The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposures to a wide variety of business and operational risks. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s receivables and borrowings.

Certain of the Company’s foreign operations expose the Company to fluctuations of foreign exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain assets and liabilities in terms of its functional currency, the U.S. Dollar.

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 this objective, the Company primarily uses interest rate swaps 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. During the three and six months ended December 31, 2022, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt.

For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Amounts reported in AOCL related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable rate debt. During the remaining six months of fiscal 2023, the Company estimates that an additional $3,664 will be reclassified as a decrease to interest expense.

The Company is exposed to fluctuations in various foreign currencies against its functional currency, the U.S. Dollar. The Company uses foreign currency derivatives including cross-currency swaps to manage its exposure to fluctuations in the USD-EUR exchange rates. Cross-currency swaps involve exchanging fixed-rate interest payments for fixed-rate interest receipts, both of which will occur at the USD-EUR forward exchange rates in effect upon entering into the instrument. The Company, at times, also uses forward contracts to manage its exposure to fluctuations in the GBP-EUR exchange rates. The Company designates these derivatives as cash flow hedges of foreign exchange risks.

For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in AOCL and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. During the remaining six months of fiscal 2023, the Company estimates that an additional $46 relating to cross-currency swaps will be reclassified as an increase to interest expense.

The Company is exposed to fluctuations in foreign exchange rates on investments it holds in its European foreign entities and their exposure to the Euro. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in the foreign exchange rate on its foreign investment in Europe. Currency forward agreements involve fixing the USD-EUR exchange rate for delivery of a specified amount of foreign currency on a specified date. The currency forward agreements are typically cash settled in U.S. Dollars for their fair value at or close to their settlement date. Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency- fixed-rate payments over the life of the agreement.

For derivatives designated as net investment hedges, the gain or loss on the derivative is reported in accumulated other comprehensive loss as part of the cumulative translation adjustment. Amounts are reclassified out of accumulated other comprehensive loss into earnings when the hedged net investment is either sold or substantially liquidated.

The Company is exposed to changes in the fair value of certain of its foreign denominated intercompany loans due to changes in foreign exchange spot rates. The Company uses fixed-to-fixed cross-currency swaps to hedge its exposure to changes in foreign exchange rates affecting gains and losses on intercompany loan principal and interest. Cross-currency swaps involve the receipt of functional-currency-fixed-rate amounts from a counterparty in exchange for the Company making foreign-currency-fixed-rate payments over the life of the agreement.

For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest and other financing expense, net.

Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company’s accounting policy election. The earnings recognition of excluded components is presented in the same income statement line item as the earnings effect of the hedged transaction. During the remaining six months of fiscal 2023, the Company estimates that an additional $239 relating to cross currency swaps will be reclassified as a decrease to interest expense.


	Carrying Amount of the Hedged Asset				Cumulative Amount of Fair Value Hedge Adjustment Included in the Carrying Amount of the Hedged Asset

	December 31, 2022		June 30, 2022		December 31, 2022		June 30, 2022
Intercompany loan receivable	$	26,441	$	25,899	$	2,230	$	122

Asset Derivatives

Balance Sheet Location

Fair Value

Derivatives designated as hedging instruments:

Interest rate swaps

Prepaid expenses and other current assets

7,240

Interest rate swaps

Other noncurrent assets

5,250

Cross-currency swaps

Prepaid expenses and other current assets

2,365

Cross-currency swaps

Other noncurrent assets

246

Total derivatives designated as hedging instruments

15,101


	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps	Prepaid expenses and other current assets	$	4,230	Accrued expenses and other current liabilities	$	—
Interest rate swaps	Other noncurrent assets	—		Other noncurrent liabilities	3,184
Cross-currency swaps	Prepaid expenses and other current assets	2,400		Accrued expenses and other current liabilities	—
Cross-currency swaps	Other noncurrent assets	846		Other noncurrent liabilities	—

Total derivatives designated as hedging instruments		$	7,476		$	3,184


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCL on Derivatives				Location of Gain (Loss) Reclassified from AOCL into Income (Expense)	Amount of Gain (Loss) Reclassified from AOCL into Income (Expense)
	Three Months Ended December 31,					Three Months Ended December 31,
	2022		2021			2022		2021
Interest rate swaps	$	(682)	$	772	Interest and other financing expense, net	$	1,988	$	(105)
Cross-currency swaps	—		593		Interest and other financing expense, net / Other expense (income), net	(115)		664
Foreign currency forward contracts	80		(98)		Cost of sales	—		26
Total	$	(602)	$	1,267		$	1,873	$	585


Derivatives in Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in AOCL on Derivatives				Location of Gain (Loss) Reclassified from AOCL into Income (Expense)	Amount of Gain (Loss) Reclassified from AOCL into Income (Expense)
	Six Months Ended December 31,					Six Months Ended December 31,
	2022		2021			2022		2021
Interest rate swaps	$	14,580	$	655	Interest and other financing expense, net	$	3,135	$	(209)
Cross-currency swaps	—		1,369		Interest and other financing expense, net / Other expense (income), net	(230)		1,402
Foreign currency forward contracts	80		(79)		Cost of sales	—		26
Total	$	14,660	$	1,945		$	2,905	$	1,219

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing cash flow hedge accounting on the Consolidated Statements of Operations for the three months ended of December 31, 2022 and 2021:


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
				Three Months Ended December 31, 2022						Three Months Ended December 31, 2021
				Cost of sales		Interest and other financing expense, net		Other expense/income, net		Cost of sales		Interest and other financing expense, net		Other expense/income, net
The effects of cash flow hedging:
	Gain (loss) on cash flow hedging relationships
		Interest rate swaps
			Amount of gain (loss) reclassified from AOCL into income	$	—	$	1,988	$	—	$	—	$	(105)	$	—

		Cross-currency swaps
			Amount of (loss) gain reclassified from AOCL into income	$	—	$	(115)	$	—	$	—	$	44	$	620

		Foreign currency forward contracts
			Amount of gain reclassified from AOCL into income	$	—	$	—	$	—	$	26	$	—	$	—


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Cash Flow Hedging Relationships
				Six Months Ended December 31, 2022						Six Months Ended December 31, 2021
				Cost of sales		Interest and other financing expense, net		Other expense (income), net		Cost of sales		Interest and other financing expense, net		Other expense (income), net
The effects of cash flow hedging:
	Gain (loss) on cash flow hedging relationships
		Interest rate swaps
			Amount of gain (loss) reclassified from AOCL into income	$	—	$	3,135	$	—	$	—	$	(209)	$	—

		Cross-currency swaps
			Amount of (loss) gain reclassified from AOCL into income	$	—	$	(230)	$	—	$	—	$	85	$	1,317

		Foreign currency forward contracts
			Amount of gain reclassified from AOCL into income	$	—	$	—	$	—	$	26	$	—	$	—


Derivatives in Fair Value Hedging Relationships	Amount of Loss Recognized in AOCL on Derivatives			Location of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)	Amount of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)
	Three Months Ended December 31,				Three Months Ended December 31,
	2022		2021		2022		2021

Cross-currency swaps	$	(1,416)	—	Interest and other financing expense, net / Other expense (income), net	$	123	—


Derivatives in Fair Value Hedging Relationships	Amount of Gain Recognized in AOCL on Derivatives			Location of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)	Amount of Gain Reclassified from AOCL into Income on Derivatives (Amount Excluded from Effectiveness Testing)
	Six Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022		2021

Cross-currency swaps	$	122	—	Interest and other financing expense, net / Other expense (income), net	$	246	—

The following table presents the pre-tax effect of the Company’s derivative financial instruments electing fair value hedge accounting on the Consolidated Statements of Operations for the three months ended of December 31, 2022 and 2021:


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Fair Value Hedging Relationships
				Three Months Ended December 31, 2022					Three Months Ended December 31, 2021
				Cost of sales		Interest and other financing expense, net		Other expense/income, net	Cost of sales		Interest and other financing expense, net		Other expense/income, net
The effects of fair value hedging:
	Gain (loss) on fair value hedging relationships



		Cross-currency swaps
			Amount of loss reclassified from AOCL into income	$	—	$	(2,107)		$	—	$	—	$	—


				Location and Amount of Gain (Loss) Recognized in the Consolidated Statement of Operations on Fair Value Hedging Relationships
				Six Months Ended December 31, 2022						Six Months Ended December 31, 2021
				Cost of sales		Interest and other financing expense, net		Other expense (income), net		Cost of sales		Interest and other financing expense, net		Other expense (income), net
The effects of fair value hedging:
	Gain (loss) on fair value hedging relationships



		Cross-currency swaps
			Amount of loss reclassified from AOCL into income	$	—	$	(296)	$	—	$	—	$	—	$	—

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the three months ended December 31, 2022 and 2021:


Derivatives in Net Investment Hedging Relationships	Amount of (Loss) Gain Recognized in AOCL on Derivatives				Location of (Loss) Gain Recognized in (Expense) Income on Derivatives	Amount of Gain (Loss) Recognized in Income (Expense) on Derivatives
	Three Months Ended December 31,					Three Months Ended December 31,
	2022		2021			2022		2021
Cross-currency swaps	$	(5,790)	$	1,849	Interest and other financing expense, net	$	495	$	140

The following table presents the pre-tax effect of the Company’s net investment hedges on AOCL and the Consolidated Statements of Operations for the six months ended December 31, 2022 and 2021:


Derivatives in Net Investment Hedging Relationships	Amount of Gain Recognized in AOCL on Derivatives				Location of (Loss) Gain Recognized in (Expense) Income on Derivatives	Amount of (Loss) Gain Recognized in (Expense) Income on Derivatives
	Six Months Ended December 31,					Six Months Ended December 31,
	2022		2021			2022		2021
Cross-currency swaps	$	479	$	4,267	Interest and other financing expense, net	$	990	$	270

The Company has agreements with each of its derivative counterparties that contain a provision providing that upon certain defaults by the Company on any of its indebtedness, the Company could also be declared in default on its derivative obligations.