The Company has entered into foreign currency forward and option contracts to hedge certain cash flows related to anticipated expenditures related to the construction of its Berea, Kentucky and Richmond, Kentucky CEA facilities. These contracts, which have maturities ranging through December 2022, qualify as cash flow hedges and are used to hedge the Company’s foreign currency risk associated with the Euro denominated payments due upon the completion of established project milestones under the applicable CEA facility construction contracts. As of September 30, 2022, the total notional amount outstanding of foreign currency contracts designated as cash flow hedging instruments was €4,693 compared to €19,149 at December 31, 2021. As of September 30, 2022 and December 31, 2021, the Company maintained collateral of $193 and $3,710, respectively, for the hedge program which is included in prepaid expenses and other current assets in the respective unaudited condensed consolidated balance sheet.

The Company has elected to measure hedge effectiveness using the “spot method” under which the hedging relationship is considered perfectly effective and changes in the fair value of the forward and options contracts attributable to changes in the spot rate are recorded as a component of accumulated other comprehensive income (“AOCI”). As the hedged items are ultimately capitalized as part of the CEA facility fixed assets, the AOCI amounts will be reclassified into earnings over the same periods as the future depreciation expense related to those assets. Consistent with the allocation of CEA facility fixed asset depreciation, the AOCI reclassification will also be allocated between cost of goods sold (“COGS”) and SG&A within the unaudited condensed consolidated statement of operations and comprehensive loss.

Under the “spot method”, changes in the fair value of forward contracts attributable to changes in the difference between the forward rate and the spot rate (forward points) and the fair value of option contracts attributable to time and volatility values (up-front premium) will be excluded from the measure of hedge effectiveness and amortized as COGS and SG&A on a straight-line basis over the terms of the underlying contracts. During the three and nine months ended September 30, 2022 and September 30, 2021 the Company recognized amortization expense of $37 and $157, and $149 and $405, respectively, related to its foreign currency hedge contracts within its unaudited condensed consolidated statement of operations and comprehensive loss.

As of September 30, 2022 and December 31, 2021, the Company had a net asset of $0 and a net liability of $49 in foreign currency contracts designated as cash flow hedging instruments, respectively, which is included in other current assets and other current liabilities in the unaudited balance sheets.


	Three Months Ended September 30, 2022						Three Months Ended September 30, 2021
	Before Tax		Tax (Expense) Benefit		After Tax		Before Tax		Tax Benefit		After Tax
Foreign currency	$	37	$	—	$	37	$	(414)	$	—	$	(414)
Interest rate swap	3,514		—		3,514		348		—		348
Total Accumulated comprehensive income (loss)	$	3,551	$	—	$	3,551	$	(66)	$	—	$	(66)


	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
	Before Tax		Tax (Expense) Benefit		After Tax		Before Tax		Tax Benefit		After Tax
Foreign currency	$	206	$	—	$	206	$	(504)	$	—	$	(504)
Interest rate swap	10,465		—		10,465		(2,074)		—		(2,074)
Total Accumulated comprehensive income (loss)	$	10,671	$	—	$	10,671	$	(2,578)	$	—	$	(2,578)

During the three and nine months ended September 30, 2022 an income tax expense of $(949) and $(2,852) was recognized within other comprehensive income (loss), respectively, compared to income tax benefit of $82 and $754 for the three and nine months ended September 30, 2021, respectively.