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Derivative Instruments and Hedging Activities | 3 Months Ended
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Mar. 31, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities We are exposed to certain risks arising from operating internationally, including fluctuations in foreign exchange rates primarily related to the translation of sterling and euro denominated net monetary liabilities, including intercompany balances, held by subsidiaries with a U.S. dollar functional currency and fluctuations in interest rates on our outstanding term loan borrowings. We manage these exposures within specified guidelines through the use of derivatives. All of our derivative instruments are utilized for risk management purposes, and we do not use derivatives for speculative trading purposes. We enter into foreign exchange forward contracts, with durations of up to 12 months, designed to limit the exposure to fluctuations in foreign exchange rates related to the translation of certain non-U.S. dollar denominated liabilities, including intercompany balances. Hedge accounting is not applied to these derivative instruments as gains and losses on these hedge transactions are designed to offset gains and losses on underlying balance sheet exposures. As of March 31, 2025 and December 31, 2024, the notional amount of foreign exchange contracts where hedge accounting is not applied was $240.1 million and $461.2 million, respectively. The foreign exchange loss in our condensed consolidated statements of loss included the following gains (losses) associated with foreign exchange contracts not designated as hedging instruments (in thousands):
|  |  | Three Months Ended March 31,
Foreign Exchange Forward Contracts: |  |  |  |  | 2025 |  | 2024
Gain (loss) recognized in foreign exchange loss |  |  |  |  | $ | 8,607 |  |  | $ | (4,086) |
To achieve a desired mix of floating and fixed interest rates on our variable rate debt, we entered into interest rate swap agreements in April 2023, which are effective until April 2026. These agreements hedge contractual term loan interest rates. As of March 31, 2025, the interest rate swap agreements had a notional amount of $500.0 million. As a result of these agreements, the interest rate on a portion of our term loan borrowings is fixed at 3.9086%, plus the borrowing spread, until April 30, 2026. The impact on accumulated other comprehensive loss and earnings (loss) from derivative instruments that qualified as cash flow hedges was as follows (in thousands):
|  |  | Three Months Ended March 31,
Interest Rate Contracts: |  |  |  |  | 2025 |  | 2024
Gain (loss) recognized in accumulated other comprehensive loss, net of tax |  |  |  |  | $ | (443) |  |  | $ | 5,177 |
Gain reclassified from accumulated other comprehensive loss to interest expense, net of tax |  |  |  |  | (396) |  |  | (1,356) |
The cash flow effects of our derivative contracts for the three months ended March 31, 2025 and 2024 are included within net cash provided by operating activities in the condensed consolidated statements of cash flows. The following tables summarize the fair value of outstanding derivatives (in thousands):
| Classification | March 31, 2025 |  | December 31, 2024
Assets |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Interest rate contracts | Other current assets | $ | 36 |  |  | $ | 959 |
| Other non-current assets | — |  |  | 32 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign exchange forward contracts | Other current assets | 6,817 |  |  | 2,250 |
Total fair value of derivative asset instruments |  | $ | 6,853 |  |  | $ | 3,241 |
Liabilities |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Interest rate contracts | Other non-current liabilities | $ | 163 |  |  | $ | — |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign exchange forward contracts | Accrued liabilities | — |  |  | 10,198 |
Total fair value of derivative liability instruments |  | $ | 163 |  |  | $ | 10,198 |
Although we do not offset derivative assets and liabilities within our condensed consolidated balance sheets, our International Swap and Derivatives Association agreements provide for net settlement of transactions that are due to or from the same counterparty upon early termination of the agreement due to an event of default or other termination event. The following table summarizes the potential effect on our condensed consolidated balance sheets of offsetting our interest rate and foreign exchange forward contracts subject to such provisions (in thousands):
| March 31, 2025
| Gross Amounts of Recognized Assets/ Liabilities |  | Gross Amounts Offset in the Consolidated Balance Sheet |  | Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet |  | Gross Amounts Not Offset in the Consolidated Balance Sheet
Description |  |  |  | Derivative Financial Instruments |  | Cash Collateral Received (Pledged) |  | Net Amount
Derivative assets | $ | 6,853 |  |  | $ | — |  |  | $ | 6,853 |  |  | $ | (121) |  |  | $ | — |  |  | $ | 6,732 |
Derivative liabilities | (163) |  |  | — |  |  | (163) |  |  | 121 |  |  | — |  |  | (42) |
| December 31, 2024
| Gross Amounts of Recognized Assets/ Liabilities |  | Gross Amounts Offset in the Consolidated Balance Sheet |  | Net Amounts of Assets/ Liabilities Presented in the Consolidated Balance Sheet |  | Gross Amounts Not Offset in the Consolidated Balance Sheet
Description |  |  |  | Derivative Financial Instruments |  | Cash Collateral Received (Pledged) |  | Net Amount
Derivative assets | $ | 3,241 |  |  | $ | — |  |  | $ | 3,241 |  |  | $ | (2,910) |  |  | $ | — |  |  | $ | 331 |
Derivative liabilities | (10,198) |  |  | — |  |  | (10,198) |  |  | 2,910 |  |  | — |  |  | (7,288) |

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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