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Derivative Instruments
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments Derivative Instruments
In the normal course of business, our operations are exposed to economic risks from interest rates and foreign currency exchange rates. We may enter into derivative financial instruments to offset these underlying economic risks.
Derivatives Designated as Hedging Instruments - Cash Flow Hedges
We enter into foreign currency forward contracts to sell GBP and buy USD to hedge the foreign currency risk on interest payments on intercompany loans denominated in GBP. There are no amounts excluded from the assessment of hedge effectiveness for cash flow hedges of foreign exchange risk. We also execute variable-to-fixed interest rate swaps and use interest rate swaption agreements to add stability to interest expense and to manage our exposure to interest rate movements associated with our term loans or forecasted transactions. If it becomes probable that a forecasted transaction will not occur within the specific time period or within an additional two-month period thereafter, any related amounts deferred in AOCI are recognized immediately in earnings. During the three months ended March 31, 2026, and 2025, no such amounts were recognized through the caption entitled 'Interest' in our consolidated statements of income and comprehensive income.
Derivatives Designated as Hedging Instruments - Fair Value Hedges
Periodically, we enter into and designate fixed-to-floating interest rate swaps to manage interest rate risk by managing our mix of fixed-rate and variable-rate debt. These swaps involve the receipt of fixed-rate amounts for variable interest rate payments over the life of the swaps without exchange of the underlying principal amount. We also designate some of our cross-currency swaps as fair value hedges as we use them to hedge foreign currency risk associated with changes in spot rates on foreign-denominated intercompany receivables and third-party debt. For these hedging instruments, we have elected to exclude the change in fair value of the cross-currency swaps attributable to the difference between the spot and forward prices from the assessment of hedge effectiveness (the "excluded component"). Changes in the fair value of the cross-currency swaps attributable to these excluded components are recorded to other comprehensive income and subsequently recognized in 'Foreign currency and derivative loss, net' on a systematic and rational basis, as net cash settlements and interest accruals on the respective cross currency swaps occur, over the remaining life of the hedging instruments.
Derivatives Designated as Hedging Instruments - Net Investment Hedges
To mitigate the foreign currency exchange rate variations associated with our investment in EUR-denominated foreign operations, we may enter into derivative instruments, such as cross-currency swaps that qualify as net investment hedges under the criteria prescribed in accordance with ASC 815-20, Hedging - General. We use the spot method of assessing hedge effectiveness and apply the consistent election to the excluded component by recognizing changes in the fair value of the hedging instruments attributable to the excluded component in the same manner as described above. Any difference between the change in the fair value of the excluded components and the amounts recognized in earnings is reported in other comprehensive income as part of the foreign cumulative translation adjustment. The gain or loss on the portion of the derivative instruments included in the assessment of effectiveness is reported in other comprehensive income as part of the 'Foreign currency translation adjustment' line item, to the extent the relationship is highly effective. If our net investment changes during a reporting period, the hedge relationship will be assessed for whether a de-designation is warranted (only if the hedge notional amount is outside of prescribed tolerance). Further, certain EUR-denominated bonds and borrowings under our revolving credit facilities and term loans may also be designated as, and are effective as, net investment hedges. Changes in the value of such borrowings, related to changes in the spot rates, will be recorded in the same manner as foreign currency translation adjustments. As of March 31, 2026, the total principal amount of foreign currency debt obligations designated as net investment hedges was $761.2 million.
Derivatives Not Designated as Hedging Instruments
We enter into foreign currency exchange swap agreements to reduce the effects of currency exchange rate fluctuations between the USD, our reporting currency, and GBP and EUR. These derivative contracts generally mature within one year and are not designated as hedge instruments for accounting purposes. As the currency exchange swap is not accounted for as a hedging instrument, the change in fair value is recorded in earnings through the caption entitled 'Foreign currency and derivative loss, net' in our consolidated statements of income and comprehensive income.
The following table summarizes the terms and fair values of our derivative financial instruments as of March 31, 2026 and December 31, 2025 (dollars in millions):
Derivative Type
Number of Instruments (1)
Notional Amount
 as of
Weighted Average Strike Rate (2)
Maturity Date (3)
Fair Value - asset (liability)
 as of
Derivatives Designated as Hedging InstrumentsMarch 31, 2026December 31, 2025March 31, 2026December 31, 2025
Interest rate swaps (4)
7$1,400.0 $2,105.03.13%Aug 2027 - Jan 2028$22.2 $5.1 
Cross-currency swaps - Fair Value
111,220.0 720.0(5)Feb 2029 - Jan 2036(64.8)(81.0)
Cross-currency swaps - Net Investment
3280.0 280.0(6)Oct 2032(55.7)(66.1)
Foreign currency forwards
65708.2 519.7(7)Apr 2026 - Dec 202814.6 (8.7)
$3,608.2 $3,624.7 $(83.7)$(150.7)
Derivatives not Designated as Hedging Instruments
Currency exchange swaps
7$3,789.9 $2,972.8 (8)Apr 2026$23.5 $(47.0)
Cross-currency swaps - Mark to Market
4500.0 — (9)Apr 2033(4.5)— 
$4,289.9 $2,972.8 $19.0 $(47.0)
Total of all Derivatives$7,898.1 $6,597.5 $(64.7)$(197.7)
(1)This column represents the number of instruments outstanding as of March 31, 2026.
(2)Weighted average strike rate is calculated using the notional value as of March 31, 2026.
(3)This column represents maturity dates for instruments outstanding as of March 31, 2026.
(4)During the year ended December 31, 2025, we entered into five variable-to-fixed interest rate swaps in connection with our GBP-denominated term loan maturing in 2028 and designated these derivatives as cash flow hedges of the underlying interest rate risk. In addition, two other variable-to-fixed interest rate swaps, which were assumed in connection with the Merger, continue to be designated as cash flow hedges of the related assumed term loans.
(5)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.681%. USD fixed rate of 3.950% and GBP weighted average fixed rate of 4.392%. USD fixed rate of 4.910% and EUR weighted average fixed rate of 4.122%.
(6)USD fixed rate of 5.625% and EUR weighted average fixed rate of 4.716%.
(7)Weighted average exchange rates of 1.34 for GBP-USD and 1.21 EUR-USD.
(8) Weighted average exchange rates of 0.87 for EUR-GBP and 1.33 for GBP-USD.
(9) USD fixed rate of 4.750% and EUR weighted average fixed rate of 3.806%.
We measure our derivatives at fair value and include the balances within 'Other assets, net' and 'Accounts payable and accrued expenses' on our consolidated balance sheets.
We have agreements with each of our derivative counterparties containing provisions under which we could be declared in default on our derivative obligations if repayment of our indebtedness is accelerated by the lender due to our default.
The following table summarizes the amount of unrealized gain (loss) on derivatives and foreign currency translation adjustments in other comprehensive income (in thousands):
Three months ended March 31,
Derivatives in Cash Flow Hedging Relationships20262025
Interest rate swaps $16,836 $(7,364)
Foreign currency forwards 23,246 (13,182)
Interest rate swaptions (210)(406)
Total derivatives in cash flow hedging relationships$39,872 $(20,952)
Derivatives in Fair Value Hedging Relationships
Cross-currency swaps - Fair Value$8,460 $10,327 
Total derivatives in fair value hedging relationships$8,460 $10,327 
Total unrealized gain (loss) on derivatives, net$48,332 $(10,625)
Derivatives and Non-derivatives in Net Investment Hedging Relationships
Cross-currency swaps - Net Investment$9,888 $(4,826)
Foreign currency debt11,126 (4,127)
Total unrealized gain (loss) recorded in foreign currency translation adjustment$21,014 $(8,953)
The following table summarizes the amount of gain (loss) on derivatives reclassified from AOCI (in thousands):
Three months ended March 31,
Derivatives in Cash Flow Hedging Relationships
Location of (Decrease) Increase Recognized in Income
20262025
Interest rate swapsInterest$2,400 $3,384 
Foreign currency forwards
Foreign currency and derivative loss, net
(8,432)1,318 
Interest rate swaptionsInterest60 104 
Total derivatives in cash flow hedging relationships$(5,972)$4,806 
Derivatives in Fair Value Hedging Relationships
Cross-currency swaps - Fair Value
Foreign currency and derivative loss, net
$(122)$215 
Total derivatives in fair value hedging relationships$(122)$215 
Derivatives in Net Investment Hedging Relationships
Cross-currency swaps - Net Investment (excluded component)
Foreign currency and derivative loss, net
$628 $652 
Total derivatives in net investment hedging relationships$628 $652 
Net (decrease) increase to net income
$(5,466)$5,673 
We expect to reclassify $14.5 million from AOCI as a decrease to interest expense relating to interest rate swaps and $11.9 million from AOCI as a decrease to foreign currency loss relating to foreign currency forwards within the next twelve months.
The following table details our foreign currency and derivative loss, net included in income (in thousands):
Three months ended March 31,
20262025
Realized foreign currency and derivative loss, net:
(Loss) gain on the settlement of undesignated derivatives$(25,407)$(23,404)
(Loss) gain on the settlement of designated derivatives reclassified from AOCI(8,432)2,185 
(Loss) gain on the settlement of transactions with third parties(3,656)3 
Total realized foreign currency and derivative loss, net$(37,495)$(21,216)
Unrealized foreign currency and derivative loss, net:
Gain (loss) on the change in fair value of undesignated derivatives$54,139 $(3,820)
(Loss) gain on remeasurement of certain assets and liabilities(33,664)22,491 
Total unrealized foreign currency and derivative gain, net$20,475 $18,671 
Total foreign currency and derivative loss, net$(17,020)$(2,545)