Company: SSUP
Filing Date: 2025-03-06
Form Type: 10-K
Source: 0000950170-25-034599
Chunk: 87

Company: SUPERIOR INDUSTRIES INTERNATIONAL INC
Filing Date: 2025-03-06
Form: 10-K
Item: Item 1B
Chunk 87
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 2025.  Commodity Price RiskThe principal raw material used in manufacturing aluminum wheels is aluminum alloys. While wheel prices under OEM customer contracts are adjusted for fluctuations in the cost of this material, the prices of its aftermarket wheels are generally fixed months in advance of the spring and winter sales seasons. Accordingly, the Company hedges a portion of its aftermarket aluminum purchases to offset the effect of fluctuating aluminum cost on its margins. In addition, the manufacture of aluminum wheels is energy-intensive so, the Company also fixes a portion of its natural gas and electricity purchases with derivatives or contractual arrangements with energy suppliers.Assets and Liabilities Measured at Fair Value on a Recurring BasisAsset and Liability Instruments The carrying amounts for cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to the short period of time until maturity. Derivative Financial Instruments  The fair value of the Company’s derivative instruments is estimated using the income valuation approach, which projects future cash flows and discounts the future amounts to a present value using market-based expectations for interest rates, foreign exchange rates, commodity prices, and the contractual terms of the derivative instruments (Level 2). The discount rate used is the relevant benchmark rate (e.g., the secured overnight financing rate, “SOFR”) plus an adjustment for counterparty risk. The fair value of the Company's embedded derivatives is estimated using either a market based approach or an income based approach, which uses Company-specific inputs and assumptions (Level 3), such as discount rates. 

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The following tables display the fair value of derivatives by financial statement line item at December 31, 2024 and 2023:  

        December 31, 2024

        Fair Value Hierarchy
         
        Current Derivative Financial Instruments

        Derivative Financial Instruments

        AccruedLiabilities

        OtherNoncurrentLiabilities

        Derivatives designated as hedging instruments:

        Foreign exchange contracts
         
        Level 2
         
        $
        20,443

        $
        14,722

        $
        451

        $
        3,664

        Commodity contracts
         
        Level 2
         
        $
        258

        $
        14

        $
        2,341

        $
        1,233

        Interest rate contracts
         
        Level 2
         
        $
        1,536

        —

        —

        —

        Derivatives