Derivative Financial Instruments

6 Months Ended

Jun. 30, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

To mitigate the risk of a rise in interest rates on the First Lien Credit Facility, we entered into interest rate swaps on January 13, 2023, April 1, 2025 and April 9, 2025. We attempt to minimize our interest risk exposure by fixing our rate through the utilization of interest rate swaps, which are derivative instruments. The interest rate swaps mitigate the exposure on the variable component of interest on our First Lien Credit Facility. The interest rate swaps result in the fixed interest rate shown in the table below on the swapped portion of the First Lien Credit Facility. Our swaps are entered into with financial

institutions that participate in the First Lien Credit Facility. By using a derivative instrument to hedge exposures to changes in interest rates, we expose ourselves to credit risk due to the possible failure of the counterparty to perform under the terms of the derivative contract.

As of June 30, 2025 and December 31, 2024, we have the following interest rate swap agreements designated as a hedging instruments:


Effective Dates	Floating Rate Debt			Fixed Rates
January 31, 2023 through January 31, 2026	$	506.7	million	3.87	%
April 1, 2025 through January 30, 2026	80.0		million	3.59	%
January 31, 2026 through March 31, 2027	275.0		million	3.59	%
January 31, 2026 through March 31, 2027	275.0		million	3.27	%

The gain or loss on the swaps is recognized in accumulated other comprehensive income/(loss) and reclassified into earnings as adjustments to interest expense in the same period or periods during which the swaps affect earnings. Gains or losses on the swaps representing hedge components excluded from the assessment of effectiveness are recognized in current earnings.

The effect of derivative instruments designated as hedging instruments on the accompanying consolidated financial statements is as follows (in thousands):


Derivatives - Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in AOCI/AOCL on Derivative		Location of Gain or (Loss) Reclassified from AOCI/AOCL into Income	Amount of Gain or (Loss) Reclassified from AOCI/AOCL into Income		Total Interest Expense on Consolidated Statements of Operations
Interest rate swaps:
Three months Ended June 30, 2025	$	(732)	Interest expense	$	717	$	(18,255)
Three months Ended June 30, 2024	$	(4,501)	Interest expense	$	8,695	$	(50,541)
Six Months Ended June 30, 2025	$	(1,288)	Interest expense	$	1,289	$	(37,155)
Six Months Ended June 30, 2024	$	(4,676)	Interest expense	$	17,297	$	(107,725)

The net amount of accumulated other comprehensive income expected to be reclassified to interest income in the next twelve months is $0.6 million.

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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+ Details

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