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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Designated Non-derivative Financial Instruments
As of December 31, 2022, the Company designated £76.5 million, A$146.0 million and €785.5 million debt and accrued interest as a hedge of our net investment in the respective international subsidiaries. As of December 31, 2021, the Company designated £68.5 million and A$80.0 million debt and accrued interest as a hedge of our net investment in the respective international subsidiaries. The remeasurement of these instruments is recorded in “Change in unrealized net (loss) gain on foreign currency” on the accompanying Consolidated Statements of Comprehensive (Loss) Income.
Derivative Financial Instruments
The Company is subject to volatility in interest rates due to variable-rate debt. To manage this risk, the Company periodically enters into interest rate swap agreements. During 2022, the Company completed a refinancing of its Senior Unsecured Credit Facility. As a result of this refinancing, the Company’s variable interest rate exposure increased. To manage this risk, the Company entered into several interest rate swap agreements. These agreements involved the receipt of variable-rate amounts in exchange for fixed-rate interest payments over the life of the respective swap agreement without an exchange of the underlying notional amount. The Company’s objective for utilizing these derivative instruments was to reduce its exposure to fluctuations in cash flows due to changes in interest rates. The following table includes the key provisions of the interest rate swaps outstanding as of December 31, 2022 (fair value in thousands):
NotionalFixed Base Interest Rate SwapEffective DateExpiration DateFair Value as of December 31, 2022
$200 million USD
3.65%9/23/202212/29/2023$2,240 
$200 million USD
3.05%12/29/20237/30/20272,328 
$175 million USD
3.47%11/30/20227/30/20272,020 
$270 million USD
3.05%11/01/202212/31/20278,034 
$250 million CAD
3.59%9/23/202212/31/2027950 
Total$15,572 
The Company had no interest rate swaps outstanding as of December 31, 2021. During 2020 we terminated interest rate swaps with notional amounts of $100 million and $225 million, and as a result accelerated the reclassification in other comprehensive income to earnings as a result of the hedged forecasted transactions becoming not probable to occur resulting in a charge to “Loss on debt extinguishment, modifications, and termination of derivative instruments” of $7.7 million on the accompanying Consolidated Statement of Operations for the year ended December 31, 2020, with the remainder being amortized to “Loss on debt extinguishment, modifications, and termination of derivative instruments” through 2024. The Company classifies cash inflow and outflows from derivatives that hedge interest rate risk within operating activities on the Consolidated Statements of Cash Flows.
The Company is subject to volatility in foreign exchange rates due to foreign-currency denominated intercompany loans. The Company implemented cross-currency swaps to manage the foreign currency exchange rate risk on certain intercompany loans. These agreements effectively mitigate the Company’s exposure to fluctuations in cash flows due to foreign exchange rate risk. These agreements involve the receipt of fixed USD amounts in exchange for payment of fixed AUD and NZD amounts over the life of the respective intercompany loan. The entirety of the Company’s outstanding intercompany loans receivable balances, $153.5 million AUD and $37.5 million NZD, were hedged under the cross-currency swap agreements at December 31, 2022 and 2021.
For derivatives designated and that qualify as cash flow hedges of foreign exchange risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income 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 next twelve months, the Company estimates that an additional $0.3 million will be reclassified as an increase to gain/loss on foreign exchange (a component of “Other income (expense), net”) and an additional $11.4 million will be reclassified as a decrease to “Interest expense”. Additionally, during the next twelve months, the Company estimates that an additional $2.5 million will be reclassified as an increase to “Loss on debt extinguishment, modification, and termination of derivative instruments”.
The Company is subject to volatility in foreign currencies against its functional currency, the US dollar. Periodically, the Company uses foreign currency derivatives including currency forward contracts to manage its exposure to fluctuations in exchange rates. While these derivatives are hedging the fluctuations in foreign currencies, they do not meet the requirements to be accounted for as hedging instruments. As a result, the changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings. As of December 31, 2022 and 2021, the Company did not have any foreign currency forwards outstanding. During the fourth quarter of 2020, the Company entered into an undesignated foreign currency forward contract to lock in the expected proceeds from the issuance of the Series D & E Senior Unsecured Notes, which would convert the Euro denominated debt issuance to USD. The notional amount was €750 million which settled on December 30, 2020. The realized loss on the foreign currency forward contract was $45 million and was reflected in “Foreign currency
exchange loss, net” on the accompanying Consolidated Statements of Operations during the year ended December 31, 2020.
The Company determines the fair value of its derivative instruments using a present value calculation with significant observable inputs classified as Level 2 of the fair value hierarchy. Derivative asset balances are recorded on the accompanying Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the accompanying Consolidated Balance Sheets within “Accounts payable and accrued expenses”. The following table presents the fair value of the derivative financial instruments within “Other assets” and “Accounts payable and accrued expenses” as of December 31, 2022 and 2021 (in thousands):
Derivative AssetsDerivative Liabilities
As of December 31,As of December 31,
2022202120222021
Designated derivatives
Foreign exchange contracts$7,948 $2,015 $— $— 
Interest rate contracts15,572 — — — 
Total fair value of derivatives$23,520 $2,015 $— $— 
The following tables present the effect of the Company’s designated derivative financial instruments on the accompanying Consolidated Statements of Operations for the years ended December 31, 2022, 2021 and 2020, including the impacts to Accumulated Other Comprehensive Income (AOCI) (in thousands):
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on DerivativeLocation of Gain or (Loss) Reclassified from AOCI into IncomeAmount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
As of December 31,As of December 31,
202220212020202220212020
Interest rate contracts$15,572 $— $(11,465)Interest expense$721 $— $(3,368)
Interest rate contracts— — (7,688)
Loss on debt extinguishment, modifications and termination of derivative instruments(1)
(2,507)(2,681)(7,688)
Foreign exchange contracts5,933 11,626 (11,015)Foreign currency exchange (loss) gain, net7,602 7,595 (12,158)
Foreign exchange contracts— — — Interest expense371 (175)(74)
Foreign exchange forwards— — 5,250 — — 
Total designated cash flow hedges$21,505 $11,626 $(24,918)$6,187 $4,739 $(23,288)
(1) The Company accelerated the reclassification in other comprehensive income to earnings as a result of the hedged forecasted transactions becoming not probable to occur resulting in a charge to “Loss on debt extinguishment, modification, and termination of derivative instruments” on the accompanying Consolidated Statement of Operations for the year ended December 31, 2020.

As of December 31, 2022 and 2021, there was no impact from netting arrangements and the Company did not have any outstanding derivatives in a net liability position. As of December 31, 2022, the Company has not posted any collateral related to these agreements. The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness. Refer to Note 18 for additional details regarding the impact of the Company’s derivatives on AOCI for the years ended December 31, 2022, 2021 and 2020.