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Derivative Financial Instruments | 6 Months Ended
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Oct. 02, 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 October 2, 2022 and March 31, 2022, the Company has hedged the price to purchase approximately 67.5 million pounds and 54.0 million pounds of lead, respectively, for a total purchase price of $59,429 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 October 2, 2022 and March 31, 2022, the Company had entered into a total of $35,916 and $29,676, respectively, of such contracts. Derivatives in Net Investment Hedging Relationships Net Investment Hedges The Company uses cross currency fixed interest rate swaps to hedge its net investments in foreign operations against future volatility in the exchange rates between the U.S. Dollar and euro. On September 29, 2022, the Company terminated its $300,000 cross-currency fixed interest rate swap contracts, originally entered into on December 23, 2021, and received a net settlement of $43,384. The cash proceeds have been included in Proceeds from termination of net investment hedges in our Consolidated Condensed Statements of Cash Flows. On September 29, 2022, the Company entered into a cross-currency fixed interest rate swap contracts with an aggregate notional amount of $150,000, maturing on December 15, 2027. The cross-currency fixed interest rate swap contracts qualify for hedge accounting as a net investment hedging instrument, which allows for them 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 $2,378 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 October 2, 2022 and March 31, 2022, the notional amount of these contracts was $52,128 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 October 2, 2022 and March 31, 2022
|  | Derivatives and Hedging Activities Designated as Cash Flow Hedges |  | Derivatives and Hedging Activities Designated as Net Investment Hedges |  | Derivatives and Hedging Activities Not Designated as Hedging Instruments
|  | October 2, 2022 |  | March 31, 2022 |  | October 2, 2022 |  | March 31, 2022 |  | October 2, 2022 |  | March 31, 2022
Prepaid and other current assets: |  |  |  |  |  |  |  |  |  |  |  |
Lead forward contracts |  | $ | — |  |  | $ | 2,520 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign currency forward contracts |  | 596 |  |  | 256 |  |  | — |  |  | — |  |  | 1,031 |  |  | — |
Net investment hedges |  | — |  |  | — |  |  | 1,143 |  |  | 4,388 |  |  | — |  |  | — |
Other assets: |  |  |  |  |  |  |  |  |  |  |  |
Net investment hedges |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total assets |  | $ | 596 |  |  | $ | 2,776 |  |  | $ | 1,143 |  |  | $ | 4,388 |  |  | $ | 1,031 |  |  | $ | — |
Accrued expenses: |  |  |  |  |  |  |  |  |  |  |  |
Lead forward contracts |  | $ | 942 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Foreign currency forward contracts |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 512 |
Other liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Net investment hedges |  | — |  |  | — |  |  | 4,641 |  |  | 4,090 |  |  | — |  |  | — |
Total liabilities |  | $ | 942 |  |  | $ | — |  |  | $ | 4,641 |  |  | $ | 4,090 |  |  | $ | — |  |  | $ | 512 |
The Effect of Derivative Instruments on the Consolidated Condensed Statements of Income For the quarter ended October 2, 2022
Derivatives Designated as Cash Flow Hedges |  | Pretax 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 |  | $ | 334 |  |  | Cost of goods sold |  | $ | (1,893) |
Foreign currency forward contracts |  | 1,361 |  |  | Cost of goods sold |  | 826 |
Total |  | $ | 1,695 |  |  |  |  | $ | (1,067) |
Derivatives Designated as Net Investment Hedges |  | Pretax 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 |  | $ | 17,023 |  |  | Interest expense |  | $ | 1,665 |
Total |  | $ | 17,023 |  |  |  |  | $ | 1,665 |
Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income on Derivatives |  | Pretax Gain (Loss)
Foreign currency forward contracts | Other (income) expense, net |  | $ | (688) |
Total |  |  | $ | (688) |
The Effect of Derivative Instruments on the Consolidated Condensed Statements of Income For the quarter ended October 3, 2021
Derivatives Designated as Cash Flow Hedges |  | Pretax 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 |  | $ | (2,409) |  |  | Cost of goods sold |  | $ | 817 |
Foreign currency forward contracts |  | 442 |  |  | Cost of goods sold |  | 132 |
Total |  | $ | (1,967) |  |  |  |  | $ | 949 |
Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income on Derivatives |  | Pretax Gain (Loss)
Foreign currency forward contracts | Other (income) expense, net |  | $ | 123 |
Total |  |  | $ | 123 |
The Effect of Derivative Instruments on the Consolidated Condensed Statements of Income For the six months ended October 2, 2022
Derivatives Designated as Cash Flow Hedges |  | Pretax 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 |  | $ | (10,528) |  |  | Cost of goods sold |  | $ | (1,198) |
Foreign currency forward contracts |  | 2,616 |  |  | Cost of goods sold |  | 1,272 |
Total |  | $ | (7,912) |  |  |  |  | $ | 74 |
Derivatives Designated as Net Investment Hedges |  | Pretax 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 |  | $ | 40,618 |  |  | Interest expense |  | $ | 2,923 |
Total |  | $ | 40,618 |  |  |  |  | $ | 2,923 |
Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income on Derivative |  | Pretax Gain (Loss)
Foreign currency forward contracts | Other (income) expense, net |  | $ | (472) |
Total |  |  | $ | (472) |
The Effect of Derivative Instruments on the Consolidated Condensed Statements of Income For the six months ended October 3, 2021
Derivatives Designated as Cash Flow Hedges |  | Pretax 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 |  | $ | 5,163 |  |  | Cost of goods sold |  | $ | 3,276 |
Foreign currency forward contracts |  | 253 |  |  | Cost of goods sold |  | (28) |
Total |  | $ | 5,416 |  |  |  |  | $ | 3,248 |
Derivatives Not Designated as Hedging Instruments | Location of Gain (Loss) Recognized in Income on Derivative |  | Pretax Gain (Loss)
Foreign currency forward contracts | Other (income) expense, net |  | $ | 117 |
Total |  |  | $ | 117 |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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