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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments Designated Non-derivative Financial Instruments As of March 31, 2024, the Company design ated £78.0 million, A$197.0 million and €817.5 million of debt and accrued interest as a hedge of our net investment in the respective international subsidiaries. As of December 31, 2023, the Company designated £78.0 million, A$191.0 million and €817.5 million debt and accrued interest as a hedge of our net investment in the respective international subsidiaries. The remeasurement of these instruments is recorded in “Change in unrealized net (loss) gain on foreign currency” on the accompanying Condensed Consolidated Statements of C omprehensive Income (Loss). Derivative Financial Instruments The Company is subject to volatility in interest rates due to variable-rate debt. To manage this risk, the Company periodically enters into interest rate swap agreements. These agreements involve the receipt of variable-rate amounts in exchange for fixed-rate interest payments over the life of the respective swap agreement without an exchange of the underlying notional amount. The Company’s objective for utilizing these derivative instruments is to reduce its exposure to fluctuations in cash flows due to changes in interest rates. The following table includes the key provisions of the interest rate swaps outstanding as of March 31, 2024 and December 31, 2023 (fair value in thousands):
Notional |  | Fixed Base Interest Rate Swap |  | Effective Date |  | Expiration Date |  | Asset Fair Value as of March 31, 2024 |  | Liability Fair Value as of March 31, 2024
$200 million |  | 3.1% |  | 12/29/2023 |  | 7/30/2027 |  | $ | 6,645 |  |  | $ | — |
$175 million |  | 3.5% |  | 11/30/2022 |  | 7/30/2027 |  | 3,548 |  |  | — |
$270 million |  | 3.1% |  | 11/01/2022 |  | 12/31/2027 |  | 9,461 |  |  | — |
C$250 million |  | 3.6% |  | 9/23/2022 |  | 12/31/2027 |  | 2,428 |  |  | — |
|  |  |  |  |  | Total |  | $ | 22,082 |  |  | $ | — |
Notional |  | Fixed Base Interest Rate Swap |  | Effective Date |  | Expiration Date |  | Asset Fair Value as of December 31, 2023 |  | Liability Fair Value as of December 31, 2023
$200 million |  | 3.1% |  | 12/29/2023 |  | 7/30/2027 |  | $ | 3,687 |  |  | $ | — |
$175 million |  | 3.5% |  | 11/30/2022 |  | 7/30/2027 |  | 788 |  |  | — |
$270 million |  | 3.1% |  | 11/01/2022 |  | 12/31/2027 |  | 5,106 |  |  | — |
C$250 million |  | 3.6% |  | 9/23/2022 |  | 12/31/2027 |  | — |  |  | 330 |
|  |  |  |  |  | Total |  | $ | 9,581 |  |  | $ | 330 |
In addition, the Company is subject to volatility in foreign exchange rates due to its foreign-currency denominated intercompany loan. The Company implemented a cross-currency swap to manage the foreign currency exchange rate risk on its intercompany loan. This agreement effectively mitigates the Company’s exposure to fluctuations in cash flows due to foreign exchange rate risk. This agreement involves the receipt of fixed USD amounts in exchange for payment of fixed Australian Dollar amounts over the life of the intercompany loan. The entirety of the Company’s outstanding intercompany loan receivable balance of A$153.5 million was hedged under the cross-currency swap agreement at March 31, 2024 and December 31, 2023. There have been no significant changes to our policy or strategy related to derivative financial instruments from what was disclosed in our 2023 Annual Report on Form 10-K. During the next twelve months, the Company estimates that an additional $0.4 million will be reclassified as an increase to “Foreign currency exchange loss” (a component of “Other, net” on the Condensed Consolidated Statements of Operations) and an additional $13.5 million will be reclassified as a decrease to “Interest expense” and a corresponding increase to operating cash flows. A dditionally, during the current year, the Company estimates that an additional $0.5 million will be reclassified as an increase to “Loss on debt extinguishment and termination of derivative instruments”. The Company determines the fair value of its derivative instruments using a present value calculation with significant observable inputs classified as Level 2 of the fair value hierarchy. Derivative asset balances are recorded on the accompanying Condensed Consolidated Balance Sheets within “Other assets” and derivative liability balances are recorded on the accompanying Condensed Consolidated Balance Sheets within “Accounts payable and accrued expenses”. The following table presents the fair value of the derivative financial instruments as of March 31, 2024 and December 31, 2023 (in thousands):
| Derivative Assets |  | Derivative Liabilities
| March 31, 2024 |  | December 31, 2023 |  | March 31, 2024 |  | December 31, 2023
| (In thousands)
Designated derivatives |  |  |  |  |  |  |
Foreign exchange contracts | $ | 9,586 |  |  | $ | 5,899 |  |  | $ | — |  |  | $ | — |
Interest rate contracts | 22,082 |  |  | 9,581 |  |  | — |  |  | 330 |
Total fair value of derivatives | $ | 31,668 |  |  | $ | 15,480 |  |  | $ | — |  |  | $ | 330 |
The following tables present the effect of the Company’s derivative financial instruments on the accompanying Condensed Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023, including the impacts to Accumulated Other Comprehensive (Loss) Income (AOCI) (in thousands):
| Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivative |  | Location of Gain or (Loss) Reclassified from AOCI into Income |  | Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
| Three Months Ended March 31, |  |  | Three Months Ended March 31,
| 2024 |  | 2023 |  |  | 2024 |  | 2023
Interest rate contracts | $ | 17,206 |  |  | $ | (10,247) |  |  | Interest expense |  | $ | 4,375 |  |  | $ | 2,432 |
Interest rate contracts | — |  |  | — |  |  | Loss on debt extinguishment, modifications and termination of derivative instruments(1) |  | (424) |  |  | (620) |
Foreign exchange contracts | 3,832 |  |  | 1,683 |  |  | Foreign currency exchange loss, net |  | 4,242 |  |  | 2,096 |
Foreign exchange contracts | — |  |  | — |  |  | Interest expense |  | 145 |  |  | 92 |
Total designated cash flow hedges | $ | 21,038 |  |  | $ | (8,564) |  |  |  |  | $ | 8,338 |  |  | $ | 4,000 |
(1) In conjunction with the termination of interest rate swaps in 2020, the Company recorded amounts in other comprehensive income that will be reclassified as an adjustment to earnings over the term of the original hedges and respective borrowings. As of March 31, 2024, the Company recorded an increase to “Loss on debt extinguishment, modifications and termination of derivative instruments” related to this transaction. In 2020, the Company terminated the two interest rate swaps related to the 2020 Senior Unsecured Credit Facility for a fee of $16.4 million, of which $8.7 million was recorded in “Accumulated other comprehensive loss” and is being amortized to “Loss on debt extinguishment, modificaitons and termination of derivative instruments” through 2024. The Company’s derivatives are subject to master netting agreements, but there was no impact of offsetting as of March 31, 2024 and December 31, 2023. As of March 31, 2024 and December 31, 2023, the Company has not posted any collateral related to these agreements. The Company has agreements with each of its derivative counterparties that contain a provision where the Company could be declared in default of its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company's default on the indebtedness.

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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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