Note 4 - Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

4

. 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.

The Company periodically utilizes commodity derivatives and foreign currency forward purchase and sales contracts in the normal course of business. Because these contracts do

not

qualify for hedge accounting, the related gains and losses are recorded in the Company’s condensed consolidated statements of comprehensive income. These gains and losses are

not

material to the Company’s condensed consolidated financial statements.

Interest Rate Swaps

In

October 2013,

the Company entered into

two

interest rate swap agreements. In

May 2014,

the Company entered into

one

interest rate swap agreement. In

2017,

the Company entered into

twenty

interest rate swap agreements. 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 therefore, the effective portions of the gains or losses are reported as a component of accumulated other comprehensive loss (AOCL) in the condensed consolidated balance sheets. The amount of gains (losses), net of tax, recognized for the

three

months ended

March 31, 2019

and

2018

were $(

5,124

) and

$6,647,

respectively. 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 9			December 31, 201 8
Commodity contracts	$	0		$	(160	)
Foreign currency contracts		(221	)		(117	)
Interest rate swaps		1,383			8,307

The fair value of the foreign currency contracts is included in other accrued liabilities and the fair value of the interest rate swaps is included in other assets in the condensed consolidated balance sheets as of

March 31, 2019.

The fair values of the commodity and foreign currency contracts are included in other accrued liabilities, and the fair value of the interest rate swaps is included in other assets in the consolidated balance sheet as of

December 31, 2018.

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

March 31, 2019

and

December 31, 2018

is an asset of

$1,186

and

$8,220,

respectively, which represents the amount the Company would receive upon exit of the agreements on those dates.