XML 35 R25.htm IDEA: XBRL DOCUMENT
v3.23.3

Hedging Activities | 9 Months Ended
--- | ---
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Hedging Activities | Hedging ActivitiesThe Company’s ongoing business operations expose it to various risks, including fluctuating foreign exchange rates and interest rate risk. To manage these risks, the Company periodically enters into derivative financial instruments, such as foreign exchange forward contracts and interest rate swap agreements. The Company does not hold or enter into financial instruments for trading or speculative purposes. Foreign Exchange Forward Contracts A significant portion of the Company’s revenues and earnings are generated by its foreign operations. These foreign operations also represent a significant portion of the Company’s assets and liabilities. Generally, all of these foreign operations use the local currency as their functional currency and many have operations in currencies other than their functional currency, which creates foreign exchange risk. The Company uses foreign exchange forward contracts to economically hedge the impact of the variability in exchange rates on certain assets and/or liabilities denominated in certain foreign currencies. These forward contracts are marked-to-market at each reporting date. Changes in the fair value of the underlying instrument and settlements are recognized in earnings in Other (expense) income, net. The fair value of the forward contract is determined from sources independent of the Company, including the financial institutions which are party to the derivative instruments. All open foreign exchange forward contracts as of September 30, 2023 were entered into as hedges against the U.S. dollar. As of September 30, 2023, the Company had open foreign exchange forward contracts with a notional U.S. dollar value of the following:
Currency |  | September 30, 2023
Mexican Peso |  | $ | 41,900 |
Japanese Yen |  | 4,500 |
|  | $ | 46,400 |
Open foreign exchange forward contracts as of September 30, 2023 had maturities occurring over a period of one month. Interest Rate Swaps In order to manage the Company’s exposure to variable interest rate risk associated with the Credit Facility, such as the Secured Overnight Financing Rate (“SOFR”), in the first quarter of 2023, the Company entered into $300.0 million notional amounts of three year interest rate swaps to convert a portion of the Company’s variable rate borrowings into a fixed rate obligation. See Note 14 of Notes to Condensed Consolidated Financial Statements. These interest rate swaps are designated as cash flow hedges and, as such, the contracts are marked-to-market at each reporting date and any unrealized gains or losses are included in AOCI to the extent effective and reclassified to interest expense in the period during which the transaction affects earnings or it becomes probable that the forecasted transaction will not occur. Interest rate swaps are entered into with a limited number of counterparties within several tranches, each of which allows for net settlement of all contracts through a single payment to participating counterparties in a single currency in the event of a default on or termination of any one contract. As such, in accordance with the Company’s accounting policy, these derivative instruments are recorded on a net basis within the Condensed Consolidated Balance Sheets. The balance sheet classification and fair values of the Company’s derivative instruments, which are Level 2 measurements, are as follows:
|  |  | Fair Value
| Condensed Consolidated Balance Sheet Location |  | September 30, 2023 |  | December 31, 2022
Derivatives designated as cash flow hedges: |  |  |  |  |
Interest rate swaps | Other non-current Assets |  | $ | 7,538 |  |  | $ | — |
Foreign currency forward contracts | Other current liabilities |  | (564) |  |  | $ | — |
|  |  | $ | 6,974 |  |  | $ | — |
The following table presents the net unrealized (gain) loss deferred to AOCI:
|  | September 30, 2023 |  | December 31, 2022
Derivatives designated as cash flow hedges: |  |  |  |
Interest rate swaps | AOCI | $ | 5,804 |  |  | $ | — |
The following table presents the net gain (loss) reclassified from AOCI to earnings:
| Location and Amount of Gain (Loss) Recognized in Statements of Operations
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
Interest rate swaps | Interest expense, net | $ | 1,198 |  |  | $ | 134 |  |  | $ | 2,259 |  |  | $ | (882) |
Foreign exchange forward contracts | Other (expense) income, net | (29) |  |  | — |  |  | 2,107 |  |  | — |
|  | $ | 1,169 |  |  | $ | 134 |  |  | $ | 4,366 |  |  | $ | (882) |

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//815/tableOfContent + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration