DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES

3 Months Ended

Mar. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES

The Company uses foreign currency exchange forward contracts (forward contracts) to protect against the impact of changes in the value of forecasted foreign currency cash flows resulting from revenues and operating expenses denominated in

currencies other than the U.S. Dollar (USD), primarily the Euro. Certain of these forward contracts are designated as cash flow hedges and have maturities of up to 21 months. The Company also enters into forward contracts to manage foreign exchange risk related to asset or liability positions denominated in currencies other than USD. Such forward contracts are considered to be economic hedges, are not designated as hedging instruments and have maturities of up to three months. The Company does not use derivative instruments for speculative trading purposes. The Company is exposed to counterparty credit risk on its derivatives. The Company has established and maintains strict counterparty credit guidelines and enters into hedging agreements with financial institutions that are investment grade or better to minimize the Company’s exposure to potential defaults. The Company is not required to pledge collateral under these agreements.

The following table summarizes the aggregate notional amounts for the Company’s derivatives outstanding as of the periods presented.


Forward Contracts	March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Sell	$	1,019,379	$	1,249,662
Purchase	$	157,832	$	198,408

Derivatives not designated as hedging instruments:
Sell	$	318,213	$	350,269
Purchase	$	10,955	$	90,102

The fair value carrying amounts of the Company’s derivatives, which are classified as Level 2 within the fair value hierarchy, were as follows:


Balance Sheet Location	March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Asset Derivatives
Other current assets	$	11,937	$	6,663
Other assets	2,489		1,855
Subtotal	$	14,426	$	8,518

Liability Derivatives
Accounts payable and accrued liabilities	$	11,883	$	30,005
Other long-term liabilities	2,512		8,171
Subtotal	$	14,395	$	38,176

Derivatives not designated as hedging instruments:
Asset Derivatives
Other current assets	$	930	$	547



Liability Derivatives
Accounts payable and accrued liabilities	$	1,793	$	3,848



Total Derivatives Assets	$	15,356	$	9,065
Total Derivatives Liabilities	$	16,188	$	42,024

For additional discussion of fair value measurements, see Note 1 – Business Overview and Significant Accounting Policies to the Company’s Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

The following tables summarize the impact of gains and losses from the Company's derivatives on its Condensed Consolidated Statements of Comprehensive Income for the periods presented.


	Three Months Ended March 31,
	2024			2023
Derivatives Designated as Cash Flow Hedging Instruments		Cash Flow Hedging Gains (Losses) Reclassified into Earnings		Cash Flow Hedging Gains (Losses) Reclassified into Earnings

Net product revenues		$	(1,119)	$	3,470
Operating expenses		$	504	$	(456)

Derivatives Not Designated as Hedging Instruments		Gains (Losses) Recognized in Earnings		Gains (Losses) Recognized in Earnings
Operating expenses		$	7,728	$	(4,163)

As of March 31, 2024, the amounts expected to be reclassified from Accumulated Other Comprehensive Income (AOCI) to earnings as the forecasted revenues and operating expense transactions occur over the next twelve months, were not material. For additional discussion of balances in AOCI see Note 7 – Accumulated Other Comprehensive Income.