We are exposed to certain risks arising from operating internationally, including fluctuations in foreign exchange rates primarily related to the translation of sterling and euro-denominated net monetary liabilities, including intercompany balances, held by subsidiaries with a U.S. dollar functional currency. We manage these exposures within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes.

In order to hedge our exposure to foreign currency exchange risk associated with our Euro Term Loan, we entered into a cross-currency interest rate swap contract in May 2021, which matured on March 31, 2022, and was de-designated as a fair value hedge. The terms of this contract converted the principal repayments and interest payments on the Euro Term Loan into U.S. dollars. The carrying amount of the Euro Term Loan and the fair value of the cross-currency interest rate swap contract

were remeasured on a monthly basis, with changes in the euro to U.S. dollar foreign exchange rates recognized within foreign exchange loss in the consolidated statements of income (loss).

The impact on accumulated other comprehensive income (loss) and earnings from the cross-currency interest rate swap contract was as follows (in thousands):


	Year Ended December 31,
Cross-Currency Interest Rate Contract:	2022		2021
Loss recognized in accumulated other comprehensive income (loss), net of tax	$	—	$	(375)
Loss reclassified from accumulated other comprehensive income (loss) to foreign exchange loss, net of tax	128		246
Loss recognized in foreign exchange loss	2,646		35,885

We enter into foreign exchange forward contracts, with durations of up to 12 months, designed to limit the exposure to fluctuations in foreign exchange rates related to the translation of certain non-U.S. dollar denominated liabilities, including intercompany balances. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of December 31, 2022 and 2021, the notional amount of foreign exchange contracts where hedge accounting was not applied was $505.0 million and $347.2 million, respectively.

The foreign exchange loss in our consolidated statements of income (loss) included the following gains and losses associated with foreign exchange contracts not designated as hedging instruments (in thousands):


	Year Ended December 31,
Foreign Exchange Forward Contracts:	2022		2021		2020
Gain (loss) recognized in foreign exchange loss	$	(58,755)	$	(19,585)	$	19,843

The cash flow effects of our derivative contracts are included within net cash provided by operating activities in the consolidated statements of cash flows, except for the settlement of notional amounts of the cross-currency swap, which were included in net cash (used in) provided by financing activities.

To achieve a desired mix of floating and fixed interest rates on our variable rate debt, we entered into interest rate swap agreements in March 2017. In May 2021, we repaid the term loan to which these interest rate swap agreements related, at which point the interest rate swap contracts were de-designated as cash flow hedges. The interest rate swap agreements matured in July 2021.

The impact on accumulated other comprehensive income (loss) and earnings from interest rate swap contracts was as follows (in thousands):


	Year Ended December 31,
Interest Rate Contracts:	2022		2021		2020
Loss recognized in accumulated other comprehensive income (loss), net of tax	$	—	$	(14)	$	(4,543)
Gain reclassified from accumulated other comprehensive income (loss) to interest expense, net of tax	—		2,482		3,401


	December 31, 2022
	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value



Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets	$	17,356	Accrued liabilities	$	—

Total fair value of derivative instruments		$	17,356		$	—

December 31, 2021

Asset Derivatives

Liability Derivatives

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Cross-currency interest rate contracts

Other current assets

—

Accrued liabilities

15,232

Derivatives not designated as hedging instruments:

Foreign exchange forward contracts

Other current assets

580

Accrued liabilities

3,187

Total fair value of derivative instruments

580

18,419

Although we do not offset derivative assets and liabilities within our consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. These provisions were not applicable as of December 31, 2022 since all derivatives were in an asset position. The following table summarizes the potential effect on our consolidated balance sheets of offsetting our interest rate contracts and foreign exchange forward contracts subject to such provisions (in thousands) for 2021:


	December 31, 2021
	Gross Amounts of Recognized Assets/ Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet
Description							Derivative Financial Instruments		Cash Collateral Received (Pledged)		Net Amount
Derivative assets	$	580	$	—	$	580	$	(567)	$	—	$	13
Derivative liabilities	(18,419)		—		(18,419)		567		—		(17,852)