v3.26.1
Derivative Instruments and Hedging Activities
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Derivative Instruments and Hedging Activities
We are exposed to certain risks arising from operating internationally, including fluctuations in foreign exchange rates primarily related to the translation of sterling and euro denominated net monetary liabilities, including intercompany balances, held by subsidiaries with a U.S. dollar functional currency and fluctuations in interest rates on our outstanding term loan borrowings. We manage these exposures within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes.
We enter into foreign exchange forward contracts, with durations of up to 12 months, designed to limit the exposure to fluctuations in foreign exchange rates related to the translation of certain non-U.S. dollar denominated liabilities, including intercompany balances. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of March 31, 2026 and
December 31, 2025, the notional amount of foreign exchange contracts where hedge accounting is not applied was $398.0 million and $575.9 million, respectively.
The foreign exchange gain (loss) in our condensed consolidated statements of income (loss) included the following gains (losses) associated with foreign exchange contracts not designated as hedging instruments (in millions):
Three Months Ended
March 31,
Foreign Exchange Forward Contracts:20262025
Gain (loss) recognized in foreign exchange gain (loss)$(8.5)$8.6 
To achieve a desired mix of floating and fixed interest rates on our variable rate debt, we entered into interest rate swap agreements in April 2023, which are effective until April 2026. These agreements hedge contractual term loan interest rates. As of March 31, 2026, the interest rate swap agreements had a notional amount of $500.0 million. As a result of these agreements, the interest rate on a portion of our term loan borrowings is fixed at 3.9086%, plus the borrowing spread, until April 30, 2026.
The impact on accumulated other comprehensive loss and earnings from derivative instruments that qualified as cash flow hedges for the three months ended March 31, 2026 and 2025 was not material.
The cash flow effects of our derivative contracts for the three months ended March 31, 2026 and 2025 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows.
The following tables summarize the fair value of outstanding derivatives (in millions):
ClassificationMarch 31,
2026		December 31,
2025
Assets
Derivatives not designated as hedging instruments:
Foreign exchange forward contractsOther current assets$— $6.3 
Total fair value of derivative asset instruments$— $6.3 
Liabilities
Derivatives not designated as hedging instruments:
Foreign exchange forward contractsAccrued liabilities$8.4 $3.7 
Derivatives designated as hedging instruments:
Interest rate contractsAccrued liabilities0.1 0.5 
Total fair value of derivative liability instruments$8.5 $4.2 
Although we do not offset derivative assets and liabilities within our condensed consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. These provisions were not applicable as of March 31, 2026 since all derivatives were in a liability position. The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate and foreign exchange forward contracts subject to such provisions as of December 31, 2025 (in millions):
December 31, 2025
Gross Amounts of Recognized Assets/ LiabilitiesGross Amounts Offset in the Consolidated Balance SheetNet Amounts of Assets/ Liabilities Presented in the Consolidated Balance SheetGross Amounts Not Offset in the Consolidated Balance Sheet
DescriptionDerivative Financial InstrumentsCash Collateral Received (Pledged)Net Amount
Derivative assets$6.3 $— $6.3 $(4.0)$— $2.3 
Derivative liabilities(4.2)— (4.2)4.0 — (0.2)