Derivative Instruments

9 Months Ended

Sep. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company uses derivative instruments to manage its exposure to variable-rate debt indexed to 1-month Term SOFR, issued under its Tranche B-1 Term Loans drawn from the Company’s Credit Agreement.

Derivative

Certain information related to our derivatives contracts is presented below (in thousands):

	Effective Date	Notional Amount		Fixed Rate		Cap		Floor		Index	Actual Termination Date
Swap contracts	3/3/2025	$	300,000	3.829	%					USD-SOFR rate	2/29/2028
Collar contracts	3/3/2025	$	300,000	—		4.500	%	3.001	%	USD-SOFR rate	2/29/2028

Cash Flow Hedge Coverage

The Company has entered into interest rate swap and collar agreements designated as cash flow hedges. These agreements are used to manage interest rate risk associated with a portion of the Company’s floating-rate debt for periods not exceeding the next three years.

Deferred Hedging Gains and Losses on Cash Flow Hedges

Based on our valuation at September 30, 2025 and assuming market rates remain constant through contract maturities, we expect transfers to earnings of the existing gains or losses reported in accumulated other comprehensive income on interest rate cash flow hedges during the next 12 months to correspond to the current assets and liabilities portion of the derivative as disclosed in Note 8—“Fair Value of Financial Instruments”.

Derivative Impact on the Statements of Comprehensive Income

The following table presents the pre-tax amounts of derivative gains or losses deferred into accumulated other comprehensive income and the income statement line item that will be affected when reclassified to earnings (in thousands):

		Three Months Ended September 30, 2025		Nine Months Ended September 30, 2025
Accumulated Other Comprehensive Income Component (OCI)	Location of Losses When Reclassified to Net Income/(Loss)	Gains/(Losses) Recognized in OCI Related to Derivatives Designated as Hedging Instruments
Cash flow hedges:
Swap contracts	Interest expense	$	(184)	$	(3,467)
Collar contracts	Interest expense	554		(1,286)
Total gains (losses) recognized in statements of comprehensive income		$	370	$	(4,753)

Derivative Impact on the Statements of Income

The following tables present the pre-tax amounts of derivative gains or (losses) recorded to earnings and the affected income statement line items (in thousands):

	Three Months Ended September 30, 2025		Nine Months Ended September 30, 2025
	Interest expense
Total amounts presented in the condensed consolidated statements of income in which the following effects were recorded
Gains/(losses) related to derivatives designated as hedging instruments:
Cash flow hedges(1):
Swap contracts	$	386	$	877
Collar contracts(2)	—		—
Total gains recognized in statements of income	$	386	$	877

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(1)    Represents the pre-tax amounts of derivative gains/(losses) reclassified from accumulated other comprehensive income to earnings.

(2)    As of the reporting date, the 1-month Term SOFR remains within the specified cap strike and floor strike bands. Consequently, there are no payments required to be exchanged under this agreement.