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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The effect of net investment hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 was as follows (in thousands):


Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Foreign currency debt		$	125,840	$	36,308	$	283,431	$	81,290
Cross-currency interest rate swaps (included component) (1)		228,210		89,494		571,532		207,598
Cross-currency interest rate swaps (excluded component) (2)		(23,959)		(2,527)		(92,913)		(27,944)
Foreign currency forward contracts (included component) (1)		33,257		7,858		48,900		3,302
Foreign currency forward contracts (excluded component) (3)		(2,998)		(53)		(5,289)		(27)
Total		$	360,350	$	131,080	$	805,661	$	264,219

Amount of gain or (loss) recognized in earnings:
	Location of gain or (loss)	Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Cross-currency interest rate swaps (excluded component) (2)	Interest expense	$	12,739	$	11,863	$	37,346	$	32,478
Foreign currency forward contracts (excluded component) (3)	Interest expense	(154)		38		(317)		242
Total		$	12,585	$	11,901	$	37,029	$	32,720

(1)Included component represents foreign exchange spot rates.

(2)Excluded component represents cross-currency basis spread and interest rates.

(3)Excluded component represents foreign currency forward points.

Schedule of Cash Flow Hedges

The effect of cash flow hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and nine months ended September 30, 2022 and 2021 was as follows (in thousands):


Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021
Foreign currency forward and option contracts (included component) (1)		$	8,720	$	27,860	$	55,300	$	61,067
Foreign currency option contracts (excluded component) (2)		—		—		—		151
Interest rate locks		(350)		7,374		49,742		6,135
Total		$	8,370	$	35,234	$	105,042	$	67,353

Amount of gain or (loss) reclassified from accumulated other comprehensive income to income:
		Three Months Ended September 30,				Nine Months Ended September 30,
	Location of gain or (loss)	2022		2021		2022		2021
Foreign currency forward contracts	Revenues	$	53,874	$	(11,863)	$	89,275	$	(41,397)
Foreign currency forward contracts	Costs and operating expenses	(25,869)		5,872		(42,974)		21,659
Interest rate locks	Interest Expense	350		(1,101)		(376)		(2,955)
Total		$	28,355	$	(7,092)	$	45,925	$	(22,693)

Amount of gain or (loss) excluded from effectiveness testing included in income:
		Three Months Ended September 30,				Nine Months Ended September 30,
	Location of gain or (loss)	2022		2021		2022		2021

Foreign currency option contracts (excluded component) (2)	Revenues	$	—	$	—	$	—	$	(244)
Total		$	—	$	—	$	—	$	(244)

(1)Included component represents foreign exchange spot rates.

(2)Excluded component represents option's time value.

Schedule of Derivatives not Designated as Hedging Instruments in the Company's Condensed Consolidated Statements of Operations

The following table presents the effect of derivatives not designated as hedging instruments in our condensed consolidated statements of operations (in thousands):


Amount of gain or (loss) recognized in earnings:
		Three Months Ended September 30,				Nine Months Ended September 30,
	Location of gain or (loss)	2022		2021		2022		2021
Embedded derivatives	Revenues	$	—	$	1,023	$	(568)	$	6,168
Economic hedge of embedded derivatives	Revenues	—		(1,532)		(983)		(6,024)
Foreign currency forward contracts	Other income (expense)	138,725		62,840		272,342		127,615
Total		$	138,725	$	62,331	$	270,791	$	127,759

Schedule of Derivative Instruments Recognized in the Company's Condensed Consolidated Balance Sheets

The following table presents the fair value of derivative instruments recognized in our condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021 (in thousands):


	September 30, 2022				December 31, 2021
	Assets (1)		Liabilities (2)		Assets (1)		Liabilities (2)
Designated as hedging instruments:
Cash flow hedges
Foreign currency forward and option contracts	$	70,539	$	—	$	22,866	$	7,618
Interest rate locks	—		—		8,662		—
Net investment hedges
Cross-currency interest rate swaps	512,227		—		56,921		19,441
Foreign currency forward contracts	40,522		14		156		70
Total designated as hedging	623,288		14		88,605		27,129

Not designated as hedging instruments:
Embedded derivatives	—		—		3,247		652
Economic hedges of embedded derivatives	—		—		2,232		637
Foreign currency forward contracts	169,763		2,381		83,265		5,854
Total not designated as hedging	169,763		2,381		88,744		7,143
Total Derivatives	$	793,051	$	2,395	$	177,349	$	34,272

(1)As presented in our condensed consolidated balance sheets within other current assets and other assets.

(2)As presented in our condensed consolidated balance sheets within other current liabilities and other liabilities.

Schedule of Offsetting Derivative Assets and Liabilities

The following table presents information related to these offsetting arrangements as of September 30, 2022 and December 31, 2021 (in thousands):


	Gross Amounts Offset in Consolidated Balance Sheet
	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Net Amounts		Gross Amounts not Offset in the Balance Sheet		Net
September 30, 2022
Derivative assets	$	820,443	$	—	$	820,443	$	(15,582)	$	804,861
Derivative liabilities	15,596		—		15,596		(15,582)		14

December 31, 2021
Derivative assets	$	207,037	$	—	$	207,037	$	(47,538)	$	159,499
Derivative liabilities	49,326		—		49,326		(47,538)		1,788

Schedule of Offsetting Derivative Assets and Liabilities

The following table presents information related to these offsetting arrangements as of September 30, 2022 and December 31, 2021 (in thousands):


	Gross Amounts Offset in Consolidated Balance Sheet
	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Net Amounts		Gross Amounts not Offset in the Balance Sheet		Net
September 30, 2022
Derivative assets	$	820,443	$	—	$	820,443	$	(15,582)	$	804,861
Derivative liabilities	15,596		—		15,596		(15,582)		14

December 31, 2021
Derivative assets	$	207,037	$	—	$	207,037	$	(47,538)	$	159,499
Derivative liabilities	49,326		—		49,326		(47,538)		1,788

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

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+ Details