Derivatives and Hedging

3 Months Ended

Mar. 31, 2025

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 March 31, 2025, we did not have any derivative contracts that qualified for hedge accounting treatment.

Foreign Currency

During the three months ended March 31, 2025, we entered into U.S. dollar, euro, Korean won, Hungarian forint, and Japanese yen 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 “Other income (expense), net” in our condensed consolidated statements of operations in the period in which the adjustment occurred.

As of March 31, 2025, the notional values of the remaining foreign currency forward contracts were as follows:

(Amounts in millions)
Currencies (Buy/Sell)	Amount (Buy/Sell)
USD/CNH	$37.2 / ¥270.0
EUR/USD	€6.5 / $7.0
KRW/USD	₩732.1 / $0.5
HUF/EUR	Ft500.0 / €1.2
JPY/EUR	¥800.0 / €4.9

Commodity

As of March 31, 2025, we had 12 outstanding contracts to hedge exposure related to the purchase of copper in our AES operating 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 “Other income (expense), net” in our condensed consolidated statements of operations in the period in which the adjustment occurred.

As of March 31, 2025, the volume of our copper contracts outstanding was as follows:

(Amounts in ones)
Contract Period	Amount
April 2025 - June 2025	69 metric tons per month
July 2025 - September 2025	69 metric tons per month
October 2025 - December 2025	69 metric tons per month
January 2026 - March 2026	69 metric tons per month