As part of our overall risk management practices, we enter into financial derivatives primarily designed to either i) hedge foreign currency risks associated with forecasted transactions (“cash flow hedges”); ii) mitigate the impact that changes in currency exchange rates have on intercompany financing transactions and foreign currency denominated receivables and payables (“foreign currency hedges”); or iii) convert variable-interest-rate debt to fixed rates.

Derivatives Designated as Hedging Instruments - Cash Flow Hedges We use currency forward contracts as cash flow hedges to manage our exposure to fluctuations in the currency exchange rates on certain forecasted production costs. Currency forward contracts involve fixing the exchange for delivery of a specified amount of foreign currency on a specified date. As of September 30, 2024, the maturity of currency forward contracts ranged from one month to 15 months.

We designate certain currency forward contracts as cash flow hedges of forecasted raw material purchases, certain production costs or capital expenditures with exposure to changes in foreign currency exchange rates. Changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk is deferred as a component of accumulated other comprehensive income in the accompanying condensed consolidated balance sheets. With respect to hedges of forecasted raw material purchases or production costs, the amount deferred is subsequently reclassified into costs of products sold in the period that inventory produced using the hedged transaction affects earnings. For hedged capital expenditures, deferred gains or losses are reclassified and included in the historical cost of the capital asset and subsequently affect earnings as depreciation is recognized.


In thousands	September 30, 2024	December 31, 2023
Derivative
Sell/Buy - sell notional
Euro / British Pound	15,338	15,210
Philippine Peso / Euro	—	137,449
U.S. Dollar / British Pound	10,335	18,470
U.S. Dollar / Euro	67	277


Sell/Buy - buy notional
Euro / Philippine Peso	670,767	788,342
British Pound / Philippine Peso	951,019	923,653
Euro / U.S. Dollar	76,139	93,397
U.S. Dollar / Canadian Dollar	32,211	30,914
British Pound / U.S. Dollar	—	2,211

Derivatives Designated as Hedging Instruments – Net Investment Hedge The €220 million Term Loan discussed in Note 15 – “Long-Term Debt” was designated as a net investment hedge of our Euro functional currency foreign subsidiaries and was extinguished on March 30, 2023 in conjunction with the amendment of the Credit Facility. During the first nine months of 2023, we recognized a pre-tax loss of $3.7 million on the remeasurement of the term loan from changes in currency exchange rates. Such amounts are recorded as a component of Other Comprehensive Income (Loss).

Derivatives Not Designated as Hedging Instruments - Foreign Currency Hedges We also entered into forward foreign exchange contracts to mitigate the impact changes in currency exchange rates have on balance sheet monetary assets and liabilities. None of these contracts are designated as hedges for financial accounting purposes and, accordingly, changes in value of the foreign exchange forward contracts and in the offsetting underlying on-balance-sheet transactions are reflected in the accompanying condensed consolidated statements of operations under the caption “Other, net.”


In thousands	September 30, 2024	December 31, 2023
Derivative
Sell/Buy - sell notional
U.S. Dollar / British Pound	13,500	22,800

British Pound / Euro	2,600	3,500
Japanese Yen / Euro	53,000	—
U.S. Dollar / Swiss Franc	—	13,620
British Pound / Swiss Franc	930	2,240
Euro / Swiss Franc	8,200	4,940
Euro / U.S. Dollar	10,300	11,000
U.S Dollar / Philippine Peso	9,100	6,700

Sell/Buy - buy notional
Euro / U.S. Dollar	—	10,200
British Pound / Euro	3,600	6,470
Swiss Franc / Danish Krone	—	—



U.S. Dollar / Canadian Dollar	2,400	1,120

Fair Value Measurements The following table summarizes the fair values of derivative instruments for the period indicated and the line items in the accompanying condensed consolidated balance sheets where the instruments are recorded:


In thousands	September 30, 2024		December 31, 2023		September 30, 2024		December 31, 2023
Balance sheet caption	Prepaid Expenses and Other Current Assets				Other Current Liabilities
Designated as hedging:
Forward foreign currency exchange contracts	$	433	$	851	$	1,278	$	1,653


Not designated as hedging:
Forward foreign currency exchange contracts	$	184	937		$	226	$	155

The amounts set forth in the table above represent the net asset or liability giving effect to rights of offset with each counterparty. The effect of netting the amounts presented above did not have a material effect on our consolidated financial position.

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The fair values of the foreign exchange forward contracts are considered to be Level 2. Foreign currency forward contracts are valued using foreign currency forward and interest rate curves. The fair value of each contract is determined by comparing the contract rate to the forward rate and discounting to present value. Contracts in a gain position are recorded in the condensed consolidated balance sheets under the caption “Prepaid expenses and other current assets” and the value of contracts in a loss position is recorded under the caption “Other current liabilities.”

The following table summarizes the amount of income or (loss) from derivative instruments recognized in our results of operations for the periods indicated and the line items in the accompanying condensed consolidated statements of operations where the results are recorded:


	Three months ended September 30,				Nine months ended September 30,
In thousands	2024		2023		2024		2023
Designated as hedging:
Forward foreign currency exchange contracts:
Cost of products sold	$	(331)	$	(261)	$	(457)	$	(1,579)


Not designated as hedging:
Forward foreign currency exchange contracts:
Other – net	$	(553)	$	250	$	2,003	$	32


In thousands	2024		2023
Balance at January 1,	$	(808)	$	242
Deferred gains on cash flow hedges	(769)		3,128
Reclassified to earnings	(457)		(1,579)
Balance at September 30,	$	(2,034)	$	1,791

We expect substantially all of the amounts recorded as a component of accumulated other comprehensive loss will be recorded in results of operations within the next 12 to 18 months and the amount ultimately recognized will vary depending on actual market rates.

Credit risk related to derivative activity arises in the event the counterparty fails to meet its obligations to us. This exposure is generally limited to the amounts, if any, by which the counterparty’s obligations exceed our obligation to them. Our policy is to enter into contracts only with financial institutions which meet certain minimum credit ratings.