. Derivative Instruments

and Hedging Activities

The Company records all derivatives in accordance with Accounting Standards Codification (ASC)

815,

Derivatives and Hedging

, which requires derivative instruments be reported on the condensed consolidated balance sheets at fair value and establishes criteria for designation and effectiveness of hedging relationships. The Company is exposed to market risk such as changes in commodity prices, foreign currencies and interest rates. The Company does

not

hold or issue derivative financial instruments for trading purposes.

Commodities

The Company is exposed to price fluctuations in commodities it uses as raw materials; primarily steel, copper and aluminum; and periodically utilizes commodity derivatives to mitigate the impact of these potential price fluctuations on its financial results and its economic well-being. These derivatives typically have maturities of less than

eighteen

months. In the

first

quarter of

2018,

the Company entered into the following commodity forward contracts:

Hedged Item	Contract Date	Effective Date	Notional Amount		Fixed Price (per lb)		Expiration Date
Copper	February 12, 2018	February 1, 2018	$	3,776	$	3.114	December 31, 2018
Copper	March 8, 2018	March 9, 2018	$	3,427	$	3.109	December 31, 2018
Copper	March 20, 2018	March 21, 2018	$	3,418	$	3.101	December 31, 2018
Copper	March 20, 2018	March 21, 2018	$	1,697	$	3.079	December 31, 2018
Copper	March 26, 2018	April 1, 2018	$	3,003	$	3.027	December 31, 2018

March 31, 2018,

December 31, 2017

and

March 31, 2017,

the Company had five,

one

and

one

commodity contracts outstanding, respectively, covering the purchases of copper.

Because these contracts do

not

qualify for hedge accounting, the related gains and losses are recorded in cost of goods sold in the Company’s condensed consolidated statements of comprehensive income. Net pre-tax gains (losses) recognized for the

three

months ended

March 31, 2018

and

2017

were $(

156

) and

$183,

respectively.

Foreign Currencies

The Company is exposed to foreign currency exchange risk as a result of transactions denominated in currencies other than the U.S. Dollar. The Company periodically utilizes foreign currency forward purchase and sales contracts to manage the volatility associated with certain foreign currency purchases and sales in the normal course of business. Contracts typically have maturities of

twelve

months or less. As of

March 31, 2018,

December 31, 2017

and

March 31, 2017,

the Company had

22,

and

foreign currency contracts outstanding, respectively.

Because these contracts do

not

qualify for hedge accounting, the related gains and losses are recorded in other, net in the Company’s condensed consolidated statements of comprehensive income. Net pre-tax gains (losses) recognized for the

three

months ended

March 31, 2018

and

2017

were

$227

and (

$201

), respectively.

Interest Rate Swaps

October 2013,

the Company entered into

two

interest rate swap agreements; in

May 2014,

the Company entered into

one

interest rate swap agreement; and in

2017,

the Company entered into

additional interest rate swap agreements. The Company formally documented all relationships between interest rate hedging instruments and the related hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions. These interest rate swap agreements qualify as cash flow hedges, and accordingly, the effective portions of the gains or losses are reported as a component of accumulated other comprehensive loss (AOCL) in the condensed consolidated balance sheets. The amount of gains (net of tax) recognized in accumulated other comprehensive loss (AOCL) for the

three

months ended

March 31, 2018

and

2017

were

$6,647

and

$440,

respectively. The cash flows of the swaps are recognized as adjustments to interest expense each period. The ineffective portions of the derivatives’ changes in fair value, if any, are immediately recognized in earnings.

Fair Value

The following table presents the fair value of all of the Company’s derivatives:

	March 31 , 201 8			December 31, 201 7
Commodity contracts	$	(163	)	$	107
Foreign currency contracts		(25	)		167
Interest rate swaps		13,339			4,356

The fair value of the commodity contracts and foreign currency contracts are included in other accrued liabilities, and the fair value of the interest rate swaps is included in other assets in the condensed consolidated balance sheets as of

March 31, 2018.

The fair value of the commodity and foreign currency contracts are included in prepaid expenses and other assets, and the fair value of the interest rate swaps are included in other assets in the consolidated balance sheet as of

December 31, 2017.

Excluding the impact of credit risk, the fair value of the derivative contracts as of

March 31, 2018

and

December 31, 2017

is an asset of

$13,375

and

$4,703,

respectively, which represents the amount the Company would receive upon exit of the agreements on those dates.