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Derivative Financial Instruments | 12 Months Ended
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Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Note 15 — Derivative Financial Instruments The Company had treasury lock agreements to protect against unfavorable movements in the benchmark treasury rate related to the issuance of our senior unsecured notes. These hedges were designated as cash flow hedges, thus any change in fair value was recorded as a component of other comprehensive income (loss). As part of the issuance of our senior notes, we net settled these derivatives for $10 million in cash and the deferred gains recorded in other comprehensive income (loss) will be released to interest expense over the life of the senior notes. The effect of these settled treasury locks reduces the effective interest rate on the senior notes by approximately 0.25%. Cross Currency and Interest Rate Swap Agreements In November 2020, we entered into a cross currency and interest rate swap which is designated as a cash flow hedge of a €270 million, 5-year amortizing, intercompany loan between one of our European subsidiaries and the U.S. parent company. Changes in the spot exchange are recorded to the general ledger and offset the fair value re-measurement of the hedged item. The net difference in the interest rates coupons is recorded as a credit to interest expense. The derivative swaps €270 million bearing interest at a fixed rate of 0.30% for $319.9 million at a fixed rate interest of 1.115%. The interest coupons settle semi-annually. The principal will amortize each year on November 15, as follows: for years 1 through 4, beginning November 15, 2021, €50 million versus $59.2 million, and a final settlement on November 15, 2025 of €70 million versus $82.9 million. The carrying value of the derivative at December 31, 2023 is a current asset o f $4.3 million and a long-term asset of $3.7 million. Foreign Currency Forward Exchange Contracts A number of our European subsidiaries are exposed to the impact of exchange rate volatility between the U.S. dollar and the subsidiaries’ functional currencies, being either the Euro or the British pound sterling. We have entered into contracts to exchange U.S. dollars for Euros and British pound sterling through June 2026. The aggregate notional amount of these contracts was $393.3 million at December 31, 2023 and $503.3 million at December 31, 2022. The purpose of these contracts is to hedge a portion of the forecasted transactions of European subsidiaries under long-term sales contracts with certain customers. These contracts are expected to provide us with a more balanced matching of future cash receipts and expenditures by currency, thereby reducing our exposure to fluctuations in currency exchange rates. The effective portion of the hedges was gain s of $10.5 millio n, losses of $27.9 million and losses of $13.3 million, for the years ended December 31, 2023, 2022 and 2021, respectively, and are recorded in other comprehensive (loss) income. The fair values of outstanding derivative financial instruments as of December 31, 2023 and December 31, 2022 were as follows:
| Prepaid and Other Current Assets |  | Other Assets |  | Current Liabilities |  | Non-Current Liabilities |
(In millions) | December 31, 2023 |  | December 31, 2022 |  | December 31, 2023 |  | December 31, 2022 |  | December 31, 2023 |  | December 31, 2022 |  | December 31, 2023 |  | December 31, 2022 |
Derivative Products |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward exchange contracts | $ | 4.8 |  | $ | 1.9 |  | $ | 5.5 |  | $ | 3.4 |  | $ | 3.2 |  | $ | 14.1 |  | $ | - |  | $ | 5.3 |
Undesignated hedges |  | - |  |  | - |  |  | - |  |  | - |  |  | 1.4 |  |  | 0.7 |  |  | - |  |  | - |
Commodity swaps |  | 0.5 |  |  | 0.5 |  |  | 0.2 |  |  | - |  |  | 1.5 |  |  | 7.2 |  |  | 0.2 |  |  | 1.4 |
Cross currency and interest rate swap |  | 4.3 |  |  | 6.2 |  |  | 3.7 |  |  | 10.1 |  |  | - |  |  | - |  |  | - |  |  | - |
Total Derivative Products | $ | 9.6 |  | $ | 8.6 |  | $ | 9.4 |  | $ | 13.5 |  | $ | 6.1 |  | $ | 22.0 |  | $ | 0.2 |  | $ | 6.7 |
During the years ended December 31, 2023 and 2022 the net impact for the hedges recognized in sales was a loss of $10.9 million and a loss of $18.7 million, respectively. For the two years ended December 31, 2023 and 2022, hedge ineffectiveness was immaterial. In addition, we enter into foreign exchange forward contracts which are not designated as hedges. These are used to provide an offset to transactional gains or losses arising from the remeasurement of non-functional monetary assets and liabilities such as accounts receivable. The change in the fair value of the derivatives is recorded in the statement of operations. There are no credit contingency features in these derivatives. During the years ended December 31, 2023, 2022 and 2021, we recognized net foreign exchange gains of $1.4 million, $3.3 million, and $1.3 million, respectively, in the Consolidated Statements of Operations. The carrying amount of the contracts for asset and liability derivatives not designated as hedging instruments was $1.4 million of current liabilities on our Consolidated Balance Sheets at December 31, 2023. The activity, net of tax, in accumulated other comprehensive loss related to foreign currency forward exchange contracts for the years ended December 31, 2023, 2022 and 2021 was as follows:
|  | 2023 |  |  | 2022 |  |  | 2021 |
Unrealized (loss) gain at beginning of period, net of tax |  | $ | (10.5 | ) |  | $ | (3.5 | ) |  | $ | 10.6 |
Loss reclassified to net sales |  |  | 8.0 |  |  |  | 14.0 |  |  |  | (4.0 | )
Increase (decrease) in fair value |  |  | 7.7 |  |  |  | (21.0 | ) |  |  | (10.1 | )
Unrealized gain (loss) at end of period, net of taxes |  | $ | 5.2 |  |  | $ | (10.5 | ) |  | $ | (3.5 | )
Unrealized gain of $1.6 million recorded in accumulated other comprehensive loss, net of tax of $0.4 million, as of December 31, 2023 are expected to be reclassified into earnings over the next twelve months as the hedged sales are recorded. The impact of credit risk adjustments was immaterial for the three years. Commodity Swap Agreements We use commodity swap agreements to hedge against price fluctuations of raw materials, including propylene (the principal component of acrylonitrile). As of December 31, 2023, the Company had commodity swap agreements with a notional value of $19.5 million. The swaps mature monthly through December 2025. The swaps are accounted for as a cash flow hedge of our forward raw material purchases. To ensure the swaps are highly effective, all of the critical terms of the swap matched the terms of the hedged items. The fair value of the commodity swap agreements was an asset of $0.7 million and a liability of $1.7 million (of which $0.2 million was recorded in long term liabilities) at December 31, 2023 and an asset of $0.5 million and a liability of $8.6 million (of which $1.4 million was recorded in long term liabilities) at December 31, 2022.

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- 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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
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