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Derivative Instruments | 9 Months Ended
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Sep. 30, 2024
Derivative Instrument Detail [Abstract] |
Derivative Instruments | NO TE 6. DERIVATIVE INSTRUMENTS From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks. Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. All our cash flow hedges are expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedges. At September 30, 2024, we had interest rate swaps associated with $761.0 million of SOFR-indexed term loan debt. These cash flow hedges convert variable rates ranging from one-month SOFR plus 1.61% to 2.30%, to fixed rates ranging from 2.14% to 4.83% before patronage credits from lenders. Additionally, at September 30, 2024, we had $200.0 million of forward-starting interest rate swaps designated as cash flow hedges for expected future debt refinancings that require settlement on the stated maturity date. On October 22, 2024, we terminated $125.0 million of the forward-starting interest rate swaps and transferred the value realized from their termination into three new interest rate swaps to hedge the variability in future cash flows on the New Term Loans. These new daily simple SOFR-indexed interest rate swaps effectively fixed the interest rates associated with the New Term Loans between 4.02% and 4.28%, before patronage credits from lenders, depending on the maturity date of the associated term loan. Following these transactions, we had one remaining forward-starting interest rate swap of $75.0 million available to fix the interest rate on future debt refinancings. See Note 5: Debt for additional information. The gross fair values of derivative instruments at September 30, 2024 and December 31, 2023 were $111.7 million and $129.1 million, respectively, all of which were classified in Other assets, non-current on our Condensed Consolidated Balance Sheets. Derivative instruments that mature within one year, as a whole, are classified as current. The following table details the effect of derivatives on the Condensed Consolidated Statements of Operations and the Condensed Consolidated Statements of Comprehensive Income (Loss):
|  |  |  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(in thousands) |  | Location |  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Derivatives designated in cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) recognized in other comprehensive income (loss), net of tax |  |  |  | $ | (23,130 | ) |  | $ | 33,607 |  |  | $ | 7,574 |  |  | $ | 42,353 |
Amounts reclassified from accumulated other comprehensive income to income, net of tax 1 |  | Interest expense, net |  | $ | 5,583 |  |  | $ | 5,143 |  |  | $ | 16,751 |  |  | $ | 13,505 |
Interest expense, net |  |  |  | $ | 9,635 |  |  | $ | 7,971 |  |  | $ | 18,049 |  |  | $ | 15,783 |
1 | Realized gains and losses on interest rate contracts consist of realized net cash received or paid and interest accruals on the interest rate swaps during the periods in addition to amortization of amounts out of other comprehensive income related to certain terminated hedges and adjustments to interest expense resulting from amortization of inception value of certain off-market designated hedges. For the nine months ended September 30, 2024 and 2023, we amortized approximately $8.0 million and $7.7 million, respectively, of the off-market designated hedges which is inc luded in Other, net within operating activities in the Condensed Consolidated Statements of Cash Flows. Net cash received or paid is included within Interest expense, net in the Condensed Consolidated Statements of Operations.
At September 30, 2024, the amount of net gains expected to be reclassified into earnings in the next 12 months is approximately $12.3 million. However, this expected amount to be reclassified into earnings is subject to volatility as the ultimate amount recognized in earnings is based on the SOFR rates at the time of net swap cash payments.

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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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