XML 31 R23.htm IDEA: XBRL DOCUMENT
v3.25.1

Derivative Financial Instruments | 3 Months Ended
--- | ---
Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | 13. Derivative Financial Instruments We are exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. We enter into financial instruments to manage and reduce the impact of these risks, not for trading or speculative purposes. The counterparties to these financial instruments are major financial institutions. We continually monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. Principal currencies hedged against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona, British pound and Japanese yen. We are subject to credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance by counterparties to financial instrument contracts. Management continues to monitor the status of our counterparties and will take action, as appropriate, to further manage our counterparty credit risk. There are no credit contingency features in our derivative financial instruments. When hedge accounting is applicable, on the date we enter into a derivative, the derivative is designated as a hedge of the identified exposure. We measure the effectiveness of our hedging relationships both at hedge inception and on an ongoing basis. Forward Currency Contracts We enter into forward foreign currency contracts with third parties to reduce the effect of fluctuating foreign currencies, primarily on foreign denominated inventory purchases and intercompany loans. Our primary exposure to currency movements is in the Euro, the Swedish krona, the British pound, the Brazilian real, the Australian dollar, the Canadian dollar, and the Mexican peso. Forward currency contracts are used to hedge foreign denominated inventory purchases for Europe, Australia, Canada, Japan and New Zealand, and are designated as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated Other Comprehensive Income (Loss) ("AOCI") until the contracts are settled and the underlying hedged transactions relating to inventory purchases are recognized, at which time the deferred gains or losses will be reported in the "Cost of products sold" line in the Consolidated Statements of Loss. As of March 31, 2025 and December 31, 2024, we had cash flow foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $80.7 million and $76.9 million, respectively, which were designated as hedges. Forward currency contracts used to hedge foreign denominated intercompany loans are not designated as hedging instruments. Gains and losses on these derivative instruments are recognized within "Other expense (income), net" in the Consolidated Statements of Loss and are largely offset by the change in the current translated value of the hedged item. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions, with some relating to intercompany loans which extend beyond March 2026. As of March 31, 2025 and December 31, 2024, we had foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $47.2 million and $73.6 million, respectively, which were not designated as hedges. The following table summarizes the fair value of our derivative financial instruments as of March 31, 2025 and December 31, 2024:
|  | Fair Value of Derivative Instruments |
|  | Derivative Assets |  |  | Derivative Liabilities |
(in millions) |  | Balance Sheet Location |  | March 31, 2025 |  |  | December 31, 2024 |  |  | Balance Sheet Location |  | March 31, 2025 |  |  | December 31, 2024 |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current assets |  | $ | 1.4 |  |  | $ | 4.0 |  |  | Other current liabilities |  | $ | 1.1 |  |  | $ | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current assets |  |  | 0.7 |  |  |  | 0.3 |  |  | Other current liabilities |  |  | 0.1 |  |  |  | 0.3 |
Foreign exchange contracts |  | Other non-current assets |  |  | 1.5 |  |  |  | 9.0 |  |  | Other non-current liabilities |  |  | 1.5 |  |  |  | 9.0 |
Total derivatives |  |  |  | $ | 3.6 |  |  | $ | 13.3 |  |  |  |  | $ | 2.7 |  |  | $ | 9.3 |
The following tables summarize the pre-tax effect of our derivative financial instruments on the condensed consolidated financial statements for the three months ended March 31, 2025 and 2024:
|  | The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements |
|  | Amount of Gain (Loss) Recognized in AOCI (Effective Portion) |  |  | Location of (Gain) Loss Reclassified from AOCI to Income |  | Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion) |
|  | Three months ended March 31, |  |  |  |  | Three months ended March 31, |
(in millions) |  | 2025 |  |  | 2024 |  |  |  |  | 2025 |  |  | 2024 |
Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | (0.6 | ) |  | $ | 1.0 |  |  | Cost of products sold |  | $ | (2.0 | ) |  | $ | (0.4 | )
|  | The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Financial Statements |
|  | Location of (Gain) Loss Recognized in Income on Derivatives |  | Amount of (Gain) Loss Recognized in Income |
|  |  |  | Three months ended March 31, |
(in millions) |  |  |  | 2025 |  |  | 2024 |
Foreign exchange contracts |  | Other expense (income), net |  | $ | 0.1 |  |  | $ | 1.3 |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration