XML 28 R17.htm IDEA: XBRL DOCUMENT v3.24.3
Derivatives
 6 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
The Company utilizes derivative financial instruments to manage interest rate risk related to its variable rate debt. The Company’s objectives in using these interest rate derivatives, which were designated as cash flow hedges, are to manage its exposure to interest rate movements and reduce volatility of interest expense.
The following table summarizes the material terms of the Company’s outstanding interest rate swap derivative contracts as of September 30, 2024:
Effective DateMaturity DateTermsNotional Amount
April 28, 2023June 30, 2025Variable to Fixed$200,000 
June 30, 2023June 30, 2026Variable to Fixed150,000 
June 28, 2024June 30, 2027Variable to Fixed200,000 
Total$550,000 
The floating-to-fixed interest rate swaps involve the exchange of variable interest amounts from a counterparty for the Company making fixed-rate interest payments over the life of the agreements without exchange of the underlying notional amount and effectively convert a portion of the variable rate debt into fixed interest rate debt.
Derivative instruments are recorded in the condensed consolidated balance sheet on a gross basis at estimated fair value. As of September 30, 2024, $2.9 million, $1.1 million and $5.0 million were classified as other current assets, other current liabilities and other long-term liabilities, respectively, on the condensed consolidated balance sheet. As of March 31, 2024, $8.7 million and $1.6 million were classified as other current assets and other long-term assets, respectively, on the condensed consolidated balance sheet.
For interest rate swaps designated as cash flow hedges, the changes in the fair value of derivatives are recorded in Accumulated Other Comprehensive Income (“AOCI”), net of taxes, and are subsequently reclassified into interest expense, net in the period that the hedged forecasted interest payments are made on the Company's variable-rate debt. The effect of derivative instruments on the accompanying condensed consolidated financial statements for the periods presented is as follows:
Derivatives in Cash Flow Hedging RelationshipsPre-Tax (Loss) Gain Recognized in AOCI on Derivatives
Pre-Tax Gain Reclassified from AOCI into Income
Three Months Ended
September 30,		Three Months Ended
September 30,
2024202320242023
Interest rate swaps (1)
$(7,806)$3,173 $2,702 $3,702 
Derivatives in Cash Flow Hedging RelationshipsPre-Tax (Loss) Gain Recognized in AOCI on Derivatives
Pre-Tax Gain Reclassified from AOCI into Income
Six Months Ended
September 30,		Six Months Ended
September 30,
2024202320242023
Interest rate swaps (1)
$(7,067)$11,772 $6,461 $7,271 
(1) The reclassifications from accumulated other comprehensive income to net income are included in interest expense in the Condensed Consolidated Statement of Operations.
Over the next 12 months, the Company estimates that $1.7 million will be reclassified as a decrease to interest expense. Cash flows associated with periodic settlements of interest rate swaps will be classified as operating activities in the condensed consolidated statement of cash flows.
The Company is subject to counterparty risk in connection with its interest rate swap derivative contracts. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The Company mitigates this credit risk by entering into agreements with credit-worthy counterparties, diversifying across multiple counterparties, and regularly reviewing credit exposure and the creditworthiness of each counterparty.