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
We utilize the following derivative instruments designated as cash flow hedges:
•foreign exchange forward contracts to hedge certain forecasted sales transactions denominated in foreign currencies;
•cross-currency swaps used to manage variability due to movements in foreign currency exchange rates related to a Euro-denominated intercompany loan; and
•pay-fixed rate, receive-floating rate interest rate swaps to effectively convert portions of our variable-rate debt to fixed.
We also utilize cross-currency swaps designated as net investment hedges to mitigate the risk associated with exchange rate fluctuations on our net investment in certain foreign operations.
The following table summarizes our outstanding derivative instruments on a gross basis, all of which are considered Level 2 financial instruments:
Notional Amount
Fair Value of Derivative Assets(2)
Fair Value of Derivative Liabilities(2)
June 30, 2026December 31, 2025June 30, 2026December 31, 2025June 30, 2026December 31, 2025
Cash flow hedges:
Foreign exchange forward contracts$1,034.6 $1,064.2 $8.1 $0.7 $9.4 $22.6 
Cross-currency swaps(1)
564.8 584.1 — — 35.8 49.7 
Interest rate swaps1,907.8 1,918.2 47.0 48.5 — — 
Net investment hedges:
Cross-currency swaps(1)
723.9 748.6 — — 45.9 63.7 
Total hedges$4,231.1 $4,315.1 $55.1 $49.2 $91.1 $136.0 
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(1)The notional values of the cross-currency swaps have been translated from Euros to U.S. dollars at the foreign currency rates in effect of approximately 1.14 and 1.17 as of June 30, 2026 and December 31, 2025, respectively.
(2)In our balance sheets, all derivative assets are recorded within prepaid expenses and other current assets and all derivative liabilities are recorded within accrued expenses and other current liabilities.
The following table summarizes the effect of our hedging relationships on accumulated other comprehensive income (AOCI):
Unrealized Gains (Losses) Recognized in Other Comprehensive Income
Three Months EndedSix Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
Cash flow hedges:
Foreign exchange forward contracts(1)
$2.6 $(53.5)$13.7 $(73.0)
Cross-currency swaps(3.1)(0.4)(2.3)4.4 
Interest rate swaps(3.2)(17.9)(1.9)(43.1)
Net investment hedges:
Cross-currency swaps4.3 (62.9)17.5 (86.7)
Total hedges$0.6 $(134.7)$27.0 $(198.4)
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(1)Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.
The following table summarizes the locations and amounts of gains (losses) recognized within earnings related to our hedging relationships:
Three Months Ended June 30, 2026Three Months Ended June 30, 2025
RevenueInterest ExpenseOther Income (Expense), NetRevenueInterest ExpenseOther Income (Expense), Net
Cash flow hedges:
Foreign exchange forward contracts:
Reclassified from AOCI into income$(3.6)$— $— $0.7 $— $— 
Cross-currency swaps:
Reclassified from AOCI into income(1)
— 2.0 6.5 — 2.1 (48.7)
Interest rate swaps:
Reclassified from AOCI into income— 9.5 — — 12.9 — 
Net investment hedges:
Cross-currency swaps:
Reclassified from AOCI into income— 2.6 — — 2.7 — 
Total hedges$(3.6)$14.1 $6.5 $0.7 $17.7 $(48.7)
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(1)The amounts reflected in other income (expense), net include $(6.7) million and $48.3 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during the three months ended June 30, 2026 and 2025, respectively.
Six Months Ended June 30, 2026Six Months Ended June 30, 2025
RevenueInterest ExpenseOther Income (Expense), NetRevenueInterest ExpenseOther Income (Expense), Net
Cash flow hedges:
Foreign exchange forward contracts:
Reclassified from AOCI into income$(6.1)$— $— $2.0 $— $— 
Cross-currency swaps:
Reclassified from AOCI into income(1)
— 4.0 16.1 — 4.5 (72.0)
Interest rate swaps:
Reclassified from AOCI into income— 19.1 — — 25.7 — 
Net investment hedges:
Cross-currency swaps:
Reclassified from AOCI into income— 5.2 — — 5.9 — 
Total hedges$(6.1)$28.3 $16.1 $2.0 $36.1 $(72.0)
(1)The amounts reflected in other income (expense), net include $(16.7) million and $71.6 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during the six months ended June 30, 2026 and 2025, respectively.
As of June 30, 2026, we estimate that $48.3 million of net deferred gains related to our designated hedges will be recognized in earnings over the next 12 months. No amounts have been excluded from our hedge effectiveness testing.
Risk Management Strategies
There have been no material changes in the risk management strategies associated with our derivatives from those disclosed in the 2025 Form 10-K.