v3.26.1
Derivatives (Notes)
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
6. DERIVATIVES

Our business and financial results are affected by fluctuations in global financial markets, including currency exchange rates and interest rates. Our hedging policy has been developed to manage these risks to an acceptable level based on management’s judgment of the appropriate trade-off between risk, opportunity and cost. We do not hold financial instruments for trading or speculative purposes.

Currency derivative contracts  From time to time, we use foreign currency forward contracts to reduce the effects of fluctuations in exchange rates relating to certain foreign currencies. As of June 30, 2026 and December 31, 2025, we had currency forward contracts outstanding with a total notional amount of $903.3 million and $216.2 million, respectively, that hedge our exposure to changes in foreign currency exchange rates for certain working capital items into the first quarter of 2029.

In January 2025, in connection with the Business Combination, we entered into a foreign currency forward contract (the Business Combination Derivative) to reduce the variability in cash flows as a result of fluctuations in the foreign currency exchange rate between the U.S. dollar and pound sterling. This foreign currency forward contract was nondesignated and recognized at fair value each reporting period through the closing of the Business Combination with changes in fair value recognized in Other income (expense), net in our Condensed Consolidated Statements of Operations. At December 31, 2025, we had a notional amount outstanding under the Business Combination Derivative of £571.0 million, which was equivalent to $769.2 million. Upon the closing of the Business Combination on February 3, 2026, the Business Combination Derivative was settled and we received net cash proceeds of $65.9 million.

Fixed-to-fixed cross-currency swaps In the second quarter of 2024, we entered into a fixed-to-fixed cross-currency swap that is designated as a fair value hedge. This fixed-to-fixed cross-currency swap reduces the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. At June 30, 2026 and December 31, 2025, we had a notional amount outstanding under the fixed-to-fixed cross-currency swap of €175.0 million, which was equivalent to $199.9 million and $205.5 million, respectively. The fixed-to-fixed cross-currency swap hedges our exposure to changes in exchange rates on the intercompany loans through the second quarter of 2027.

In the first quarter of 2026, we entered into additional fixed-to-fixed cross-currency swaps that are designated as fair value hedges. These fixed-to-fixed cross-currency swaps reduce the variability of functional currency equivalent cash flows associated with changes in exchange rates on certain Euro-based intercompany loans. At June 30, 2026, we had a notional amount outstanding under the fixed-to-fixed cross-currency swaps of €200.0 million, which was equivalent to $228.5 million which hedges our exposure through the first quarter of 2028, and €200.0 million, which was equivalent to $228.5 million which hedges our exposure through the first quarter of 2029.

Variable-to-fixed interest rate swap As of June 30, 2026, we have $1.0 billion notional amount hedged in relation to our variable-to-fixed interest rate swap through the fourth quarter of 2028, which subsequently decreases to $900.0 million through the fourth quarter of 2030 and to $500.0 million through the fourth quarter of 2031.

The following table summarizes the reclassification of pre-tax derivative gains and losses into net income (loss) from accumulated other comprehensive income (loss) for those derivative instruments designated as cash flow and fair value hedges under Accounting Standards Codification (ASC) 815 - Derivatives and Hedging:
LocationGain (Loss) Reclassified DuringTotal of Financial Gain Expected
of Gain (Loss)Three Months EndedSix Months EndedStatement to be Reclassified
  Reclassified intoJune 30,June 30,Line ItemDuring the
  Net Income (Loss)20262025202620252026Next 12 Months
(in millions)
Currency forward contractsCost of Goods Sold$4.0 $(1.9)$6.5 $(6.0)$4,770.9 $10.1 
Fixed-to-fixed cross-currency swapOther Income (Expense), net6.9 (17.0)20.7 (25.0)(44.6)— 
Variable-to-fixed interest rate swapInterest Expense(0.1)0.4 (0.4)1.4 (179.4)1.9 
See Note 8 - Reclassifications out of Accumulated Other Comprehensive Income (Loss) (AOCI) for amounts recognized in other comprehensive income (loss) during the three and six months ended June 30, 2026 and 2025.

The following table summarizes the amount and location of gains and losses recognized in the Condensed Consolidated Statements of Operations for those derivative instruments not designated as hedging instruments under ASC 815:
LocationGain Recognized DuringTotal of Financial
of GainThree Months EndedSix Months EndedStatement
 Recognized in June 30,June 30,Line Item
  Net Income (Loss)20262025202620252026
(in millions)
Currency forward contractsOther Income (Expense), net$12.5 $2.8 $2.3 $3.7 $(44.6)
Currency forward contractsGain on Business Combination Derivative— 46.3 12.9 68.2 12.9