Derivative Instruments

6 Months Ended

Jun. 30, 2025

Derivative Instrument Detail [Abstract]

Derivative Instruments

NOTE 6. DERIVATIVE INSTRUMENTS

From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks. Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. All our cash flow hedges are expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedges.

At June 30, 2025, we had interest rate swaps associated with $761.0 million of SOFR-indexed term loan debt. These cash flow hedges convert variable rates ranging from one-month SOFR plus 1.61% to 2.30%, to fixed rates ranging from 2.14% to 4.83% before patronage credits from lenders. Additionally, at June 30, 2025, we had $176.0 million of interest rate swaps associated with SOFR-indexed term loan debt whereby the cash flow hedges convert variable rates ranging from daily simple SOFR-indexed plus a spread of 2.20% to 2.30%, to fixed rates ranging from 4.02% to 4.28% before patronage credits from lenders. At June 30, 2025, we had a $75.0 million forward-starting interest rate swap designated as a cash flow hedge for expected future debt refinancing that requires settlement on the stated maturity date.

The gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets were as follows:

(in thousands)	Location	June 30, 2025		December 31, 2024
Derivatives designated in cash flow hedging relationships:
Interest rate contracts	Other assets, current1	$	424	$	—
Interest rate contracts	Other assets, non-current		107,687		138,354
		$	108,111	$	138,354

1.Derivative instruments that mature within one year, as a whole, are classified as current.

The following table details the effect of derivatives on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Income (Loss):

		Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	Location	2025			2024		2025			2024
Derivatives designated in cash flow hedging relationships:
Interest rate contracts
(Loss) income recognized in other comprehensive income (loss), net of tax		$	(3,160	)	$	9,184	$	(15,264	)	$	30,704
Amounts reclassified from accumulated other comprehensive income to income, net of tax1	Interest expense, net	$	4,546		$	5,573	$	9,051		$	11,168
Interest expense, net		$	10,412		$	8,696	$	11,904		$	8,414

1. Realized gains and losses on interest rate contracts consist of realized net cash received or paid and interest accruals on the interest rate swaps during the periods in addition to amortization of amounts out of other comprehensive income (loss) related to certain terminated hedges and adjustments to interest expense resulting from amortization of inception value of certain off-market designated hedges. For the six months ended June 30, 2025 and 2024, we amortized approximately $5.7 million and $5.3 million, respectively, of the off-market designated hedges. Net cash received or paid is included within Interest expense, net in the Condensed Consolidated Statements of Operations.

At June 30, 2025, the amount of net gains expected to be reclassified into earnings in the next 12 months is approximately $14.4 million. However, this expected amount to be reclassified into earnings is subject to volatility as the ultimate amount recognized in earnings is based on the SOFR rates at the time of net swap cash payments.