Company: IPAR
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001753926-25-000738
Chunk: 33

Company: INTERPARFUMS INC
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 7
Chunk 33
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 period earnings. Any hedge ineffectiveness
is also recognized as a gain or loss on foreign currency in the income statement. For hedge contracts that are no longer deemed
highly effective, hedge accounting is discontinued, and gains and losses accumulated in other comprehensive income are reclassified
to earnings. If it is probable that the forecasted transaction will no longer occur, then any gains or losses accumulated
in other comprehensive income are reclassified to current-period earnings. 
 
In
December 2022, to finance the acquisition of the Lacoste trademark, the Company entered into a €50 million (approximately
$54.1 million) 4-year term loan with a variable interest rate. This variable rate debt was swapped for variable interest rate
debt with a maximum rate of 2% per annum. This swap is a hedged derivative instrument and is therefore recorded at fair value
and changes in fair value are reflected in other comprehensive income.
 
In
connection with the April 2021 acquisition of the office building complex in Paris, €120 million (approximately $129.8 million)
of the purchase price was financed through a 10-year term loan. The Company entered into interest rate swap contracts related
to €80 million of the loan, effectively exchanging the variable interest rate to a fixed rate of approximately 1.1%. This
derivative instrument is recorded at fair value and changes in fair value are reflected in the accompanying consolidated statements
of income.
 
Gains
and losses in derivatives designated as hedges are accumulated in other comprehensive income and gains and losses in derivatives
not designated as hedges are included in loss (gain) on foreign currency on the accompanying consolidated statements of income.
Such gains and losses were immaterial for the three months ended March 31, 2025 and 2024, respectively.
 
All
derivative instruments are reported as either assets or liabilities on the consolidated balance sheet measured at fair value.
The valuation of interest rate swaps is included in long-term debt on the accompanying consolidated balance sheet. The valuation
of foreign currency forward exchange contracts at March 31, 2025, resulted in a net asset and is included in other current assets on the accompanying consolidated balance sheet.

At March 31, 2025, the Company had foreign currency contracts in the form of forward exchange contracts with notional amounts of approximately USD $161 million which all have maturities of less than one year.  

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INTERPARFUMS, INC