v3.26.1
Derivatives and Hedging
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Derivatives and Hedging
The valuation of our derivative contracts used to manage their respective risks is described below:
•Foreign Currency – The fair value of any foreign currency option derivative is based upon valuation models applied to current market information such as strike price, spot rate, maturity date and volatility, and by reference to market values resulting from an over-the-counter market or obtaining market data for similar instruments with similar characteristics.
•Commodity – The fair value of copper derivatives is computed using a combination of intrinsic and time value valuation models, which are collectively a function of five primary variables: price of the underlying instrument, time to expiration, strike price, interest rate and volatility. The intrinsic valuation model reflects the difference between the strike price of the underlying copper derivative instrument and the current prevailing copper prices in an over-the-counter market at period end. The time value valuation model incorporates changes in the price of the underlying copper derivative instrument, the time value of money, the underlying copper derivative instrument’s strike price and the remaining time to the underlying copper derivative instrument’s expiration date from the period end date.
As of June 30, 2026, we did not have any derivative contracts that qualified for hedge accounting treatment.
Foreign Currency
During the six months ended June 30, 2026, we entered into U.S. dollar and euro forward contracts. We entered into these foreign currency forward contracts to mitigate certain global transactional exposures. These contracts do not qualify for hedge accounting treatment. As a result, any fair value adjustments required on these contracts are recorded in the “Other income (expense), net” line item in our condensed consolidated statements of operations in the period in which the adjustment occurred.
As of June 30, 2026, the notional values of the remaining foreign currency forward contracts were as follows:
(Amounts in millions)
Currencies (Buy/Sell)Maturity DateNotional Amount (Buy/Sell)
USD/CNYAugust 4, 2026
$57.4 / ¥391.0
EUR/USDAugust 3, 2026
€17.8 / $20.4
Commodity
As of June 30, 2026, we had 12 outstanding contracts to hedge exposure related to the commodity price of copper in our AES operating and reportable segment. These contracts are held with financial institutions and are intended to offset rising copper prices and do not qualify for hedge accounting treatment. As a result, any fair value adjustments required on these contracts are recorded in the “Other income (expense), net” line item in our condensed consolidated statements of operations in the period in which the adjustment occurred.
As of June 30, 2026, the volume of our copper contracts outstanding was as follows:
(Volume in ones, notional in millions)
Contract PeriodVolumeNotional Amount
July 2026 - September 2026
69 metric tons per month
$2.1
October 2026 - December 2026
69 metric tons per month
$2.3
January 2027 - March 2027
69 metric tons per month
$2.7
April 2027 - June 2027
69 metric tons per month
$2.8
Effects on Financial Statements
The following table presents the impact from these instruments on the condensed consolidated statements of operations and condensed consolidated statements of comprehensive income (loss):
Three Months EndedSix Months Ended
(Dollars in millions)Financial Statement Line ItemJune 30, 2026June 30, 2025June 30, 2026June 30, 2025
Foreign Currency Contracts
Contracts not designated as hedging instrumentsOther income (expense), net$(1.3)$(0.2)$(2.3)$(0.4)
Copper Derivative Contracts 
Contracts not designated as hedging instrumentsOther income (expense), net$0.5 $(0.1)$0.5 $0.1