Company: CHD
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000950170-25-019801
Chunk: 117

Company: CHURCH & DWIGHT CO INC /DE/
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1B
Chunk 117
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 period in which the hedged exposure affects earnings.  The Company reviews the effectiveness of its hedging instruments on a quarterly basis.  If the Company determines that a derivative instrument is no longer effective in offsetting changes in fair values or cash flows, it recognizes the hedge ineffectiveness in current period earnings and discontinues hedge accounting with respect to the derivative instrument.  Changes in the fair value of derivatives not designated as hedges or those not qualifying for hedge accounting are recognized in current period earnings.  Upon termination of cash flow hedges, the Company reclassifies gains and losses from accumulated other comprehensive income based on the timing of the underlying cash flows, unless the termination results from the failure of the intended transaction to occur in the expected timeframe.  Such untimely transactions require immediate recognition in earnings of gains and losses previously recorded in other comprehensive income.During 2024 and 2023, the Company used derivative instruments to mitigate risk, some of which were designated as hedging instruments.  The tables following the discussion of the derivative instruments below summarize the fair value of the Company’s derivative 

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CHURCH & DWIGHT CO., INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)(In millions, except share and per share data)  

instruments and the effect of derivative instruments on the Company’s consolidated Statements of Income and on other comprehensive income.Derivatives Designated as Hedging Instruments Diesel Fuel HedgesThe Company uses independent freight carriers to deliver its products.  The carriers charge the Company a basic rate per mile for diesel fuel.  The Company has entered into hedge agreements with counterparties to mitigate the volatility of diesel fuel prices, and not to speculate in the future price of diesel fuel.  Under the hedge agreements, the Company agreed to pay a fixed price per gallon of diesel fuel determined at the time the agreements were executed and to receive a floating rate payment that is determined on a monthly basis based on the average price of the Department of Energy’s Diesel Fuel Index during the applicable month and is designed to offset any increase or decrease in fuel costs that the Company pays to it common carriers.  The agreements covered approximately 42.0% of the Company’s 2024 diesel fuel requirements.  These diesel fuel hedge agreements qualified for hedge accounting.  Therefore, changes in the fair value of such agreements are recorded under Accumulated Other Comprehensive Income (Loss) on the Consolidated Balance Sheet.  Foreign CurrencyThe Company is subject to exposure from fluctuations