Derivative Instruments and Hedging Activities

12 Months Ended

Jun. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

NOTE 6 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

As part of our financial risk management program, we use certain derivative financial instruments. See Note 2 for discussion on our derivative instruments and hedging activities policy.

There are no derivatives designated as hedging instruments as of June 30, 2022 or 2021. The fair value of derivatives not designated as hedging instruments in the consolidated balance sheets are as follows:

(in thousands)	2022		2021
Derivatives not designated as hedging instruments
Other current assets - currency forward contracts	$	176	$	36
Other current liabilities - currency forward contracts	(574)		(87)
Total derivatives not designated as hedging instruments	(398)		(51)
Total derivatives	$	(398)	$	(51)

Certain currency forward contracts that hedge significant cross-border intercompany loans are considered as other derivatives and therefore do not qualify for hedge accounting. These contracts are recorded at fair value in the consolidated balance sheets, with the offset to other income, net. Losses related to derivatives not designated as hedging instruments have been recognized as follows:

(in thousands)	2022		2021		2020
Other income, net - currency forward contracts	$	377	$	2	$	210

CASH FLOW HEDGES

During fiscal 2020 we entered into seven forward-starting interest rate swap contracts with an aggregate notional amount totaling $200.0 million. A forward-starting interest rate swap is an agreement that effectively hedges the variability in future benchmark interest payments attributable to changes in interest rates on the forecasted issuance of fixed-rate debt. During fiscal 2021, upon issuance of the Senior Unsecured Notes due 2031 (see Note 11 for more information) we settled the forward starting interest rate swap contracts for a gain of $10.2 million in other comprehensive income (loss). The gain will be amortized out of accumulated other comprehensive income (loss) and into interest expense (as a benefit) over the life of the Senior Unsecured Notes due 2031. There were no interest rate swap contracts outstanding at June 30, 2022 or 2021.

NET INVESTMENT HEDGES

As of June 30, 2022 and 2021 we had foreign currency-denominated intercompany loans payable with total aggregate principal amounts of €13 million and €5.2 million, respectively, designated as net investment hedges to hedge the foreign exchange exposure of our net investment in Euro-based subsidiaries. A gain of $0.8 million, a loss of $1.9 million, and a gain of $0.6 million were recorded as a component of foreign currency translation adjustments in other comprehensive income (loss) during 2022, 2021 and 2020, respectively.

As of June 30, 2022 and 2021, the foreign currency-denominated intercompany loans payable designated as net investment hedges consisted of:

(in thousands)	2022		2021
Instrument	Notional (EUR)(2)	Notional (USD)(2)	Notional (EUR)(2)	Notional (USD)(2)	Maturity
Foreign currency-denominated intercompany loan payable	€0	$0	€5,173	$6,146	June 26, 2022
Foreign currency-denominated intercompany loan payable	€13,013	$13,531	€0	$0	August 31, 2022

(2) Includes principal and accrued interest.