Derivative Financial Instruments

9 Months Ended

Sep. 30, 2021

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Note 10 – Derivative Financial Instruments

We use derivative instruments to manage risks related to foreign currencies, interest rates and the net investment risk in our foreign subsidiaries. Our objectives for holding derivatives include reducing, eliminating, and efficiently managing the economic impact of

these exposures as effectively as possible. Our derivative programs include strategies that both qualify and do not qualify for hedge accounting treatment.

Hedges of Foreign Currency Risk - We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward agreements to manage this exposure. At September 30, 2021 and December 31, 2020, we had $199.5 million and $276.2 million, respectively, of outstanding foreign currency forward agreements that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities; these instruments are not designated for hedge accounting treatment in accordance with ASC No. 815. We have recorded foreign currency forward agreements with a fair value of less than $0.5 million as a liability on our consolidated balance sheet.

Hedges of Interest Rate and Net Investment Risk -The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps, including interest rate collars, as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company makes use of cross currency swaps to decrease the foreign exchange risk inherent in the Company’s investment in some of its foreign subsidiaries.

The table below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their classification on our condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020:


	Other Current Liabilities
	2021		2020
Interest rate swaps and collars	$	99	$	1,626

The tables below set forth the effect of the Company’s derivative financial instruments on our condensed consolidated statements of income for the three and nine months ended September 30, 2021 and 2020:


Derivative Instruments	Amount of Gain or (Loss) Recognized in OCI on Derivative						Location of Gain or (Loss) Reclassified from OCI into	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Net Income						Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion Excluded from	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Designated as	September 30,						Accumulated	September 30,						Effectiveness	September 30,
Hedging Instruments	2021			2020			Income	2021			2020			Testing)	2021		2020
Three Months Ended
Interest rate swaps and collars	$	(3	)	$	2		Interest expense	$	(168	)	$	(210	)	Interest expense	$	-	$	-
Cross currency swaps	$	886		$	-		N/A	$	-		$	-		Interest income	$	627	$	-
Nine Months Ended
Interest rate swaps and collars	$	(13	)	$	(1,569	)	Interest expense	$	(495	)	$	(283	)	N/A		-		-
Cross currency swaps	$	1,862		$	-		N/A		-			-		Interest income	$	1,853	$	-

We estimate that $0.1 million of net derivative losses included in accumulated other comprehensive income (“AOCI”) as of September 30, 2021 will be reclassified into expense within the following 12 months. No gains or losses were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during three and nine months ended September 30, 2021 or 2020.




	Amount of Gain or (Loss) Recognized in Net Income
	September 30,
Derivative Instruments Not Designated as Hedging Instruments	2021			2020			Location of Gain or (Loss) Recognized in Net Income
Three Months Ended
Foreign currency forward contracts	$	(387	)	$	2,252		Foreign currency loss, net
Nine Months Ended
Foreign currency forward contracts	$	1,405		$	(286	)	Foreign currency loss, net

As of September 30, 2021 and December 31, 2020, the Company had not posted any collateral related to these agreements.