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DERIVATIVES

3 Months Ended

Mar. 31, 2026

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 months ended March 31, 2026 and 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 March 31, 2026. 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 $76,794 and $88,555 at March 31, 2026 and December 31, 2025, respectively.

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 $269,566 and $337,659 at March 31, 2026 and December 31, 2025, 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 $409,689 and $370,668 at March 31, 2026 and December 31, 2025, respectively.

Fair values of derivative instruments in the Company’s Condensed Consolidated Balance Sheets consisted of the following:


	March 31, 2026												December 31, 2025
	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	$	1,507		$	482		$	—		$	—		$	2,149		$	289		$	—		$	—
Net investment contracts		3,784			1,255			—			—			102			12,529			—			—
Not designated as hedging instruments:
Foreign exchange contracts		1,419			1,587			—			—			582			470			—			—
Total derivatives	$	6,710		$	3,324		$	—		$	—		$	2,833		$	13,288		$	—		$	—

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 (loss) gain		2026			2025
Not designated as hedges:
Foreign exchange contracts		Selling, general & administrative expenses		$	(3,353)		$	8,333

The effects of designated hedges on AOCI consisted of the following:



Total gain (loss) recognized in AOCI, net of tax		March 31, 2026			December 31, 2025
Foreign exchange contracts		$	642		$	1,396
Forward starting swap agreements			15,722			16,291
Net investment contracts			(4,179)			(5,721)

The Company expects a gain of $642 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.

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


		Gain (loss) recognized in the		Three Months Ended March 31,
Derivative type		Consolidated Statements of Income:		2026			2025
Foreign exchange contracts		Sales		$	1,472		$	(713)
		Cost of goods sold			1,560			361
Forward starting swap agreements		Interest expense, net			689			689