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DERIVATIVES | 3 Months Ended
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Mar. 31, 2023
DERIVATIVES |
DERIVATIVES | NOTE 13 — DERIVATIVES The Company uses derivative instruments to manage exposures to currency exchange rates, interest rates and commodity prices arising in the normal course of business. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable. Hedge ineffectiveness was immaterial in the three months ended March 31, 2023 and 2022. The Company is subject to the credit risk of the counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with any individual counterparty was considered significant at March 31, 2023. The Company does not expect any counterparties to fail to meet their obligations. Cash Flow Hedges Certain foreign currency forward contracts are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of these short-term contracts was $65,779 at March 31, 2023 and $66,296 at December 31, 2022. The Company has interest rate forward starting swap agreements that are qualified and designated as cash flow hedges. The dollar equivalent gross notional amount of the long-term contracts was $100,000 at March 31, 2023 and December 31, 2022 and have a termination date of August 2025. The Company has commodity contracts with a notional amount of 300,000 pounds and 875,000 pounds at March 31, 2023 and December 31, 2022, respectively, which are qualified and designated as cash flow hedges. In March 2023, the Company entered into interest rate swap agreements, which were qualified and designated as cash flow hedges, with an aggregate notional amount of $150,000. The interest rate swaps will effectively convert the interest rate on $150,000 of the Term Loan discussed in Note 10 from a variable rate based on one-month SOFR to a fixed rate. Net Investment Hedges The Company has foreign currency forward contracts that qualify and are designated as net investment hedges. The dollar equivalent gross notional amount of these short-term contracts was $90,105 at March 31, 2023 and $88,843 at December 31, 2022. Derivatives Not Designated as Hedging Instruments The Company has certain foreign exchange forward contracts that are not designated as hedges. These derivatives are held as economic hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts was $323,519 and $380,443 at March 31, 2023 and December 31, 2022, respectively. Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | March 31, 2023 | ​ | December 31, 2022
​ | Other | ​ | Other | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Other | ​ | Other | ​ | ​ | ​ | ​ | ​ | ​
​ | Current | ​ | Current | ​ | Other | ​ | Other | ​ | Current | ​ | Current | ​ | Other | ​ | Other
Derivatives by hedge designation | Assets |  | Liabilities |  | Assets |  | Liabilities |  | Assets |  | Liabilities |  | Assets |  | Liabilities
Designated as hedging instruments: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Foreign exchange contracts | $ | 3,678 | ​ | $ | 618 | ​ | $ | — | ​ | $ | — | ​ | $ | 1,467 | ​ | $ | 738 | ​ | $ | — | ​ | $ | —
Interest rate swap agreements |  | — | ​ |  | — | ​ | ​ | 877 | ​ | ​ | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Forward starting swap agreements | ​ | — | ​ | ​ | — | ​ | ​ | 17,651 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 19,291 | ​ | ​ | —
Net investment contracts | ​ | — | ​ | ​ | 2,947 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 2,229 | ​ | ​ | — | ​ | ​ | —
Commodity contracts | ​ | 155 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 181 | ​ | ​ | 33 | ​ | ​ | — | ​ | ​ | —
Not designated as hedging instruments: |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign exchange contracts |  | 5,378 | ​ | ​ | 536 | ​ | ​ | — | ​ | ​ | — | ​ |  | 2,348 | ​ |  | 790 | ​ |  | — | ​ |  | —
Total derivatives | $ | 9,211 | ​ | $ | 4,101 | ​ | $ | 18,528 | ​ | $ | — | ​ | $ | 3,996 | ​ | $ | 3,790 | ​ | $ | 19,291 | ​ | $ | —
​ The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Three Months Ended March 31,
Derivatives by hedge designation |  | Classification of gain (loss) |  | 2023 |  | 2022
Not designated as hedges: | ​ |  | ​ | ​ |  |  | ​ |
Foreign exchange contracts | ​ | Selling, general & administrative expenses | ​ | $ | 6,690 | ​ | $ | 1,897
​ The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ | ​ | ​ | ​ |
Total gain recognized in AOCI, net of tax |  | March 31, 2023 |  | December 31, 2022 |
Foreign exchange contracts | ​ | $ | 1,769 | ​ | $ | 627 | ​
Interest rate swap agreements | ​ | ​ | 656 | ​ | ​ | — | ​
Forward starting swap agreements | ​ | ​ | 11,950 | ​ | ​ | 13,191 | ​
Net investment contracts | ​ | ​ | 8,599 | ​ |  | 9,440 | ​
Commodity Contracts | ​ |  | 66 | ​ |  | 91 | ​
​ The Company expects a gain of $1,835 related to existing contracts to be reclassified from AOCI, net of tax, to earnings over the next 12 months as the hedged transactions are realized. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Three Months Ended March 31,
​ | ​ | Gain (loss) recognized in the | ​ | ​ | ​ | ​ | ​ | ​
Derivative type |  | Consolidated Statements of Income: |  | 2023 |  | 2022
Foreign exchange contracts |  | Sales | ​ | $ | 1,206 | ​ | $ | 180
​ |  | Cost of goods sold | ​ |  | 3 | ​ |  | (455)
Commodity contracts | ​ | Cost of goods sold | ​ | ​ | 179 | ​ | ​ | —
​

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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