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DERIVATIVES

12 Months Ended

Dec. 31, 2024

DERIVATIVES

DERIVATIVES

NOTE 14 – 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 for each of the three years in the period ended December 31, 2024.

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 December 31, 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 $96,444 and $84,148 at December 31, 2024 and 2023, respectively.

The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during 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 had commodity contracts that were qualified and designated as cash flow hedges that matured in 2024. The notional amount of these contracts was 200,000 pounds at December 31, 2023.

The Company had interest rate swap agreements, which were qualified and designated as cash flow hedges. At December 31, 2023, the aggregate notional amount of the contracts was $150,000. During 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 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 were $319,450 and $119,607 at December 31, 2024 and 2023, respectively.

Derivatives not designated as hedging instruments

The Company has certain foreign exchange forward contracts which are not designated as hedges. These derivatives are held as hedges of certain balance sheet exposures. The dollar equivalent gross notional amount of these contracts were $421,754 and $492,600 at December 31, 2024 and 2023, respectively.

Fair values of derivative instruments in the Company’s Consolidated Balance Sheets follow:


	December 31, 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	$	1,663		$	2,972		$	—		$	—		$	1,548		$	687		$	—		$	—
Interest rate swap agreements		—			—			—			—			—			—			1,460			—
Forward starting swap agreements		—			—			—			—			—			—			20,377			—
Net investment contracts		10,276			—			—			—			—			3,351			—			—
Commodity contracts		—			—			—			—			45			—			—			—
Not designated as hedging instruments:
Foreign exchange contracts		1,560			4,251			—			—			4,063			623			—			—
Total derivatives	$	13,499		$	7,223		$	—		$	—		$	5,656		$	4,661		$	21,837		$	—

The effects of undesignated derivative instruments on the Company’s Consolidated Statements of Income consisted of the following:


				Year Ended December 31,
Derivatives by hedge designation		Classification of (loss) gain		2024			2023
Not designated as hedges:
Foreign exchange contracts		Selling, general & administrative expenses		$	(11,198)		$	15,990

The effects of designated cash flow hedges on AOCI and the Company’s Consolidated Statements of Income consisted of the following:


		December 31,
Total (loss) gain recognized in AOCI, net of tax		2024			2023
Foreign exchange contracts		$	(812)		$	721
Interest rate swap agreements			—			1,085
Forward starting swap agreements			18,067			14,696
Net investment contracts			20,403			7,136
Commodity contracts			—			34

The Company expects a loss of $812 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.


				Year Ended December 31,
		Gain (loss) recognized in the
Derivative type		Consolidated Statements of Income:		2024			2023
Foreign exchange contracts		Net Sales		$	(625)		$	5,210
		Cost of goods sold			494			590
Commodity contracts		Cost of goods sold			110			193
Forward starting swap agreements		Interest expense, net			1,394			—