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DERIVATIVES | 9 Months Ended
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Sep. 30, 2024
DERIVATIVES |
DERIVATIVES | NOTE 12 — 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 and nine months ended September 30, 2024 and 2023. 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 September 30, 2024. 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 $94,030 at September 30, 2024 and $84,148 at December 31, 2023. The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during the second quarter of 2024. At December 31, 2023, the dollar equivalent gross notional amount of the contracts was $100,000. Upon termination of the contracts in the second quarter of 2024, the Company had a gain of $25,852 recorded in AOCI that will be amortized to Interest expense, net over the life of the associated debt. The Company has commodity contracts that are qualified and designated as cash flow hedges. The notional amount of these contracts were 25,000 pounds and 200,000 pounds at September 30, 2024 and December 31, 2023, respectively. 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. In June 2024, the Company terminated the interest rate swaps that were associated with the Term Loan and realized a gain of $2,428, which is recorded in Other (expense) income. 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 contracts was $334,947 and $119,607 at September 30, 2024 and December 31, 2023, respectively. 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 $384,414 and $492,600 at September 30, 2024 and December 31, 2023, respectively. Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets follow: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | September 30, 2024 | ​ | December 31, 2023
​ | 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 | $ | 264 | ​ | $ | 3,074 | ​ | $ | — | ​ | $ | — | ​ | $ | 1,548 | ​ | $ | 687 | ​ | $ | — | ​ | $ | —
Interest rate swap agreements |  | — | ​ |  | — | ​ | ​ | — | ​ | ​ | — | ​ |  | — | ​ |  | — | ​ |  | 1,460 | ​ |  | —
Forward starting swap agreements | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 20,377 | ​ | ​ | —
Net investment contracts | ​ | — | ​ | ​ | 4,747 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,351 | ​ | ​ | — | ​ | ​ | —
Commodity contracts | ​ | 20 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 45 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | —
Not designated as hedging instruments: |  | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Foreign exchange contracts |  | 679 | ​ | ​ | 2,735 | ​ | ​ | — | ​ | ​ | — | ​ |  | 4,063 | ​ |  | 623 | ​ |  | — | ​ |  | —
Total derivatives | $ | 963 | ​ | $ | 10,556 | ​ | $ | — | ​ | $ | — | ​ | $ | 5,656 | ​ | $ | 4,661 | ​ | $ | 21,837 | ​ | $ | —
​ The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Derivatives by hedge designation |  | Classification of (loss) gain |  | 2024 |  | 2023 |  | 2024 |  | 2023
Not designated as hedges: | ​ |  | ​ | ​ |  |  | ​ |  | ​ | ​ |  |  | ​ |
Foreign exchange contracts | ​ | Selling, general & administrative expenses | ​ | $ | 3,108 | ​ | $ | (6,705) | ​ | $ | (3,663) | ​ | $ | 5,066
​ The effects of designated hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ | ​ | ​ | ​ |
Total gain (loss) recognized in AOCI, net of tax |  | September 30, 2024 |  | December 31, 2023 |
Foreign exchange contracts | ​ | $ | (2,019) | ​ | $ | 721 | ​
Interest rate swap agreements | ​ | ​ | — | ​ | ​ | 1,085 | ​
Forward starting swap agreements | ​ | ​ | 18,534 | ​ | ​ | 14,696 | ​
Net investment contracts | ​ | ​ | 4,120 | ​ |  | 7,136 | ​
Commodity contracts | ​ |  | 15 | ​ |  | 34 | ​
​ The Company expects a loss of $2,004 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 September 30, |  | Nine Months Ended September 30,
​ | ​ | Gain (loss) recognized in the | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Derivative type |  | Consolidated Statements of Income: |  | 2024 |  | 2023 |  | 2024 |  | 2023
Foreign exchange contracts |  | Sales | ​ | $ | (630) | ​ | $ | 1,757 | ​ | $ | 657 | ​ | $ | 4,847
​ |  | Cost of goods sold | ​ |  | 40 | ​ |  | 159 | ​ |  | 524 | ​ |  | 187
Commodity contracts | ​ | Cost of goods sold | ​ | ​ | 26 | ​ | ​ | (3) | ​ | ​ | 92 | ​ | ​ | 194
Forward starting swap agreements | ​ | Interest expense, net | ​ | ​ | 639 | ​ | ​ | — | ​ | ​ | 706 | ​ | ​ | —
​

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