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v3.22.2.2
Derivative instruments
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12 Months Ended |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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Derivative instruments |
Derivative instruments The Company manages exposure to interest rates and foreign currency movements by entering into derivative contracts from time to time, as movements in such markets could impact the financial results and Consolidated Statements of Financial Position. The changes in estimated fair values of derivative instruments result from changes in interest rates and foreign currency exchange rates. Such changes serve to offset exposure in related business assets or liabilities. The Company is exposed to credit loss in the event of nonperformance by a counterparty. Certain of the Company's derivative instruments are subject to master netting agreements. In certain circumstances, this agreement allows the Company to net-settle amounts payable or receivable related to multiple derivative transactions with the same counterparty. The fair values of derivative instruments are presented on a gross basis, even when the derivative instruments are subject to master netting arrangements. Collateral is generally not required of the Company or of the counterparties to the master netting agreements, and no cash collateral was received or pledged under such agreements as of July 31, 2022 or July 31, 2021. The Company does not enter into derivative instruments for trading or speculative purposes. The Company's accounting policies do not apply hedge accounting treatment to derivative instruments. As of July 31, 2022, the Company held the following interest rate swap agreements, which fixed the interest rate on the applicable notional amount of outstanding variable rate debt: As discussed in Note 14 (Commitments and contingencies), the Company manages annual barrel purchases by engaging domestic and foreign cooperages to provide specified barrel quantities on agreed delivery dates. Some of these invoices are paid in Euros. In order to reduce the foreign exchange risk associated with the Euro to U.S. Dollar conversion rate, the Company enters into foreign currency forward contracts aligning settlement dates with expected barrel delivery and the anticipated payments to various coopers. The total notional amounts of the Company’s derivative instruments outstanding are as follows: | | | | | | | | | | | | | July 31, | (in thousands) | 2022 | | 2021 | Derivative instruments not designated as hedging instruments | | | | Interest rate swap contracts | $ | 100,000 | | | $ | 100,000 | | Foreign currency forward contracts | 2,793 | | | 2,369 | | Total derivative instruments not designated as hedging instruments | $ | 102,793 | | | $ | 102,369 | |
Results of period derivative activity The estimated fair value and classification of derivative instruments on the accompanying Consolidated Statements of Financial Position are as follows for the years ended: | | | | | | | | | | | | | | | | | July 31, | (in thousands) | | 2022 | | 2021 | Derivative instruments not designated as hedging instruments | | | | | Classification | | | | Interest rate swap contracts | | | | | Derivative instrument | Long-term asset | $ | 1,443 | | | $ | — | | | | | | | Derivative instrument | Other long-term liabilities | — | | | 480 | | Total interest rate swap contract liability | | $ | 1,443 | | | $ | 480 | | | | | | | Foreign currency forward contracts | | | | | Derivative instrument | Other current assets | — | | | 5 | | Derivative instrument | Other current liabilities | 223 | | | — | | Total foreign currency contract asset | | $ | 223 | | | $ | 5 | |
The amounts and classification of the gains and losses in the Consolidated Statements of Operations related to derivative instruments not designated as hedging instruments are as follows: | | | | | | | | | | | | | | | | | | | | | | | Fiscal years ended July 31, | (in thousands) | Classification | 2022 | | 2021 | | 2020 | Interest rate swap contracts | Other (income) expense, net | $ | (1,923) | | | $ | (5,961) | | | $ | 2,596 | | Foreign currency forward contracts | Other (income) expense, net | 228 | | | 113 | | | (256) | | Total (gains) losses | | $ | (1,695) | | | $ | (5,848) | | | $ | 2,340 | |
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- DefinitionThe 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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