Derivative Financial Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

NOTE 4 - DERIVATIVE FINANCIAL INSTRUMENTS

Derivative Instruments and Hedging Activities

We use derivatives to partially offset our exposure to foreign currency, interest rate, aluminum and other commodity risks. We may enter into forward contracts, option contracts, swaps, collars or other derivative instruments to offset some of the risk on expected future cash flows and on certain existing assets and liabilities. However, we may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign currency exchange rates, interest rates, and aluminum and natural gas commodity prices.

To help protect gross margins from fluctuations in foreign currency exchange rates, certain of our subsidiaries, whose functional currency is the U.S. dollar or the Euro, hedge a portion of their forecasted foreign currency costs denominated in the Mexican Peso and Polish Zloty, respectively. We may hedge portions of our forecasted foreign currency exposure up to 48 months.

The following tables display the fair value of derivatives by balance sheet line item at December 31, 2020 and December 31, 2019:

	December 31, 2020
	Other Current Assets		Other Non-current Assets		Accrued Liabilities		Other Non-current Liabilities
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	1,218	$	6,531	$	3,435	$	2,645
Foreign exchange forward contracts not designated as hedging instruments		1,167		—		122		—
Aluminum forward contracts designated as hedging instruments		262		—		—		—
Natural gas forward contracts designated as hedging instruments		816		224		22		70
Interest rate swap contracts designated as hedging instruments		—		—		4,771		4,194
Total derivative financial instruments	$	3,463	$	6,755	$	8,350	$	6,909

	December 31, 2019
	Other Current Assets		Other Non-current Assets		Accrued Liabilities		Other Non-current Liabilities
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	7,808	$	12,821	$	60	$	100
Foreign exchange forward contracts not designated as hedging instruments		1,196		—		554		—
Aluminum forward contracts designated as hedging instruments		60		—		127		—
Natural gas forward contracts designated as hedging instruments		81		7		1,312		727
Interest rate swap contracts designated as hedging instruments		—		—		2,304		3,525
Total derivative financial instruments	$	9,145	$	12,828	$	4,357	$	4,352

The following table summarizes the notional amount and estimated fair value of our derivative financial instruments:

	December 31, 2020					December 31, 2019
	Notional U.S. Dollar Amount		Fair Value			Notional U.S. Dollar Amount		Fair Value
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	421,253	$	1,669		$	449,181	$	20,469
Foreign exchange forward contracts not designated as hedging instruments		71,217		1,045			73,491		642
Aluminum forward contracts designated as hedging instruments		4,068		262			9,405		(67	)
Natural gas forward contracts designated as hedging instruments		5,523		948			5,816		(1,951	)
Interest rate swap contracts designated as hedging instruments		200,000		(8,965	)		260,000		(5,829	)
Total derivative financial instruments	$	702,061	$	(5,041	)	$	797,893	$	13,264

Notional amounts are presented on a net basis. The notional amounts of the derivative financial instruments do not represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the financial risks described above. The amounts exchanged are calculated by reference to the notional amounts and by other terms of the derivatives, such as interest rates, foreign currency exchange rates or commodity prices.

The following tables summarize the gain or loss recognized in accumulated other comprehensive income or loss (“AOCI”) for the years ended December 31, 2020 and 2019, the amounts reclassified from AOCI into earnings and the amounts recognized directly into earnings for the years ended December 31, 2020 and 2019:

Year Ended December 31, 2020	Amount of Gain or (Loss) Recognized in AOCI on Derivatives			Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income			Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
(Dollars in thousands)
Derivative Contracts	$	(11,689	)	$	(8,365	)	$	2,098
Total	$	(11,689	)	$	(8,365	)	$	2,098

Year Ended December 31, 2019	Amount of Gain or (Loss) Recognized in AOCI on Derivatives		Amount of Pre-tax Gain or (Loss) Reclassified from AOCI into Income		Amount of Pre-tax Gain or (Loss) Recognized in Income on Derivatives
(Dollars in thousands)
Derivative Contracts	$	13,156	$	3,746	$	4,320
Total	$	13,156	$	3,746	$	4,320