Derivative Financial Instruments

6 Months Ended

Jun. 28, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Cash Flow Hedges

Our cash flow hedges consists of forward interest rate swaps to manage our exposure to interest rate movements on a portion of our debt through January 1, 2031. Our forward interest rate swaps hedge forecasted transactions through January 1, 2031.

The notional amounts of derivative instruments are as follows:


	(Dollars in thousands)
	June 28, 2025		December 31, 2024
Derivative instruments designated as hedging instruments:
Interest rate contracts	$	150,000	$	150,000

The following table summarizes the fair value and presentation on the condensed consolidated balance sheets for derivative instruments:


		(Dollars in thousands)
	Balance Sheet Location	June 28, 2025		December 31, 2024
Derivative instruments designated as hedging instruments:
Interest rate contracts	Other assets, current	$	3,203	$	3,576
	Other assets	9,802		14,606

Accumulated other comprehensive income activities during the six months ended June 28, 2025 were as follows (in thousands):


	December 31, 2024		Six Months Ended June 28, 2025				June 28, 2025
	Balance		Changes in Fair Value Recognized		Reclassifications to Income Statement		Balance
Cash flow hedges, before tax totals	$	17,831	$	(3,190)	$	(1,926)	$	12,715

Unrealized (losses) gains associated with our hedging transactions recognized in other comprehensive income are presented in the following table:


	(Dollars in thousands) Three Months Ended				(Dollars in thousands) Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Change in Other Comprehensive Income:
Interest rate contracts	$	(1,558)	$	211	$	(3,932)	$	2,412

We began reclassifying gains/losses associated with our cash flow hedges from accumulated other comprehensive income to the condensed statements of income when the Forward Interest Rate Swaps became effective as of January 1, 2024. We reclassify amounts to income as the hedged item impacts earnings and those amounts are presented in the following table:


	(Dollars in thousands) Three Months Ended				(Dollars in thousands) Six Months Ended
	June 28, 2025		June 29, 2024		June 28, 2025		June 29, 2024
Interest rate contracts:
Interest expense	$	979	$	1,358	$	1,926	$	2,698

The pre-tax deferred gains recorded in other comprehensive income that will mature in the next 12 months total $3.1 million.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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+ Details

DUCOMMUN INC /DE/ 10-Q