Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2025

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Note 6 — Derivative Instruments and Hedging Activities

The Company uses derivative instruments, including foreign currency forward contracts and commodity futures contracts, to manage its exposures to foreign exchange and commodity prices. Commodity futures contracts are used as hedges of market price risks associated with the anticipated purchases of certain raw materials (primarily sugar). Foreign currency forward contracts are used as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States, and periodic equipment purchases from foreign suppliers denominated in a foreign currency. The Company does not engage in trading or other speculative use of derivative instruments.

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Statement of Financial Position. Derivative assets are recorded in other receivables and derivative liabilities are recorded in accrued liabilities. The Company uses hedge accounting for its foreign currency and commodity derivative instruments. Derivatives that qualify for hedge accounting are designated as cash flow hedges by formally documenting the hedge relationships, including identification of the hedging instruments, the hedged items and other critical terms, as well as the Company’s risk management objectives and strategies for undertaking the hedge transaction. As of March 31, 2025, December 31, 2024 and March 31, 2024, all derivative instruments are accounted for using hedge accounting.

Changes in the fair value of the Company’s cash flow hedges are recorded in accumulated other comprehensive loss, net of tax, and are reclassified to earnings in the periods in which earnings are affected by the hedged item. Substantially all amounts reported in accumulated other comprehensive loss for commodity derivatives

are expected to be reclassified to cost of goods sold. Approximately $387, $(55), and $(109) of this accumulated comprehensive loss (gain) is expected to be reclassified to earnings in 2025, 2026 and 2027, respectively. Approximately $388 and $232 reported in accumulated other comprehensive loss for foreign currency derivatives is expected to be reclassified to other income, net in 2025 and 2026, respectively.  

The following tables summarize the Company’s outstanding derivative contracts and their effects on its Condensed Consolidated Statements of Financial Position at March 31, 2025, December 31, 2024 and March 31, 2024:

	March 31, 2025
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency derivatives	$	19,625	$	—	$	(620)
Commodity derivatives		15,223		326		(549)
Total derivatives			$	326	$	(1,169)
	December 31, 2024
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency derivatives	$	26,129	$	—	$	(818)
Commodity derivatives		20,959		39		(2,205)
Total derivatives			$	39	$	(3,023)
	March 31, 2024
	Notional
	Amounts		Assets		Liabilities
Derivatives designated as hedging instruments:
Foreign currency derivatives	$	9,646	$	25	$	(54)
Commodity derivatives		24,413		211		(770)
Total derivatives			$	236	$	(824)

The effects of derivative instruments on the Company’s Condensed Consolidated Statements of Earnings and Retained Earnings and the Condensed Consolidated Statements of Comprehensive Earnings for periods ended March 31, 2025 and March 31, 2024 are as follows:

	For Quarter Ended March 31, 2025
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain (Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency derivatives	$	(39)	$	(237)	$	—
Commodity derivatives		1,052		(891)		—
Total	$	1,013	$	(1,128)	$	—
	For Quarter Ended March 31, 2024
					Gain (Loss)
			Gain (Loss)		on Amount Excluded
	Gain (Loss)		Reclassified from		from Effectiveness
	Recognized		Accumulated OCI		Testing Recognized
	in OCI		into Earnings		in Earnings
Foreign currency derivatives	$	(358)	$	(26)	$	—
Commodity derivatives		1,558		(409)		—
Total	$	1,200	$	(435)	$	—