XML 26 R11.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Derivatives and Hedging | 12 Months Ended
--- | ---
Dec. 31, 2023
Fair Value Disclosures [Abstract] |
Derivatives and Hedging | Derivatives and Hedging The valuation of our derivative contracts used to manage their respective risks is described below: •Foreign Currency – The fair value of any foreign currency option derivative is based upon valuation models applied to current market information such as strike price, spot rate, maturity date and volatility, and by reference to market values resulting from an over-the-counter market or obtaining market data for similar instruments with similar characteristics. •Commodity – The fair value of copper derivatives is computed using a combination of intrinsic and time value valuation models, which are collectively a function of five primary variables: price of the underlying instrument, time to expiration, strike price, interest rate and volatility. The intrinsic valuation model reflects the difference between the strike price of the underlying copper derivative instrument and the current prevailing copper prices in an over-the-counter market at period end. The time value valuation model incorporates changes in the price of the underlying copper derivative instrument, the time value of money, the underlying copper derivative instrument’s strike price and the remaining time to the underlying copper derivative instrument’s expiration date from the period end date. As of December 31, 2023, we did not have any derivative contracts that qualified for hedge accounting treatment. Foreign Currency In 2023, we entered into U.S. dollar, euro, Korean won, and Japanese yen forward contracts. We entered into these foreign currency forward contracts to mitigate certain global transactional exposures. These contracts do not qualify for hedge accounting treatment. As a result, any fair value adjustments required on these contracts are recorded in the “Other income (expense), net” line item in the consolidated statements of operations in the period in which the adjustment occurred. As of December 31, 2023, the notional values of these foreign currency forward contracts were as follows:
Notional Values of Foreign Currency Derivatives
USD/CNH | $ | 25,900,000 |
KRW/USD | ₩ | 1,291,700,000 |
EUR/USD | € | 12,600,000 |
JPY/EUR | ¥ | 250,000,000 |
Commodity As of December 31, 2023, we had 12 outstanding contracts to hedge exposure related to the purchase of copper in our AES operating segment. These contracts are held with financial institutions and are intended to offset rising copper prices and do not qualify for hedge accounting treatment. As a result, any fair value adjustments required on these contracts are recorded in the “Other income (expense), net” line item in the con solidated statements of operations in the period in which the adjustment occurred. As of December 31, 2023, the volume of our copper contracts outstanding were as follows:
Volume of Copper Derivatives
January 2024 - March 2024 | 69 metric tons per month
April 2024 - June 2024 | 69 metric tons per month
July 2024 - September 2024 | 69 metric tons per month
October 2024 - December 2024 | 69 metric tons per month
Effects on Financial Statements The following table presents the impact from these instruments on the consolidated statements of operations and consolidated statements of comprehensive income:
|  | Years Ended December 31,
(Dollars in millions) | Financial Statement Line Item | 2023 |  | 2022 |  | 2021
Foreign Currency Contracts |  |  |  |  |  |
Contracts not designated as hedging instruments | Other income (expense), net | $ | 1.0 |  |  | $ | (0.3) |  |  | $ | (2.9) |
Copper Derivatives Contracts |  |  |  |  |  |
Contracts not designated as hedging instruments | Other income (expense), net | $ | (0.6) |  |  | $ | 0.8 |  |  | $ | 3.9 |
The accounting guidance for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. •Level 1 – Quoted prices in active markets for identical assets or liabilities. •Level 2 – Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. •Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair values of derivative instruments measured at fair value on a recurring basis, categorized by contract type and level of inputs used in the valuation, were as follows:
| Derivative Instruments at Fair Value as of December 31, 2023 |  |
(Dollars in millions) | Level 1 |  | Level 2 |  | Level 3 |  | Total(1) |  |
Foreign currency contracts | $ | — |  |  | $ | (0.2) |  |  | $ | — |  |  | $ | (0.2) |  |  |
Copper derivative contracts | $ | — |  |  | $ | 0.4 |  |  | $ | — |  |  | $ | 0.4 |  |  |
| Derivative Instruments at Fair Value as of December 31, 2022
(Dollars in millions) | Level 1 |  | Level 2 |  | Level 3 |  | Total(1)
Foreign currency contracts | $ | — |  |  | $ | (0.1) |  |  | $ | — |  |  | $ | (0.1) |
Copper derivative contracts | $ | — |  |  | $ | 0.5 |  |  | $ | — |  |  | $ | 0.5 |
(1) All balances were recorded in the “Other current assets” or the “Other accrued liabilities” line items in the consolidated statements of financial position.

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://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
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

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