Derivative Instruments

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The 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.

As of March 31, 2023, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts, EUR forward contract and CNY forward contracts were $577.5 million, $448.2 million, $321.7 million and $9.9 million, respectively. As of March 31, 2022, the aggregate notional amount of the Company's outstanding forward contracts used to hedge variability in cash flows on its Chinese Yuan denominated purchases were CNY68.3 million, all of which expired by December 31, 2022.

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, 2023.

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



				2023				2022
(in thousands)				Interest expense, net		Other & foreign exchange loss, net		Cost of sales	Interest expense, net	Other & foreign exchange loss, net
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				$	(570)	$	(398)	256,789	(212)	(216)
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	3,196		—		—	(29)	—
		Cross currency swap contract
			Amount of gain or (loss) reclassified from OCI to earnings	1,339		(1,816)		—	21	(2,967)
		Forward contract
			Amount of gain or (loss) reclassified from OCI to earnings	—		—		163	—	—

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended March 31, 2023 and 2022 were as follows:


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)	2023		2022			2023		2022
Interest rate contracts	$	(4,043)	$	(1,805)	Interest expense	$	3,196	$	(29)
Cross currency contracts	(2,279)		(7,548)		Interest expense	1,339		21
Forward contracts	$	(35)	$	—	FX gain (loss)	(1,816)		(2,967)
FX gain (loss)	$	—	$	—	Cost of goods sold	—		163
Total	$	(6,357)	$	(9,353)		$	2,719	$	(2,812)

For the three months ending March 31, 2023 losses on the net investment hedge and March 31, 2022 gains on net investment hedge of $0.2 million and $6.8 million were included in OCI, respectively. For the three months ending March 31, 2023, excluded gains of $1.2 million were reclassified from OCI to interest expense, while none were reported for the three months ended March 31, 2022.

As of March 31, 2023, the aggregate fair values of the Company’s derivative instruments on the Condensed Consolidated Balance Sheet were comprised of an asset of $35.6 million, of which $18.0 million is included in other current assets, and the balance, or $17.7 million as other non-current assets, and a non-current liability of $11.5 million.