v3.25.4
Derivatives and Hedging
 12 Months Ended
Dec. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Derivatives and Hedging
The following table summarizes the fair value of our derivative instruments as well as the location of the asset and/or liability on the consolidated balance sheets as of the periods presented below (in millions):
Fair Value of
Asset Derivatives
December 31,
Balance Sheet Location20252024
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contractsOther current assets$0.4 $0.1 
Interest rate swap contractsOther current assets— 3.0 
Interest rate swap contractsOther assets, net— 4.8 
Total$0.4 $7.9 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsOther current assets0.3 5.6 
Total asset position$0.7 $13.5 
Fair Value of
Liability Derivatives
December 31,
Balance Sheet Location20252024
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contractsAccounts payable and accrued expenses$0.4 $0.8 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsAccounts payable and accrued expenses0.4 0.2 
Total liability position$0.8 $1.0 
Our derivative instruments are subject to a master netting agreement with each respective counterparty bank and are therefore net settled at their respective maturity date. Although we have the legal right of offset under the master netting agreements, we have elected to present these contracts on a gross basis on the accompanying consolidated balance sheets as of December 31, 2025 and 2024. Gains and losses related to our derivative instruments are presented as an adjustment to reconcile net income to net cash provided by or used in operating activities in the consolidated statements of cash flows.
Cash Flow Hedging Instruments
Foreign Currency Forward Contracts
As of December 31, 2025, there were no notional amounts on our foreign currency forward contracts designated as cash flow hedging instruments. As of December 31, 2024, the notional amounts of our foreign currency forward contracts designated as cash flow hedging instruments was a short position of approximately $9.4 million.
Interest Rate Swap Contracts
We used interest rate swaps in order to mitigate the risk of changes in interest rates associated with our variable-rate long term debt.
In April 2023, we entered into interest rate swaps designated as cash flow hedges in order to mitigate the risk of interest rate fluctuations associated with our 2023 Term Loan B as well as any of our other variable rate debt. Over the life of the 2023 Term Loan B, we were to receive variable interest payments from the counterparty lenders in exchange for fixed interest rate payments, which were made at a weighted-average rate of 3.36% across our interest rate swap contracts without exchange of the underlying notional amount. During the fourth quarter of 2025, we closed out our interest rate swaps in connection with an amendment to the 2023 Term Loan B (see Note 7) resulting in no underlying notional amounts as of December 31, 2025. As of December 31, 2024, our underlying notional amounts on interest rate swaps was $400.0 million.
The following tables summarize the net effect of all cash flow hedges on the consolidated financial statements for the periods presented (in millions):
Gain (Loss) Recognized in Other Comprehensive Income
Year Ended December 31,
Derivatives designated as cash flow hedging instruments202520242023
Foreign currency forward contracts$(5.1)$4.9 $8.6 
Interest rate swap contracts(4.9)12.6 6.9 
Total$(10.0)$17.5 $15.5 
Gain (Loss) Reclassified from Other Comprehensive Income into Earnings
Year Ended December 31,
Derivatives designated as cash flow hedging instrumentsStatement of Operations Location202520242023
Foreign currency forward contractsCost of sales$(5.2)$5.9 $5.9 
Interest rate swap contractsInterest expense3.1 10.3 8.2 
Total$(2.1)$16.2 $14.1 
For the year ended December 31, 2025, $2.3 million of net gains related to the amortization of forward points were released from other comprehensive income and recognized in cost of sales. Based on the current valuation, we expect to reclassify net losses of $0.5 million related to foreign currency forward contracts from accumulated other comprehensive income into earnings during the next 12 months.
Based on forecasted transactions as of December 31, 2025, we do not expect to reclassify a net gain related to the interest rate swap contracts from accumulated other comprehensive loss into earnings during the next 12 months.
Foreign Currency Forward Contracts Not Designated as Hedging Instruments
We use foreign currency forward contracts that are not designated as qualifying cash flow hedging instruments to mitigate our exposure to fluctuations in foreign currency exchange rates due to the remeasurement of certain balance sheet payables and receivables denominated in foreign currencies, as well as gains and losses resulting from the translation of the operating results of our international subsidiaries into U.S. dollars for financial reporting purposes. These contracts generally mature within 12 months from inception. As of December 31, 2025, 2024 and 2023, the notional amounts of our foreign currency forward contracts used to mitigate the exposures discussed above were approximately $88.4 million, $203.0 million, and $209.4 million, respectively. We estimate the fair values of foreign currency forward contracts based on pricing models using current market rates, and record all derivatives on our consolidated balance sheet at fair value, with changes in fair value recorded in our consolidated statements of operations. Foreign currency forward contracts are classified under Level 2 of the fair value hierarchy (see Note 17).
The following table summarizes the location of net gains and losses for each type of our derivative contracts recognized in the consolidated statements of operations for the periods presented (in millions):
Amount of Net Gain Recognized in Income on Derivative Instruments
Derivatives not designated as hedging instrumentsLocation of Net Gain (Loss) Recognized in Income on Derivative InstrumentsYears Ended December 31,
202520242023
Foreign currency forward contractsOther income, net$(18.5)$31.9 $19.6 
During the years ended December 31, 2025, 2024 and 2023, we recognized net foreign currency transactional gains of $17.5 million, losses of $19.4 million and losses of $8.2 million, respectively, in our consolidated statements of operations.