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Derivative Instruments
 6 Months Ended
Jun. 30, 2023
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Instruments

Note 12 – Derivative Instruments

Certain divisions of the ALP segment are subject to risk from increases in the price of commodities (copper and aluminum) used in the production of inventory. To minimize this risk, futures contracts are entered into which are designated as cash flow hedges. At June 30, 2023, approximately 50%, or $2,725, of anticipated copper purchases over the next nine months and 61%, or $695, of anticipated aluminum purchases over the next six months are hedged. At June 30, 2022, approximately 33%, or $2,533, of anticipated copper purchases over the next year and 67%, or $935, of anticipated aluminum purchases over the next year were hedged.

The Corporation periodically enters into purchase commitments to cover a portion of its anticipated natural gas and electricity usage. The commitments qualify as normal purchases and, accordingly, are not reflected on the condensed consolidated balance sheets. At June 30, 2023, the Corporation has purchase commitments covering approximately 23%, or $3,478, of anticipated natural gas usage through December 31, 2025 for two of its subsidiaries and approximately 19%, or $1,329, of anticipated electricity usage through December 31, 2025 for two of its subsidiaries. Purchases of natural gas and electricity under previously existing commitments equaled $904 and $1,437 for the three and six months ended June 30, 2023, respectively. Purchases of natural gas and electricity under previously existing commitments equaled $1,651 and $2,238 for the three and six months ended June 30, 2022, respectively.

The Corporation previously entered into foreign currency purchase contracts to manage the volatility associated with euro-denominated progress payments to be made for certain machinery and equipment. As of December 31, 2010, all contracts were settled, the underlying fixed assets were placed in service and the change in fair value of the foreign currency purchase contracts deferred in accumulated other comprehensive loss began being amortized to earnings (depreciation and amortization) over the life of the underlying assets.

No portion of the existing cash flow hedges is considered to be ineffective, including any ineffectiveness arising from the unlikelihood of an anticipated transaction to occur. Additionally, no amounts have been excluded from assessing the effectiveness of a hedge.

The Corporation does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes.

(Loss) gain on foreign exchange transactions included in other income – net equaled $(1,244) and $(1,159) for the three and six months ended June 30, 2023, respectively, and $1,303 and $1,559 for the three and six months ended June 30, 2022, respectively.

The change in the fair value of the cash flow contracts is recorded as a component of accumulated other comprehensive loss. The balances as of June 30, 2023 and 2022 and the amounts recognized as and reclassified from accumulated other comprehensive loss for each of the periods are summarized below. Amounts are after tax where applicable. Certain amounts recognized as comprehensive income (loss) or reclassified from accumulated other comprehensive loss have no tax effect due to the Corporation having a valuation allowance recorded against the deferred income tax assets for the jurisdiction where the income or expense is recognized.

Three Months Ended June 30, 2023

 

Beginning of
the Period

 

 

Recognized

 

 

Reclassified

 

 

End of
the Period

 

Foreign currency purchase contracts

 

$

102

 

 

$

-

 

 

$

8

 

 

$

94

 

Futures contracts – copper and aluminum

 

 

114

 

 

 

(278

)

 

 

65

 

 

 

(229

)

 

$

216

 

 

$

(278

)

 

$

73

 

 

$

(135

)

Three Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency purchase contracts

 

$

128

 

 

$

-

 

 

$

6

 

 

$

122

 

Futures contracts – copper and aluminum

 

 

497

 

 

 

(1,001

)

 

 

158

 

 

 

(662

)

 

$

625

 

 

$

(1,001

)

 

$

164

 

 

$

(540

)

Six Months Ended June 30, 2023

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency purchase contracts

 

$

108

 

 

$

-

 

 

$

14

 

 

$

94

 

Futures contracts – copper and aluminum

 

 

44

 

 

 

(100

)

 

 

173

 

 

 

(229

)

 

$

152

 

 

$

(100

)

 

$

187

 

 

$

(135

)

Six Months Ended June 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency purchase contracts

 

$

135

 

 

$

-

 

 

$

13

 

 

$

122

 

Futures contracts – copper and aluminum

 

 

142

 

 

 

(558

)

 

 

246

 

 

 

(662

)

 

$

277

 

 

$

(558

)

 

$

259

 

 

$

(540

)

The change in fair value reclassified or expected to be reclassified from accumulated other comprehensive loss to earnings is summarized below. All amounts are pre-tax.

 

 

Location of Gain (Loss)
in Statements

 

Estimated to
be Reclassified
in the Next 12 Months

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

of Operations

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Foreign currency purchase contracts

 

Depreciation and amortization

 

$

28

 

 

$

8

 

 

$

6

 

 

$

14

 

 

$

13

 

 

Futures contracts – copper and aluminum

 

Costs of products sold
(excluding depreciation and amortization)

 

$

(238

)

 

$

68

 

 

$

163

 

 

$

179

 

 

$

254