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Derivative Financial Instruments
 6 Months Ended
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments DERIVATIVE FINANCIAL INSTRUMENTS
The objective of our use of derivative financial instruments is to minimize the risks and/or costs associated with our investments and/or financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815 – “Derivatives and Hedging.” Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks. Refer to Note 2 for additional discussion of the accounting for designated and non-designated hedges.
The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, we only enter into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which we and our affiliates also have other financial relationships.
Net Investment Hedges of Foreign Currency Risk
Certain of our international investments expose us to fluctuations in foreign interest rates and currency exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional currency, the U.S. dollar. We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. dollar.
Designated Hedges of Foreign Currency Risk
The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of foreign currency risk (notional amounts in thousands):
June 30, 2023December 31, 2022
Foreign Currency Derivatives
Number of
 Instruments
Notional
 Amount
Foreign Currency Derivatives
Number of
 Instruments
Notional
 Amount
Buy USD / Sell SEK Forward2kr 1,004,507 Buy USD / Sell SEK Forward2kr1,003,626 
Buy USD / Sell GBP Forward5£706,195 Buy USD / Sell GBP Forward6£690,912 
Buy USD / Sell EUR Forward7€684,078 Buy USD / Sell EUR Forward8€722,311 
Buy USD / Sell AUD Forward5A$452,074 Buy USD / Sell AUD Forward8A$541,813 
Buy USD / Sell DKK Forward2kr.195,656 Buy USD / Sell DKK Forward3kr.195,019 
Buy USD / Sell CAD Forward2C$22,189 Buy USD / Sell CAD Forward2C$22,187 
Buy USD / Sell CHF Forward4CHF7,116 Buy USD / Sell CHF Forward2CHF5,263 

Non-designated Hedges of Foreign Currency Risk
The following table details our outstanding foreign exchange derivatives that were non-designated hedges of foreign currency risk (notional amounts in thousands):
June 30, 2023December 31, 2022
Non-designated Hedges
Number of
 Instruments
Notional
 Amount
Non-designated Hedges
Number of
 Instruments
Notional
 Amount
Buy GBP / Sell USD Forward2£24,400 Buy GBP / Sell USD Forward2£109,076 
Buy USD / Sell GBP Forward2£24,400 Buy USD / Sell GBP Forward2£109,076 
Buy EUR / Sell USD Forward2€17,500 Buy AUD / Sell USD Forward1A$23,600 
Buy USD / Sell EUR Forward2€17,500 Buy USD / Sell AUD Forward1A$23,600 
Cash Flow Hedges of Interest Rate Risk
Certain of our financing transactions expose us to a fixed versus floating rate mismatch between our assets and liabilities. We use derivative financial instruments, which include interest rate swaps, and may also include interest rate caps, interest rate options, floors, and other interest rate derivative contracts, to hedge interest rate risk associated with our borrowings where there is potential for an index mismatch.
The following table details our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk (notional amount in thousands):
June 30, 2023
Interest Rate DerivativesNumber of InstrumentsNotional AmountFixed RateIndexWtd. Avg. Maturity (Years)
Interest Rate Swaps1$229,858 4.60%SOFR1.4
No cash flow hedges of interest rate risk were outstanding as of December 31, 2022.
Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on our floating rate debt. During the twelve months following June 30, 2023, we estimate that an additional $1.4 million will be reclassified from accumulated other comprehensive income (loss) as a decrease to interest expense.
Financial Statement Impact of Hedges of Foreign Currency and Interest Rate Risks
The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):
 Increase (Decrease) to Net Interest Income Recognized from Derivatives
Three Months Ended June 30,Six Months Ended June 30,
Derivatives
in Hedging Relationships
Location of Income
 (Expense) Recognized
2023202220232022
Designated Hedges
Interest Income(1)
$7,072 $3,238 $15,479 $4,982 
Designated Hedges
Interest Expense(2)
75—75—
Non-Designated Hedges
Interest Income(1)
51(7)68(8)
Non-Designated Hedges
Interest Expense(3)
(43)55(62)65
Total $7,155 $3,286 $15,560 $5,039 
(1)Represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and prevailing US interest rates. These forward contracts effectively convert the foreign currency rate exposure for such investments to USD-equivalent interest rates.
(2)Represents the financial statement impact of proceeds (payments) from periodic settlements related to our interest rate swap, which is designated as a cash flow hedge.
(3)Represents the spot rate movement in our non-designated foreign currency hedges, which are marked-to-market and recognized in interest expense.
Valuation and Other Comprehensive Income
The following table summarizes the fair value of our derivative financial instruments ($ in thousands):
 
Fair Value of Derivatives in an Asset
 Position(1) as of
Fair Value of Derivatives in a Liability Position(2) as of
June 30, 2023December 31, 2022June 30, 2023December 31, 2022
Derivatives designated as hedging instruments:
Foreign exchange contracts$11,060 $501 $19,087 $111,573 
Interest rate derivatives1,388 — — — 
Total derivatives designated as hedging instruments$12,448 $501 $19,087 $111,573 
Derivatives not designated as hedging instruments:
Foreign exchange contracts$241 $6,848 $875 $8,092 
Interest rate derivatives— — — — 
Total derivatives not designated as hedging instruments$241 $6,848 $875 $8,092 
Total Derivatives$12,689 $7,349 $19,962 $119,665 
(1)Included in other assets in our consolidated balance sheets.
(2)Included in other liabilities in our consolidated balance sheets.
The following table presents the effect of our derivative financial instruments on our consolidated statements of operations ($ in thousands):
Derivatives in Hedging Relationships
Amount of Gain (Loss) Recognized in
OCI on Derivatives
Location of
 Gain (Loss)
 Reclassified
from Accumulated OCI into Income		Amount of
Loss Reclassified from
 Accumulated OCI into Income
Three Months Ended June 30, 2023Six Months Ended June 30, 2023Three Months Ended June 30, 2023Six Months Ended June 30, 2023
Net Investment Hedges 
Foreign exchange contracts(1)
$(26,945)$(50,997)Interest Expense$— $— 
Cash Flow Hedges 
Interest rate derivatives1,3881,388Interest Expense—— 
Total$(25,557)$(49,609) $— $— 
(1)During the three and six months ended June 30, 2023, we paid net cash settlements of $7.8 million and $139.2 million, respectively, on our foreign currency forward contracts, respectively. Those amounts are included as a component of accumulated other comprehensive income on our consolidated balance sheets.

Credit-Risk Related Contingent Features
We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of June 30, 2023, we were in a net liability position with one of our counterparties and in a net asset position with our other counterparty. As of June 30, 2023, we had collateral posted with our counterparties of $9.0 million. As of December 31, 2022, we were in a net liability position with one of our counterparties and in a net asset position with our other counterparty. As of December 31, 2022 we had collateral posted with our counterparties of $103.1 million.