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Derivative Financial Instruments (Notes) | 3 Months Ended
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Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | Derivatives and Hedging Activities Hedge Accounting and Hedging Program The purposes of our cash flow hedging programs are to manage the foreign currency exchange rate risk on forecasted revenues and expenses denominated in currencies other than the functional currency of the operating unit, and to manage floating interest rate risk associated with future interest payments on the variable-rate term loans issued in January 2022. We do not issue derivatives for trading or speculative purposes. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. The derivative instruments we utilize, including various foreign exchange contracts and interest rate swaps, are designated and qualify as cash flow hedges. Our derivative instruments are recorded at fair value on the condensed consolidated balance sheets and are classified based on the instrument's maturity date. We record gains or losses from changes in the fair values of the derivative instruments as a component of other comprehensive income (loss) and we reclassify those gains or losses into earnings in the same line item associated with the forecasted transaction and in the same period during which the hedged transaction affects earnings. If the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, we reclassify the gain or loss on the related derivative instrument from accumulated other comprehensive loss into earnings immediately. Foreign Currency Exchange Rate Risk Foreign Exchange Forward Contracts We enter into foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated revenues and expenses to minimize the effect of foreign exchange rate movements on the related cash flows. These contracts are agreements to buy or sell a quantity of a currency at a predetermined future date and at a predetermined exchange rate. Our foreign exchange forward contracts hedge exposures principally denominated in Mexican Pesos ("MXN"), Euros, Czech Koruna ("CZK"), Japanese Yen ("JPY"), Swedish Krona ("SEK"), Chinese Renminbi ("CNH"), Canadian Dollar ("CAD") and Australian Dollar ("AUD") and have varying maturities with an average term of approximately twelve months. The total notional amount of these outstanding derivative contracts as of March 31, 2023 was $101.8 million, which included the notional equivalent of $3.6 million in MXN, $26.4 million in Euros, $4.7 million in CZK, $21.2 million in JPY, $14.8 million in CNH, $2.7 million in SEK, $13.1 million in CAD, $13.1 million in AUD and $2.2 million in other foreign currencies, with terms currently through June 2024. Cross-currency Par Forward Contracts We enter into cross-currency par forward contracts to hedge a portion of our Mexico forecasted expenses denominated in MXN. These contracts are agreements to exchange cash flows from one currency to another at specified intervals over the contract term with all exchanges occurring at the same predetermined rate. In November 2021, we entered into a one-year cross-currency par forward contract with a term from December 1, 2021 to December 1, 2022. The total notional amount of this outstanding derivative as of March 31, 2022 was approximately 311.6 million MXN. This derivative instrument matures in equal monthly amounts at a fixed forward rate of 21.60 MXN/USD. Floating Interest Rate Risk In November 2021, in anticipation of entering into the new senior secured credit facilities in January 2022, which includes a variable-rate term loan A and a variable-rate term loan B (see Note 17: Long-Term Debt), we entered into two forward-starting interest rate swaps. In February 2022, certain terms under the agreements were amended to reflect the transition from LIBOR to the Secured Overnight Financing Rate ("SOFR"), an alternative reference rate. Under the interest rate swap agreements, we exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional amount. Effective March 30, 2022, the term loan A swap, as amended, has an initial notional amount of $300.0 million, reducing to $150.0 million evenly on a quarterly basis excluding its final maturity on March 30, 2027. We will pay a fixed rate of 1.32% and will receive the greater of 3-month USD SOFR or (0.15)%. Effective March 30, 2022, the term loan B swap, as amended, has an initial notional amount of $750.0 million, reducing to $46.9 million evenly on a quarterly basis excluding its final maturity on March 30, 2026. We will pay a fixed rate of 1.17% and will receive the greater of 3-month USD SOFR or 0.35%. These swaps effectively convert the relevant portion of the floating-rate term loans to fixed rates. The following table presents the fair values of our derivative instruments included within the Condensed Consolidated Balance Sheets (in thousands):
|  | Derivatives Designated as Cash Flow Hedging Instruments |  |
Condensed Consolidated Balance Sheet Location |  | Foreign Exchange Contracts |  | Interest Rate Swaps |  | Gross Derivatives
As of March 31, 2023 |  |  |  |  |  |
Prepaid expenses and other current assets |  | $ | 7,433 |  |  | $ | 25,560 |  |  | $ | 32,993 |
Other assets |  | 51 |  |  | 19,672 |  |  | 19,723 |
Total assets |  | $ | 7,484 |  |  | $ | 45,232 |  |  | $ | 52,716 |
Accrued liabilities |  | $ | 2,132 |  |  | $ | — |  |  | $ | 2,132 |
Other long-term liabilities |  | 41 |  |  | — |  |  | 41 |
Total liabilities |  | $ | 2,173 |  |  | $ | — |  |  | $ | 2,173 |
As of December 31, 2022 |  |  |  |  |  |
Prepaid expenses and other current assets |  | $ | 4,860 |  |  | $ | 28,431 |  |  | $ | 33,291 |
Other assets |  | 94 |  |  | 26,753 |  |  | 26,847 |
Total assets |  | $ | 4,954 |  |  | $ | 55,184 |  |  | $ | 60,138 |
Accrued liabilities |  | $ | 1,847 |  |  | $ | — |  |  | $ | 1,847 |
Other long-term liabilities |  | 167 |  |  | — |  |  | 167 |
Total liabilities |  | $ | 2,014 |  |  | $ | — |  |  | $ | 2,014 |
We recognized the following gains on our derivative instruments designated as cash flow hedges in other comprehensive income before reclassifications to net loss (in thousands):
|  | Gain (Loss) Recognized in Other Comprehensive Income
|  | Three months ended March 31, |  |
|  | 2023 |  | 2022 |  |  |  |
Derivatives designated as cash flow hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 2,451 |  |  | $ | 3,112 |  |  |  |  |
Interest rate swaps |  | (2,584) |  |  | 30,051 |  |  |  |  |
Total derivatives designated as cash flow hedging instruments |  | $ | (133) |  |  | $ | 33,163 |  |  |  |  |
The following table presents the effects of our derivative instruments designated as cash flow hedges on the Condensed Consolidated Statements of Operations (in thousands):
|  | Gain (Loss) Reclassified From Accumulated Other Comprehensive (Loss) Income into Income
|  |  |  | Three months ended March 31, |  |
|  | Location of Gain (Loss) Recognized in Income |  | 2023 |  | 2022 |  |  |  |
Derivatives designated as cash flow hedging instruments: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Total revenues |  | $ | (1,922) |  |  | $ | 2,543 |  |  |  |  |
Foreign exchange contracts |  | Cost of goods sold |  | 1,500 |  |  | (513) |  |  |  |  |
Foreign exchange contracts |  | Other (expense) income, net(1) |  | 229 |  |  | — |  |  |  |  |
Foreign exchange contracts |  | Interest expense(2) |  | 13 |  |  | 249 |  |  |  |  |
Interest rate swaps |  | Interest expense |  | 7,369 |  |  | — |  |  |  |  |
Total derivatives designated as cash flow hedging instruments |  |  |  | $ | 7,189 |  |  | $ | 2,279 |  |  |  |  |
_______________________________ (1) Represents location of gain reclassified from accumulated other comprehensive income into income as a result of ineffectiveness. (2) Represents location of gain reclassified from accumulated other comprehensive income into income as a result of forecasted transactions no longer probable of occurring. As of March 31, 2023, we expect an estimated $5.3 million in deferred gains on the outstanding foreign exchange contracts and an estimated $26.3 million in deferred gains on the interest rate swaps will be reclassified from accumulated other comprehensive loss to net income during the next 12 months concurrent with the underlying hedged transactions also being reported in net income.

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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 https://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 https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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