Company: PTC
Filing Date: 2025-02-06
Form Type: 10-Q
Source: 0000950170-25-015530
Chunk: 34

Company: PTC INC.
Filing Date: 2025-02-06
Form: 10-Q
Item: Part I, Item 8
Chunk 34
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 using the net equity position of Euro and Japanese Yen functional subsidiaries. As the forward contracts are highly effective in offsetting exchange rate exposure, we record changes in these net investment hedges in Accumulated other comprehensive loss and subsequently reclassify them to Foreign currency translation adjustment in Accumulated other comprehensive loss at the time of forward contract maturity. Changes in the fair value of foreign exchange forward contracts due to changes in time value are excluded from the assessment of effectiveness. Our derivatives are not subject to any credit contingent features. We manage credit risk with counterparties by trading among several counterparties and we review our counterparties’ credit at least quarterly.As of December 31, 2024 and September 30, 2024, we had outstanding forward contracts designated as net investment hedges with notional amounts equivalent to the following:

        Currency Hedged (in thousands)
         
        December 31,2024

        September 30,2024

        Euro / U.S. Dollar
         
        $
        436,716

        $
        462,894

        Japanese Yen / U.S. Dollar

        9,822

        10,739

        Total
         
        $
        446,538

        $
        473,633

       The following table shows the effect of our derivative instruments designated as net investment hedges in the Consolidated Statements of Operations for the three months ended December 31, 2024 and December 31, 2023:

        (in thousands)

        Three months ended

        Location of Gain (Loss)
         
        December 31,2024

        December 31,2023

        Gain (loss) recognized in Other comprehensive income (loss) ("OCI")
         
        OCI
         
        $
        33,448

        $
        (15,304
        )

        Gain (loss) reclassified from OCI to earnings
         
        n/a
         
        $
        —

        $
        —

        Gain recognized, excluded portion
         
        Other income (expense), net
         
        $
        1,075

        $
        1,136

      As of December 31, 2024, we estimate that all amounts reported in Accumulated other comprehensive loss will be applied against exposed balance sheet accounts upon translation within the next three months.

12

Offsetting Derivative Assets and LiabilitiesWe have entered into master netting arrangements for our forward contracts that allow net settlements under certain conditions