The Company’s interest rate risk relates to U.S. dollar denominated variable interest rate borrowings. The Company uses interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates. These interest rate swaps apply a fixed interest rate on a portion of the Company's expected SOFR-indexed borrowings. In connection with the March 2023 Amendment to the Senior Credit Facility, the Company amended its interest rate from LIBOR to SOFR-indexed interest. In March 2023, the Company entered into a basis swap where the Company receives Term SOFR and pays LIBOR to convert the portfolio of swaps from LIBOR to SOFR.


	September 30, 2023												September 30, 2023
Hedged Item	Notional Amount		Designation Date		Effective Date		Termination Date		Fixed Interest Rate			Estimated Fair Value
													Asset (Liability)
1-month Term SOFR Loan	150,000			December 13, 2017		July 1, 2019		June 30, 2024		2.423	%		3,395
1-month Term SOFR Loan	200,000			December 13, 2017		January 1, 2018		December 31, 2024		2.313	%		7,440
1-month Term SOFR Loan	75,000			October 10, 2018		July 1, 2020		June 30, 2025		3.220	%		2,381
1-month Term SOFR Loan	75,000			October 10, 2018		July 1, 2020		June 30, 2025		3.199	%		2,486
1-month Term SOFR Loan	75,000			October 10, 2018		July 1, 2020		June 30, 2025		3.209	%		2,339
1-month Term SOFR Loan	100,000			December 18, 2018		December 30, 2022		December 31, 2027		2.885	%		6,052
1-month Term SOFR Loan	100,000			December 18, 2018		December 30, 2022		December 31, 2027		2.867	%		6,187
1-month Term SOFR Loan	575,000			December 15, 2020		July 31, 2025		December 31, 2027		1.415	%		31,528
1-month Term SOFR Loan	125,000			December 15, 2020		July 1, 2025		December 31, 2027		1.404	%		7,369
Basis Swap (1)	—			March 31, 2023		March 24, 2023		December 31, 2027		N/A			(1,923)
	$	1,475,000											$	67,254
(1) The notional of the basis swap amortizes to match the total notional of the interest rate swap portfolio over time


		December 31, 2022							December 31, 2022
Hedged Item	Notional Amount			Designation Date	Effective Date	Termination Date	Fixed Interest Rate		Estimated Fair Value
									Asset (Liability)
1-month USD LIBOR Loan		150,000		December 13, 2017	July 1, 2019	June 30, 2024	2.423	%	5,012
1-month USD LIBOR Loan		200,000		December 13, 2017	January 1, 2018	December 31, 2024	2.313	%	8,380
1-month USD LIBOR Loan		75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.220	%	1,831
1-month USD LIBOR Loan		75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.199	%	1,905
1-month USD LIBOR Loan		75,000		October 10, 2018	July 1, 2020	June 30, 2025	3.209	%	1,970
1-month USD LIBOR Loan		100,000		December 18, 2018	December 30, 2022	December 31, 2027	2.885	%	4,252
1-month USD LIBOR Loan		100,000		December 18, 2018	December 30, 2022	December 31, 2027	2.867	%	4,153
1-month USD LIBOR Loan		575,000		December 15, 2020	July 31, 2025	December 31, 2027	1.415	%	23,742
1-month USD LIBOR Loan		125,000		December 15, 2020	July 1, 2025	December 31, 2027	1.404	%	5,467

		$	1,475,000						$	56,712

The Company has designated these derivative instruments as cash flow hedges. The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive income (“AOCI”), net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings. If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the remaining amount of any gain or loss on the related cash flow hedge recorded in AOCI to interest expense at that time.

From time to time, the Company enters into foreign currency hedge contracts intended to protect the U.S. dollar value of certain forecasted foreign currency denominated transactions. The Company assesses the effectiveness of the contracts that are designated as hedging instruments. The changes in fair value of foreign currency cash flow hedges are recorded in AOCI, net of tax. Those amounts are subsequently reclassified to earnings from AOCI as impacted by the hedged item when the hedged item affects earnings. If the hedged forecasted transaction does not occur or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

On September 22, 2023, the Company amended the Swiss Franc ("CHF")-denominated intercompany loan to partially settle CHF 20.0 million and extend the termination date to September 2024 and as a result, the Company terminated the cross-currency swap designated as cash flow hedge of an intercompany loan with aggregate notional amount of $48.5 million. Simultaneously, the Company entered into a cross-currency swap agreement to hedge a notional amount of CHF 28.5 million equivalent to $31.5 million of this amended intercompany loan into U.S. dollars. The loss recorded by the Company upon the settlement of the swap was not material for the period.

On December 21, 2020, the Company entered into cross-currency swap agreements to convert a notional amount of $471.6 million equivalent to 420.1 million of a CHF-denominated intercompany loan into U.S. dollars. The CHF-denominated intercompany loan was the result of an intra-entity transfer of certain intellectual property rights to a subsidiary in Switzerland completed during the fourth quarter of 2020. The intercompany loan requires quarterly payments of CHF 5.8 million plus accrued interest. As a result, the aggregate notional amount of the related cross-currency swaps will decrease by a corresponding amount.

The objective of these cross-currency swaps is to reduce volatility of earnings and cash flows associated with changes in the foreign currency exchange rate. Under the terms of these contracts, which have been designated as cash flow hedges, the Company will make interest payments in Swiss Francs and receive interest in U.S. dollars. Upon the maturity of these contracts, the Company will pay the principal amount of the loans in Swiss Francs and receive U.S. dollars from the counterparties.


					September 30, 2023	December 31, 2022	September 30, 2023		December 31, 2022
	Effective Date	Termination Date	Fixed Rate	Aggregate Notional Amount			Fair Value Asset (Liability)

Pay CHF	December 21, 2020	December 22, 2025	3.00%	CHF	356,886	374,137	(9,326)		(4,241)
Receive U.S.$			3.98%	$	400,637	420,001

Pay CHF	September 28, 2022	September 29, 2023	1.95%	CHF	—	48,532	—		(3,528)
Receive U.S.$			5.32%	$	—	49,142

Pay CHF	September 22, 2023	September 29, 2024	2.40%	CHF	28,500	—	342		—
Receive U.S.$			6.27%	$	31,457	—

Total							$	(8,984)	$	(7,769)

The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCI. For the three and nine months ended September 30, 2023 the Company recorded gains of $15.3 million and $3.3 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the losses recognized on the intercompany loans. For the three and nine months ended September 30, 2022, the Company recorded gains of $16.5 million and $42.2 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the losses recognized on the intercompany loans.

For the three and nine months ended September 30, 2023, the Company recorded gains of $13.8 million and $3.1 million in AOCI, respectively, related to change in fair value of the cross-currency swaps. For the three and nine months ended September 30, 2022, the Company recorded a loss of $12.3 million and a gain of $33.8 million in AOCI, respectively, related to change in fair value of the cross-currency swaps.

For the three and nine months ended September 30, 2023, the Company recorded gains of $1.5 million and $4.4 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps. For the three and nine months ended September 30, 2022, the Company recorded gains of $1.1 million and $5.0 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The Company manages certain foreign exchange risks through a variety of strategies, including hedging. The Company is exposed to foreign exchange risk from its international operations through foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business. On October 1, 2018 and December 16, 2020, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.


					September 30, 2023	December 31, 2022	September 30, 2023		December 31, 2022
	Effective Date	Termination Date	Fixed Rate	Aggregate Notional Amount			Fair Value Asset (Liability)

Pay EUR	October 3, 2018	September 30, 2023	—%	EUR	—	51,760	—		4,713
Receive U.S.$			2.57%	$	—	60,000

Pay EUR	October 3, 2018	September 30, 2025	—%	EUR	38,820	38,820	4,223		4,307
Receive U.S.$			2.19%	$	45,000	45,000

Pay CHF	May 26, 2022	December 16, 2028	—%	CHF	288,210	288,210	(25,294)		(14,663)
Receive U.S.$			1.94%	$	300,000	300,000

Total							$	(21,071)	$	(5,643)

The cross-currency swaps were carried on the consolidated balance sheet at fair value and changes in the fair values were recorded as unrealized gains or losses in AOCI. For the three and nine months ended September 30, 2023, the Company recorded a gain of $6.1 million and a loss of $4.1 million, respectively, in AOCI related to the change in fair value of the cross-currency swaps. For the three and nine months ended September 30, 2022, the Company recorded gains of $9.4 million and $21.5 million in AOCI, respectively, related to change in fair value of the cross-currency swaps.

For the three and nine months ended September 30, 2023, the Company recorded gains of $1.8 million and $6.0 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps. For the three and nine months ended September 30, 2022, the Company recorded gains of $2.4 million and $4.7 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.

The Company has entered into a hedge for forecasted intercompany purchases denominated in foreign currencies through the use of forward contracts designated as cash flow hedges. To the extent these forward contracts meet hedge accounting criteria, changes in their fair value are not included in accumulated comprehensive loss. These changes in fair value will be recognized into earnings as a component of cost of sales when the forecasted-transaction occurs.

During 2023, the Company entered into foreign currency forward Contracts to mitigate the risk of foreign currency on intercompany purchases in CHF. These contracts typically settle at various dates within twelve months of execution. As of September 30, 2023 the notional amount of foreign currency forward contracts was $3.5 million. During the three and nine months ended September 30, 2023 the Company recorded gains of $0.1 million and $0.3 million, respectively in AOCI related to the change in fair value of the foreign currency forward contracts.

The Company manages its concentration of counterparty credit risk on its derivative instruments by limiting acceptable counterparties to a group of major financial institutions with investment grade credit ratings, and by actively monitoring their credit ratings and outstanding positions on an ongoing basis. Therefore, the Company considers the credit risk of the counterparties to be low. Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency.

The Company has classified all of its derivative instruments within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of the derivative instruments. The fair values of the interest rate swaps and cross-currency swaps were developed using a market approach based on publicly available market yield curves and the terms of the swap. The Company performs ongoing assessments of counterparty credit risk.


	Fair Value as of
Location on Balance Sheet (1):	September 30, 2023		December 31, 2022
Dollars in thousands
Derivatives designated as hedges — Assets:
Prepaid expenses and other current assets
Cash Flow Hedges
Interest rate swap(2)	$	19,938	$	16,682
Cross-currency swap	4,242		4,497
Net Investment Hedges
Cross-currency swap	2,380		11,653
Other assets
Cash Flow Hedges
Interest rate swap(2)	49,240		40,030
Cross-currency swap	—		—
Net Investment Hedges
Cross-currency swap	3,220		3,311
Total derivatives designated as hedges — Assets	$	79,020	$	76,173

Derivatives designated as hedges — Liabilities:
Accrued expenses and other current liabilities
Cash Flow Hedges
Interest rate swap(2)	$	663	$	—
Cross-currency swap	—		3,528
Foreign currency forward contracts	127
Net Investment Hedges
Cross-currency swap	—		—
Other liabilities
Cash Flow Hedges
Interest rate swap(2)	1,261		—
Cross-currency swap	13,226		8,738
Net Investment Hedges
Cross-currency swap	26,671		20,608
Total derivatives designated as hedges — Liabilities	$	41,948	$	32,874


Dollars in thousands	Balance in AOCI Beginning of Quarter		Amount of Gain (Loss) Recognized in AOCI		Amount of Gain (Loss) Reclassified from AOCI into Earnings		Balance in AOCI End of Quarter		Location in Statements of Operations
Three Months Ended September 30, 2023
Cash Flow Hedges
Interest rate swap	$	56,901	$	15,317	$	4,964	$	67,254	Interest expense
Cross-currency swap	(18,925)		13,796		15,347		(20,476)		Other income, net
Foreign Currency Forward Contract	(123)		98		87		(112)		Cost of Sales
Net Investment Hedges
Cross-currency swap	(21,239)		6,051		1,772		(16,960)		Interest income
	$	16,614	$	35,262	$	22,170	$	29,706
Three Months Ended September 30, 2022
Cash Flow Hedges
Interest rate swap	$	26,939	$	32,939	$	(726)	$	60,604	Interest expense
Cross-currency swap	(17,835)		12,332		17,627		(23,130)		Other income, net
Net Investment Hedges
Cross-currency swap	7,506		9,403		2,378		14,531		Interest income
	$	16,610	$	54,674	$	19,279	$	52,005

Dollars in thousands	Balance in AOCI Beginning of Year		Amount of Gain (Loss) Recognized in AOCI		Amount of Gain (Loss) Reclassified from AOCI into Earnings		Balance in AOCI End of Quarter		Location in Statements of Operations
Nine Months Ended September 30, 2023
Cash Flow Hedges
Interest rate swap	$	56,712	$	23,477	$	12,935	$	67,254	Interest expense
Cross-currency swap	(20,271)		3,114		3,319		(20,476)		Other income (expense),net
Foreign Currency Forward Contract	—		333		445		(112)
Net Investment Hedges
Cross-currency swap	(6,914)		(4,066)		5,980		(16,960)		Interest income
	$	29,527	$	22,858	$	22,679	$	29,706
Nine Months Ended September 30, 2022
Cash Flow Hedges
Interest rate swap	$	(43,956)	$	94,729	$	(9,831)	$	60,604	Interest expense
Cross-currency swap	(9,688)		33,784		47,226		(23,130)		Other income (expense), net
Net Investment Hedges
Cross-currency swap	(2,321)		21,528		4,676		14,531		Interest income
	$	(55,965)	$	150,041	$	42,071	$	52,005

During the second quarter of 2021, the Company entered into a foreign currency swap, with a notional amount of $7.3 millions to mitigate the risk from fluctuations in foreign currency exchange rates associated with an intercompany loan denominated in Japanese Yen. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another currency at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company subsequently paid down a portion of this swap, bringing the notional amount down to $5.5 million.