these items recorded in our Consolidated Balance Sheets for the years ended December 31, 2025 and 2024 are disclosed in Note 1 to the Consolidated Financial Statements.

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