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Derivative Financial Instruments (Tables) | 9 Months Ended
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Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | As of March 31, 2023, we had sixteen effective outstanding interest rate swap contracts. Fourteen of our swaps are indexed to USD LIBOR, while the remaining two are indexed to Term SOFR. The transition relief guidance from ASC 848 was applied to designate the two Term SOFR swap contracts that we entered into during the current quarter for hedge accounting. After USD LIBOR sunsets on June 30, 2023, we may convert our contracts to index to Term SOFR, otherwise the contracts will be subject to the fallback language within our credit agreement. Our interest rate swap contracts have varying start and maturity dates through April 2028.
Interest rate swap contracts outstanding: |  | Notional Amounts
Contracts accruing interest as of March 31, 2023 |  | $ | 400,000 |
Contracts with a future start date |  | 430,000 |
Total |  | $ | 830,000 |
Schedule of Notional Amounts of Outstanding Derivative Positions | As of March 31, 2023, we had the following outstanding currency derivative contracts that were not designated for hedge accounting and were primarily used to hedge fluctuations in the U.S. dollar value of forecasted transactions or balances denominated in Australian Dollar, British Pound, Canadian Dollar, Danish Krone, Euro, Indian Rupee, Mexican Peso, New Zealand Dollar, Norwegian Krone, Philippine Peso, Swiss Franc and Swedish Krona:
Notional Amount |  | Effective Date |  | Maturity Date |  | Number of Instruments |  | Index
$532,504 |  | June 2021 through March 2023 |  | Various dates through March 2025 |  | 553 |  | Various
Derivative Instruments in Statement of Financial Position, Fair Value | The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of March 31, 2023 and June 30, 2022. Our derivative asset and liability balances fluctuate with interest rate and currency exchange rate volatility.
| March 31, 2023
| Asset Derivatives |  | Liability Derivatives
| Balance Sheet line item |  | Gross amounts of recognized assets |  | Gross amount offset in Consolidated Balance Sheet |  | Net amount |  | Balance Sheet line item |  | Gross amounts of recognized liabilities |  | Gross amount offset in Consolidated Balance Sheet |  | Net amount
Derivatives in cash flow hedging relationships |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps | Other current assets / other assets |  | $ | 17,962 |  |  | $ | (863) |  |  | $ | 17,099 |  |  | Other current liabilities / other liabilities |  | $ | — |  |  | $ | — |  |  | $ | — |
Cross-currency swaps | Other assets |  | — |  |  | — |  |  | — |  |  | Other liabilities |  | (1,937) |  |  | — |  |  | (1,937) |
Total derivatives designated as hedging instruments |  |  | $ | 17,962 |  |  | $ | (863) |  |  | $ | 17,099 |  |  |  |  | $ | (1,937) |  |  | $ | — |  |  | $ | (1,937) |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency forward contracts | Other current assets / other assets |  | $ | 2,142 |  |  | $ | (620) |  |  | 1,522 |  |  | Other current liabilities / other liabilities |  | $ | (7,217) |  |  | 2,992 |  |  | $ | (4,225) |
Currency option contracts | Other current assets / other assets |  | 2,139 |  |  | (224) |  |  | 1,915 |  |  | Other current liabilities / other liabilities |  | (1,959) |  |  | 378 |  |  | (1,581) |
Total derivatives not designated as hedging instruments |  |  | $ | 4,281 |  |  | $ | (844) |  |  | $ | 3,437 |  |  |  |  | $ | (9,176) |  |  | $ | 3,370 |  |  | $ | (5,806) |
| June 30, 2022
| Asset Derivatives |  | Liability Derivatives
| Balance Sheet line item |  | Gross amounts of recognized assets |  | Gross amount offset in Consolidated Balance Sheet |  | Net amount |  | Balance Sheet line item |  | Gross amounts of recognized liabilities |  | Gross amount offset in Consolidated Balance Sheet |  | Net amount
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives in cash flow hedging relationships |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps | Other current assets / other assets |  | $ | 14,336 |  |  | $ | — |  |  | $ | 14,336 |  |  | Other current liabilities / other liabilities |  | $ | — |  |  | $ | — |  |  | $ | — |
Cross-currency swaps | Other assets |  | — |  |  | — |  |  | — |  |  | Other liabilities |  | (446) |  |  | — |  |  | $ | (446) |
Total derivatives designated as hedging instruments |  |  | $ | 14,336 |  |  | $ | — |  |  | $ | 14,336 |  |  |  |  | $ | (446) |  |  | $ | — |  |  | $ | (446) |
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency forward contracts | Other current assets / other assets |  | $ | 24,440 |  |  | $ | (3,802) |  |  | $ | 20,638 |  |  | Other current liabilities / other liabilities |  | $ | (505) |  |  | $ | — |  |  | $ | (505) |
Currency option contracts | Other current assets / other assets |  | 10,612 |  |  | (1) |  |  | 10,611 |  |  | Other current liabilities / other liabilities |  | (9) |  |  | — |  |  | (9) |
Total derivatives not designated as hedging instruments |  |  | $ | 35,052 |  |  | $ | (3,803) |  |  | $ | 31,249 |  |  |  |  | $ | (514) |  |  | $ | — |  |  | $ | (514) |
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive (loss) income, net of tax, for the three and nine months ended March 31, 2023 and 2022:
| Three Months Ended March 31, |  | Nine Months Ended March 31,
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |
Derivatives in cash flow hedging relationships |  |  |  |  |  |  |  |  |
Interest rate swaps | $ | (4,007) |  |  | $ | 12,446 |  |  | $ | 7,681 |  |  | $ | 17,986 |  |  |
Cross-currency swaps | (660) |  |  | (5,224) |  |  | (1,237) |  |  | (15,187) |  |  |
Derivatives in net investment hedging relationships |  |  |  |  |  |  |  |  |
Intercompany loan | (3,418) |  |  | 2,515 |  |  | (9,102) |  |  | 19,901 |  |  |
Currency forward contracts | — |  |  | 1,176 |  |  | — |  |  | 7,590 |  |  |
Total | $ | (8,085) |  |  | $ | 10,913 |  |  | $ | (2,658) |  |  | $ | 30,290 |  |  |
Reclassification out of Accumulated Other Comprehensive Income | The following table presents reclassifications out of accumulated other comprehensive loss for the three and nine months ended March 31, 2023 and 2022:
| Amount of Net Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income | Affected line item in the Statement of Operations
| Three Months Ended March 31, |  | Nine Months Ended March 31, |
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |  |
Derivatives in cash flow hedging relationships |  |  |  |  |  |  |  |  |  |
Interest rate swaps | $ | (1,939) |  |  | $ | 2,684 |  |  | $ | (2,632) |  |  | $ | 8,154 |  |  |  | Interest expense, net
Cross-currency swaps | 595 |  |  | 2,538 |  |  | 1,459 |  |  | 10,346 |  |  |  | Other income, net
Total before income tax | (1,344) |  |  | 5,222 |  |  | (1,173) |  |  | 18,500 |  |  |  | (Loss) income before income taxes
Income tax | 375 |  |  | (821) |  |  | 402 |  |  | (785) |  |  |  | Income tax expense
Total | $ | (969) |  |  | $ | 4,401 |  |  | $ | (771) |  |  | $ | 17,715 |  |  |  |
Derivatives Not Designated as Hedging Instruments | The following table presents the adjustment to fair value recorded within the consolidated statements of operations for the three and nine months ended March 31, 2023 and 2022 for derivative instruments for which we did not elect hedge accounting and de-designated derivative financial instruments that did not qualify as hedging instruments.
| Amount of Gain (Loss) Recognized in Net Loss | Affected line item in the Statement of Operations
| Three Months Ended March 31, |  | Nine Months Ended March 31, |
| 2023 |  | 2022 |  | 2023 |  | 2022 |  |  |
Currency contracts | $ | (2,428) |  |  | $ | 4,630 |  |  | $ | 2,021 |  |  | $ | 24,653 |  |  |  | Other income, net
Interest rate swaps | — |  |  | 6,580 |  |  | — |  |  | 6,364 |  |  |  | Other income, net
Total | $ | (2,428) |  |  | $ | 11,210 |  |  | $ | 2,021 |  |  | $ | 31,017 |  |  |  |

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