Derivative Financial Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Foreign Currency Derivatives

HBB held forward foreign currency exchange contracts with total notional amounts of $12.3 million and $13.2 million at December 31, 2020, and 2019, respectively, denominated primarily in Canadian dollars and Mexican pesos. The fair value of these contracts approximated a payable of $0.5 million at December 31, 2020 and a payable of $0.3 million at December 31, 2019.

Forward foreign currency exchange contracts that qualify for hedge accounting are used to hedge transactions expected to occur within the next twelve months. The mark-to-market effect of forward foreign currency exchange contracts that are considered effective as hedges has been included in AOCI.

Interest Rate Derivatives

HBB has interest rate swaps that hedge interest payments on its one-month LIBOR borrowings. All swaps have been designated as cash flow hedges.

The following table summarizes the notional amounts, related rates and remaining terms of interest rate swap agreements for HBB at December 31 in millions:

	Notional Amount				Average Fixed Rate				Remaining Term at
	2020		2019		2020		2019		December 31, 2020
Interest rate swaps	$	—	$	20.0	—	%	1.4	%	n/a
Interest rate swaps	$	25.0	$	15.0	1.7	%	1.6	%	Extending to January 2024
Delayed start interest rate swaps	$	—	$	10.0	—	%	1.7	%	n/a

The fair value of HBB's interest rate swap agreements was a payable of $1.2 million at December 31, 2020 and a payable of $0.1 million at December 31, 2019. The mark-to-market effect of interest rate swap agreements that are considered effective as hedges has been included in AOCI. The interest rate swap agreements held by HBB on December 31, 2020 are expected to continue to be effective as hedges.

The following table summarizes the fair value of derivative instruments at December 31 as recorded in the Consolidated Balance Sheets:

	Asset Derivatives					Liability Derivatives
	Balance sheet location	2020		2019		Balance sheet location	2020		2019
Interest rate swap agreements
Current	Prepaid expenses and other current assets	$	—	$	—	Other current liabilities	$	380	$	21
Long-term	Other non-current assets	—		—		Other long-term liabilities	779		61
Foreign currency exchange contracts
Current	Prepaid expenses and other current assets	—		—		Other current liabilities	518		308
Total derivatives		$	—	$	—		$	1,677	$	390