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Derivative instruments | 12 Months Ended
--- | ---
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative instruments | Derivative instruments The Company’s derivatives that are designated for hedge accounting consist of cross-currency interest rate swaps, foreign currency forwards, call spreads, interest coupon only swaps and sustainability linked ESG Principal Only and are classified cash flow hedges. Further details are in "Cash Flow" hedge section. The Company enters into certain derivatives that are not designated for hedge accounting. The Company has entered into foreign currency forwards, call spread and interest coupon only swap to mitigate the foreign currency fluctuations on foreign currency denominated liabilities. Further details are explained in the “Derivatives not designated as hedging instruments” section. The following table presents the fair values of derivative instruments included in the consolidated balance sheets as of December 31, 2023 and 2022:
|  | Assets |  |  | Liabilities
Type of Derivative | Balance Sheets Location | 2023 | 2022 |  | Balance Sheets Location | 2023 | 2022
Derivatives designated as hedging instruments |  |  |  |
Cash Flow hedge |  |  |  |  |  |  |
Forward contracts | Other receivables | $ | 119 |  | $ | 268 |  |  | Accrued payroll and other liabilities | $ | (1,536) |  | $ | (1,147) |
Call spread + Coupon-only swap | Derivative instruments | 2,823 |  | — |  | — |  | Derivative instruments | (185) |  | — |
Sustainability linked ESG Principal Only Swap | Derivative instruments | 18,466 |  | — |  | $ | — |  | Derivative instruments | (261) |  | — |
Cross-currency interest rate swap | Derivative instruments | 19,337 |  | 43,757 |  |  | Derivative instruments | (2,398) |  | (581) |
Subtotal |  | $ | 40,745 |  | $ | 44,025 |  |  |  | $ | (4,380) |  | $ | (1,728) |
Derivatives not designated as hedging instruments |  |  |  |  |  |
Cross-currency interest rate swap | Derivative instruments | $ | — |  | $ | 38,031 |  |  | Derivative instruments | $ | — |  | $ | (1,224) |
Call Spread + Coupon-only swap | Derivative instruments | 3,761 |  | 6,445 |  |  | Derivative instruments | (12,578) |  | (16,703) |
Call spread | Derivative instruments | 2,099 |  | 3,626 |  |  | Derivative instruments | — |  | — |
Coupon-only swap | Derivative instruments | — |  | — |  |  | Derivative instruments | (7,336) |  | (9,874) |
Sustainability-linked ESG Principal Only Swap | Derivative instruments | — |  | 1,050 |  |  | Derivative instruments | — |  | — |
Subtotal |  | $ | 5,860 |  | $ | 49,152 |  |  |  | $ | (19,914) |  | $ | (27,801) |
Total derivative instruments | $ | 46,605 |  | $ | 93,177 |  |  |  | $ | (24,294) |  | $ | (29,529) |
Derivatives designated as hedging instruments Cash flow hedge 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 inven tory paid to the suppliers). As of December 31, 2023, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive loss will be reclassified into earnings within the next 12 months. Moreover, the Company, through it’s Brazilian subsidiary, enters into certain instruments designated as cash flow hedge to reduce the exposure to variability in expected future cash flows related to intercompany loans (principal and interest). The Company uses call spread, coupon-only swaps, cross-currency interest rate swap and a sustainability-linked ESG principal only swap. As of December 31, 2023, the Company estimated that the whole amount of net derivative gains or losses related to its cash flow hedges included in accumulated other comprehensive loss will be reclassified into earnings within the next 6 years. For certain call spreads, in July 2023 the Company’s Brazilian subsidiary paid a net premium of $2,581 to buy the options. For the sustainability-linked ESG principal only swap, and in order to maintain the same notional payables and receivables of a previous cross-currency interest rate swap, in September 2023 the Company´s Brazilian subsidiary made a deposit amounting to $19,587. The following table presents the notional amounts of the Company’s outstanding derivative instruments classified as cash flow hedge:
| Notional amount as of December 31,
| 2023 |  | 2022
Forward contracts | $ | 44,412 |  |  | $ | 34,843 |
Call Spread + Coupon-only swap | 24,000 |  |  | — |
Sustainability-linked ESG Principal Only | 50,000 |  |  | — |
Cross-currency interest rate swap | 80,000 |  |  | 100,000 |
Additional disclosures The following table presents the pretax amounts affecting income and other comprehensive income (loss) for the fiscal years ended December 31, 2023, 2022 and 2021 for each type of derivative relationship:
Derivatives in Cash Flow Hedging Relationships |  | (Loss) Gain Recognized in Accumulated OCI on Derivative |  | Loss (Gain) Reclassified from Accumulated OCI into income (loss) |  |  |
| 2023 | 2022 | 2021 |  | 2023 | 2022 | 2021 |  |  |  |  |
Forward contracts (i) |  | $ | (6,710) |  | $ | (1,225) |  | $ | 1,366 |  |  | $ | 6,172 |  | $ | (263) |  | $ | 507 |  |  |  |  |  |
Cross-currency interest rate swaps (ii) |  | (14,730) |  | (31,174) |  | 23,802 |  |  | 10,913 |  | 8,727 |  | (8,564) |  |  |  |  |  |
Call Spread (iii) |  | 30 |  | — |  | (2,593) |  |  | 2,385 |  | 3,275 |  | 1,915 |  |  |  |  |  |
Coupon-only swap (iii) |  | (263) |  | — |  | 1,093 |  |  | (1,752) |  | (964) |  | (797) |  |  |  |  |  |
Sustainability linked ESG Principal Only Swap (ii) |  | (1,224) |  | — |  | — |  |  | 2,014 |  | — |  | — |  |  |  |  |  |
Total |  | $ | (22,897) |  | $ | (32,399) |  | $ | 23,668 |  |  | $ | 19,732 |  | $ | 10,775 |  | $ | (6,939) |  |  |  |  |  |
(i)The results recognized in income related to forward contracts were recorded as an adjustment to food and paper. (ii)The net (loss) gain recognized in income is presented as follows:
Adjustment to: | 2023 |  | 2022 |  | 2021
Net interest expense and other financing results | (1,933) |  |  | (4,639) |  |  | (3,828) |
(Loss) gain from derivative instruments (a) | (6) |  |  | 5,907 |  |  | — |
Foreign currency exchange results | (10,988) |  |  | (9,995) |  |  | 12,392 |
Total | $ | (12,927) |  |  | $ | (8,727) |  |  | $ | 8,564 |
(a) Related to the discontinued relationships of Cross-currency interest rate swaps during July 2023 and September 2022. (iii) The results recognized in income related to Call Spread agreements were recorded as an adjustment to “Foreign currency exchange results”. The results recognized in income related to Coupon-only agreements were recorded as an adjustment to “Net interest expense and other financing results”. Derivatives not designated as hedging instruments The Company entered into certain derivatives that are not designated for hedge accounting, therefore the changes in the fair value of these derivatives are recognized immediately within “Loss from derivative instruments”. The following table presents the notional amounts of the Company’s outstanding derivative instruments not designed as hedging instruments:
|  | Notional amount as of December 31,
|  | 2023 |  | 2022
Cross-currency interest rate swap |  | $ | — |  |  | $ | 115,439 |
Call Spread + Coupon-only swap |  | 50,000 |  |  | 50,000 |
Call Spread |  | 30,000 |  |  | 30,000 |
Coupon-only swap |  | 30,000 |  |  | 30,000 |
Sustainability-linked ESG Principal Only Swap |  | — |  |  | 50,000 |

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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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