Derivative Financial Instruments

12 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

17. Derivative Financial Instruments

Non-Designated Hedges

As of September 30, 2022 and 2021, we had outstanding forward contracts for derivatives not designated as hedging instruments with notional amounts equivalent to the following:


	September 30,
Currency Hedged (in thousands)	2022		2021
Canadian / U.S. Dollar	$	2,731	$	4,894
Euro / U.S. Dollar		316,869		387,466
British Pound / U.S. Dollar		7,368		23,141
Israeli Shekel / U.S. Dollar		12,052		10,475
Japanese Yen / U.S. Dollar		25,566		46,450
Swiss Franc / U.S. Dollar		25,559		18,039
Swedish Krona / U.S. Dollar		35,713		34,196
Singapore Dollar / U.S. Dollar		3,637		3,498
Chinese Renminbi / U.S. Dollar		23,965		23,297
New Taiwan Dollar / U.S. Dollar		13,906		3,369
Russian Ruble/ U.S. Dollar		—		2,614
Korean Won/ U.S. Dollar		4,919		—
Danish Krone/ U.S. Dollar		3,192		2,380
Australian Dollar/ U.S. Dollar		3,269		2,086
All other		4,432		2,016
Total	$	483,178	$	563,921

The following table shows the effect of our non-designated hedges, all of which were forward contracts, on the Consolidated Statements of Operations for the years ended September 30, 2022, 2021 and 2020:


(in thousands)		Year ended September 30,
	Location of gain (loss)	2022		2021			2020
Net realized and unrealized gain (loss), excluding the underlying foreign currency exposure being hedged	Other income, net	$	11,950	$	(3,758	)	$	3,518

Net Investment Hedges

As of September 30, 2022 and 2021, we had outstanding forward contracts designated as net investment hedges with notional amounts equivalent to the following:


	September 30,
Currency Hedged (in thousands)	2022		2021
Euro / U.S. Dollar	$	110,466	$	128,103

The following table shows the effect of our derivative instruments designated as net investment hedges, all of which were forward contracts, on the Consolidated Statements of Operations for the years ended September 30, 2022, 2021, and 2020:


(in thousands)		Year ended September 30,
	Location of gain (loss)	2022			2021		2020
Gain (loss) recognized in OCI—effective portion	OCI	$	(1,478	)	$	695	$	(5,483	)
Gain (loss) reclassified from OCI—effective portion	OCI	$	(17,466	)	$	2,723	$	109
Gain recognized—portion excluded from effectiveness testing	Other income, net	$	1,862		$	1,249	$	3,506

As of September 30, 2022, we estimate that all amounts reported in Accumulated other comprehensive loss will be applied against exposed balance sheet accounts upon translation within the next three months.

The following table shows our derivative instruments measured at gross fair value as reflected in the Consolidated Balance Sheets:


(in thousands)	Fair Value of Derivatives Designated As Hedging Instruments				Fair Value of Derivatives Not Designated As Hedging Instruments
	September 30,
	2022		2021		2022		2021
Derivative assets:(1)
Forward contracts	$	1,960	$	1,641	$	7,098	$	3,722
Derivative liabilities:(2)
Forward contracts	$	—	$	—	$	2,908	$	3,318

(1)

As of September 30, 2022 and 2021, current derivative assets of $9.1 million and $5.4 million, respectively, are recorded in Other current assets on the Consolidated Balance Sheets.

(2)

As of September 30, 2022 and 2021, current derivative liabilities of $2.9 million and $3.3 million, respectively, are recorded in Accrued expenses and other current liabilities on the Consolidated Balance Sheets.

Offsetting Derivative Assets and Liabilities

We have entered into master netting arrangements that allow net settlements under certain conditions. Although netting is permitted, it is currently our policy and practice to record all derivative assets and liabilities on a gross basis in the Consolidated Balance Sheets.

The following table sets forth the offsetting of derivative assets as of September 30, 2022:


(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of September 30, 2022	Gross Amount of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Received		Net Amount
Forward Contracts	$	9,058	$	—	$	9,058	$	(2,908	)	$	—	$	6,150

The following table sets forth the offsetting of derivative liabilities as of September 30, 2022:


(in thousands)	Gross Amounts Offset in the Consolidated Balance Sheets						Gross Amounts Not Offset in the Consolidated Balance Sheets
As of September 30, 2022	Gross Amount of Recognized Liabilities		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets		Financial Instruments			Cash Collateral Pledged		Net Amount
Forward Contracts	$	2,908	$	—	$	2,908	$	(2,908	)	$	—	$	—

Net gains and losses on foreign currency exposures, including realized and unrealized gains and losses on forward contracts, included in Other income, net, were net losses of $0.9 million, $8.0 million and $1.7 million in 2022, 2021 and 2020, respectively. Net realized and unrealized gains and losses on forward contracts included in Other income, net were a net gain of $16.4 million and $7.0 million in 2022 and 2020, and net loss of $4.9 million in 2021.