Net Investment Hedges. We are exposed to the impact of foreign exchange rate fluctuations on the value of investments in our foreign subsidiaries whose functional currencies are other than the U.S. Dollar. In order to mitigate the impact of foreign currency exchange rates, we have entered into various foreign currency debt obligations, which are designated as hedges against our net investments in foreign subsidiaries. As of both September 30, 2023 and December 31, 2022, the total principal amounts of foreign currency debt obligations designated as net investment hedges was $1.5 billion.

We also utilize cross-currency interest rate swaps, designated as net investment hedges, which effectively convert a portion of our U.S. dollar-denominated fixed-rate debt to foreign currency-denominated fixed-rate debt, to hedge the currency exposure associated with our net investment in our foreign subsidiaries. As of September 30, 2023 and December 31, 2022, the total notional amount of cross-currency interest rate swaps designated as net investment hedges were $3.5 billion and $3.9 billion respectively, with maturity dates ranging through 2026.

From time to time, we use foreign currency forward contracts, which are designated as net investment hedges, to hedge against the effect of foreign exchange rate fluctuations on our net investment in our foreign subsidiaries. As of September 30, 2023 and December 31, 2022, the total notional amount of foreign currency forward contracts designated as net investment hedges were $359.8 million and $373.4 million, respectively.

Certain of our customer agreements that are priced in currencies different from the functional or local currencies of the parties involved are deemed to have foreign currency forward contracts embedded in them. These embedded derivatives are separated from their host contracts and carried on our balance sheet at their fair value. The majority of these embedded derivatives arise as a result of our foreign subsidiaries pricing their customer contracts in U.S. Dollars. We use these forward contracts embedded within our customer agreements to hedge against the effect of foreign exchange rate fluctuations on our net investment in our foreign subsidiaries.

The effect of net investment hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):


Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Foreign currency debt		$	51,080	$	125,840	$	11,830	$	283,431
Cross-currency interest rate swaps (included component) (1)		100,788		228,210		79,700		571,532
Cross-currency interest rate swaps (excluded component) (2)		(11,957)		(23,959)		(14,775)		(92,913)
Foreign currency forward contracts (included component) (1)		9,822		33,257		8,701		48,900
Foreign currency forward contracts (excluded component) (3)		(125)		(2,998)		6		(5,289)
Total		$	149,608	$	360,350	$	85,462	$	805,661

Amount of gain or (loss) recognized in earnings:
	Location of gain or (loss)	Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Cross-currency interest rate swaps (excluded component) (2)	Interest expense	$	10,636	$	12,739	$	34,676	$	37,346
Foreign currency forward contracts (excluded component) (3)	Interest expense	492		(154)		1,136		(317)
Total		$	11,128	$	12,585	$	35,812	$	37,029

Cash Flow Hedges. We hedge our foreign currency transaction exposure for forecasted revenues and expenses in our EMEA region between the U.S. Dollar and the British Pound and Euro. The foreign currency forward and option contracts that we use to hedge this exposure are designated as cash flow hedges. As of September 30, 2023 and December 31, 2022, the total notional amounts of these foreign exchange contracts were $856.2 million and $490.8 million, respectively.

As of September 30, 2023, our foreign currency cash flow hedge instruments had maturity dates ranging from October 2023 to December 2024 and we had a net gain of $17.8 million recorded within accumulated other comprehensive income (loss) to be reclassified to revenues and expenses for cash flow hedges that will mature in the next 12 months. As of December 31, 2022, our foreign currency cash flow hedge instruments had maturity dates ranging from January 2023 to February 2024 and we had a net gain of $8.2 million recorded within accumulated other comprehensive income (loss) to be reclassified to revenues and expenses for cash flow hedges that will mature in the next 12 months.

We enter into intercompany hedging instruments ("intercompany derivatives") with our wholly-owned subsidiaries in order to hedge certain forecasted revenues and expenses denominated in currencies other than the U.S. Dollar. Simultaneously, we enter into derivative contracts with unrelated third parties to externally hedge the net exposure created by such intercompany derivatives.

We hedge the interest rate exposure created by anticipated fixed rate debt issuances through the use of treasury locks and swap locks (collectively, interest rate locks), which are designated as cash flow hedges. As of both September 30, 2023 and December 31, 2022, we had no interest rate locks outstanding. When interest rate locks are settled, any gain or loss from the transactions is deferred and included as a component of other comprehensive income (loss) and is amortized to interest expense over the term of the forecasted hedged transaction which is equivalent to the term of the interest rate locks. As of September 30, 2023 and December 31,

2022, we had a net gain of $1.2 million and $1.4 million, respectively, recorded within accumulated other comprehensive income (loss) to be reclassified to interest expense in the next 12 months for interest rate locks.

We also use cross-currency swaps, which are designated as cash flow hedges, to manage the foreign currency exposure associated with a portion of our foreign currency-denominated debt. As of both September 30, 2023 and December 31, 2022, the total notional amount of cross-currency interest rate swaps, designated as cash flow hedges, was $280.3 million.

The effect of cash flow hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and nine months ended September 30, 2023 and 2022 was as follows (in thousands):


Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023		2022
Foreign currency forward and option contracts (included component) (1)		$	36,171	$	8,720	$	19,351	$	55,300

Cross-currency interest rate swaps		(865)		—		(2,280)		—
Interest rate locks		(288)		(350)		(4,681)		49,742
Total		$	35,018	$	8,370	$	12,390	$	105,042

Amount of gain or (loss) reclassified from accumulated other comprehensive income to income:
		Three Months Ended September 30,				Nine Months Ended September 30,
	Location of gain or (loss)	2023		2022		2023		2022
Foreign currency forward contracts	Revenues	$	(12,192)	$	53,874	$	(6,596)	$	89,275
Foreign currency forward contracts	Costs and operating expenses	8,676		(25,869)		12,863		(42,974)
Interest rate locks	Interest Expense	288		350		892		(376)
Total		$	(3,228)	$	28,355	$	7,159	$	45,925

Embedded Derivatives. As described above, certain of our customer agreements that are priced in currencies different from the functional or local currencies of the parties involved are deemed to have foreign currency forward contracts embedded in them.

Economic Hedges of Embedded Derivatives. We use foreign currency forward contracts to manage the foreign exchange risk associated with our customer agreements that are priced in currencies different from the functional or local currencies of the parties involved ("economic hedges of embedded derivatives"). Foreign currency forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon price on an agreed-upon settlement date.

Foreign Currency Forward Contracts. We also use foreign currency forward contracts to manage the foreign exchange risk associated with certain foreign currency-denominated monetary assets and liabilities. As a result of foreign currency fluctuations, the U.S. Dollar equivalent values of our foreign currency-denominated monetary assets and liabilities change. Gains and losses on these contracts are included in other income (expense), on a net basis, along with the foreign currency gains and losses of the related foreign currency-denominated monetary assets and liabilities associated with these foreign currency forward contracts. As of September 30, 2023 and December 31, 2022, the total notional amounts of these foreign currency contracts were $2.2 billion and $3.0 billion, respectively.

Cross-currency Interest Rate Swaps. During the three months ended September 30, 2023, we elected to de-designate a portion of our cross-currency interest rate swaps previously designated as net investment hedges. Gains and losses subsequent to the de-designation will be recognized in earnings to offset remeasurement gains and losses from foreign currency monetary assets and liabilities. We also entered into $167.7 million of cross-currency interest rate swaps, which were not previously designated as hedging instruments. As of September 30, 2023, the total notional amount of cross-currency interest rate swaps which were not designated as hedging instruments was $544.8 million.


Amount of gain or (loss) recognized in earnings:
		Three Months Ended September 30,				Nine Months Ended September 30,
	Location of gain or (loss)	2023		2022		2023		2022
Embedded derivatives (1)	Revenues	$	—	$	—	$	—	$	(568)
Economic hedge of embedded derivatives (2)	Revenues	—		—		—		(983)
Foreign currency forward contracts	Other income (expense)	77,823		138,725		81,591		272,342
Cross-currency interest rate swaps	Other income (expense)	2,651		—		2,651		—
Total		$	80,474	$	138,725	$	84,242	$	270,791

The following table presents the fair value of derivative instruments recognized in our condensed consolidated balance sheets, excluding accrued interest, as of September 30, 2023 and December 31, 2022 (in thousands):


	September 30, 2023				December 31, 2022
	Assets (1)		Liabilities (2)		Assets (1)		Liabilities (2)
Designated as hedging instruments:
Cash flow hedges
Foreign currency forward and option contracts	$	29,798	$	6,333	$	27,812	$	21,352
Cross-currency interest rate swaps	22,144		—		19,239		—
Net investment hedges
Foreign currency forward contracts	15,089		1,875		25,077		4,805
Cross-currency interest rate swaps	282,483		—		274,234		—
Total designated as hedging	349,514		8,208		346,362		26,157

Not designated as hedging instruments:


Foreign currency forward contracts	31,441		3,380		58,230		7,531
Cross-currency interest rate swaps	68,512		8,758		—		—
Total not designated as hedging	99,953		12,138		58,230		7,531
Total Derivatives	$	449,467	$	20,346	$	404,592	$	33,688

We enter into master netting agreements with our counterparties for transactions other than embedded derivatives to mitigate credit risk exposure to any single counterparty. Master netting agreements allow for individual derivative contracts with a single counterparty to offset in the event of default. For presentation on the condensed consolidated balance sheets, we do not offset fair value amounts recognized for derivative instruments or the accrued interest related to cross-currency interest rate swaps under master netting arrangements. The following table presents information related to these offsetting arrangements, inclusive of accrued interest, as of September 30, 2023 and December 31, 2022 (in thousands):


	Gross Amounts Offset in Consolidated Balance Sheet
	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Net Amounts		Gross Amounts not Offset in the Balance Sheet		Net
September 30, 2023
Derivative assets	$	475,060	$	—	$	475,060	$	(32,408)	$	442,652
Derivative liabilities	34,284		—		34,284		(32,408)		1,876

December 31, 2022
Derivative assets	$	424,516	$	—	$	424,516	$	(34,429)	$	390,087
Derivative liabilities	39,234		—		39,234		(34,429)		4,805