We measure certain financial assets and liabilities at fair value on a recurring basis. Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. An entity is required to classify certain assets and liabilities measured at fair value based on the following fair value hierarchy that prioritizes the inputs used to measure fair value:

Level 2 – Quoted prices for identical assets and liabilities in markets that are not active, quoted prices for similar assets and liabilities in active markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3– Unobservable inputs that are supported by little or no market activity, may be derived from internally developed methodologies based on management’s best estimate of fair value and that are significant to the fair value of the asset or liability.

Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment and may affect its placement within the fair value hierarchy. The following tables show, by level within the fair value hierarchy, our financial assets and liabilities that are accounted for at fair value on a recurring basis.


	September 30, 2023
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities
Money market funds	$	13,365	$	137,444	$	—	$	150,809
Equity securities	—		13,778		—		13,778
Commingled fixed income securities	1,500		5,756		—		7,256
Government and related securities	10,456		17,350		—		27,806
Corporate debt securities	—		50,820		—		50,820
Mortgage-backed / asset-backed securities	—		114,327		—		114,327
Derivatives
Interest rate swap	—		11,683		—		11,683

Total assets	$	25,321	$	351,158	$	—	$	376,479
Liabilities:
Derivatives

Foreign exchange contracts	$	—	$	(715)	$	—	$	(715)
Total liabilities	$	—	$	(715)	$	—	$	(715)


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Assets:
Investment securities
Money market funds	$	29,087	$	238,536	$	—	$	267,623
Equity securities	—		13,233		—		13,233
Commingled fixed income securities	1,520		6,526		—		8,046
Government and related securities	10,253		18,796		—		29,049
Corporate debt securities	—		52,319		—		52,319
Mortgage-backed / asset-backed securities	—		126,882		—		126,882
Derivatives
Interest rate swap	—		15,283		—		15,283
Foreign exchange contracts	—		479		—		479
Total assets	$	40,860	$	472,054	$	—	$	512,914
Liabilities:
Derivatives

Foreign exchange contracts	$	—	$	(1,472)	$	—	$	(1,472)
Total liabilities	$	—	$	(1,472)	$	—	$	(1,472)

The valuation of investment securities is based on the market approach using inputs that are observable, or can be corroborated by observable data, in an active marketplace. The following information relates to our classification within the fair value hierarchy:

•Money Market Funds: Money market funds typically invest in government securities, certificates of deposit, commercial paper and other highly liquid, low risk securities. Money market funds are principally used for overnight deposits and are classified as Level 1 when unadjusted quoted prices in active markets are available and as Level 2 when they are not actively traded on an exchange.

•Commingled Fixed Income Securities: Commingled fixed income securities are comprised of mutual funds that invest in a variety of fixed income securities, including securities of the U.S. government and its agencies, corporate debt, mortgage-backed securities and asset-backed securities. Fair value is based on the value of the underlying investments owned by each fund, minus its liabilities, divided by the number of shares outstanding, as reported by the fund manager. These mutual funds are classified as Level 1 when unadjusted quoted prices in active markets are available and as Level 2 when they are not actively traded on an exchange.

•Government and Related Securities: Debt securities are classified as Level 1 when unadjusted quoted prices in active markets are available. Debt securities are classified as Level 2 where fair value is determined using quoted market prices for similar securities or benchmarking model derived prices to quoted market prices and trade data for identical or comparable securities.

•Corporate Debt Securities: Corporate debt securities are valued using recently executed comparable transactions, market price quotations or bond spreads for the same maturity as the security. These securities are classified as Level 2.

•Mortgage-Backed Securities / Asset-Backed Securities: These securities are valued based on external pricing indices or external price/spread data. These securities are classified as Level 2.

•Foreign Exchange Contracts: The valuation of foreign exchange derivatives is based on the market approach using observable market inputs, such as foreign currency spot and forward rates and yield curves. These securities are classified as Level 2.

•Interest Rate Swaps: The valuation of interest rate swaps is based on an income approach using inputs that are observable or that can be derived from, or corroborated by, observable market data. These securities are classified as Level 2.

Investment securities classified as available-for-sale are recorded at fair value with changes in fair value due to market conditions recorded in accumulated other comprehensive loss (AOCL), and changes in fair value due to credit conditions recorded in earnings. There were no unrealized losses due to credit losses charged to earnings in the nine months ended September 30, 2023.


	September 30, 2023
	Amortized cost		Gross unrealized losses		Estimated fair value
Government and related securities	$	35,125	$	(9,054)	$	26,071
Corporate debt securities	65,271		(14,451)		50,820
Commingled fixed income securities	1,778		(278)		1,500
Mortgage-backed / asset-backed securities	148,113		(33,786)		114,327
Total	$	250,287	$	(57,569)	$	192,718


	December 31, 2022
	Amortized cost		Gross unrealized gains		Gross unrealized losses		Estimated fair value
Government and related securities	$	35,744	$	11	$	(8,210)	$	27,545
Corporate debt securities	66,300		—		(13,981)		52,319
Commingled fixed income securities	1,749		—		(229)		1,520
Mortgage-backed / asset-backed securities	156,352		—		(29,470)		126,882
Total	$	260,145	$	11	$	(51,890)	$	208,266


	September 30, 2023				December 31, 2022
	Fair Value		Gross unrealized losses		Fair Value		Gross unrealized losses
Greater than 12 continuous months
Government and related securities	$	26,071	$	9,054	$	17,063	$	2,753
Corporate debt securities	50,820		14,451		48,812		13,749

Mortgage-backed / asset-backed securities	114,327		33,786		114,839		28,040
Total	$	191,218	$	57,291	$	180,714	$	44,542

Less than 12 continuous months
Government and related securities	$	—	$	—	$	10,061	$	5,457
Corporate debt securities	—		—		3,508		232
Commingled fixed income securities	1,500		278		1,520		229
Mortgage-backed / asset-backed securities	—		—		12,042		1,430
Total	$	1,500	$	278	$	27,131	$	7,348

At September 30, 2023, all securities in the investment portfolio were in an unrealized loss position. However, we have the ability and intent to hold these securities until recovery of the unrealized losses or expect to receive the stated principal and interest at maturity. Accordingly, we have not recognized an impairment loss and our allowance for credit losses on these investment securities is not significant.


	Amortized cost		Estimated fair value
Within 1 year	$	2,567	$	2,280
After 1 year through 5 years	15,107		13,669
After 5 years through 10 years	71,033		56,861
After 10 years	161,580		119,908
Total	$	250,287	$	192,718

Actual maturities may not coincide with scheduled maturities as certain securities contain early redemption features and/or allow for the prepayment of obligations.

Held-to-maturity securities at September 30, 2023 and December 31, 2022 totaled $25 million and $22 million, respectively. Held-to-maturity securities primarily consist of highly-liquid government securities with maturities less than two years.

In the normal course of business, we are exposed to the impact of changes in foreign currency exchange rates and interest rates. We limit these risks by following established risk management policies and procedures, including the use of derivatives. We use derivative instruments to limit the effects of currency exchange rate fluctuations on financial results and manage the cost of debt. We do not use derivatives for trading or speculative purposes. Derivative instruments are recorded at fair value and the accounting for changes in fair value depends on the intended use of the derivative, the resulting designation and the effectiveness of the instrument in offsetting the risk exposure it is designed to hedge.

We may enter into foreign exchange contracts to mitigate the currency risk associated with anticipated inventory purchases between affiliates and from third parties. These contracts are designated as cash flow hedges. The effective portion of the gain or loss on cash flow hedges is included in AOCL in the period that the change in fair value occurs and is reclassified to earnings in the period that the hedged item is recorded in earnings. There were no outstanding contracts associated with these anticipated transactions at September 30, 2023. At December 31, 2022, outstanding contracts associated with these anticipated transactions had a notional value of $1 million.

We have interest rate swap agreements with an aggregate notional value of $200 million that are designated as cash flow hedges. The fair value of the interest rate swaps is recorded as a derivative asset or liability at the end of each reporting period with the change in fair value reflected in AOCL.


Designation of Derivatives	Balance Sheet Location	September 30, 2023		December 31, 2022
Derivatives designated as hedging instruments
Foreign exchange contracts	Other current assets and prepayments	$	—	$	15
	Accounts payable and accrued liabilities	—		(23)

Interest rate swaps	Other assets	11,683		15,283

Derivatives not designated as hedging instruments
Foreign exchange contracts	Other current assets and prepayments	—		464
	Accounts payable and accrued liabilities	(715)		(1,449)

	Total derivative assets	$	11,683	$	15,762
	Total derivative liabilities	(715)		(1,472)
	Total net derivative asset	$	10,968	$	14,290


	Three Months Ended September 30,
	Derivative Gain (Loss) Recognized in AOCL (Effective Portion)				Location of Gain (Loss) (Effective Portion)	Gain (Loss) Reclassified from AOCL to Earnings (Effective Portion)
Derivative Instrument	2023		2022			2023		2022
Foreign exchange contracts	$	—	$	134	Cost of sales	$	—	$	80

Interest rate swap	(1,600)		3,936		Interest expense	137		137
	$	(1,600)	$	4,070		$	137	$	217

	Nine Months Ended September 30,
	Derivative Gain (Loss) Recognized in AOCL (Effective Portion)				Location of Gain (Loss) (Effective Portion)	Gain (Loss) Reclassified from AOCL to Earnings (Effective Portion)
Derivative Instrument	2023		2022			2023		2022
Foreign exchange contracts	$	(25)	$	257	Cost of sales	$	(33)	$	143

Interest rate swap	(3,600)		12,863		Interest expense	412		412
	$	(3,625)	$	13,120		$	379	$	555

We also enter into foreign exchange contracts to minimize the impact on earnings from the revaluation of short-term intercompany loans and related interest denominated in a foreign currency. These foreign exchange contracts are not designated as hedging instruments. Accordingly, the revaluation of intercompany loans and interest and the change in fair value of these derivatives are recorded in earnings. All outstanding contracts at September 30, 2023 mature within three months.

The impact on earnings from the change in fair value of these foreign exchange contracts, exclusive of the corresponding impact on earnings from the revaluation of the intercompany loans and related interest, was as follows:


		Three Months Ended September 30,
		Derivative Gain (Loss) Recognized in Earnings
Derivatives Instrument	Location of Derivative Gain (Loss)	2023		2022
Foreign exchange contracts	Selling, general and administrative expense	$	(11,614)	$	(24,116)

		Nine Months Ended September 30,
		Derivative Gain (Loss) Recognized in Earnings
Derivatives Instrument	Location of Derivative Gain (Loss)	2023		2022
Foreign exchange contracts	Selling, general and administrative expense	$	(4,150)	$	(45,299)

Our financial instruments include cash and cash equivalents, available-for-sale and held-to-maturity investment securities, accounts receivable, loan receivables, derivative instruments, accounts payable and debt. The carrying value of cash and cash equivalents, held-to-maturity investment securities, accounts receivable, loans receivable, and accounts payable approximate fair value. The fair value of available-for-sale investment securities and derivative instruments are presented above. The fair value of debt is estimated based on recently executed transactions and market price quotations. The inputs used to determine the fair value of debt were classified as Level 2 in the fair value hierarchy. The carrying value and estimated fair value of debt was as follows: