Derivative Instruments

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

10. Derivative Instruments

Certain of the Corporation’s operations are subject to risk from exchange rate fluctuations in connection with sales in foreign currencies. To minimize this risk, foreign currency sales contracts are entered into which are designated as cash flow or fair value hedges. As of March 31, 2017, approximately $17,088 of anticipated foreign-denominated sales has been hedged which are covered by fair value contracts settling at various dates through April 2018. The fair value of assets held as collateral for the fair value contracts as of March 31, 2017 approximated $5,624, including a $5,000 standby letter of credit.

Additionally, certain of the divisions of the Air and Liquid Processing segment are subject to risk from increases in the price of commodities (copper and aluminum) used in the production of inventory. To minimize this risk, futures contracts are entered into which are designated as cash flow hedges. At March 31, 2017, approximately 46% or $2,350 of anticipated copper purchases over the next 12 months and 56% or $435 of anticipated aluminum purchases over the next six months are hedged.

The Corporation previously entered into foreign currency purchase contracts to manage the volatility associated with Euro-denominated progress payments to be made for certain machinery and equipment. As of December 31, 2010, all contracts had been settled and the underlying fixed assets were placed in service.

No portion of the existing cash flow or fair value hedges is considered to be ineffective, including any ineffectiveness arising from the unlikelihood of an anticipated transaction to occur. Additionally, no amounts have been excluded from assessing the effectiveness of a hedge.

The Corporation does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes.

(Losses) gains on foreign exchange transactions included in other income (expense) approximated $(1,064) and $1,173 for the three months ended March 31, 2017, and 2016, respectively.

The location and fair value of the foreign currency sales contracts recorded on the condensed consolidated balance sheets were as follows:

	Location	March 31, 2017		December 31, 2016
Fair value hedge contracts	Other current assets	$	206	$	214
	Other noncurrent assets		0		2
	Other current liabilities		293		940
	Other noncurrent liabilities		2		35
Fair value hedged items	Receivables		48		121
	Other current assets		269		808
	Other noncurrent assets		3		45
	Other current liabilities		173		233
	Other noncurrent liabilities		0		5

The change in the fair value of the cash flow contracts is recorded as a component of accumulated other comprehensive loss. The balances as of March 31, 2017, and 2016, and the amount recognized as and reclassified from accumulated other comprehensive loss for each of the periods is summarized below. Amounts are after-tax, where applicable. Certain amounts recognized as and reclassified from comprehensive income (loss) for 2017 have no tax effect due to the Corporation recording a valuation allowance against its deferred income tax assets in the related jurisdictions.

Three Months Ended March 31, 2017	Comprehensive Income (Loss) Beginning of the Year			Plus Recognized as Comprehensive Income (Loss)		Less Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss			Comprehensive Income (Loss) End of the Period
Foreign currency sales contracts	$	0		$	0	$	0		$	0
Foreign currency purchase contracts		216			0		7			209
Futures contracts – copper and aluminum		335			224		148			411
	$	551		$	224	$	155		$	620
Three Months Ended March 31, 2016
Foreign currency sales contracts	$	4		$	3	$	7		$	0
Foreign currency purchase contracts		241			0		4			237
Futures contracts – copper and aluminum		(200	)		15		(146	)		(39	)
	$	45		$	18	$	(135	)	$	198

The change in fair value reclassified or expected to be reclassified from accumulated other comprehensive loss to earnings is summarized below. All amounts are pre-tax.

	Location of Gain (Loss) in Statements	Estimated to be Reclassified in the Next		Three Months Ended March 31,
	of Operations	12 Months		2017		2016
Foreign currency sales contracts – cash flow hedges	Net sales	$	0	$	0	$	10
Foreign currency purchase contracts	Depreciation and amortization		27		7		7
Futures contracts – copper and aluminum	Costs of products sold (excluding depreciation and amortization)		411		148		(236	)