The objective of our use of derivative financial instruments is to minimize the risks and/or costs associated with our investments and/or financing transactions. These derivatives may or may not qualify as net investment, cash flow, or fair value hedges under the hedge accounting requirements of ASC 815 – “Derivatives and Hedging.” Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements and other identified risks. Refer to Note 2 for additional discussion of the accounting for designated and non-designated hedges.

The use of derivative financial instruments involves certain risks, including the risk that the counterparties to these contractual arrangements do not perform as agreed. To mitigate this risk, we only enter into derivative financial instruments with counterparties that have appropriate credit ratings and are major financial institutions with which we and our affiliates also have other financial relationships.

Certain of our international investments expose us to fluctuations in foreign interest rates and currency exchange rates. These fluctuations may impact the value of our cash receipts and payments in terms of our functional currency, the U.S. dollar. We use foreign currency forward contracts to protect the value or fix the amount of certain investments or cash flows in terms of the U.S. dollar.

The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of foreign currency risk (notional amounts in thousands):


December 31, 2024				December 31, 2023
Foreign Currency Derivatives	Number of Instruments	Notional Amount		Foreign Currency Derivatives	Number of Instruments	Notional Amount
Buy USD / Sell SEK Forward	2	kr	971,180	Buy USD / Sell SEK Forward	2	kr	973,246
Buy USD / Sell GBP Forward	5	£	604,739	Buy USD / Sell GBP Forward	7	£	696,919
Buy USD / Sell EUR Forward	8	€	603,910	Buy USD / Sell EUR Forward	8	€	673,644
Buy USD / Sell AUD Forward	6	A$	355,703	Buy USD / Sell AUD Forward	10	A$	471,989
Buy USD / Sell CHF Forward	1	CHF	6,752	Buy USD / Sell DKK Forward	2	kr.	195,674
				Buy USD / Sell CHF Forward	4	CHF	8,352

The following table details our outstanding foreign exchange derivatives that were non-designated hedges of foreign currency risk as of December 31, 2023 (notional amounts in thousands):


December 31, 2024				December 31, 2023
Non-designated Hedges	Number of Instruments	Notional Amount		Non-designated Hedges	Number of Instruments	Notional Amount
Buy GBP / Sell USD Forward	3	£	54,400	Buy SEK / Sell USD Forward	1	kr	30,800
Buy USD / Sell GBP Forward	3	£	54,400	Buy USD / Sell SEK Forward	1	kr	30,800
				Buy GBP / Sell USD Forward	2	£	26,900
				Buy USD / Sell GBP Forward	2	£	26,900
				Buy AUD / Sell USD Forward	1	A$	7,600
				Buy USD / Sell AUD Forward	1	A$	7,600

Certain of our financing transactions expose us to a fixed versus floating rate mismatch between our assets and liabilities. We use derivative financial instruments, which include interest rate swaps, and may also include interest rate caps, interest rate options, floors, and other interest rate derivative contracts, to hedge interest rate risk associated with our borrowings where there is potential for an index mismatch.

No cash flow hedges of interest rate risk were outstanding as of December 31, 2024. The following table details our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of December 31, 2023 (notional amount in thousands):

Certain of our corporate financings expose us to fluctuations in the fair value of our outstanding fixed rate debt. We use derivative financial instruments, which include interest rate swaps, to hedge interest rate risk associated with changes in the fair value of our fixed rate debt. The changes in the value of the interest rate swap is recognized in earnings and offset the corresponding changes in the fair value of the debt.






December 31, 2024
Line Item in the Consolidated Balance Sheets in which the Hedged Item is Included	Carrying Amount of the Hedged Assets/ Liabilities		Cumulative Amount of Fair Value Hedging Adjustment Included in Carrying Amount
Senior secured notes, net	$	437,759	$	(4,424)


			Increase (Decrease) to Net Interest Income Recognized from Derivatives
		Year Ended December 31,
Derivatives in Hedging Relationships	Location of Income (Expense) Recognized		2024		2023		2022
Designated Hedges	Interest Income(1)		$	16,490	$	25,439	$	19,910
Designated Hedges	Interest Expense(2)		1,119		893		—
Non-Designated Hedges	Interest Income(1)		(44)		65		(62)
Non-Designated Hedges	Interest Expense(3)		4		(71)		100
Total			$	17,569	$	26,326	$	19,948

(1)Represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate differentials between the applicable base rate for our foreign currency investments and prevailing US interest rates. These forward contracts effectively convert the foreign currency rate exposure for such investments to USD-equivalent interest rates.

The following table presents the net gains (losses) on derivatives and the related hedged items in fair value hedging relationships for the year ended December 31, 2024 ($ in thousands):


	Year Ended December 31, 2024
Total interest and related expenses presented in the consolidated statement of operations	$	1,289,972
Gains (losses) on fair value hedging relationships:

Total gain (loss) on derivative instruments	$	(4,386)
Fair value basis adjustment on hedged items	4,424
Derivative settlements and accruals	(232)
Net Gains (Losses) on Fair Value Hedging Relationships(1)	$	(194)


	Fair Value of Derivatives in an Asset Position(1) as of				Fair Value of Derivatives in a Liability Position(2) as of
	December 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	69,433	$	30	$	—	$	92,922
Interest rate derivatives	—		317		4,386		—
Total derivatives designated as hedging instruments	$	69,433	$	347	$	4,386	$	92,922
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	3,021	$	1,543	$	852	$	1,895
Interest rate derivatives	—		—		—		—
Total derivatives not designated as hedging instruments	$	3,021	$	1,543	$	852	$	1,895
Total Derivatives	$	72,454	$	1,890	$	5,238	$	94,817

The following table presents the effect of our derivative financial instruments on our consolidated statements of comprehensive income and operations ($ in thousands):


Derivatives in Hedging Relationships	Amount of Gain (Loss) Recognized in OCI on Derivatives						Location of Gain (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income

	Year Ended December 31,							Year Ended December 31,
	2024		2023		2022			2024		2023		2022
Net Investment Hedges
Foreign exchange contracts(1)	$	88,591	$	(76,224)	$	173,362	Interest Expense	$	—	$	—	$	—
Cash Flow Hedges
Interest rate derivatives	998		1,210		—		Interest Expense(2)	1,315		893		(4)
Total	$	89,589	$	(75,014)	$	173,362		$	1,315	$	893	$	(4)

(1)During the year ended December 31, 2024, we paid net cash settlements of $59.8 million on our foreign currency forward contracts. During the year ended December 31, 2023, we paid net cash settlements of $69.9 million on our foreign currency forward contracts. During the year ended December 31, 2022, we received net cash settlements of $330.3 million on our foreign currency forward contracts.

(2)During the year ended December 31, 2024, we recorded total interest and related expenses of $1.3 billion which was reduced by $1.3 million related to income generated by our cash flow hedges. During the years ended December 31, 2023 and 2022, we recorded total interest and related expenses of $1.4 billion and $710.9 million, respectively, which included $893,000 and $4,000, respectively, related to our cash flow hedges.

We have entered into agreements with certain of our derivative counterparties that contain provisions where if we were to default on any of our indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, we may also be declared in default on our derivative obligations. In addition, certain of our agreements with our derivative counterparties require that we post collateral to secure net liability positions. As of December 31, 2024, we were in a net asset position with our counterparties related to our foreign exchange hedges, and had $4.8 million of collateral posted with one counterparty related to our interest rate swap. As of December 31, 2023, we were in a net liability position with our counterparties, and had $103.5 million of collateral posted with our counterparties.