The carrying value of cash and cash equivalents and short-term debt approximates fair value. The fair value of long-term debt is determined based on recent trade information in the financial markets of the Company’s public debt or is determined by discounting future cash flows using interest rates available to the Company for issues with similar terms and maturities which is considered a Level 2 fair value measurement.

At September 29, 2024 and December 31, 2023, the Company had derivative financial instruments outstanding to hedge anticipated transactions and certain asset and liability related cash flows. These contracts, which have maturities ranging from July 2024 to December 2024, qualify as cash flow hedges under U.S. generally accepted accounting principles (“GAAP”). For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. Cash flows from derivative financial instruments designated as cash flow hedges are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.

Certain derivative contracts entered into to manage the cost of anticipated purchases of natural gas and aluminum have been designated by the Company as cash flow hedges. At September 29, 2024, these contracts included natural gas swaps covering approximately 20 thousand metric million British thermal units (“MMBTUs”). These contracts represented approximately 0.9% of anticipated usage in North America for the remainder of 2024. The Company also has certain natural gas hedges that it does not treat as cash flow hedges. See “Non-Designated Derivatives” below for a discussion of these hedges. At September 29, 2024, the Company had also designated swap contracts covering 133 metric tons of aluminum as cash flow hedges. The fair value of the Company’s commodity cash flow hedges netted to loss positions of $(4) and $(41) at September 29, 2024 and December 31, 2023, respectively. The amount of the loss included in accumulated other comprehensive loss at September 29, 2024 expected to be reclassified to the income statement during the next twelve months is $(4).

The Company has entered into forward contracts to hedge certain anticipated foreign currency denominated sales and purchases expected to occur in 2024 and 2025. The net positions of these contracts at September 29, 2024 were as follows (in thousands):


Currency	Action	Quantity
Colombian peso	purchase	5,942,202
Mexican peso	purchase	140,315
Polish zloty	purchase	32,938
Danish krone	purchase	11,593
Swedish krona	sell	(2,124)
Czech koruna	purchase	25,869
Canadian dollar	purchase	8,239
Euro	purchase	593
Turkish lira	purchase	11,092
Brazilian real	purchase	13,088
British pound	sell	(331)

The fair value of foreign currency cash flow hedges related to forecasted sales and purchases netted to a loss position of $(654) and a gain position of $1,502 at September 29, 2024 and December 31, 2023, respectively. Losses of $(654) are expected to be reclassified from accumulated other comprehensive income to the income statement during the next twelve months.

In 2023, the Company became a party to cross-currency swap agreements with a total notional amount of $500,000 to effectively convert a portion of the Company’s fixed-rate U.S. dollar denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The swap agreements, which had a maturity of December 18, 2026, provided for the Company to receive semi-annual interest payments in U.S. dollars at a fixed rate and to make semi-annual interest payments in euros at a fixed rate. The risk management objective of entering into the swap agreements was to manage foreign currency risk relating to net investments in certain European subsidiaries denominated in euros. The agreements were designated as net investment hedges for accounting purposes. On April 15, 2024, as a result of the strengthening of the U.S. dollar against the euro, as well as a reduction in the differential between U.S. and European interest rates, the Company terminated its swap agreements and received a net cash settlement of $9,068. The foreign currency translation gain of approximately $3,143, net of tax, is included as a component of “Accumulated other comprehensive loss.”

Following the unwind of the swaps, the Company entered into new cross-currency swap agreements with a total notional amount of $500,000 to effectively convert a portion of the Company’s fixed-rate U.S. dollar-denominated debt, including the semi-annual interest payments, to fixed-rate euro-denominated debt. The new swap agreements, which have a maturity of May 1, 2027, share the same risk management objective as the terminated cross-currency swap agreements and are also designated as net investment hedges for accounting purposes.

The gain or loss on the net investment hedge derivative instruments is included in the “Foreign currency translation” component of “Accumulated other comprehensive loss” until the net investment is sold, diluted, or liquidated. Interest payments received for the cross-currency swaps are excluded from the net investment hedge effectiveness assessment and are recorded in “Interest expense” in the Company’s Condensed Consolidated Statements of Income. The assumptions used in measuring fair value of the cross-currency swaps are considered level 2 inputs, which are based upon the Euro-to-U.S. dollar exchange rate market.

The fair value of the Company’s net investment hedges were loss positions of $(18,941) and $(5,073) at September 29, 2024 and December 31, 2023, respectively. Translation losses of $14,111 (net of income taxes of $4,830) and $3,779 (net of income taxes of $1,294) were reported as components of “Accumulated other comprehensive loss” within “Foreign currency items” at September 29, 2024 and December 31, 2023, respectively.

The Company routinely enters into other derivative contracts which are not designated for hedge accounting treatment under ASC 815. As such, changes in fair value of these non-designated derivatives are recorded directly to income and expense in the periods that they occur. Cash flows from derivative financial instruments not designated as hedges are classified as cash flows from operating activities in the Condensed Consolidated Statements of Cash Flows.

The Company routinely enters into forward contracts or swaps to economically hedge the currency exposure of intercompany debt and foreign currency denominated receivables and payables. The net currency positions of these non-designated contracts at September 29, 2024, were as follows (in thousands):


Currency	Action	Quantity
Colombian peso	purchase	64,773,834
Mexican peso	purchase	364,260
Canadian dollar	purchase	6,979
Thai baht	sell	(11,455)

The Company has entered into non-designated derivative contracts to manage the cost of anticipated purchases of natural gas. At September 29, 2024, these contracts consisted of natural gas swaps covering approximately 7.3 million MMBTUs and represented approximately 92% and 74% of anticipated usage for the remainder of 2024 and 2025, respectively.

In anticipation of the offering of the Notes, the Company entered into treasury lock derivative instruments with eleven banks, with a total notional principal amount of $900,000, on August 29, 2024. These instruments had the risk management objective of reducing the Company’s exposure to increases in the underlying Treasury index up to the date of pricing of the Notes. The derivatives were settled when the Notes priced on September 17, 2024, with the Company recognizing a loss on the settlement of $(11,088). The loss is included in “Interest expense” in the Company’s Condensed Consolidated Statements of Income for the three- and nine-month periods ended September 29, 2024.

The following table sets forth the location and fair values of the Company’s derivative instruments at September 29, 2024 and December 31, 2023:


Description	Balance Sheet Location	September 29, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Commodity Contracts	Prepaid expenses	$	32	$	67

Commodity Contracts	Accrued expenses and other	(36)		(108)

Foreign Exchange Contracts	Prepaid expenses	480		2,525

Foreign Exchange Contracts	Accrued expenses and other	(1,134)		(1,024)

Net Investment Hedge	Prepaid expense	4,836		5,567

Net Investment Hedge	Other liabilities	(23,777)		(10,640)
Derivatives not designated as hedging instruments:
Commodity Contracts	Prepaid expenses	99		12
Commodity Contracts	Other assets	346		—
Commodity Contracts	Accrued expenses and other	(3,265)		(6,782)
Commodity Contracts	Other liabilities	(33)		—
Foreign Exchange Contracts	Prepaid expenses	52		130

Foreign Exchange Contracts	Accrued expenses and other	(382)		(159)

While certain of the Company’s derivative contract arrangements with its counterparties provide for the ability to settle contracts on a net basis, the Company reports its derivative positions on a gross basis. There are no collateral arrangements or requirements in these agreements.

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the three-month periods ended September 29, 2024 and October 1, 2023, excluding the amount of foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to the carrying value of the capitalized expenditures:


Description	Amount of Gain or (Loss) Recognized in OCI on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated OCI Into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI Into Income
Derivatives in Cash Flow Hedging Relationships:
Three-month period ended September 29, 2024
Foreign Exchange Contracts	$	(444)	Net sales	$	(513)
			Cost of sales	(86)
Commodity Contracts	(21)		Cost of sales	(21)

Three-month period ended October 1, 2023
Foreign Exchange Contracts	$	(509)	Net sales	$	3,195
			Cost of sales	(1,180)
Commodity Contracts	140		Cost of sales	—

Description

Gain or (Loss)
Recognized

Location of Gain or (Loss) Recognized in
Income Statement

Derivatives not Designated as Hedging Instruments:

Three-month period ended September 29, 2024

Commodity Contracts

(1,377)

Cost of sales

Foreign Exchange Contracts

(1,573)

Selling, general and administrative

Three-month period ended October 1, 2023

Commodity Contracts

(2,118)

Cost of sales

Foreign Exchange Contracts

579

Selling, general and administrative

The following tables set forth the effect of the Company’s derivative instruments on financial performance for the nine-month periods ended September 29, 2024 and October 1, 2023, excluding the amount of foreign currency cash flow hedges that were reclassified from accumulated other comprehensive loss to the carrying value of the capitalized expenditures:


Description	Amount of Gain or (Loss) Recognized in OCI on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated OCI Into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI Into Income
Derivatives in Cash Flow Hedging Relationships:
Nine-month period ended September 29, 2024
Foreign Exchange Contracts	$	(2,094)	Net sales	$	153
			Cost of sales	(225)
Commodity Contracts	16		Cost of sales	(21)

Nine-month period ended October 1, 2023
Foreign Exchange Contracts	$	6,517	Net sales	$	6,772
			Cost of sales	(2,552)
Commodity Contracts	(6)		Cost of sales	(32)

Description

Gain or (Loss)
Recognized

Location of Gain or (Loss) Recognized in
Income Statement

Derivatives not Designated as Hedging Instruments:

Nine-month period ended September 29, 2024

Commodity Contracts

(3,465)

Cost of sales

Foreign Exchange Contracts

(4,039)

Selling, general and administrative

Nine-month period ended October 1, 2023

Commodity Contracts

(13,635)

Cost of sales

Foreign Exchange Contracts

4,651

Selling, general and administrative


	Nine-month period ended September 29, 2024				Nine-month period ended October 1, 2023
Description	Revenue		Cost of sales		Revenue		Cost of sales
Total amount of income and expense line items presented in the Condensed Consolidated Statements of Income	$	153	$	(246)	$	6,772	$	(2,584)















Gain or (loss) on cash flow hedging relationships:
Foreign exchange contracts:
Amount of gain/(loss) reclassified from accumulated other comprehensive income into net income	$	153	$	(225)	$	6,772	$	(2,552)


Commodity contracts:
Amount of gain reclassified from accumulated other comprehensive income into net income	$	—	$	(21)	$	—	$	(32)