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Derivative Instruments and Hedges | 9 Months Ended
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Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedges | Derivative Instruments and Hedges Our risk management and foreign currency derivatives and hedging policy specifies the conditions under which we may enter into derivative contracts. See Notes 1 and 9 to our consolidated financial statements included in our 2021 Annual Report and Note 7 o f this Quarterly Report for additional information on our derivatives. We enter into foreign exchange forward contracts to hedge our cash flow risks associated with transactions denominated in currencies other than the local currency of the operation engaging in the transaction. We have not elected hedge accounting for our foreign exchange forward contracts and the changes in the fair values are recognized immediately in our condensed consolidated statements of income. Forei gn exchange forward contr acts with third parties had a notional value of $399.6 million and $425.2 million at September 30, 2022 and December 31, 2021, respectively. At September 30, 2022, the length of foreign exchange forward contracts currently in place ranged from 5 days to 29 months. We are exposed to risk from credit-related losses resulting from non performance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under foreign exchange forward contracts agreements and expect all counterparties to meet their obligations. We have not experienced credit losses from our counterparties. The fair values of foreign exchange forward contracts are summarized below:
| September 30, |  | December 31,
(Amounts in thousands) | 2022 |  | 2021
Current derivative assets | $ | 5,016 |  |  | $ | 740 |
Noncurrent derivative assets | — |  |  | 2 |
Current derivative liabilities | 7,051 |  |  | 2,924 |
Noncurrent derivative liabilities | 315 |  |  | 82 |
Current and noncurrent derivative assets are reported in our condensed consolidated balance sheets in prepaid expenses and other and other assets, net, respectively. Current and noncurrent derivative liabilities are reported in our condensed consolidated balance sheets in accrued liabilities and retirement obligations and other liabilities, respectively. The impact of net changes in the fair values of foreign exchange forward contracts are summarized below:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(Amounts in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Gains (losses) recognized in income | $ | 1,245 |  |  | $ | (75) |  |  | $ | 1,478 |  |  | $ | 1,718 |
Gains and losses recognized in our condensed consolidated statements of income for foreign exchange forward contracts are classified as other income (expense), net. As a means of managing the volatility of foreign currency exposure with the Euro/U.S. dollar exchange rate, we enter into cross-currency swap agreements as a hedge of our Euro investment in certain of our international subsidiaries. Accordingly, on April 14, 2021 and March 9, 2021, we entered into cross currency swap agreements, with both having termination dates of October 1, 2030 and the March 9, 2021 cross currency swap having an early termination date of March 11, 2025. Also, d uring the third quarter of 2020 we entered into a cross currency swap agreement with a termination date of October 1, 2030 and an early termination date of September 22, 2025. The swap agreements are designated as net investment hedges and as of September 30, 2022 the combined notional value of these swaps was €423.2 million. The swaps are classified as Level II under the fair value hierarchy. The fair values of our cross-currency swaps are summarized below:
| September 30, |  | December 31,
(Amounts in thousands) | 2022 |  | 2021
Other assets, net | $ | 96,798 |  |  | $ | 23,129 |
We exclude the interest accruals on the swaps from the assessment of hedge effectiveness and recognize the interest accruals in earnings within interest expense. For each reporting period, the change in the fair value of the swaps attributable to changes in the spot rate and differences between the change in the fair value of the excluded components and the amounts recognized in earnings under the swap accrual process are reported in accumulate d other comprehensive loss ("AOCL") on our consolidated balance sheet. For the three and nine months ending September 30, 2022, an interest accrual of $2.3 million and $6.4 million, respectively, was recognized within interest expense in our condensed consolidated statements of income. For the three and nine months ending September 30, 2021, an interest accrual of $1.9 million and $4.3 million, respectively, was recognized within interest expense. The cumulative net investment hedge (gains) losses, net of deferred taxes, under cross-currency swaps recorded in AOCL on our condensed consolidated balance sheet are summarized below:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(Amounts in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
(Gain) loss-included component (1) | $ | (22,107) |  |  | $ | (8,869) |  |  | $ | (66,363) |  |  | $ | (8,684) |
(Gain) loss-excluded component (2) | 839 |  |  | (3,647) |  |  | (7,669) |  |  | 243 |
(Gain) loss recognized in AOCL | $ | (21,268) |  |  | $ | (12,516) |  |  | $ | (74,032) |  |  | $ | (8,441) |
_____________________________________________ (1) Change in the fair value of the swaps attributable to changes in spot rates. (2) Change in the fair value of the swaps due to changes other than those attributable to spot rates. In March 2015, we designat ed €255.7 million of our 1.25% E UR 2022 Senior Notes ("2022 Euro Senior Notes") as a net investment hedge of our Euro investment in certain of our international subsidiaries. On September 22, 2020, we increased the designated hedged value on the 2022 Euro Senior Notes to €336.3 million, which reflected the remaining balance of the 2022 Euro Senior Notes. For each reporting period, the change in the carrying value due to the remeasurement of the effective portion was reported in AOCL on our condensed consolidated balance sheet and the remaining change in the carrying value of the ineffective portion, if any, was recognized in other income (expense), net in our condensed consolidated statements of income. As a result of the redemption of our 2022 Euro Senior Notes in the first quarter of 2021, we dedesignated the hedged value of our net investment hedge. Prior to the dedesignation, the cumulative impact recorded in AOCL on our condensed consolidated balance sheet from the change in carrying value due to the remeasurement of the effective portion of the net investment hedge is summarized below:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(Amounts in thousands) | 2022 |  | 2021 |  | 2022 |  | 2021
Loss recognized in AOCL | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 29,554 |
We use the spot method to measure the effectiveness of our net investment hedges and evaluate the effectiveness on a prospective basis at the beginning of each quarter. We did not record any ineffectiveness during the three and nine months ended September 30, 2022 and 2021, respectively.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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