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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Aptargroup, Inc · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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A significant number of our operations are located outside of the United States. Because of this, movements in exchange rates may have a significant impact on the translation of the financial condition and results of operations of our subsidiaries. Our primary foreign exchange exposure is to the euro, but we have foreign exchange exposure to the Chinese yuan, Brazilian real, Argentine peso, Mexican peso, Swiss franc and other Asian, European and Latin American currencies. A weakening U.S. dollar relative to foreign currencies has an additive translation effect on our financial statements. Conversely, a strengthening U.S. dollar has a dilutive translation effect. Additionally, in some cases, we sell products denominated in a currency different from the currency in which the related costs are incurred. Any changes in exchange rates on such inter-country sales may impact our results of operations.
The table below provides information as of June 30, 2026 about our forward currency exchange contracts. The increase in USD/MXN and MXN/USD notional amounts reflect forward-starting foreign currency swaps entered into during the quarter. The tabular presentation includes both the near and far legs of these contracts in accordance with the Company's market risk disclosure methodology. The majority of the contracts expire before the end of the third quarter of 2026.
Buy/Sell Contract Amount (in thousands) Average Contractual Exchange Rate Min / Max Notional Volumes
USD / MXN $ 44,000 17.7222 31,000 - 49,000
EUR / USD 27,486 1.1642 27,486 - 33,688
MXN / USD 14,700 0.0573 0 - 22,200
EUR / BRL 9,666 6.0998 9,666 - 9,997
CZK / EUR 9,158 0.0411 6,843 - 9,158
CHF / EUR 7,469 1.0904 636 - 7,469
EUR / CHF 5,260 0.9188 4,291 - 5,260
INR / EUR 5,142 0.0090 0 - 5,142
USD / EUR 4,285 0.8611 4,285 - 6,108
EUR / INR 4,225 113.0352 0 - 4,225
EUR / MXN 2,857 20.9366 2,857 - 3,503
EUR / THB 2,724 37.8925 2,593 - 2,724
GBP / EUR 1,039 1.1511 898 - 1,374
EUR / GBP 848 0.8674 438 - 1,824
CHF / USD 844 1.2756 702 - 1,049
USD / INR 716 97.1439 0 - 716
CZK / USD 320 0.0479 120 - 320
EUR / CZK 255 24.3573 255 - 633
USD / GBP 231 0.7470 231 - 330
USD / CHF 100 0.7902 100 - 338
GBP / USD 58 1.3458 0 - 182
Total $ 141,383
As of June 30, 2026, we have recorded the fair value of foreign currency forward exchange contracts of $0.6 million in prepaid and other and $1.0 million in accounts payable, accrued and other liabilities on the Condensed Consolidated Balance Sheets.
The Company enters into cross-currency swap contracts to hedge its net investment in euro-denominated assets against future volatility in the exchange rate between the U.S. dollar and the euro. These instruments are designated as net investment hedges and we elected the spot method. Gains and losses resulting from the settlement of the excluded components are recorded in interest expense in the Condensed Consolidated Statements of Income. Gains and losses resulting from the fair value adjustments to the cross-currency swap agreements are recorded in accumulated other comprehensive (loss) income as the swaps are effective in hedging the designated risk. Our derivative contracts expire at various dates through September 2029. As of June 30, 2026, the fair value of the cross currency swap contracts was a $24.7 million liability.
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