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Derivative Financial Instruments
 3 Months Ended
Jul. 03, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The Company utilizes derivative instruments to reduce its exposure to fluctuations in commodity prices, foreign exchange rates and interest, under established procedures and controls. The Company does not enter into derivative contracts for speculative purposes. The Company’s agreements are with creditworthy financial institutions and the Company anticipates performance by counterparties to these contracts and therefore no material loss is expected.

Derivatives in Cash Flow Hedging Relationships

Lead Forward Contracts

The Company enters into lead forward contracts to fix the price for a portion of its lead purchases. Management considers the lead forward contracts to be effective against changes in the cash flows of the underlying lead purchases. The vast majority of such contracts are for a period not extending beyond one year. At July 3, 2022 and March 31, 2022, the Company has hedged the price to purchase approximately 55.5 million pounds and 54.0 million pounds of lead, respectively, for a total purchase price of $54,078 and $56,768, respectively.

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts and options to hedge a portion of the Company’s foreign currency exposures for lead, as well as other foreign currency exposures so that gains and losses on these contracts offset changes in the underlying foreign currency denominated exposures. The vast majority of such contracts are for a period not extending beyond one year. As of July 3, 2022 and March 31, 2022, the Company had entered into a total of $33,463 and $29,676, respectively, of such contracts.
Derivatives in Net Investment Hedging Relationships

Net Investment Hedges

On December 23, 2021, the Company entered into cross currency fixed interest rate swap agreements, with aggregate notional amounts of $300,000, to hedge its net investments in foreign operations against future volatility in the exchange rates between U.S. dollars and euros. These swaps mature on December 15, 2027 and qualify for hedge accounting as a net investment hedging instrument, which allows the swaps to be remeasured to foreign currency translation adjustment within AOCI (“Accumulated Other Comprehensive Income”) to offset the translation risk from those investments. Balances in the foreign currency translation adjustment accounts remain until the sale or substantially complete liquidation of the foreign entity, upon which they are recognized as a component of income (expense).

Impact of Hedging Instruments on AOCI

In the coming twelve months, the Company anticipates that $1,714 of pretax loss relating to lead, foreign currency forward contracts and net investment hedges will be reclassified from AOCI as part of cost of goods sold and interest expense. This amount represents the current net unrealized impact of hedging lead, foreign exchange rates and interest rates, which will change as market rates change in the future. This amount will ultimately be realized in the Consolidated Condensed Statements of Income as an offset to the corresponding actual changes in lead, foreign exchange rates and interest costs resulting from variable lead cost, foreign exchange and interest rates hedged.

Derivatives not Designated in Hedging Relationships

Foreign Currency Forward Contracts

The Company also enters into foreign currency forward contracts to economically hedge foreign currency fluctuations on intercompany loans and foreign currency denominated receivables and payables. These are not designated as hedging instruments and changes in fair value of these instruments are recorded directly in the Consolidated Condensed Statements of Income. As of July 3, 2022 and March 31, 2022, the notional amount of these contracts was $51,256 and $22,990, respectively.

Presented below in tabular form is information on the location and amounts of derivative fair values in the Consolidated Condensed Balance Sheets and derivative gains and losses in the Consolidated Condensed Statements of Income:

Fair Value of Derivative Instruments
July 3, 2022 and March 31, 2022
 
 Derivatives and Hedging  Activities Designated as Cash Flow HedgesDerivatives and Hedging Activities Designated as Net Investment HedgesDerivatives and Hedging Activities Not Designated as Hedging Instruments
 July 3, 2022March 31, 2022July 3, 2022March 31, 2022July 3, 2022March 31, 2022
Prepaid and other current assets:
Lead forward contracts$— $2,520 $— $— $— $— 
Foreign currency forward contracts475 256 — — — — 
Net investment hedges— — 5,041 4,388 — — 
Other assets:
Net investment hedges— — 17,594 — — — 
Total assets$475 $2,776 $22,635 $4,388 $— $— 
Accrued expenses:
Lead forward contracts$5,431 $— $— $— $— $— 
Foreign currency forward contracts— — — — 231 512 
Other liabilities:
Net investment hedges— — — 4,090 — — 
Total liabilities$5,431 $— $— $4,090 $231 $512 
The Effect of Derivative Instruments on the Consolidated Condensed Statements of Income
For the quarter ended July 3, 2022
Derivatives Designated as Cash Flow HedgesPretax Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)Location of Gain (Loss)  Reclassified from AOCI into Income (Effective Portion)Pretax Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Lead forward contracts$(10,862)Cost of goods sold$695 
Foreign currency forward contracts1,255 Cost of goods sold446 
Total$(9,607)$1,141 
Derivatives Designated as Net Investment HedgesPretax Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)Location of Gain (Loss)  Reclassified from AOCI into Income (Effective Portion)Pretax Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Cross currency fixed interest rate swaps$23,595 Interest expense$1,258 
Total$23,595 $1,258 

Derivatives Not Designated as Hedging InstrumentsLocation of Gain (Loss) Recognized in Income on DerivativesPretax Gain (Loss)
Foreign currency forward contractsOther (income) expense, net$216 
Total$216 


The Effect of Derivative Instruments on the Consolidated Condensed Statements of Income
For the quarter ended July 4, 2021
Derivatives Designated as Cash Flow HedgesPretax Gain (Loss) Recognized in AOCI on Derivative (Effective Portion)Location of Gain (Loss)  Reclassified from AOCI into Income (Effective Portion)Pretax Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Lead forward contracts$7,572 Cost of goods sold$2,459 
Foreign currency forward contracts(189)Cost of goods sold(160)
Total$7,383 $2,299 
Derivatives Not Designated as Hedging InstrumentsLocation of Gain (Loss) Recognized in Income on DerivativesPretax Gain (Loss)
Foreign currency forward contractsOther (income) expense, net$(6)
Total$(6)