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Derivative instruments | 12 Months Ended
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Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative instruments | Derivative instrumentsThe following table presents the fair values of derivative instruments included in the consolidated balance sheets as of December 31, 2020 and 2019:
|  | Assets |  |  | Liabilities
Type of Derivative | Balance Sheets Location | 2020 | 2019 |  | Balance Sheets Location | 2020 | 2019
Derivatives designated as hedging instruments |  |  |  |
Cash Flow hedge |  |  |  |  |  |  |
Forward contracts | Other receivables | $ | — |  | $ | 259 |  |  | Accrued payroll and other liabilities | $ | (1,264) |  | $ | (532) |
Cross-currency interest rate swap | Derivative instruments | 86,534 |  | 37,219 |  |  | Derivative instruments | (6,194) |  | (8,179) |
Call spread | Derivative instruments | 21,858 |  | 20,609 |  |  | Derivative instruments | — |  | — |
Coupon-only swap | Derivative instruments | 3,591 |  | — |  |  | Derivative instruments | — |  | (5,326) |
Subtotal |  | 111,983 |  | 58,087 |  |  |  | (7,458) |  | (14,037) |
Derivatives not designated as hedging instruments |  |  |  |  |  |
Forward contracts | Other receivables | — |  | 20 |  |  | Accrued payroll and other liabilities | — |  | — |
Call spread | Derivative instruments | 3,798 |  | — |  |  | Derivative instruments | — |  | — |
Coupon-only swap | Derivative instruments | 202 |  | — |  |  | Derivative instruments | (5,017) |  | — |
Call Spread + Coupon-only swap | Derivative instruments | 6,620 |  | — |  |  | Derivative instruments | (8,050) |  | — |
Subtotal |  | 10,620 |  | 20 |  |  |  | (13,067) |  | — |
Total derivative instruments | $ | 122,603 |  | $ | 58,107 |  |  |  | $ | (20,525) |  | $ | (14,037) |
Derivatives designated as hedging instruments Cash flow hedge Forward contracts The Company has entered into various forward contracts in a few territories to hedge a portion of the foreign exchange risk associated with forecasted imports of goods. The effect of the hedges results in fixing the cost of goods acquired (i.e. the net settlement or collection adjusts the cost of inventory paid to the suppliers). As of December 31, 2020, the Company had forward contracts outstanding with a notional amount of $20,276 that mature during 2021. The Company made net collections totaling $1,757, $711 and $75 during fiscal years 2020, 2019 and 2018, respectively, as a result of the net settlements of these derivatives. Cross-currency interest rate swap The Company entered into four cross-currency interest rate swap agreements to hedge all the variability of the principal and interest collections of its BRL intercompany loan receivables with ADBV. The agreements were signed during November 2013 (amended in February 2017), June and July 2017 and October 2020. The following table presents information related to the terms of the agreements: Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Cross-currency interest rate swap (continued)
Bank |  | Payable |  | Receivable |  | Interest payment dates |  | Maturity
| Currency |  | Amount |  | Interest rate |  | Currency |  | Amount |  | Interest rate |
JP Morgan Chase Bank, N.A. |  | BRL |  | 108,000 |  |  | 13 | % |  | $ |  | 35,400 |  |  | 4.38 | % |  | March 31/ September 30 |  | September 2023
JP Morgan Chase Bank, N.A. |  | BRL |  | 98,670 |  |  | 13 | % |  | $ |  | 30,000 |  |  | 6.02 | % |  | March 31/ September 30 |  | September 2023
Citibank N.A. |  | BRL |  | 94,200 |  |  | 13 | % |  | $ |  | 30,000 |  |  | 6.29 | % |  | March 31/ September 30 |  | September 2023
Citibank N.A. |  | BRL |  | 112,738 |  |  | 13 | % |  | $ |  | 20,049 |  |  | 8.08 | % |  | March 31/ September 30 |  | September 2023
During April 2017, the Company’s Brazilian subsidiary entered into similar agreements in order to hedge all the variability in a portion (50%) of the principal and interest payable of certain intercompany loan payables nominated in US dollar. The following table presents information related to the terms of the agreements:
Bank |  | Payable |  | Receivable |  | Interest payment dates |  | Maturity
| Currency |  | Amount |  | Interest rate |  | Currency |  | Amount |  | Interest rate |
BAML (i) |  | BRL |  | 156,250 |  |  | 13.64 | % |  | $ |  | 50,000 |  |  | 6.91 | % |  | March 31/ September 30 |  | April 2027
Banco Santander S.A. |  | BRL |  | 155,500 |  |  | 13.77 | % |  | $ |  | 50,000 |  |  | 6.91 | % |  | June 30/ December 31 |  | September 2023
(i)Bank of America Merrill Lynch Banco Múltiplo S.A. The Company paid $4,031, $8,692 and $10,671 of net interest during the fiscal years ended December 31, 2020, 2019 and 2018, respectively. Call spread During April 2017, the Company’s Brazilian subsidiary entered into two call spread agreements in order to hedge all variability in a portion (50%) of the principal of certain intercompany loan payables nominated in US dollar. Call spread agreements consist of a combination of two call options: the Company bought an option to buy US dollar at a strike price equal to the BRL exchange rate at the date of the agreements, and wrote an option to buy US dollar at a higher strike price than the previous one. Both pair of options have the same notional amount and are based on the same underlying with the same maturity date. Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Call spread (continued) The following table presents information related to the terms of the agreements:
Bank |  | Nominal Amount |  | Strike price |  | Maturity
| Currency |  | Amount |  | Call option written | Call option bought |
Citibank S.A. |  | $ |  | 50,000 |  |  |  | 4.49 |  |  | 3.11 |  |  | September 2023
JP Morgan S.A. |  | $ |  | 50,000 |  |  |  | 5.20 |  |  | 3.13 |  |  | April 2027
Coupon-only swap During April 2017, the Company’s Brazilian subsidiary entered into two coupon-only swap agreements in order to hedge all the variability in a portion (50%) in the interest payable related to the intercompany loan aforementioned. The following table presents information related to the terms of the agreements:
Bank |  | Payable |  | Receivable |  | Interest payment dates |  | Maturity
| Currency |  | Amount |  | Interest rate |  | Currency |  | Amount |  | Interest rate |
Citibank S.A. |  | BRL |  | 155,500 |  |  | 11.08 | % |  | $ |  | 50,000 |  |  | 6.91 | % |  | June 30/ December 31 |  | September 2023
JP Morgan S.A. |  | BRL |  | 156,250 |  |  | 11.18 | % |  | $ |  | 50,000 |  |  | 6.91 | % |  | March 31/ September 30 |  | April 2027
The Company paid $197, $2,036 and $2,900 of net interest during the fiscal years ended December 31, 2020, 2019 and 2018, respectively, related to these agreements. Additional disclosures The following table present the pretax amounts affecting income and other comprehensive income for the fiscal years ended December 31, 2020, 2019 and 2018 for each type of derivative relationship: Derivatives designated as hedging instruments (continued) Cash flow hedge (continued) Additional disclosures (continued)
Derivatives in Cash Flow Hedging Relationships |  | Gain (Loss) Recognized in Accumulated OCI on Derivative |  | (Gain) Loss Reclassified from Accumulated OCI into (loss) income (i) |  |  |
| 2020 | 2019 | 2018 |  | 2020 | 2019 | 2018 |  |  |  |  |
Forward contracts |  | $ | 904 |  | $ | (10) |  | $ | 731 |  |  | $ | (1,895) |  | $ | (711) |  | $ | (75) |  |  |  |  |  |
Cross-currency interest rate swaps |  | 55,124 |  | (8,506) |  | 11,279 |  |  | (37,376) |  | 2,056 |  | (18,888) |  |  |  |  |  |
Call Spread |  | 6,758 |  | 4,377 |  | 4,034 |  |  | (18,153) |  | (3,561) |  | (15,421) |  |  |  |  |  |
Coupon-only swap |  | 8,604 |  | (1,889) |  | 1,864 |  |  | (421) |  | 1,860 |  | 2,415 |  |  |  |  |  |
Total |  | $ | 71,390 |  | $ | (6,028) |  | $ | 17,908 |  |  | $ | (57,845) |  | $ | (356) |  | $ | (31,969) |  |  |  |  |  |
(i)The results recognized in income related to forward contracts were recorded as an adjustment to food and paper. The net gain (loss) recognized in income, related to cross-currency interest rate swaps is presented as follows:
Adjustment to: | 2020 |  | 2019 |  | 2018
Foreign currency exchange results | $ | 40,353 |  |  | $ | 6,346 |  |  | $ | 28,588 |
Net interest expense | (2,977) |  |  | (8,402) |  |  | (9,700) |
Total | $ | 37,376 |  |  | $ | (2,056) |  |  | $ | 18,888 |
The results recognized in income related to call spread agreements and coupon-only swap agreements were recorded as an adjustment to foreign currency exchange and interest expense, respectively. Derivatives not designated as hedging instruments In October 2020, the Company’s Brazilian subsidiary enters into certain derivatives that are not designated as hedge accounting, therefore the changes in the fair value of these derivatives are recognized immediately in earnings, within "Gain (loss) from derivative instruments". These agreements are: –A call spread with JPMorgan. It consists of a combination of two call options likewise the ones previously mention. This agreement matures in April 2027. The following table presents information related to the terms of the agreements: Derivatives not designated as hedging instruments (continued)
| Nominal Amount |  | Strike price |
| Currency |  | Amount |  | Call option written | Call option bought |
| $ |  | 30,000 |  |  |  | 8.20 |  |  | 5.62 |  |
–A coupon-only swap with JP Morgan that matures in April 2027. The following table presents information related to the terms of the agreements:
| Payable |  | Receivable |  | Interest payment dates |
| Currency |  | Amount |  | Interest rate (i) |  | Currency |  | Amount |  | Interest rate |
| BRL |  | 168,690 |  |  | CDI plus 2.42% |  | $ |  | 30,000 |  |  | 5.46 | % |  | April 30/ October 31 |
(i) “CDI” Certificados de Depósitos Interbancários –A combination of call spread + coupon only swap into one agreement with Itaú Unibanco S.A, that matures in April 2027. The following tables present information related to the terms of the agreements:
| Nominal Amount |  | Strike price |
| Currency |  | Amount |  | Call option written | Call option bought |
| $ |  | 50,000 |  |  |  | 8.20 |  |  | 5.62 |  |
Payable |  | Receivable |  | Interest payment dates
Currency |  | Amount |  | Interest rate (i) |  | Currency |  | Amount |  | Interest rate |
BRL |  | 281,150 |  | CDI plus 2.47% |  | $ |  | 50,000 |  | 5.46% |  | April 30/ October 31
(i) “CDI” Certificados de Depósitos Interbancários In addition, during the fiscal years ended December 31, 2020, 2019 and 2018, the Company entered into certain forward contracts that generated net (payments) and collections for $(39), $787 and ($81).

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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