We use derivatives to partially offset our exposure to foreign currency, interest rate, aluminum and other commodity price 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 the full financial impact resulting from movements in foreign currency exchange rates, interest rates, and aluminum or other commodity prices.

To help mitigate gross margin fluctuations due to changes 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.

We record all derivatives in the condensed consolidated balance sheets at fair value. Our accounting treatment for these instruments is based on the hedge designation. Gains or losses on derivatives that are designated as hedging instruments are recorded in accumulated other comprehensive income (loss) (“AOCI”) until the hedged item is recognized in earnings, at which point accumulated gains or losses will be recognized in earnings and classified with the underlying hedged transaction. Derivatives that are not designated as hedging instruments are adjusted to fair value through earnings in the financial statement line item to which the derivative relates. The Company has derivatives that are designated as hedging instruments, as well as derivatives that do not qualify for designation as hedging instruments.

The following tables display the fair value of derivatives by balance sheet line item at June 30, 2021 and December 31, 2020:

	June 30, 2021
	Other Current Assets		Other Non-current Assets		Accrued Liabilities		Other Non-current Liabilities
(Dollars in thousands)
Foreign exchange forward contracts designated as hedging instruments	$	2,642	$	6,404	$	456	$	2,147
Foreign exchange forward contracts not designated as hedging instruments		277		—		1,237		—
Aluminum forward contracts designated as hedging instruments		1,609		—		—		—
Natural gas forward contracts designated as hedging instruments		1,509		329		4		—
Interest rate swap contracts designated as hedging instruments		—		—		4,754		1,904
Total derivative financial instruments	$	6,037	$	6,733	$	6,451	$	4,051

	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

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

	June 30, 2021					December 31, 2020
	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	$	472,229	$	6,443		$	421,253	$	1,669
Foreign exchange forward contracts not designated as hedging instruments		22,243		(960	)		71,217		1,045
Aluminum forward contracts designated as hedging instruments		12,446		1,609			4,068		262
Natural gas forward contracts designated as hedging instruments		5,447		1,834			5,523		948
Interest rate swap contracts designated as hedging instruments		200,000		(6,658	)		200,000		(8,965	)
Total derivative financial instruments	$	712,365	$	2,268		$	702,061	$	(5,041	)

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. 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 AOCI, the amounts reclassified from AOCI into earnings and the amounts recognized directly into earnings for the three and six months ended June 30, 2021 and 2020:

Three Months Ended June 30, 2021	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	$	15,447	$	758	$	1,638
Total	$	15,447	$	758	$	1,638

Six Months Ended June 30, 2021	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	$	6,985	$	319	$	(1,266	)
Total	$	6,985	$	319	$	(1,266	)

Three Months Ended June 30, 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	$	15,298		$	(3,980	)	$	1,692
Total	$	15,298		$	(3,980	)	$	1,692

Six Months Ended June 30, 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	$	(29,999	)	$	(5,094	)	$	(3,747	)
Total	$	(29,999	)	$	(5,094	)	$	(3,747	)