As of March 31, 2023, the Company designated £78.0 million, A$152.0 million and €794.5 million debt and accrued interest as a hedge of our net investment in the respective international subsidiaries. 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. The remeasurement of these instruments is recorded in “Change in unrealized net loss on foreign currency” on the accompanying Condensed Consolidated Statements of Comprehensive Loss.

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. These agreements involve 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 is 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 March 31, 2023 and December 31, 2022 (fair value in thousands):


Notional	Fixed Base Interest Rate Swap	Effective Date	Expiration Date	Debt Instrument	Fair Value as of March 31, 2023		Fair Value as of December 31, 2022
$200 million USD	3.65%	9/23/2022	12/29/2023	Tranche A-1	$	1,609	$	2,240
$200 million USD	3.05%	12/29/2023	7/30/2027	Tranche A-1	206		2,328
$175 million USD	3.47%	11/30/2022	7/30/2027	Tranche A-1	(530)		2,020
$270 million USD	3.05%	11/01/2022	12/31/2027	Delayed Draw Tranche A-3	3,513		8,034
$250 million CAD	3.59%	9/23/2022	12/31/2027	Tranche A-2	(1,905)		950
			Total		$	2,893	$	15,572

In addition, 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 Australian and New Zealand Dollar 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 March 31, 2023 and December 31, 2022.

There have been no significant changes to our policy or strategy from what was disclosed in our 2022 Annual Report on Form 10-K. During the next twelve months, the Company estimates that an additional $2.3 million will be reclassified as an increase to “Loss on debt extinguishment, modifications, and termination of derivative instruments”. Additionally, during the next twelve months, the Company estimates that an additional $0.3 million will be reclassified as a increase to gain/loss on foreign exchange (a component of “Other income (expense), net”) and an additional $10.1 million will be reclassified as a decrease to “Interest expense”.

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 Condensed Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the accompanying Condensed 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 March 31, 2023 and December 31, 2022 (in thousands):


			Derivative Assets						Derivative Liabilities
			March 31, 2023				December 31, 2022				March 31, 2023				December 31, 2022


Designated derivatives
Foreign exchange contracts			$	9,539			$	7,948			$	—			$	—
Interest rate contracts			5,328				15,572				2,435				—



Total fair value of derivatives	$	14,867			$	23,520			$	2,435			$	—

The following tables present the effect of the Company’s derivative financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022, including the impacts to Accumulated Other Comprehensive (Loss) Income (AOCI) (in thousands):


	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative				Location of Gain or (Loss) Reclassified from AOCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

	Three Months Ended March 31,					Three Months Ended March 31,
	2023		2022			2023		2022

Interest rate contracts	$	(10,247)	$	—	Interest expense	$	2,432	$	—
Interest rate contracts	—		—		Loss on debt extinguishment, modifications and termination of derivative instruments(1)	(620)		(627)
Foreign exchange contracts	1,683		(4,325)		Foreign currency exchange loss, net	2,096		(3,851)
Foreign exchange contracts	—		—		Interest expense	92		2

Total designated cash flow hedges	$	(8,564)	$	(4,325)		$	4,000	$	(4,476)

(1) In conjunction with the termination of interest rate swaps in 2020, the Company recorded amounts in other comprehensive income that will be reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings. As of March 31, 2023, the Company recorded an increase to “Loss on debt extinguishment, modifications and termination of derivative instruments” related to this transaction.

The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of March 31, 2023. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the accompanying Condensed Consolidated Balance Sheets (in thousands):


March 31, 2023
Offsetting of Derivative Assets
							Gross Amounts Not Offset in the Consolidated Balance Sheet
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Assets Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	14,867	$	—	$	14,867	$	(1,343)	$	—	$	13,524

Offsetting of Derivative Liabilities
							Gross Amounts Not Offset in the Consolidated Balance Sheet
	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts of Liabilities Presented in the Consolidated Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
Derivatives	$	(2,435)	$	—	$	(2,435)	$	1,343	$	—	$	(1,092)

As of December 31, 2022, there was no impact from netting arrangements and the Company did not have any outstanding derivatives in a net liability position. Refer to Note 9 for additional details regarding the impact of the Company’s derivatives on AOCI for the three months ended March 31, 2023 and 2022, respectively.