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DERIVATIVES

12 Months Ended

Dec. 31, 2025

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, 2025.

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, 2025. 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 $88,555 and $96,444 at December 31, 2025 and 2024, respectively.

The Company had interest rate forward starting swap agreements that were qualified and designated as cash flow hedges that were terminated during 2024. Upon termination of the contracts in 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.

Net investment hedges

The Company has foreign currency forward contracts and zero-cost collar contracts that qualify and are designated as net investment hedges. The dollar equivalent gross notional amount of the foreign currency forward contracts and zero-cost collar contracts were $337,659 and $319,450 at December 31, 2025 and December 31, 2024, 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 $370,668 and $421,754 at December 31, 2025 and 2024, respectively.

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


	December 31, 2025												December 31, 2024
	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	$	2,149		$	289		$	—		$	—		$	1,663		$	2,972		$	—		$	—
Net investment contracts		102			12,529			—			—			10,276			—			—			—
Not designated as hedging instruments:
Foreign exchange contracts		582			470			—			—			1,560			4,251			—			—
Total derivatives	$	2,833		$	13,288		$	—		$	—		$	13,499		$	7,223		$	—		$	—

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		2025			2024
Not designated as hedges:
Foreign exchange contracts		Selling, general & administrative expenses		$	25,417		$	(11,198)

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		2025			2024
Foreign exchange contracts		$	1,396		$	(812)
Forward starting swap agreements			16,291			18,067
Net investment contracts			(5,721)			20,403

The Company expects a loss of $1,396 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:		2025			2024
Foreign exchange contracts		Net Sales		$	2,349		$	(625)
		Cost of goods sold			242			494
Forward starting swap agreements		Interest expense, net			2,755			1,394