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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  ___________________________________ 
FORM 10-Q
  ___________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________.
Commission File Number: 001-36127
   ______________________________
COOPER-STANDARD HOLDINGS INC.
(Exact name of registrant as specified in its charter)
   ______________________________
Delaware20-1945088
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
40300 Traditions Drive
Northville, Michigan 48168
(Address of principal executive offices)
(Zip Code)
(248) 596-5900
(Registrant’s telephone number, including area code)
 ______________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareCPSNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of April 29, 2022, there were 17,062,869 shares of the registrant’s common stock, $0.001 par value, outstanding.
1


COOPER-STANDARD HOLDINGS INC.
Form 10-Q
For the period ended March 31, 2022
 
2


PART I — FINANCIAL INFORMATION
Item 1.         Financial Statements
COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollar amounts in thousands except per share amounts) 
 Three Months Ended March 31,
 20222021
Sales$612,984 $668,967 
Cost of products sold591,442 600,675 
Gross profit21,542 68,292 
Selling, administration & engineering expenses51,904 58,054 
Gain on sale of business, net (891)
Amortization of intangibles1,746 1,772 
Restructuring charges7,831 21,047 
Impairment charges455  
Operating loss(40,394)(11,690)
Interest expense, net of interest income(18,177)(17,784)
Equity in (losses) earnings of affiliates(1,356)786 
Other expense, net(1,211)(5,089)
Loss before income taxes(61,138)(33,777)
Income tax expense 652 936 
Net loss(61,790)(34,713)
Net loss attributable to noncontrolling interests430 849 
Net loss attributable to Cooper-Standard Holdings Inc.$(61,360)$(33,864)
Loss per share:
Basic$(3.58)$(2.00)
Diluted$(3.58)$(2.00)
The accompanying notes are an integral part of these financial statements.

3


COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(Unaudited)
(Dollar amounts in thousands) 
Three Months Ended March 31,
20222021
Net loss$(61,790)$(34,713)
Other comprehensive income (loss):
Currency translation adjustment8,365 (6,572)
Benefit plan liabilities adjustment, net of tax984 2,739 
Fair value change of derivatives, net of tax2,431 (571)
Other comprehensive income (loss), net of tax11,780 (4,404)
Comprehensive loss(50,010)(39,117)
Comprehensive loss attributable to noncontrolling interests441 1,101 
Comprehensive loss attributable to Cooper-Standard Holdings Inc.$(49,569)$(38,016)
The accompanying notes are an integral part of these financial statements.

4



COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollar amounts in thousands except share amounts)
March 31, 2022December 31, 2021
 (unaudited)
Assets
Current assets:
Cash and cash equivalents$252,911 $248,010 
Accounts receivable, net337,582 317,469 
Tooling receivable, net90,724 88,900 
Inventories196,921 158,075 
Prepaid expenses26,773 26,313 
Income tax receivable and refundable credits80,773 82,813 
Other current assets108,166 73,317 
Total current assets1,093,850 994,897 
Property, plant and equipment, net745,343 784,348 
Operating lease right-of-use assets, net106,561 111,052 
Goodwill142,337 142,282 
Intangible assets, net53,469 60,375 
Other assets141,576 133,539 
Total assets$2,283,136 $2,226,493 
Liabilities and Equity
Current liabilities:
Debt payable within one year$53,605 $56,111 
Accounts payable394,683 348,133 
Payroll liabilities82,989 69,353 
Proceeds from deferred sale of fixed assets49,911  
Accrued liabilities122,603 101,466 
Current operating lease liabilities21,470 22,552 
Total current liabilities725,261 597,615 
Long-term debt979,922 980,604 
Pension benefits126,915 129,880 
Postretirement benefits other than pensions43,413 43,498 
Long-term operating lease liabilities89,149 92,760 
Other liabilities47,696 50,776 
Total liabilities2,012,356 1,895,133 
Equity:
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,127,504 shares issued and 17,061,695 shares outstanding as of March 31, 2022, and 19,057,788 shares issued and 16,991,979 outstanding as of December 31, 202117 17 
Additional paid-in capital504,934 504,497 
Retained (loss) earnings(35,807)25,553 
Accumulated other comprehensive loss(193,393)(205,184)
Total Cooper-Standard Holdings Inc. equity275,751 324,883 
Noncontrolling interests(4,971)6,477 
Total equity270,780 331,360 
Total liabilities and equity$2,283,136 $2,226,493 
The accompanying notes are an integral part of these financial statements.
5


COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited)
(Dollar amounts in thousands except share amounts)
 Total Equity
 Common SharesCommon StockAdditional Paid-In CapitalRetained Earnings (Loss)Accumulated Other Comprehensive LossCooper-Standard Holdings Inc. EquityNoncontrolling InterestsTotal Equity
Balance as of December 31, 202116,991,979 $17 $504,497 $25,553 $(205,184)$324,883 $6,477 $331,360 
Share-based compensation, net69,716 — 437  — 437 — 437 
Deconsolidation of noncontrolling interest— — — — — — (11,007)(11,007)
Net loss— — — (61,360)— (61,360)(430)(61,790)
Other comprehensive income (loss)— — — — 11,791 11,791 (11)11,780 
Balance as of March 31, 202217,061,695 $17 $504,934 $(35,807)$(193,393)$275,751 $(4,971)$270,780 
 Total Equity
 Common SharesCommon StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive LossCooper-Standard Holdings Inc. EquityNoncontrolling InterestsTotal Equity
Balance as of December 31, 202016,897,085 $17 $498,719 $350,270 $(241,896)$607,110 $17,001 $624,111 
Share-based compensation, net45,467 — 952  — 952 — 952 
Net loss— — — (33,864)— (33,864)(849)(34,713)
Other comprehensive loss— — — — (4,152)(4,152)(252)(4,404)
Balance as of March 31, 202116,942,552 $17 $499,671 $316,406 $(246,048)$570,046 $15,900 $585,946 
The accompanying notes are an integral part of these financial statements.
6


COOPER-STANDARD HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollar amounts in thousands)
 Three Months Ended March 31,
 20222021
Operating Activities:
Net loss$(61,790)$(34,713)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation30,387 31,756 
Amortization of intangibles1,746 1,772 
Gain on sale of business, net (891)
Impairment charges455  
Share-based compensation expense584 2,178 
Equity in losses (earnings) of affiliates, net of dividends related to earnings1,356 (786)
Deferred income taxes(511)(1,434)
Other509 130 
Changes in operating assets and liabilities15,051 (5,096)
Net cash used in operating activities(12,213)(7,084)
Investing activities:
Capital expenditures(32,314)(38,617)
Proceeds from deferred sale of fixed assets50,008  
Proceeds from sale of fixed assets and other2,377 2,363 
Net cash provided by (used in) investing activities20,071 (36,254)
Financing activities:
Principal payments on long-term debt(1,429)(1,797)
(Decrease) increase in short-term debt, net(1,667)3,429 
Taxes withheld and paid on employees' share-based payment awards(523)(729)
Other646 385 
Net cash (used in) provided by financing activities(2,973)1,288 
Effects of exchange rate changes on cash, cash equivalents and restricted cash5,123 5,358 
Changes in cash, cash equivalents and restricted cash10,008 (36,692)
Cash, cash equivalents and restricted cash at beginning of period251,128 443,578 
Cash, cash equivalents and restricted cash at end of period$261,136 $406,886 
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
Balance as of
March 31, 2022December 31, 2021
Cash and cash equivalents$252,911 $248,010 
Restricted cash included in other current assets6,953 961 
Restricted cash included in other assets1,272 2,157 
Total cash, cash equivalents and restricted cash$261,136 $251,128 
The accompanying notes are an integral part of these financial statements.
7

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)

1. Overview
Basis of Presentation
Cooper-Standard Holdings Inc. (together with its consolidated subsidiaries, the “Company” or “Cooper Standard”), through its wholly-owned subsidiary, Cooper-Standard Automotive Inc. (“CSA U.S.”), is a leading manufacturer of sealing, fuel and brake delivery, and fluid transfer systems. The Company’s products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (“OEMs”) and replacement markets. The Company conducts substantially all of its activities through its subsidiaries.
The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), as filed with the SEC. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. These financial statements include all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company. The operating results for the interim period ended March 31, 2022 are not necessarily indicative of results for the full year. In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.
2. Deconsolidation and Divestiture
2022 Joint Venture Deconsolidation
In the first quarter of 2022, a joint venture in the Asia Pacific region that was previously consolidated with a noncontrolling interest amended the governing document underlying the joint venture. The amendment to the agreement did not change the Company’s 51% ownership. However, as a result of the amendment and effective as of January 1, 2022, the joint venture was deconsolidated and accounted for as an investment under the equity method. The Company remeasured the retained investment using the income approach method and performed a discounted cash flow analysis of the projected free cash flows of the joint venture. As a result of the deconsolidation, during the three months ended March 31, 2022, the Company recorded a loss of $2,257 , included in other expense, net in the condensed consolidated statements of operations.
2020 Divestiture
In the fourth quarter of 2019, management approved a plan to sell its European rubber fluid transfer and specialty sealing businesses, as well as its Indian operations. On July 1, 2020, the Company completed the divestiture to Mutares SE & Co. KGaA (“Mutares”). During the three months ended March 31, 2021, the Company recorded subsequent adjustments resulting in a net gain of $891.
3. Revenue
Revenue is recognized for manufactured parts at a point in time, generally when products are shipped or delivered. The Company usually enters into agreements with customers to produce products at the beginning of a vehicle’s life. Blanket purchase orders received from customers and related documents generally establish the annual terms, including pricing, related to a vehicle model. Customers typically pay for parts based on customary business practices with payment terms generally between 30 and 90 days.
Revenue by customer group for the three months ended March 31, 2022 was as follows:
North AmericaEuropeAsia PacificSouth AmericaCorporate, Eliminations and OtherConsolidated
Passenger and Light Duty$314,587 $125,368 $103,404 $21,513 $ $564,872 
Commercial3,674 5,923 347 6 1,657 11,607 
Other3,633 123 2  32,747 36,505 
Revenue$321,894 $131,414 $103,753 $21,519 $34,404 $612,984 
8

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)

Revenue by customer group for the three months ended March 31, 2021 was as follows:
North AmericaEuropeAsia PacificSouth AmericaCorporate, Eliminations and OtherConsolidated
Passenger and Light Duty$331,613 $159,781 $113,041 $15,479 $ $619,914 
Commercial4,281 5,881 1,182 7 1,251 12,602 
Other3,142 114 2  33,193 36,451 
Revenue$339,036 $165,776 $114,225 $15,486 $34,444 $668,967 
The passenger and light duty group consists of sales to automotive OEMs and automotive suppliers, while the commercial group represents sales to OEMs of on- and off-highway commercial equipment and vehicles. The other customer group includes sales related to specialty and adjacent markets.
Substantially all of the Company’s revenues were generated from sealing, fuel and brake delivery and fluid transfer systems for use in passenger vehicles and light trucks manufactured by global OEMs.
A summary of the Company’s products is as follows:
Product LineDescription
Sealing SystemsProtect vehicle interiors from weather, dust and noise intrusion for improved driving experience; provide aesthetic and functional class-A exterior surface treatment
Fuel & Brake Delivery SystemsSense, deliver and control fluids to fuel and brake systems
Fluid Transfer SystemsSense, deliver and control fluids and vapors for optimal powertrain & HVAC operation
Revenue by product line for the three months ended March 31, 2022 was as follows:
North AmericaEuropeAsia PacificSouth AmericaCorporate, Eliminations and OtherConsolidated
Sealing systems$127,552 $105,134 $63,036 $16,110 $ $311,832 
Fuel and brake delivery systems102,721 23,038 23,747 3,561  153,067 
Fluid transfer systems91,621 3,242 16,970 1,848  113,681 
Other    34,404 34,404 
Revenue$321,894 $131,414 $103,753 $21,519 $34,404 $612,984 
Revenue by product line for the three months ended March 31, 2021 was as follows:
North AmericaEuropeAsia PacificSouth AmericaCorporate, Eliminations and OtherConsolidated
Sealing systems$121,175 $129,361 $69,673 $11,274 $ $331,483 
Fuel and brake delivery systems112,656 30,790 28,369 2,865  174,680 
Fluid transfer systems105,205 5,625 16,183 1,347  128,360 
Other    34,444 34,444 
Revenue$339,036 $165,776 $114,225 $15,486 $34,444 $668,967 
Contract Estimates
The amount of revenue recognized is usually based on the purchase order price and adjusted for variable consideration, including pricing concessions. The Company accrues for pricing concessions by reducing revenue as products are shipped or delivered. The accruals are based on historical experience, anticipated performance and management’s best judgment. The Company also generally has ongoing adjustments to customer pricing arrangements based on the content and cost of its products. Such pricing accruals are adjusted as they are settled with customers. Customer returns, which are infrequent, are usually related to quality or shipment issues and are recorded as a reduction of revenue. The Company generally does not recognize significant return obligations due to their infrequent nature.
9

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Contract Balances
The Company’s contract assets consist of unbilled amounts associated with variable pricing arrangements in its Asia Pacific region. Once pricing is finalized, contract assets are transferred to accounts receivable. As a result, the timing of revenue recognition and billings, as well as changes in foreign exchange rates, will impact contract assets on an ongoing basis. Contract assets were not materially impacted by any other factors during the three months ended March 31, 2022.
The Company’s contract liabilities consist of advance payments received and due from customers. Net contract assets (liabilities) consisted of the following:
March 31, 2022December 31, 2021Change
Contract assets$8,564 $ $8,564 
Contract liabilities(15)(143)128 
Net contract assets (liabilities)$8,549 $(143)$8,692 
Other
The Company, at times, enters into agreements that provide for lump sum payments to customers. These payment agreements are recorded as a reduction of revenue during the period the commitment is made. Amounts related to commitments of future payments to customers on the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 were current liabilities of $9,944 and $12,045, respectively, and long-term liabilities of $6,705 and $7,214, respectively.
The Company provides assurance-type warranties to its customers. Such warranties provide customers with assurance that the related product will function as intended and complies with any agreed-upon specifications, and are recognized in costs of products sold.
4. Restructuring
On an ongoing basis, the Company evaluates its business and objectives to ensure that it is properly configured and sized based on changing market conditions. Accordingly, the Company has implemented several restructuring initiatives, including closure or consolidation of facilities throughout the world and the reorganization of its operating structure.
The Company’s restructuring charges consist of severance, retention and outplacement services, and severance-related postemployment benefits (collectively, “employee separation costs”), other related exit costs and asset impairments related to restructuring activities. Employee separation costs are recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy.
10

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Restructuring expense by segment for the three months ended March 31, 2022 and 2021 was as follows:
Three Months Ended March 31,
20222021
North America$(439)$2,363 
Europe8,431 16,397 
Asia Pacific(153)369 
South America36 1,587 
Total Automotive7,875 20,716 
Corporate and other(44)331 
Total$7,831 $21,047 
Restructuring activity for the three months ended March 31, 2022 was as follows:
Employee Separation CostsOther Exit CostsTotal
Balance as of December 31, 2021$20,957 $5,627 $26,584 
Expense4,148 3,683 7,831 
Cash payments(6,493)(801)(7,294)
Foreign exchange translation and other(411)530 119 
Balance as of March 31, 2022$18,201 $9,039 $27,240 
Other exit costs for the three months ended March 31, 2022 included an immaterial gain on sale of fixed assets related to a closed facility in the Asia Pacific region.
5. Inventories
Inventories consist of the following:
March 31, 2022December 31, 2021
Finished goods$54,555 $43,186 
Work in process48,422 37,045 
Raw materials and supplies93,944 77,844 
$196,921 $158,075 
11

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
6. Leases
The Company primarily has operating and finance leases for certain manufacturing facilities, corporate offices and certain equipment. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, net, debt payable within one year, and long-term debt on the Company’s condensed consolidated balance sheets.
The components of lease expense were as follows:
Three Months Ended March 31,
20222021
Operating lease expense$7,386 $7,344 
Short-term lease expense911 1,640 
Variable lease expense288 248 
Finance lease expense:
Amortization of right-of-use assets492 546 
Interest on lease liabilities332 366 
Total lease expense$9,409 $10,144 
Other information related to leases was as follows:
Three Months Ended March 31,
20222021
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
     Operating cash flows for operating leases$7,530 $7,346 
     Operating cash flows for finance leases337 362 
     Financing cash flows for finance leases579 652 
Non-cash right-of-use assets obtained in exchange for lease obligations:
     Operating leases6,319 2,932 
Weighted Average Remaining Lease Term (in years)
Operating leases7.57.6
Finance leases9.510.4
Weighted Average Discount Rate
Operating leases5.9 %5.4 %
Finance leases5.8 %5.7 %
12

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Future minimum lease payments under non-cancellable leases as of March 31, 2022 were as follows:
YearOperating LeasesFinance
Leases
Remainder of 2022$20,564 $2,299 
202324,096 3,149 
202418,032 3,393 
202515,254 3,458 
202611,302 3,186 
Thereafter49,389 17,242 
    Total future minimum lease payments138,637 32,727 
Less imputed interest(28,018)(7,909)
    Total$110,619 $24,818 
Amounts recognized on the condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 were as follows:
March 31, 2022December 31, 2021
Operating Leases
Operating lease right-of-use assets, net$106,561 $111,052 
Current operating lease liabilities21,470 22,552 
Long-term operating lease liabilities89,149 92,760 
Finance Leases
Debt payable within one year2,110 2,153 
Long-term debt22,708 23,590 

As of March 31, 2022 and December 31, 2021, assets recorded under finance leases, net of accumulated depreciation were $24,754 and $25,690, respectively. As of March 31, 2022, the Company had one real estate lease that had not yet commenced with undiscounted lease payments of approximately $2,551. This lease is part of the sale-leaseback agreement on one of the Company’s European facilities. The lease commencement date was April 1, 2022, and the lease term is three years.
7. Property, Plant and Equipment
Property, plant and equipment consists of the following:
March 31, 2022December 31, 2021
Land and improvements$44,119 $44,495 
Buildings and improvements272,888 285,240 
Machinery and equipment1,259,431 1,269,330 
Construction in progress74,095 80,868 
1,650,533 1,679,933 
Accumulated depreciation(905,190)(895,585)
Property, plant and equipment, net$745,343 $784,348 
During the three months ended March 31, 2022, the Company recorded impairment charges of $455 due to idle assets in Europe. The fair value was determined using salvage value.
The deconsolidation of a joint venture during the three months ended March 31, 2022 included the removal of property, plant and equipment with gross carrying value of $29,590 and accumulated depreciation of $11,625.
In the first quarter of 2022, the Company signed a sale-leaseback agreement on one of its European facilities. The Company closed the transaction and received cash proceeds in the amount of $50,008 during the three months ended March 31, 2022. The sale-leaseback became effective on April 1, 2022. A corresponding accrued liability was recorded when proceeds
13

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
were received, which will be reduced when control transfers to the Company and a gain is recorded on April 1, 2022. The Company expects to record a gain on the sale transaction of approximately $32,500.
8. Goodwill and Intangible Assets
Goodwill
Changes in the carrying amount of goodwill by reporting unit for the three months ended March 31, 2022 were as follows:
North AmericaIndustrial Specialty GroupTotal
Balance as of December 31, 2021$128,246 $14,036 $142,282 
Foreign exchange translation55  55 
Balance as of March 31, 2022$128,301 $14,036 $142,337 
Goodwill is tested for impairment by reporting unit annually or more frequently if events or circumstances indicate that an impairment may exist. There were no indicators of potential impairment during the three months ended March 31, 2022.
Intangible Assets
Intangible assets and accumulated amortization balances as of March 31, 2022 and December 31, 2021 were as follows:
Gross
Carrying
Amount
Accumulated
Amortization
Net
Carrying
Amount
Customer relationships$153,376 $(126,632)$26,744 
Other39,441 (12,716)26,725 
Balance as of March 31, 2022$192,817 $(139,348)$53,469 
Customer relationships$154,767 $(126,626)$28,141 
Other44,955 (12,721)32,234 
Balance as of December 31, 2021$199,722 $(139,347)$60,375 
The deconsolidation of a joint venture during the three months ended March 31, 2022 included the removal of intangible assets (primarily land use rights) with net carrying value of $5,258.
14

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
9. Debt
A summary of outstanding debt as of March 31, 2022 and December 31, 2021 is as follows:
March 31, 2022December 31, 2021
Senior Notes$396,723 $396,544 
Senior Secured Notes242,310 241,683 
Term Loan320,605 321,212 
ABL Facility  
Finance leases24,818 25,743 
Other borrowings49,071 51,533 
Total debt1,033,527 1,036,715 
Less current portion(53,605)(56,111)
Total long-term debt$979,922 $980,604 
5.625% Senior Notes due 2026
In November 2016, the Company issued $400,000 aggregate principal amount of its 5.625% Senior Notes due 2026 (the “Senior Notes”). The Senior Notes mature on November 15, 2026. Interest on the Senior Notes is payable semi-annually in arrears in cash on May 15 and November 15 of each year.
Debt issuance costs related to the Senior Notes are amortized into interest expense over the term of the Senior Notes. As of March 31, 2022 and December 31, 2021, the Company had $3,277 and $3,456 of unamortized debt issuance costs, respectively, related to the Senior Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets.
13.0% Senior Secured Notes due 2024
In May 2020, the Company issued $250,000 aggregate principal amount of its 13.0% Senior Secured Notes due 2024 (the “Senior Secured Notes”). The Senior Secured Notes mature on June 1, 2024. Interest on the Senior Secured Notes is payable semi-annually in arrears in cash on June 1 and December 1 of each year.
The Company paid approximately $6,431 of debt issuance costs in connection with the transaction. Additionally, the Senior Secured Notes were issued at a discount of $5,000. As of March 31, 2022 and December 31, 2021, the Company had $4,236 and $4,594 of unamortized debt issuance costs, respectively, and $3,454 and $3,723 of unamortized original issue discount, respectively, related to the Senior Secured Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the Senior Secured Notes.
Term Loan Facility
In November 2016, the Company entered into Amendment No. 1 to its senior term loan facility (“Term Loan Facility”), which provides for loans in an aggregate principal amount of $340,000. On May 2, 2017, the Company entered into Amendment No. 2 to the Term Loan Facility to modify the interest rate. Subsequently, on March 6, 2018, the Company entered into Amendment No. 3 to the Term Loan Facility to further modify the interest rate. In accordance with this amendment, borrowings under the Term Loan Facility bear interest, at the Company’s option, at either (1) with respect to Eurodollar rate loans, the greater of the applicable Eurodollar rate and 0.75% plus 2.0% per annum, or (2) with respect to base rate loans, the base rate, (which is the highest of the then current federal funds rate plus 0.5%, the prime rate most recently announced by the administrative agent under the term loan, and the one-month Eurodollar rate plus 1.0%) plus 1.0% per annum. The Term Loan Facility matures on November 2, 2023, unless earlier terminated.
As of March 31, 2022 and December 31, 2021, the Company had $939 and $1,087 of unamortized debt issuance costs, respectively, and $606 and $701 of unamortized original issue discount, respectively, related to the Term Loan Facility, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the Term Loan Facility.
ABL Facility
In November 2016, the Company entered into a Third Amended and Restated Loan Agreement of its ABL Facility, which provided an aggregate revolving loan availability of up to $210,000, subject to borrowing base availability. In March 2020, the Company entered into the First Amendment of the Third Amended and Restated Loan Agreement (“the Amendment”). As a
15

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
result of the Amendment, the senior asset-based revolving credit facility (“ABL Facility”) maturity was extended to March 2025 and the aggregate revolving loan availability was reduced to $180,000. The aggregate revolving loan availability includes a $100,000 letter of credit sub-facility and a $25,000 swing line sub-facility. The ABL Facility also provides for an uncommitted $100,000 incremental loan facility, for a potential total ABL Facility of $280,000, if requested by the borrowers under the ABL Facility and the lenders agree to fund such increase. No consent of any lender is required to effect any such increase, except for those participating in the increase.
As of March 31, 2022, there were no loans outstanding under the ABL Facility. The Company’s borrowing base was $164,941. Net of the greater of 10% of the borrowing base or $15,000 that cannot be borrowed without triggering the fixed charge coverage ratio maintenance covenant and $5,769 of outstanding letters of credit, the Company effectively had $142,678 available for borrowing under its ABL facility.
Any borrowings under the ABL Facility will mature, and the commitments of the lenders under the ABL Facility will terminate, on the earlier of March 24, 2025 or the date 91 days prior to the maturity date of the Term Loan Facility (or another fixed asset facility replacing the Term Loan Facility).
As of March 31, 2022 and December 31, 2021, the Company had $720 and $782, respectively, of unamortized debt issuance costs related to the ABL Facility, which are presented in other assets in the condensed consolidated balance sheets.
Debt Covenants
The Company was in compliance with all covenants of the Senior Notes, Senior Secured Notes, Term Loan Facility and ABL Facility as of March 31, 2022.
Other
Other borrowings as of March 31, 2022 and December 31, 2021 reflect borrowings under local bank lines classified in debt payable within one year on the condensed consolidated balance sheet.
10. Fair Value Measurements and Financial Instruments
Fair Value Measurements
Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy is utilized, which prioritizes the inputs used in measuring fair value as follows:
Level 1:Observable inputs such as quoted prices in active markets;
Level 2:Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3:Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
Items Measured at Fair Value on a Recurring Basis
Estimates of the fair value of foreign currency derivative instruments are determined using exchange traded prices and rates. The Company also considers the risk of non-performance in the estimation of fair value and includes an adjustment for non-performance risk in the measure of fair value of derivative instruments. In certain instances where market data is not available, the Company uses management judgment to develop assumptions that are used to determine fair value. Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured or disclosed at fair value on a recurring basis as of March 31, 2022 and December 31, 2021 were as follows:
March 31, 2022December 31, 2021Input
Forward foreign exchange contracts - other current assets$2,686 $647 Level 2
Forward foreign exchange contracts - accrued liabilities(1,208)(1,535)Level 2
16

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
Items Measured at Fair Value on a Nonrecurring Basis
In addition to items that are measured at fair value on a recurring basis, the Company measures certain assets and liabilities at fair value on a nonrecurring basis, which are not included in the table above. As these nonrecurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy. For further information on assets and liabilities measured at fair value on a nonrecurring basis see Note 2. “Deconsolidation and Divestiture” and Note 7. “Property, Plant and Equipment.”
Items Not Carried at Fair Value
Fair values of the Company’s Senior Notes, Senior Secured Notes and Term Loan Facility were as follows:
March 31, 2022December 31, 2021
Aggregate fair value$764,211 $899,909 
Aggregate carrying value (1)
972,150 973,000 
(1) Excludes unamortized debt issuance costs and unamortized original issue discount.
Fair values were based on quoted market prices and are classified within Level 1 of the fair value hierarchy.
Derivative Instruments and Hedging Activities
The Company is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The Company enters into derivative instruments primarily to hedge portions of its forecasted foreign currency denominated cash flows and designates these derivative instruments as cash flow hedges in order to qualify for hedge accounting.
The Company formally documents its hedge relationships, including the identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the cash flow hedges. The Company also formally assesses whether a cash flow hedge is highly effective in offsetting changes in the cash flows of the hedged item. Derivatives are recorded at fair value in other current assets, other assets, accrued liabilities and other long-term liabilities. For a cash flow hedge, the change in fair value of the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) in the condensed consolidated balance sheet, to the extent that the hedges are effective, and reclassified into earnings when the underlying hedged transaction is realized. The realized gains and losses are recorded on the same line as the hedged transaction in the condensed consolidated statements of operations.
The Company is exposed to credit risk in the event of nonperformance by its counterparties on its derivative financial instruments. The Company mitigates this credit risk exposure by entering into agreements directly with major financial institutions with high credit standards that are expected to fully satisfy their obligations under the contracts.
Cash Flow Hedges
Forward Foreign Exchange Contracts - The Company uses forward contracts to mitigate the potential volatility to earnings and cash flow arising from changes in currency exchange rates that impact the Company’s foreign currency transactions. The principal currencies hedged by the Company include various European currencies, the Canadian Dollar, and the Mexican Peso. As of March 31, 2022 and December 31, 2021, the notional amount of these contracts was $96,913 and $136,103, respectively, and consisted of hedges of transactions up to December 2022.
Pretax amounts related to the Company’s cash flow hedges that were recognized in other comprehensive income (loss) (“OCI”) were as follows:
Gain (Loss) Recognized in OCI
Three Months Ended March 31,
20222021
Forward foreign exchange contracts$2,411 $(548)
Pretax amounts related to the Company’s cash flow hedges that were reclassified from AOCI and recognized in cost of products sold were as follows:
Gain (Loss) Reclassified from AOCI to Income
Three Months Ended March 31,
20222021
Forward foreign exchange contracts$43 $188 
17

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
(Dollar amounts in thousands except per share and share amounts)
11. Accounts Receivable Factoring
As a part of its working capital management, the Company sells certain receivables through a single third-party financial institution (the “Factor”) in a pan-European program. The amount sold varies each month based on the amount of underlying receivables and cash flow needs of the Company. These are permitted transactions under the Company’s credit agreements governing the ABL Facility and Term Loan Facility and the indentures governing the Senior Notes and Senior Secured Notes. The European factoring facility, which was renewed in March 2020, allows the Company to factor up to €120 million of its Euro-denominated accounts receivable, accelerating access to cash and reducing credit risk. The factoring facility expires in December 2023.
Costs incurred on the sale of receivables are recorded in other expense, net in the condensed consolidated statements of operations. The sale of receivables under this contract is considered an o