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Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Designated Non-derivative Financial Instruments
As of December 31, 2024, the Company designated A$197.0 million and €820.5 million of debt and accrued interest as a hedge of its net investments in certain international subsidiaries. As of December 31, 2023, the Company designated £78.0 million, A$191.0 million and €817.5 million of debt and accrued interest as a hedge of its net investments in certain international subsidiaries. The remeasurement of these instruments is recorded in “Unrealized net gain (loss) on foreign currency” on the Consolidated Statements of Comprehensive (Loss) Income.
During the second quarter of 2024, the Company determined that its previous designation of £78.0 million of debt and accrued interest as a hedge of its net investment in the United Kingdom-based subsidiary did not qualify for hedge accounting, and the cumulative foreign exchange gain associated with this transaction of $10.4 million, previously classified within “Accumulated other comprehensive loss” on the Consolidated Balance Sheets, was recorded as a Gain from removal of hedge designation within “Other, net” on the Consolidated Statements of Operations for the year ended December 31, 2024. The Company has determined that the impacts of this adjustment are immaterial to the current and prior period interim and annual financial statements and disclosures. Furthermore, the Company fully paid off the balance of this revolving debt during the year ended December 31, 2024.
Refer to Note 18 - Accumulated Other Comprehensive Loss for additional details regarding the impact of the Company’s net investment hedges on AOCI for the years ended December 31, 2024, 2023 and 2022.
Derivative Financial Instruments
The Company is subject to volatility in interest rates due to variable-rate debt. To manage this risk, the Company periodically enters into interest rate swap agreements. These agreements involve the receipt of variable-rate amounts in exchange for fixed-rate interest payments over the life of the respective swap agreement without an exchange of the underlying notional amount. The Company’s objective for utilizing these derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in interest rates.
The following table includes the key provisions of the interest rate swaps outstanding as of December 31, 2024 and 2023:
NotionalFixed Base Interest Rate SwapEffective DateExpiration Date
Asset Fair Value as of December 31, 2024
Liability Fair Value as of December 31, 2024
(In thousands)
$200 million
3.05%12/29/20237/30/2027$4,651 $— 
$175 million
3.47%11/30/20227/30/20272,265 — 
$270 million
3.05%11/01/202212/31/20277,225 — 
C$250 million
3.59%9/23/202212/31/2027— 3,021 
Total$14,141 $3,021 
NotionalFixed Base Interest Rate SwapEffective DateExpiration Date
Asset Fair Value as of December 31, 2023
Liability Fair Value as of December 31, 2023
(In thousands)
$200 million
3.05%12/29/20237/30/2027$3,687 $— 
$175 million
3.47%11/30/20227/30/2027788 — 
$270 million
3.05%11/01/202212/31/20275,106 — 
C$250 million
3.59%9/23/202212/31/2027— 330 
Total$9,581 $330 
In 2020, the Company terminated the two interest rate swaps related to the 2020 Senior Unsecured Credit Facility for a fee of $16.4 million, of which $8.7 million was recorded in “Accumulated other comprehensive loss” on the Consolidated Balance Sheets and has been fully amortized to “Loss on debt extinguishment, modifications and termination of derivative instruments” as of December 31, 2024. The amortization of costs recognized in the Consolidated Statements of Operations from terminating these swaps was $1.0 million, $2.5 million, and $2.5 million during the years ended December 31, 2024, 2023 and 2022, respectively.
The Company is also subject to volatility in foreign exchange rates due to foreign-currency denominated intercompany loans. To manage this risk, the Company periodically enters into cross-currency swap agreements. These agreements effectively mitigate the Company’s exposure to fluctuations in cash flows due to changes in foreign exchange rates. The existing agreement involves the receipt of fixed USD amounts in exchange for payment of fixed AUD amounts over the life of the respective intercompany loan. The Company’s outstanding intercompany loan balance of A$153.5 million was hedged under the cross-currency swap agreement at December 31, 2024 and 2023. The Company previously had a cross-currency swap agreement that involved the receipt of fixed USD amounts in exchange for payment of fixed NZD amounts over the life of an intercompany loan balance of NZ$37.5 million, which matured on December 13, 2023.
For derivatives designated and that qualify as cash flow hedges, the gain or loss on the derivative instrument is recorded as “Unrealized net gain (loss) on cash flow hedges” on the Consolidated Statements of Comprehensive (Loss) Income and subsequently reclassified in the period(s) during which the hedged transaction affects earnings within the same income statement and related cash flow line items as the earnings effect of the hedged transaction. During the next year, the Company estimates that an additional $5.9 million will be reclassified as a decrease to “Interest expense” and a corresponding increase to operating cash flows.
The Company determines the fair value of its derivative instruments using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, implied volatilities, foreign currency spot and forward rates. The fair values are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. Foreign currency spot, forward and cross-currency basis are also incorporated into the valuation of cross-currency swaps. These inputs are classified as Level 2 of the fair value hierarchy. Derivative asset balances are recorded on the accompanying Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the accompanying Consolidated Balance Sheets within “Accounts payable and accrued expenses”.
The following table presents the fair value of the derivative financial instruments as of December 31, 2024 and December 31, 2023:
Derivative AssetsDerivative Liabilities
December 31, 2024December 31, 2023December 31, 2024December 31, 2023
Designated derivatives
(In thousands)
Foreign exchange contracts$15,727 $5,899 $— $— 
Interest rate contracts14,141 9,581 3,021 330 
Total fair value of derivatives$29,868 $15,480 $3,021 $330 
The following table presents the effect of the Company’s designated derivative financial instruments on the accompanying Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022, including the impacts to AOCI:
Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) on DerivativeLocation of Gain (Loss) Reclassified from AOCI into EarningsAmount of Gain (Loss) Reclassified from AOCI into Earnings
As of December 31,As of December 31,
202420232022202420232022
(In thousands)
(In thousands)
Interest rate contracts$17,431 $7,504 $15,572 Interest expense$15,574 $13,825 $721 
Loss on debt extinguishment, modifications and termination of derivative instruments(1)
(973)(2,513)(2,507)
Foreign exchange contracts10,334 1,028 5,933 
Foreign currency exchange gain (loss), net
9,371 200 7,602 
Interest expense506 374 371 
Total designated cash flow hedges$27,765 $8,532 $21,505 $24,478 $11,886 $6,187 
(1)In conjunction with the termination of interest rate swaps in 2020, the Company recorded amounts in AOCI that were reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings through August 2024 within “Loss on debt extinguishment, modifications and termination of derivative instruments.”
The Company’s derivatives are subject to master netting agreements, but there was no impact of offsetting as of December 31, 2024 and 2023.
As of December 31, 2024 and 2023, the Company has not posted any collateral related to these agreements. The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness.