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Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments DERIVATIVE FINANCIAL INSTRUMENTS
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.
Net Investment Hedges of Foreign Currency Risk
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.
Designated Hedges of Foreign Currency Risk
The following table details our outstanding foreign exchange derivatives that were designated as net investment hedges of
foreign currency risk (notional amounts in thousands):
March 31, 2025
December 31, 2024
Foreign Currency Derivatives
Number of
Instruments
Notional
Amount
Foreign Currency Derivatives
Number of
Instruments
Notional
Amount
Buy USD / Sell SEK Forward
2
kr 970,177
Buy USD / Sell SEK Forward
2
kr 971,180
Buy USD / Sell GBP Forward
9
£596,868
Buy USD / Sell GBP Forward
5
£604,739
Buy USD / Sell EUR Forward
8
€615,758
Buy USD / Sell EUR Forward
8
€603,910
Buy USD / Sell AUD Forward
4
A$364,687
Buy USD / Sell AUD Forward
6
A$355,703
Buy USD / Sell CAD Forward
3
C$119,585
Buy USD / Sell CHF Forward
1
CHF6,752
Buy USD / Sell CHF Forward
1
CHF6,752
Non-designated Hedges of Foreign Currency Risk
The following table details our outstanding foreign exchange derivatives that were non-designated hedges of foreign
currency risk (notional amounts in thousands):
March 31, 2025
December 31, 2024
Non-designated Hedges
Number of
Instruments
Notional
Amount
Non-designated Hedges
Number of
Instruments
Notional
Amount
Buy EUR / Sell USD Forward
2
€14,300
Buy GBP / Sell USD Forward
3
£54,400
Buy USD / Sell EUR Forward
2
€14,300
Buy USD / Sell GBP Forward
3
£54,400
Buy GBP / Sell USD Forward
2
£6,600
Buy USD / Sell GBP Forward
2
£6,600
Fair Value Hedges of Interest Rate Risk
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.
The following tables detail our outstanding interest rate derivatives that were designated as fair value hedges of interest rate
risk (notional amount in thousands):
March 31, 2025
Interest Rate Derivatives
Number of
Instruments
Notional Amount
Fixed Rate
Index
Maturity (Years)
Interest Rate Swaps
1
$450,000
3.81%
SOFR
4.7
December 31, 2024
Interest Rate Derivatives
Number of
Instruments
Notional Amount
Fixed Rate
Index
Maturity (Years)
Interest Rate Swaps
1
$450,000
3.81%
SOFR
4.9
The following tables detail the carrying amount and cumulative basis adjustments on hedged items designated as fair value
hedges ($ in thousands):
March 31, 2025
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
$445,664
$3,108
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
$437,760
$(4,424)
Financial Statement Impact of Hedges of Foreign Currency and Interest Rate Risks
The following table presents the effect of our derivative financial instruments on our consolidated statements of operations
($ in thousands):
Increase (Decrease) to Net Interest
Income Recognized from Derivatives
Three Months Ended March 31,
Derivatives in Hedging Relationships
Location of Income
(Expense) Recognized
2025
2024
Designated Hedges
Interest Income(1)
$2,951
$4,412
Designated Hedges
Interest Expense(2)
(568)
425
Non-Designated Hedges
Interest Income(1)
—
(6)
Non-Designated Hedges
Interest Expense(3)
3
7
Total
$2,386
$4,838
(1)Represents the forward points earned on our foreign currency forward contracts, which reflect the interest rate
differentials between the applicable base rate for our foreign currency investments and prevailing US interest rates.
These forward contracts effectively convert the foreign currency rate exposure for such investments to USD-
equivalent interest rates.
(2)Represents the financial statement impact of proceeds (payments) from periodic settlements related to our interest
rate swap.
(3)Represents the spot rate movement in our non-designated foreign currency hedges, which are marked-to-market and
recognized in interest expense.
Fair Value Hedges
The following table presents the net gains (losses) on derivatives and the related hedged items in fair value hedging
relationships for the three months ended March 31, 2025 ($ in thousands):
Three Months Ended
March 31, 2025
Total interest and related expenses presented in the consolidated statement of operations
$242,233
Gains (losses) on fair value hedging relationships:
Total gain on derivative instruments
$3,164
Fair value basis adjustment on hedged items
(3,108)
Derivative settlements and accruals
818
Net Gain on Fair Value Hedging Relationships(1)
$874
(1)Included within interest and related expenses presented in the consolidated statement of operations.
There were no fair value hedges outstanding during the three months ended March 31, 2024.
Valuation and Other Comprehensive Income
The following table summarizes the fair value of our derivative financial instruments ($ in thousands):
Fair Value of Derivatives in an Asset
Position(1) as of
Fair Value of Derivatives in a Liability
Position(2) as of
March 31, 2025
December 31, 2024
March 31, 2025
December 31, 2024
Derivatives designated as hedging instruments:
Foreign exchange contracts
$1,432
$69,433
$66,805
$—
Interest rate derivatives
3,164
—
—
4,386
Total derivatives designated as hedging
instruments
$4,596
$69,433
$66,805
$4,386
Derivatives not designated as hedging instruments:
Foreign exchange contracts
$391
$3,021
$1,353
$852
Interest rate derivatives
—
—
—
—
Total derivatives not designated as hedging
instruments
$391
$3,021
$1,353
$852
Total Derivatives
$4,987
$72,454
$68,158
$5,238
(1)Included in other assets in our consolidated balance sheets
(2)Included in other liabilities in our consolidated balance sheets.
The following table presents the effect of our derivative financial instruments on our consolidated statements of
comprehensive income and operations ($ 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
Three Months Ended
March 31,
Three Months Ended
March 31,
2025
2024
2025
2024
Net Investment Hedges
Foreign exchange contracts(1)
$(60,394)
$45,741
Interest Expense
$—
$—
Cash Flow Hedges
Interest rate derivatives
—
832
Interest Expense(2)
—
425
Total
$(60,394)
$46,573
$—
$425
(1)During the three months ended March 31, 2025 and 2024, we received net cash settlements of $80.5 million and
paid net cash settlements of $67.3 million on our foreign currency forward contracts, respectively. Those amounts
are included as a component of accumulated other comprehensive income on our consolidated balance sheets.
(2)During the three months ended March 31, 2025, we recorded total interest and related expenses of $242.2 million
which was reduced by $0 related to income generated by our cash flow hedges. During the three months ended
March 31, 2024, we recorded total interest and related expenses of $343.7 million which was reduced by $425,000
related to income generated by our cash flow hedges.
Credit-Risk Related Contingent Features
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 March 31, 2025, we were in a
net liability position with our counterparties related to our foreign exchange hedges, and had $69.6 million of collateral
posted with two counterparties. 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.