XML 29 R17.htm IDEA: XBRL DOCUMENT
v3.22.4

Derivative Instruments | 12 Months Ended
--- | ---
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments The Company enters into derivative instrument agreements, including forward foreign currency exchange contracts, interest rate swaps, and cross currency swaps to manage risk in connection with changes in foreign currency and interest rates. The Company hedges committed exposures and does not engage in speculative transactions. The Company only enters into derivative instrument agreements with counterparties who have highly rated credit. The Company produces certain of its concrete products from a wholly owned subsidiary in China, and as a result is exposed to variability in cash outflows associated with changes in the foreign exchange rate between the U.S. Dollar and the Chinese Yuan (CNY). In November 2022, the Company entered into a series of foreign currency derivative contracts that mature monthly between January 2023 and, December 2023 to buy CNY 102.4 million in the aggregate by selling a total of $14.8 million. These forward contracts are accounted for as cash flow hedges under the accounting standards, and fair value is included in other current assets or other current liabilities, as applicable, in the consolidated balance sheet. Net deferred gains and losses on these contracts relating to changes in fair value are included in accumulated other OCI and are reclassified into cost of sales in the consolidated statements of operations in the which the hedged items are recorded in the same period the hedged item affects earnings. There were no amounts recognized for gains or losses on these contracts during the year ended December 31, 2022. Changes in fair value of any forward contracts that are determined to be ineffective are immediately reclassified from OCI into earnings. The amounts deferred in OCI are expected to be recognized as a component of cost of sales in the consolidated statements of operations during 2023 and 2024. Beginning in March 2022, the Company entered into a forward foreign currency contract expiring in March 2029 to hedge its exposure to adverse foreign currency exchange rate movements for its operations in Europe and elected the spot method for designating this contract as a net investment hedge with the excluded forward point amortized to interest expense. During May 2022, the Company settled the March 2022 forward foreign currency contract for $3.9 million in cash, which included $0.4 million in recognized forward points, terminated the hedge accounting treatment and simultaneously entered into a new forward foreign currency contract expiring in March 2029 with the same notional amount at a new forward rate. The Company also elected the spot method for designating the May 2022 contract as a net investment hedge. The $3.5 million gain recognized on the March 2022 contract excluding recognized forward points is deferred in OCI and will remain in OCI until either the sale or substantially complete liquidation of the hedged subsidiaries. Beginning in March 2022, the Company also converted a Euro-denominated ("EUR"), fixed rate obligation into a U.S. Dollar fixed rate obligation using a receive fixed, pay fixed cross currency swap, which was designated as a cash flow hedge. During May 2022, the Company settled the March 2022 cross currency swap for $22.4 million in cash, which was comprised of $21.3 million gain on the swap excluding accrued interest and $1.1 million of net interest income accrued according to the terms of the swap. The Company terminated the hedge accounting treatment and simultaneously entered into a new cross currency swap expiring in March 2029 with a lower notional amount for the US dollar denominated leg at a new US dollar interest rate. An amount of $28.3 million was reclassified out of OCI into earnings to offset the currency loss on the underlying security being hedged resulting in a net $7.0 million hedge accounting reserve balance within OCI, which is being amortized to interest expense in the consolidated statements of operations through the termination of the underlying hedged intercompany debt in March 2029. In addition, the Company converted its domestic U.S. variable rate debt to fixed rate debt using a receive variable, pay fixed interest rate swap expiring March 2027. The interest rate swap contract is also designated as a cash flow hedge. As of December 31, 2022, the aggregate notional amount of the Company's outstanding interest rate contracts, cross currency swap contracts, EUR forward contract and CNY forward contracts were $583.2 million, $454.1 million, $321.7 million and $14.8 million, respectively. As of December 31, 2021, there were no outstanding forward contracts on its Chinese Yuan denominated purchases. Changes in fair value of any forward contracts that are determined to be ineffective are immediately reclassified from OCI into earnings. There were no amounts recognized due to ineffectiveness during the twelve months ended December 31, 2022. The effects of fair value and cash flow hedge accounting on the consolidated statements of operations for the periods ended December 31, were as follows:
| 2022 |  | 2021
(in thousands) | Cost of sales | Interest expense, net | Other & foreign exchange loss, net |  | Cost of sales
Total amounts of income and expense line items presented in the Consolidated Statements of Operations in which the effects of fair value or cash flow hedges are recorded | $ | 1,174,794 |  | $ | (7,594) |  | $ | (3,408) |  |  | $ | 818,187 |
The effects of fair value and cash flow hedging |  |  |  |  |
| Gain or (loss) on cash flow hedging relationships |  |  |  |  |
|  | Interest contracts: |  |  |  |  |
|  |  | Amount of gain or (loss) reclassified from OCI to earnings |  | (1,012) |  |  |  |
|  | Cross currency swap contract |  |  |  |  |
|  |  | Amount of gain or (loss) reclassified from OCI to earnings |  | 5,650 |  | 14,349 |  |  |
|  | Forward contract |  |  |  |  |
|  |  | Amount of gain or (loss) reclassified from OCI to earnings | 122 |  |  |  |  | 472 |
The effects of derivative instruments on the consolidated statements of operations for the twelve months ended December 31, 2022 and December 31, 2021 were as follows:
Cash Flow Hedging Relationships | Gain (Loss) Recognized in OCI |  | Location of Gain (Loss) Reclassified from OCI into Earnings | Gain (Loss) Reclassified from OCI into Earnings
| 2022 | 2021 |  |  | 2022 | 2021
Interest rate contracts | $ | 26,830 |  | $ | — |  |  | Interest expense | $ | (1,012) |  | $ | — |
Cross currency contracts | 26,174 |  | — |  |  | Interest expense | 5,650 |  | — |
|  |  |  | FX gain (loss) | 14,349 |  | — |
Forward contracts | 231 |  | 163 |  |  | Cost of goods sold | — |  | 472 |
Total | $ | 53,235 |  | $ | 163 |  |  |  | $ | 18,987 |  | $ | 472 |
For the twelve months ended December 31, 2022, gains on the net investment hedge of $13.0 million were included in OCI. For the twelve months ended December 31, 2022, gains excluded of $3.3 million, were reclassified from OCI to interest expense. As of December 31, 2022, the aggregate fair values of the Company’s derivative instruments were comprised of assets totaling $43.9 million, and liabilities of $8.0 million on the consolidated balance sheets. As of December 31, 2022, the Company expects it will reclassify net gains of approximately $20.2 million, currently recorded in AOCI, into interest expense in earnings within the next twelve months. However, the actual amount reclassified could vary due to future changes in the fair value of these derivatives.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration