Derivative Instruments

12 Months Ended

Dec. 31, 2024

Derivative Instrument Detail [Abstract]

NOTE 10. 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 December 31, 2024, we had interest rate swaps associated with $761.0 million of SOFR-indexed term loan debt whereby the cash flow hedges convert variable rates ranging from one-month SOFR plus a spread between 1.61% to 2.30%, to fixed rates ranging from 2.14% to 4.83% before patronage credits from lenders. Additionally, at December 31, 2024, we had $176.0 million of interest rate swaps associated with SOFR-indexed term loan debt whereby the cash flow hedges convert variable rates ranging from daily simple SOFR-indexed plus a spread of 2.20% to 2.30%, to fixed rates ranging from 4.02% to 4.28% before patronage credits from lenders. At December 31, 2024, we have a $75.0 million forward-starting interest rate swap designated as a cash flow hedge for expected future debt refinancing that requires settlement on the stated maturity date. See Note 9: Debt for additional information.

The gross fair values of our cash flow derivative instruments at December 31, 2024 and 2023 were $138.4 million and $129.1 million, respectively, all of which were classified in Other assets, non-current on our 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 our Consolidated Statements of Operations:


		Year Ended December 31,
(in thousands)	Location	2024			2023			2022
Derivatives designated in cash flow hedging relationships:
Interest rate contracts
Income recognized in other comprehensive income, net of tax		$	42,685		$	14,716		$	116,890
Amounts reclassified from accumulated other comprehensive income to income, net of tax1	Interest expense, Net	$	(21,850	)	$	(18,905	)	$	1,125

Interest expense, net		$	28,923		$	24,218		$	27,400

          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 years ended December 31, 2024, 2023, and 2022, we amortized approximately $10.8 million, $10.3 million, and $3.1 million, respectively, of the off-market designated hedges which is included within operating activities in the Consolidated Statements of Cash Flows. Net cash received or paid is included within Interest expense, net in the Consolidated Statements of Operations.

At December 31, 2024, the amount of net gains expected to be reclassified into earnings in the next 12 months is approximately $16.3 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 rate at the time of net swap cash payments.