Our ongoing business operations expose us to various risks, such as fluctuating interest rates, foreign currency exchange rates and increasing commodity prices. To manage these market risks, we periodically enter into derivative financial instruments, such as interest rate swaps, options and foreign exchange contracts for periods consistent with, and for notional amounts equal to or less than, the related underlying exposures. We do not purchase or hold any derivative financial instruments for investment or trading purposes. All derivatives are recorded in our consolidated balance sheet at fair value.

We have entered into forward exchange contracts, designated as fair value hedges, to manage our exposure to fluctuating foreign exchange rates on cross-currency intercompany loans. As of December 31, 2024 the total amount of these forward exchange contracts was Singapore Dollar ("SGD") 421.9 million and $13.4 million. As of December 31, 2023 the total amount of these forward exchange contracts was SGD 601.5 million and $13.4 million. We have also entered into forward exchange contracts, designated as fair value hedges, to manage our exposure to fluctuating foreign exchange rates on cross-currency intercompany demand notes which were executed at various times throughout 2023 and 2024. As of December 31, 2024, the total amount of these forward exchange contracts was Euro ("EUR") 145.3 million and $47.1 million. As of December 31, 2023, the total amount of these forward exchange contracts was EUR 278.6 million and SGD 94.0 million.

In addition, we have entered into several foreign currency contracts, designated as cash flow hedges, for periods of up to eighteen months, intended to hedge the currency risk associated with a portion of our forecasted transactions denominated in foreign currencies.

In December 2019, we entered into a five-year floating-to-floating forward-starting cross-currency swap for $90 million, which we designated as a hedge of our net investment in Daikyo. This cross-currency swap had an original maturity date of December 31, 2024, but was extinguished in July 2024. In July 2024, we entered into a new cross-currency swap for $130 million, which we designated as a hedge of our net investment in Daikyo. As of December 31, 2024, the notional amount of the cross-currency swap is Japanese Yen ("JPY") 17.0 billion ($130.0 million) and the swap termination date is July 2, 2027. Under the current cross-currency swap, we receive fixed USD interest rate payments in return for paying fixed JPY interest rate payments.

Additionally, we will periodically enter into forward exchange contracts to mitigate our exposure to fluctuating foreign exchange rates on assets and liabilities, other than the intercompany loans and demand notes referenced above, which are denominated in foreign currencies. The Company has elected not to designate these forward contracts in hedging relationships, and any change in the value of the contracts is recognized in income.

Many of our proprietary products are made from synthetic elastomers, which are derived from the petroleum refining process. We purchase the majority of our elastomers via long-term supply contracts, some of which contain clauses that provide for surcharges related to fluctuations in crude oil prices. The following economic hedges did not qualify for hedge accounting treatment since they did not meet the highly effective requirement at inception.

We regularly purchase call options on crude oil to mitigate our exposure to such oil-based surcharges and protect operating cash flows with regard to a portion of our forecasted elastomer purchases. As of December 31, 2024, we had outstanding contracts to purchase 190,773 barrels of crude oil from December 2024 to June 2026, at a weighted-average strike price of $84.70 per barrel.


	Amount of Gain (Loss) Recognized in Income						Location on Statement of Income
($ in millions)	2024		2023		2022
Fair Value Hedges:
Hedged item (intercompany loan)	$	1.6	$	(0.3)	$	(28.3)	Other expense (income)
Derivative designated as hedging instrument	(1.6)		0.3		28.3		Other expense (income)
Amount excluded from effectiveness testing	(5.9)		(1.4)		5.2		Other expense (income)
Total	$	(5.9)	$	(1.4)	$	5.2

We recognize in earnings the initial value of forward point components on a straight-line basis over the life of the fair value hedge. The expense recognized in earnings, pre-tax, for forward point components for the years ended December 31, 2024 and 2023 was $5.9 million and $0.2 million, respectively. The income recognized in earnings, pre-tax, for forward point components for the year ended December 31, 2022 was $4.0 million. We expect to recognize an expense of $0.3 million in earnings, pre-tax, for forward point components in 2025.

The following tables summarize the effects of derivative instruments designated as fair value, cash flow, and net investment hedges on OCI and earnings, net of tax, for the years ended December 31:


	Amount of Gain (Loss) Recognized in OCI
($ in millions)	2024		2023		2022
Fair Value Hedges:
Foreign currency hedge contracts	$	0.2	$	(2.0)	$	1.3
Total	$	0.2	$	(2.0)	$	1.3
Cash Flow Hedges:
Foreign currency hedge contracts (hedges of net sales)	$	1.1	$	(0.8)	$	0.3
Foreign currency hedge contracts (hedges of cost of goods and services sold)	(6.9)		(4.0)		(1.1)
Forward treasury locks	—		—		—
Total	$	(5.8)	$	(4.8)	$	(0.8)
Net Investment Hedges:
Cross-currency swap	$	6.8	$	8.6	$	9.1
Total	$	6.8	$	8.6	$	9.1


	Amount of (Gain) Loss Reclassified from Accumulated OCI into Income						Location of (Gain) Loss Reclassified from Accumulated OCI into Income
($ in millions)	2024		2023		2022
Fair Value Hedges:
Foreign currency hedge contracts	$	(0.7)	$	2.9	$	(1.6)	Other expense (income)
Total	$	(0.7)	$	2.9	$	(1.6)
Cash Flow Hedges:
Foreign currency hedge contracts	$	(0.5)	$	1.3	$	(1.2)	Net sales
Foreign currency hedge contracts	4.2		2.2		3.5		Cost of goods and services sold
Forward treasury locks	0.1		0.2		0.2		Interest expense
Total	$	3.8	$	3.7	$	2.5
Net Investment Hedges:
Cross-currency swap	—		—		—		Other expense (income)
Total	$	—	$	—	$	—

Refer to the above table which summarizes the effects of derivative instruments designated as fair value hedges within the other expense (income) line in our consolidated statements of income for the years ended December 31. The following table summarizes the effects of derivative instruments designated as cash flow and net investment hedges by line item in our consolidated statements of income for the years ended December 31:


	Amount of Gain (Loss) Recognized in Income						Location on Statement of Income
($ in millions)	2024		2023		2022
Commodity call options	$	(0.7)	$	(1.3)	$	1.5	Other expense (income)
Currency forwards	(2.5)		0.1		—		Other expense (income)
Total	$	(3.2)	$	(1.2)	$	1.5