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SEC Filings

10-Q
FORTERRA, INC. filed this Form 10-Q on 11/09/2017
Entire Document
 
FORTERRA, INC.
Notes to Unaudited Condensed Consolidated Financial Statements



A quantitative analysis is utilized to assess hedge effectiveness for cash flow hedges. The Company assesses the hedge effectiveness and measures the amount of ineffectiveness for the hedge relationships based on changes in forward exchange rates. The Company elects to present all derivative assets and derivative liabilities on a net basis on its condensed consolidated balance sheets when a legally enforceable International Swaps and Derivatives Association, Inc. (“ISDA”) Master Agreement exists. An ISDA Master Agreement is an agreement between two counterparties, which may have multiple derivative transactions with each other governed by such agreement, and such ISDA Master Agreement generally provides for the net settlement of all or a specified group of these derivative transactions, through a single payment, in a single currency, in the event of a default on, or affecting any, one derivative transaction or a termination event affecting all, or a specified group of, derivative transactions. At September 30, 2017 and December 31, 2016, the Company’s derivative instruments fall under an ISDA master netting agreement.

The following table presents the fair values of derivative assets and liabilities in the condensed consolidated balance sheets (in thousands):

 
September 30, 2017
 
Derivative Assets
 
Derivative Liabilities
 
Notional Amount
 
Fair Value
 
Notional Amount
 
Fair Value
Foreign exchange forward contracts
$

 

 
$
92,961

 
$
7,028

Interest rate swaps
525,000

 
2,035

 

 

Total derivatives, gross
 
 
2,035

 
 
 
7,028

Less: Legally enforceable master netting agreements
 
 

 
 
 

Total derivatives, net
$

 
$
2,035

 
$

 
$
7,028


 
December 31, 2016
 
Derivative Assets
 
Derivative Liabilities
 
Notional Amount
 
Fair Value
 
Notional Amount
 
Fair Value
Foreign exchange forward contracts
$

 
$

 
$
92,961

 
$
372

Total derivatives, gross
 
 

 
 
 
372

Less: Legally enforceable master netting agreements
 
 

 
 
 

Total derivatives, net
$

 
$

 
$

 
$
372



The following table presents the effect of derivative instruments on the condensed consolidated statements of operations (in thousands):
 
Three months ended
Nine months ended
 
September 30,
September 30,
 
2017
2016
2017
2016
Foreign exchange forward contracts
 
 
 
 
Gain (loss) on derivatives not designated as hedges in other operating income (expense)
$

$
850

$

$
(2,024
)
Interest rate swaps
 
 
 
 
Gain on derivatives not designated as hedges included in interest expense
709


2,035




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