Derivatives and Hedging

12 Months Ended

Dec. 31, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging

Derivatives and Hedging

Cash flow hedge

In July 2015, the Company entered into a series of $300.0 million notional Treasury rate lock contracts which were designated and qualified as cash flow hedges. The Company documented its hedging strategy and risk management objective for this contract in anticipation of a future debt issuance. The Treasury rate lock contract eliminated the impact of fluctuations in the underlying benchmark interest rate for future forecasted debt issuances. The Company assessed the effectiveness of the hedging contract at inception and on a quarterly basis thereafter. The forecasted debt issuances occurred in July 2016 and the Treasury rate lock, which had an accumulated fair value of $(34.4) million, was settled.

As of December 31, 2024, the balance recorded in accumulated other comprehensive income (loss) in connection with the Treasury rate lock contract amounted to $(7.1) million, net of tax. This balance will be reclassified to earnings through interest expense over the life of the issued debt. Amounts of $3.6 million, $3.4 million and $4.6 million have been reclassified for the years ended December 31, 2024, 2023 and 2022, respectively. During the next twelve months the Company expects to reclassify approximately $3.9 million to interest expense.

On January 18, 2022, the Company completed the full redemption of the $125 million aggregate principal amount outstanding of its 5.125% Senior Notes due August 1, 2031. As a result of this transaction, amortization expense of $1.3 million (of the $4.6 million interest expense reclassified to earnings for the year ended December 31, 2022) was reclassified to earnings as interest expense.