Derivative Instruments

12 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

6.    Derivative Instruments

Net gains and losses related to foreign exchange contracts are recorded as a component of “Other income (expense)” in the accompanying Consolidated Statements of Operations and are as follows for the fiscal years ended September 30, 2023, 2022 and 2021 (in thousands):

	Year Ended September 30,
	2023		2022		2021
Realized gains (losses) on derivatives not designated as hedging instruments	$	(1,174)	$	991	$	(7,781)

The notional amounts of the Company’s derivative instruments as of September 30, 2023 and 2022 were as follows (in thousands):

			Year Ended September 30,
	Hedge Designation		2023		2022
Cross-currency swap	Net Investment Hedge	$	436,360	$	960,000
Foreign exchange contracts	Undesignated		184,800		585,800

The fair value of derivative instruments are as follows at September 30, 2023 and 2022 (in thousands):

		Fair Value of Assets				Fair Value of Liabilities
As of September 30,		2023		2022		2023		2022
Derivatives not designated as hedging instruments
Foreign exchange contracts	$	44	$	634	$	(421)	$	(230)
Total fair value	$	44	$	634	$	(421)	$	(230)

Hedging Activities

On February 1, 2022, the Company entered into a cross-currency swap agreement to hedge the variability of exchange rate impacts between the U. S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $1.0 billion for €915.0 million at a weighted average interest rate of 1.20%. The designated notional amount was $960.0 million, and the actual interest rate was 1.28%. The 1.28% rate was in the range of the market value for that day and was the true interest rate on the notional amount. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries requiring an exchange of the notional amounts at maturity. At the maturity of the cross currency-swap on February 1, 2023, the Company delivered a notional amount of €852.0 million and received a notional amount of $960.0 million at an USD/EUR exchange rate of 1.13, which included realization of a gain of $29.3 million recorded in “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets.

On February 1, 2023, the Company entered into another cross-currency swap agreement to hedge the variability of exchange rate impacts between the U.S. dollar and the Euro. Under the terms of the cross-currency swap agreement, the Company notionally exchanged $436.0 million for €400.0 million at a weighted average interest rate of 1.66%. The Company designated the cross-currency swap as a hedge of net investments against one of its Euro denominated subsidiaries, which requires an exchange of the notional amounts at maturity on February 1, 2024.

Cross-currency swaps are marked to market at each reporting period, representing the fair values of the cross-currency swap and any changes in fair value are recognized as a component of “Accumulated other comprehensive income (loss)” in the Consolidated Balance Sheets.

Interest earned on the cross-currency swap is recorded within “Interest income” in the Consolidated Statements of Operations. For the fiscal years ended September 30, 2023 and 2022, the Company recorded “Interest income” of $8.9 million and $8.2 million, respectively, on this instrument.