Derivative Financial Instruments

12 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

We are exposed to various market risks, including risks associated with interest rates and foreign currency exchange rates.  We enter into certain derivative transactions to mitigate the volatility associated with these exposures. 

CASH FLOW HEDGES - INTEREST RATE SWAP CONTRACT

During the first quarter of fiscal 2021, the Company entered into a new interest rate swap agreement to extend the duration of its existing swap arrangement and to take advantage of lower interest rates. The existing interest rate swap, which was in a loss position of $35.3 million, was terminated, and the hedging relationship was de-designated. The liability for the terminated interest rate swap is not measured at fair value and will be paid over the remaining term of the new swap. The loss amount for the terminated swap is included in Accumulated other comprehensive income (loss) and will be amortized on a straight-lined basis into interest expense through January 31, 2024, the remaining term of the original swap.

The new interest rate swap is a floating-to-fixed interest rate swap contract to hedge the variability in LIBOR-based interest payments on a portion of our outstanding variable rate debt. The notional amount is scheduled to decrease quarterly and will expire on January 29, 2027. The new interest rate swap was designated as a cash flow hedge based on certain quantitative and qualitative assessments and we have determined that the hedge is highly effective and qualifies for hedge accounting.

FOREIGN CURRENCY CONTRACTS NOT DESIGNATED AS HEDGES

We enter into forward foreign exchange contracts in an effort to mitigate the risks associated with currency fluctuations on certain foreign currency balance sheet exposures. These foreign exchange contracts do not qualify for hedge accounting. 

The notional amounts of our derivative instruments are as follows:

	September 30,
	2021		2020
Derivatives designated as hedging instruments
Interest rate swap contract - new agreement	$	555,210	$	—
Interest rate swap contract - terminated agreement	—		571,000
Derivatives not designated as hedging instruments
Foreign exchange contracts to purchase U.S. dollars	$	4,225	$	8,054
Foreign exchange contracts to sell U.S. dollars	23,235		25,105

The fair values of our derivative instruments included in the Consolidated Balance Sheets are as follows:

	Consolidated Balance Sheets Location	Derivative Assets				Derivative Liabilities
		September 30,				September 30,
		2021		2020		2021		2020
Derivatives designated as hedging instruments
Interest rate swap contract	Other long-term assets	$	12,335	$	—	$	—	$	—
	Accrued expenses and other current liabilities	—		—		2,995		11,992
	Other long-term liabilities	—		—		—		26,000
Derivatives not designated as hedging instruments
Foreign exchange contracts	Prepaid expenses and other current assets	$	—	$	27	$	—	$	—
	Accrued expenses and other current liabilities	—		—		388		165

The following table summarizes the effects of our derivative instrument on our Consolidated Statements of (Loss) Income:

	Consolidated Statements of (Loss) Income Location	(Loss) Gain Recognized in Consolidated Statements of (Loss) Income
		Year Ended September 30,
		2021		2020		2019
Derivatives designated as hedging instruments
Interest rate swap contract	Interest expense, net	$	(4,835)	$	(9,360)	$	524
Terminated interest rate swap contract	Interest expense, net	(9,287)		—		—
Derivatives not designated as hedging instruments
Foreign exchange contracts	Other expense, net	$	(794)	$	(222)	$	28

The following table summarizes the effects of our derivative instrument on Accumulated other comprehensive income (loss):

	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss)
	Year Ended September 30,
	2021		2020		2019
Derivatives designated as hedging instruments
Interest rate swap contract	$	7,184	$	(23,161)	$	(23,667)

We expect approximately $14,139 to be reclassified from Accumulated other comprehensive income (loss) into Interest expense, net during the next twelve months related to our existing and terminated interest rate swaps based on projected rates of the LIBOR forward curve as of September 30, 2021.