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Derivative | 9 Months Ended
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Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative | Note 12. Derivative Interest Rate Cap On January 4, 2023, we entered into an interest rate cap agreement with an effective date of January 31, 2023. The interest rate cap manages our exposure to interest rate increases on $300 million in SOFR-based borrowings under our 2021 Credit Facility and provides us with the right to receive payment if the one-month SOFR exceeds the Strike Rate. Beginning on February 28, 2023, we pay a fixed monthly deferred premium based on an annual rate of 0.3335% for the interest rate cap, which matures on January 31, 2025. During the three and nine months ended September 30, 2024, we received gross proceeds from the interest rate cap of $0.3 million and $0.8 million, respectively, as one-month SOFR exceeded the Strike Rate. We designated the interest rate cap as a cash flow hedge designed to hedge the variability of the SOFR-based interest payments on our 2021 Credit Facility. The interest rate cap is recorded in the Condensed Consolidated Balance Sheets at fair value. The fair value is determined using widely accepted valuation techniques and reflects the contractual terms of the interest rate cap including the price of the cap and the period to maturity. While there are no quoted prices in active markets, our calculation uses observable market-based inputs, including interest rate curves. The interest rate cap is classified as Level 2 within the fair value hierarchy. Refer to Note 13 – Fair Value Measurements for the related fair value disclosures. The fair value of the interest rate cap is as follows:
|  |  |  | September 30, |  |  | December 31, |
(in thousands) |  | Classification |  | 2024 |  |  | 2023 |
Derivatives designated as hedging instruments |  |  |  |  |  |  |  |
Interest rate cap - short-term |  | Other current liabilities |  | $ | 337 |  |  | $ | 443 |
Interest rate cap - long-term |  | Other deferred items and liabilities |  |  | — |  |  |  | 45 |
Total derivatives designated as hedging instruments |  |  |  | $ | 337 |  |  | $ | 488 |
Changes in the fair value of the interest rate cap are recorded in “Accumulated other comprehensive income (loss)” (“AOCI”). Amounts accumulated in AOCI are reclassified to “Interest expense, net” in the Condensed Consolidated Statements of Operations when the hedged item affects earnings. We reclassified to interest expense, net, approximately $0.3 million during the three months ended September 30, 2024 and approximately $0.9 million during the nine months ended September 30, 2024, and $0.4 million remained in unrealized losses in AOCI as of September 30, 2024. We estimate that $0.1 million will be reclassified to earnings within the next 12 months.

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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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