Derivative Instruments |
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Sep. 30, 2026 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments | Derivative Instruments As part of our risk management strategy, we occasionally use derivative instruments, including interest rate swaps, forward foreign exchange contracts and non-derivative instruments such as foreign currency denominated debt, to reduce our market risk for changes in interest rates and to manage foreign exchange rate risk. There have been no material changes during the nine months ended September 30, 2026 to our risk management policies, strategies, types of instruments and valuation techniques used in measuring fair value from the information provided in Note 17 of the notes to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2025. The notional amounts of financial instruments used to hedge the above risks are as follows (in millions):
We do not offset derivative assets against liabilities in master netting agreements and there were no receivables or payables recognized on receipt or payment of cash collateral at September 30, 2026 and December 31, 2025. Cash Flow Hedges The fair value of interest rate swap agreements designated as cash flow hedges of interest rate risk are as follows (in thousands):
Gains/losses are deferred and recorded in accumulated other comprehensive income, net of income taxes, in our consolidated balance sheet and reclassified to interest expense in the consolidated statements of operations when the hedged interest payments on the underlying borrowings are recognized in interest expense. We expect to reclassify a net gain of $2.5 million from accumulated other comprehensive income in the next twelve months. We perform quarterly hedge effectiveness assessments and anticipate that the interest rate swap will be highly effective throughout its term. If it becomes probable that the hedged interest payment(s) will not occur, we immediately recognize the related deferred hedging gains/losses in earnings. There were no such reclassifications during the nine months ended September 30, 2026. Net Investment Hedge Foreign exchange remeasurement gains/losses on euro-denominated debt designated in the fourth quarter of 2024 as a hedge of our net investment in Nissens Automotive's foreign operations, whose functional currency is Danish kroner, are recorded as a currency translation adjustment in accumulated other comprehensive income on the consolidated balance sheet, provided the net investment hedge is highly effective. The gains/losses will subsequently be reclassified into earnings when the hedged net investment is either sold or substantially liquidated. We recognized a gain of $6.5 million as a currency translation adjustment in other comprehensive income in the nine months ended September 30, 2026 and a loss of $25.6 million in the nine months ended September 30, 2025 . No gains or losses related to the net investment hedge were recognized in earnings during the nine months ended September 30, 2026 or 2025.
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