Company: SSUP
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000950170-25-034599
Chunk: 86

Company: SUPERIOR INDUSTRIES INTERNATIONAL INC
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1B
Chunk 86
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       Contract liabilities consist of deferred revenue related to tooling. The changes in the contract liability balances primarily result from timing differences between the Company's performance and customer payment. Contract assets with customers are not material to the Company. During the years ended December 31, 2024 and 2023, the Company recognized tooling reimbursement revenue of $8.5 million and $8.6 million. During the years ended December 31, 2024 and 2023, the Company recognized revenue of $1.5 million and $4.7 million from performance obligations satisfied in previous periods as a result of adjustments to pricing estimates and other revenue adjustments.

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NOTE 3 - DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE The Company is exposed to market risks such as fluctuations in foreign currency exchange rates, interest rates, and aluminum and other commodity prices. Derivative financial instruments may be used to offset some of the effects of these market risks on the expected future cash flows and on certain existing assets and liabilities. In certain cases, the Company may or may not designate certain derivative instruments as hedges for accounting purposes. The Company may choose not to hedge certain exposures for a variety of reasons including, but not limited to, accounting considerations and the prohibitive economic cost of hedging particular exposures. Market RisksForeign Currency Exchange Rate RiskThe Company has manufacturing locations primarily in Mexico and Poland and sells its products globally. As a result, the Company’s financial results could be significantly affected by foreign currency exchange rates. To help mitigate gross margin and cash flow fluctuations due to changes in foreign currency exchange rates, certain subsidiaries in Mexico and Poland, whose functional currency is the U.S. dollar or the Euro, may hedge a portion of their forecasted foreign currency exposure denominated in the Mexican Peso and Polish Zloty using foreign currency forward contracts up to 48 months. The Company has designated some of its foreign currency contracts as cash flow hedging instruments.  Interest Rate RiskThe borrowings under the Company’s Senior Secured Credit Facilities (as subsequently defined) are at variable rates of interest and expose it to interest rate risk. If interest rates increase, debt service obligations on the variable rate indebtedness will increase even though the amount borrowed remains the same. The Company hedges a portion of its interest rate risk through interest rate swaps that exchange floating for fixed-rate interest payments and has designated these contracts as cash flow hedging instruments. The interest rate swaps outstanding at December 31, 2024 mature on December 31,