Derivative Instruments

3 Months Ended

Mar. 31, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative InstrumentsThe Company enters into derivative instrument agreements, including forward foreign currency exchange contracts, interest rate swaps, and cross currency swaps to manage risk in connection with changes in foreign currency and interest rates. The Company hedges committed exposures and does not engage in speculative transactions. The Company only enters into derivative instrument agreements with counterparties who have highly rated credit.

The Company uses a forward foreign currency contract to hedge its exposure to adverse foreign currency exchange rate movements for its operations in Europe. This contract matures in March 2029. The Company has elected the spot method for designating this contract as a net investment hedge. The Company has also converted a Euro-denominated ("EUR"), fixed rate obligation into a U.S. Dollar fixed rate obligation using a receive fixed, pay fixed cross currency swap. The cross-currency swap is designated as a cash flow hedge. In addition, the Company has converted domestic U.S. variable rate debt to fixed rate debt using a receive variable, pay fixed interest rate swap. The interest rate swap contract is also designated as a cash flow hedge.

As of March 31, 2022, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts and forward contract were $700.0 million, $500.0 million and $328.2 million, respectively. As of March 31, 2021, the aggregate notional amount of the Company's outstanding forward contracts were $9.1 million.

Changes in fair value of any forward contracts that are determined to be ineffective are immediately reclassified from OCI into earnings. There were no amounts recognized due to ineffectiveness during the three months ended March 31, 2022.

The effects of fair value and cash flow hedge accounting on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the period ended March 31, 2022 was as follows:



(in thousands)				Cost of Goods Sold		Interest expense, net and other
Total amounts of income and expense line items presented in the Condensed Consolidated Statement of Earnings in which the effects of fair value or cash flow hedges are recorded				$	256,789	$	(428)
The effects of fair value and cash flow hedging
	Gain or (loss) on cash flow hedging relationships
		Interest contracts:
			Amount of gain or (loss) reclassified from OCI to earnings	—		(29)
		Cross currency swap contract
			Amount of gain or (loss) reclassified from OCI to earnings	—		(2,946)
		Forward contract
			Amount of gain or (loss) reclassified from OCI to earnings	163		—

Fair value and cash flow hedge accounting had no effect on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the period ended March 31, 2021.

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the period ended March 31 were as follow:


Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI				Location of Gain (Loss) Reclassified from OCI into Earnings	Gain (Loss) Reclassified from OCI into Earnings
(in thousands)	2022		2021			2022		2021
Interest rate contracts	$	(1,805)	$	—	Interest expense	$	(29)	$	—
Cross currency contracts	(7,548)		—		Interest expense	21		—
					FX gain (loss)	(2,967)		—
Forward contracts	$	—	$	—	Cost of goods sold	163		—
Total	$	(9,353)	$	—		$	(2,812)	$	—

For the three months ending March 31, 2022, losses on the net investment hedge of $6.8 million was included in OCI and no gains or losses were reclassified from OCI to earnings.