. Derivative Instruments and Hedging Activities

The Company records all derivatives in accordance with

Accounting Standards Codification (ASC)

815,

Derivatives and Hedging

, which requires derivative instruments be reported on the condensed consolidated balance sheets at fair value and establishes criteria for designation and effectiveness of hedging relationships. The Company is exposed to market risk such as changes in commodity prices, foreign currencies and interest rates. The Company does not hold or issue derivative financial instruments for trading purposes.

Commodities

The Company

is exposed to significant price fluctuations in commodities it uses as raw materials, and periodically utilizes commodity derivatives to mitigate the impact of these potential price fluctuations on its financial results and its economic well-being. These derivatives typically have maturities of less than

eighteen

months. At

March

31,

2017,

December

31,

2016

and

March

31,

2016,

the Company had

one,

one

and

zero

commodity contracts outstanding, respectively, covering the purchases of copper.

Because these contracts do not qualify for hedge

accounting, the related gains and losses are recorded in cost of goods sold in the Company’s condensed consolidated statements of comprehensive income. Net gains (losses) recognized for the

three

months ended

March

31,

2017

and

2016

were

$183

and

$(6),

respectively.

Foreign Currencies

The Company is exposed to foreign currency exchange risk as a result of transactions denominated in currencies

other than the U.S. Dollar. The Company periodically utilizes foreign currency forward purchase and sales contracts to manage the volatility associated with certain foreign currency purchases and sales in the normal course of business. Contracts typically have maturities of

twelve

months or less. As of

March

31,

2017,

December

31,

2016

and

March

31,

2016,

the Company had

nineteen,

thirty

eight

and

nine

foreign currency contracts outstanding, respectively.

Because these contracts do not qualify for

hedge accounting, the related gains and losses are recorded in cost of goods sold in the Company’s condensed consolidated statements of comprehensive income. Net losses recognized for the

three

months ended

March

31,

2017

and

2016

were

$201

and

$179,

respectively.

Interest Rate Swaps

October

2013,

the Company entered into

two

interest rate swap agreements, and in

May

2014,

the Company entered into an additional interest rate swap agreement. The Company formally documented all relationships between interest rate hedging instruments and the related hedged items, as well as its risk-management objectives and strategies for undertaking various hedge transactions. These interest rate swap agreements qualify as cash flow hedges, and accordingly, the effective portions of the gains or losses are reported as a component of accumulated other comprehensive loss (AOCL). The cash flows of the swaps are recognized as adjustments to interest expense each period. The ineffective portions of the derivatives’ changes in fair value, if any, are immediately recognized in earnings.

Fair Value

The following table presents the fair value of

all of the Company’s derivatives:

	March 31 , 201 7			December 31, 201 6
Commodity contracts	$	585		$	623
Foreign currency contracts		(117	)		(150	)
Interest rate swaps		(1,016	)		(1,739	)

The fair

value of the commodity contract is included in other assets, the fair value of the foreign currency contracts are included in other accrued liabilities, and the fair value of the interest rate swaps are included in other long-term liabilities in the condensed consolidated balance sheets as of

March

31,

2017

and

December

31,

2016.

Excluding the impact of credit risk, the fair value of the derivative contracts as of

March

31,

2017

and

December

31,

2016

is a liability of

$566

and

$1,295,

respectively, which represents the amount the Company would need to pay to exit the agreements on those dates.

The amount of

gains (losses) recognized in AOCL in the condensed consolidated balance sheets on the effective portion of interest rate swaps designated as hedging instruments for the

three

months ended

March

31,

2017

and

2016

were

$440

and

$(1,154),

respectively. The amount of losses recognized in cost of goods sold in the condensed consolidated statements of comprehensive income for commodity and foreign currency contracts not designated as hedging instruments for the

three

months ended

March

31,

2017

and

2016

were

$18

and

$185,

respectively.