Derivative Instruments

3 Months Ended

Sep. 30, 2024

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 September 30, 2024, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts, and EUR forward contract were $393.8 million, $412.8 million and $321.7 million, respectively.

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 and nine months ended September 30, 2024 and September 30, 2023.

The effects of fair value and cash flow hedge accounting on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the nine months ended September 30, were as follows:



				2024						2023
(in thousands)				Cost of sales		Interest income (expense), net and other finance costs		Other & foreign exchange loss, net		Cost of sales		Interest income (expense), net and other finance costs		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				$	916,551	$	4,111	$	352	$	888,835	$	18	$	(1,471)
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	—		9,303		—		—		11,409		—
		Cross currency swap contract
			Amount of gain or (loss) reclassified from OCI to earnings	—		3,433		(4,900)		—		4,088		6,508
		Forward contract
			Amount of gain (loss) reclassified from OCI to earnings	(188)		—		—		60		—		—

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the three months ended September 30, 2024 and 2023 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)	2024		2023			2024		2023
Interest rate contracts	$	(7,000)	$	4,959	Interest expense	$	3,067	$	4,302
Cross currency contracts	(13,285)		12,156		Interest expense	898		1,483
Forward contracts	—		(122)		FX gain (loss)	(19,134)		11,753
					Cost of goods sold	—		(20)
Total	$	(20,285)	$	16,993		$	(15,169)	$	17,518

The effects of derivative instruments on the Condensed Consolidated Statement of Earnings and Comprehensive Income for the nine months ended September 30, 2024 and 2023 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)	2024		2023			2024		2023
Interest rate contracts	$	2,173	$	11,505	Interest expense	$	9,303	$	11,409
Cross currency contracts	3,048		4,137		Interest expense	3,433		4,088
Forward contracts	—		(535)		FX gain (loss)	(4,900)		6,508
					Cost of goods sold	(188)		60
Total	$	5,221	$	15,107		$	7,648	$	22,065

For the three months ending September 30, 2024 and September 30, 2023 losses on the net investment hedge of $8.8 million and $3.2 million were included in OCI, respectively. For the three months ending September 30, 2024 and September 30, 2023, excluded gains of $1.3 million and $1.3 million were reclassified from OCI to interest expense, respectively.

For the nine months ending September 30, 2024 and September 30, 2023 gains on the net investment hedge of $1.0 million and $1.1 million were included in OCI, respectively. For the nine months ending September 30, 2024 and September 30, 2023, excluded gains of $3.8 million and $3.8 million were reclassified from OCI to interest expense, respectively.

As of September 30, 2024, the aggregate fair values of the Company’s derivative instruments on the Condensed Consolidated Balance Sheet were comprised of an asset of $14.2 million, of which $10.4 million is included in other current assets, and the balance of $3.8 million as other non-current assets, and of a non-current liability of $30.1 million included as deferred income tax and other long-term liabilities.