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DERIVATIVE AND HEDGING INSTRUMENTS
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE AND HEDGING INSTRUMENTS DERIVATIVE AND HEDGING INSTRUMENTS
The Company is exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign exchange rates. The Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and foreign exchange rates. The Company’s derivative financial instruments are used to manage differences in the amount of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.
Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value in the Company’s functional currency, the U.S. dollar, of the Company’s investment in foreign operations, the cash receipts and payments related to these foreign operations and payments of interest and principal under Canadian dollar denominated debt. The Company enters into derivative financial instruments to protect the value of its foreign investments and fix a portion of the interest payments for certain debt obligations. The Company does not enter into derivatives for speculative purposes.
Cash Flow Hedges
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. During each of the three and six months ended June 30, 2025, the Company reclassified $17.2 million of gain related to six previously terminated interest rate swaps from accumulated other comprehensive loss to other income as the related forecasted transactions were determined to be probable not to occur. As of June 30, 2025, approximately $4.1 million of gains, which are included in accumulated other comprehensive loss, are expected to be reclassified into earnings in the next 12 months.
Net Investment Hedges
The Company is exposed to fluctuations in foreign exchange rates on investments it holds in Canada. The Company uses cross currency interest rate swaps to hedge its exposure to changes in foreign exchange rates on these foreign investments.
The following presents the notional amount of derivative instruments as of the dates indicated (in thousands):
June 30, 2025December 31, 2024
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars (1)
$930,000 $430,000 
Denominated in Canadian Dollars$150,000 $150,000 
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars$— $46,270 
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars$182,800 $189,600 
Derivatives not designated as net investment hedges:
Denominated in Canadian Dollars$— $10,030 
(1)    Balance as of June 30, 2025 includes six forward starting swaps with an effective date of July 30, 2025 and an aggregate notional amount of $500.0 million.
Derivative and Financial Instruments Designated as Hedging Instruments
The following is a summary of the derivative and financial instruments designated as hedging instruments held by the Company at June 30, 2025 and December 31, 2024 (dollars in thousands):
Count as of June 30, 2025
Fair Value as of
Maturity Dates as of June 30, 2025
TypeDesignationJune 30, 2025December 31, 2024Balance Sheet Location
Assets:
Interest rate swapsCash flow5 $5,067 $14,085 2028Accounts receivable, prepaid expenses and other assets, net
Cross currency interest rate swapsNet investment— — 6,290 —Accounts receivable, prepaid expenses and other assets, net
$5,067 $20,375 
Liabilities:
Forward starting interest rate swapsCash flow6 $1,483 $— 2030Accounts payable and accrued liabilities
CAD borrowings under Revolving Credit FacilityNet investment1 $24,023 $27,554 2027Revolving credit facility
CAD Term LoanNet investment1 109,860 104,370 2028Term loans, net
$135,366 $131,924 
The following presents the effect of the Company’s derivative and financial instruments designated as hedging instruments on the consolidated statements of income and the consolidated statements of equity for the three and six months ended June 30, 2025 and 2024 (in thousands):
(Loss) Gain Recognized in Other Comprehensive (Loss) Income
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Cash Flow Hedges:
Interest rate products$(2,528)$3,066 $(7,196)$14,562 
Net Investment Hedges:
Foreign currency products(1,586)382 (1,418)1,293 
CAD borrowings under Revolving Credit Facility(330)46 (558)(457)
CAD Term Loan(5,355)1,095 (5,490)3,525 
$(9,799)$4,589 $(14,662)$18,923 
Gain Reclassified from Accumulated Other Comprehensive (Loss) Income into Income
Three Months Ended June 30,Six Months Ended June 30,
Income Statement Location2025202420252024
Cash Flow Hedges:
Interest rate productsInterest expense$1,323 $2,390 $2,712 $4,838 
During the three and six months ended June 30, 2025 and 2024, no cash flow hedges were determined to be ineffective.
Derivatives Not Designated as Hedging Instruments
As of June 30, 2025, the Company’s derivatives were all designated as hedging instruments. During each of the three and six months ended June 30, 2025, the Company incurred $0.3 million of other expense, and during each of the three and six months ended June 30, 2024, the Company incurred $0.1 million of other income related to the portion of derivatives not designated as hedging instruments.
Offsetting Derivatives
The Company enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of June 30, 2025 and December 31, 2024 (in thousands):
As of June 30, 2025
Gross Amounts of Recognized Assets / LiabilitiesGross Amounts Offset in the Balance SheetNet Amounts of Assets / Liabilities Presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet
Financial InstrumentsCash Collateral ReceivedNet Amount
Offsetting Assets:
Derivatives$5,067 $— $5,067 $(354)$— $4,713 
Offsetting Liabilities:
Derivatives$1,483 $— $1,483 $(354)$— $1,129 
As of December 31, 2024
Gross Amounts of Recognized Assets / LiabilitiesGross Amounts Offset in the Balance SheetNet Amounts of Assets / Liabilities Presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet
Financial InstrumentsCash Collateral ReceivedNet Amount
Offsetting Assets:
Derivatives$20,375 $— $20,375 $— $— $20,375 
Offsetting Liabilities:
Derivatives$— $— $— $— $— $— 
Credit Risk-related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision pursuant to which the Company could be declared in default on the derivative obligation if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender. As of June 30, 2025, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $1.4 million. As of June 30, 2025, the Company has not posted any collateral related to these agreements. If the Company had breached any of these provisions at June 30, 2025, it could have been required to settle its obligations under the agreements at their termination value of $1.1 million.