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Derivatives
 6 Months Ended
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives Hedging Objectives—We are exposed to certain risks relating to ongoing business operations. The primary risks managed by using derivative instruments are foreign currency exchange rate risk and interest rate risk. Forward contracts on various foreign currencies are entered into to manage the foreign currency exchange rate risk on operational expenditures' exposure
denominated in foreign currencies. Interest rate swaps are entered into to manage interest rate risk associated with our floating-rate borrowings.
In accordance with authoritative guidance on accounting for derivatives and hedging, we designate foreign currency forward contracts as cash flow hedges on operational exposure and interest rate swaps as cash flow hedges of floating-rate borrowings.
Cash Flow Hedging Strategy—To protect against the reduction in value of forecasted foreign currency cash flows, we hedge portions of our revenues and expenses denominated in foreign currencies with forward contracts. For example, when the dollar strengthens significantly against the foreign currencies, the decline in present value of future foreign currency expense is offset by losses in the fair value of the forward contracts designated as hedges. Conversely, when the dollar weakens, the increase in the present value of future foreign currency expense is offset by gains in the fair value of the forward contracts. Due to the uncertainty driven by the COVID-19 pandemic on our foreign currency exposures, we have paused entering into new cash flow hedges of forecasted foreign currency cash flows until we have more clarity regarding the recovery trajectory and its impacts on net exposures. As of June 30, 2023 and December 31, 2022, we had no unsettled forward contracts.
We enter into interest rate swap agreements to manage interest rate risk exposure. The interest rate swap agreements modify our exposure to interest rate risk by converting floating-rate debt to a fixed rate basis, thus reducing the impact of interest rate changes on future interest expense and net earnings. These agreements involve the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreements without an exchange of the underlying principal amount.
For derivative instruments that are designated and qualify as cash flow hedges, the effective portions and ineffective portions of the gain or loss on the derivative instruments, and the hedge components excluded from the assessment of effectiveness, are reported as a component of other comprehensive income (loss) (“OCI”) and reclassified into earnings in the same line item associated with the forecasted transaction and in the same period or periods during which the hedged transaction affects earnings. Cash flow hedges are classified in the same category in the consolidated statements of cash flows as the items being hedged and gains and losses on the derivative financial instruments are reported in cash provided by (used in) operating activities within the consolidated statements of cash flows. Derivatives not designated as hedging instruments are carried at fair value with changes in fair value reflected in Other, net in the consolidated statements of operations.
Interest Rate Swap Contracts—Interest rate swaps outstanding during the six months ended June 30, 2023 and 2022, are as follows:
Notional AmountInterest Rate
Received		Interest Rate PaidEffective DateMaturity Date
Designated as Hedging Instrument
$200 million
1 month SOFR(1)
1.71%(2)
April 30, 2022December 31, 2023
$150 million
1 month SOFR(1)
2.79%(3)
June 30, 2022December 31, 2023
$250 million
1 month SOFR(1)
4.72%
June 30, 2023June 30, 2026
$250 million
1 month SOFR(1)
3.88%
December 31, 2023December 31, 2024
______________________
(1)    Subject to a 0.5% floor.
(2)    Fixed fee of 1.71% effective April 30, 2022, and expiring December 30, 2022, and 3.09% effective December 31, 2022, and expiring December 31, 2023.
(3)    Fixed fee of 2.79% effective June 30, 2022, and expiring December 30, 2022, and 3.98% effective December 31, 2022, and expiring December 31, 2023.

In April 2022, we entered into an interest rate swap to hedge the interest payments associated with $200 million of the floating-rate 2022 Term Loan B-1 for the years 2022 and 2023. In June 2022, we entered into an interest rate swap to hedge the interest payments associated with $150 million of the floating-rate 2022 Term Loan B-1 for the years 2022 and 2023. In February 2023, we entered into a forward-starting interest rate swap to hedge the interest payments associated with $250 million of the floating-rate 2022 Term Loan B-1 for the year ended 2024. In June 2023, we entered into an interest rate swap to hedge the interest payments associated with $250 million of the floating-rate 2022 Term Loan B-2 for the years 2023 through 2026. We designated these swaps as cash flow hedges.
The estimated fair values of our derivatives designated as hedging instruments as of June 30, 2023 and December 31, 2022 are as follows (in thousands):
 Derivative Assets
  Fair Value as of
Derivatives Designated as Hedging InstrumentsConsolidated Balance Sheet LocationJune 30, 2023December 31, 2022
Interest rate swaps
Prepaid expenses and other current assets
$3,374 $4,905 
Interest rate swapsOther noncurrent liabilities(127)(168)
Total $3,247 $4,737 

The effects of derivative instruments, net of taxes, on OCI for the three and six months ended June 30, 2023 and 2022 are as follows (in thousands):
 Amount of Gains (Losses) Recognized in OCI on Derivative,
Effective Portion
Derivatives in Cash Flow Hedging RelationshipsThree Months Ended June 30,Six Months Ended June 30,
2023202220232022
Interest rate swaps$1,181 $(18)$885 $(18)
Total$1,181 $(18)$885 $(18)

  Amount of (Gains) Losses Reclassified from Accumulated OCI into Income, Effective Portion
Derivatives in Cash Flow Hedging RelationshipsIncome Statement LocationThree Months Ended June 30,Six Months Ended June 30,
2023202220232022
Interest rate swapsInterest expense, net$(1,427)$244 $(2,416)$244 
Total$(1,427)$244 $(2,416)$244