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Financial Instruments and Fair Value Measurement
 12 Months Ended
Dec. 31, 2023
Financial Instruments And Fair Value Measurement [Abstract]  
Financial Instruments and Fair Value Measurement

3) FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENT

Cash Flow Hedges:

When applicable, we measure our interest rate swaps at fair value on a recurring basis. The fair value of our interest rate swaps is based on quotes from our counterparties. We consider those inputs to be “level 2” in the fair value hierarchy as outlined in the authoritative guidance for disclosures in connection with derivative instruments and hedging activities. During the years ended December 31, 2023, 2022 and 2021, we had no cash flow hedges outstanding.

Foreign Currency Forward Exchange Contracts:

We use forward exchange contracts to hedge our net investment in foreign operations against movements in exchange rates. The effective portion of the unrealized gains or losses on these contracts is recorded in foreign currency translation adjustment within accumulated other comprehensive income and remains there until either the sale or liquidation of the subsidiary. In connection with these forward exchange contracts, we recorded net cash outflows of approximately $41 million during 2023, and net cash inflows of approximately $95 million during 2022 and $1 million during 2021.

Derivatives Hedging Relationships:

The following table presents the effects of our foreign currency foreign exchange contracts on our results of operations for the three years ended December 31 (in thousands):

 

 

 

 

 

 

 

 

 

 

 

Gain/(Loss) recognized in AOCI

 

 

 

 

 

 

 

December 31,

 

 

December 31,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Hedge relationships

 

 

 

 

 

 

 

 

 

Foreign currency foreign exchange contracts

$

(45,748

)

 

$

96,698

 

 

$

(7,272

)

 

No other gains or losses were recognized in income related to derivatives in Subtopic 815-20.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The following fair value hierarchy classifies the inputs to valuation techniques used to measure fair value into one of three levels:

•
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
•
Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These included quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
•
Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The following tables present the assets and liabilities recorded at fair value on a recurring basis:

 

 

Balance at

 

Balance Sheet

Basis of Fair Value Measurement

 

(in thousands)

December 31, 2023

 

Location

Level 1

 

Level 2

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

Money market mutual funds

$

111,129

 

Other noncurrent assets

$

111,129

 

 

 

 

 

Certificates of deposit

 

2,300

 

Other noncurrent assets

 

 

 

2,300

 

 

 

Equity securities

 

49,923

 

Other noncurrent assets

 

49,923

 

 

 

 

 

Deferred compensation assets

 

43,060

 

Other noncurrent assets

 

43,060

 

 

 

 

 

 

$

206,412

 

 

$

204,112

 

$

2,300

 

 

-

 

Liabilities:

 

 

 

 

 

 

 

 

 

Foreign currency foreign exchange contracts

$

1,911

 

 Accrued liabilities other

 

 

$

1,911

 

 

 

Deferred compensation liability

 

43,060

 

Other noncurrent liabilities

 

43,060

 

 

 

 

 

 

$

44,971

 

 

$

43,060

 

$

1,911

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Balance at

 

Balance Sheet

Basis of Fair Value Measurement

 

(in thousands)

December 31, 2022

 

Location

Level 1

 

Level 2

 

Level 3

 

Assets:

 

 

 

 

 

 

 

 

 

Money market mutual funds

$

113,649

 

Other noncurrent assets

$

113,649

 

 

 

 

 

Certificates of deposit

 

2,200

 

Other noncurrent assets

 

 

 

2,200

 

 

 

Equity securities

 

78,099

 

Other noncurrent assets

 

78,099

 

 

 

 

 

Deferred compensation assets

 

38,032

 

Other noncurrent assets

 

38,032

 

 

 

 

 

Foreign currency foreign exchange contracts

 

3,142

 

Other current assets

 

 

 

3,142

 

 

 

 

$

235,122

 

 

$

229,780

 

$

5,342

 

 

-

 

Liabilities:

 

 

 

 

 

 

 

 

 

Deferred compensation liability

$

38,032

 

Other noncurrent liabilities

$

38,032

 

 

 

 

 

 

$

38,032

 

 

$

38,032

 

 

-

 

 

-

 

The fair value of our money market mutual funds, certificates of deposit and equity securities with a readily determinable fair value are computed based upon quoted market prices in an active market. The fair value of deferred compensation assets and the offsetting liability are computed based on market prices in an active market held in a rabbi trust. The fair value of our foreign currency exchange contracts is valued using quoted forward exchange rates and spot rates at the reporting date.