v3.23.3

Derivative Instruments | 9 Months Ended
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Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments Interest Rate Swap and Foreign Currency Contracts The Company has entered into interest rate swap contracts with counterparties to reduce its exposure to changes in cash flows associated with its variable rate debt and has designated these derivatives as cash flow hedges. In June 2023, the Company amended these contracts to coincide with the origination of the Credit Agreement and to replace LIBOR as a reference rate with Term SOFR. The Company utilized an expedient under Accounting Standards Codification Topic 848, Reference Rate Reform, to conclude that these amendments should be accounted for as a continuation of the existing swap agreements, resulting in no impact on the Company’s financial statements. Under the amended interest rate swap contracts, the Company receives three-month Term SOFR subject to a 0.0% floor and pays a fixed rate ranging from 0.89% to 1.84%. Both the fixed and floating payment streams are based on a notional amount of $700 million, outstanding through August 2025. At September 30, 2023, the interest on the Company’s variable rate debt hedged by these contracts is effectively fixed at rates ranging from 3.39% to 4.34%, which includes the Term Loan margin of 2.50%. To reduce the effect of fluctuations in Canadian dollar (“CAD”) denominated expenses relative to their U.S. dollar equivalents originating from its Canadian operations, the Company enters into CAD purchase contracts. The Company designated these contracts as cash flow hedges. As of September 30, 2023, the Company had no CAD purchase contracts outstanding. A summary of the fair value of interest rate and foreign currency instruments is as follows:
(In thousands) |  |  |  | September 30, 2023 |  | December 31, 2022
Asset derivatives |  | Location |  |  |  |
Interest rate swap contracts (1) |  | Other assets, net |  | $ | 44,126 |  |  | $ | 48,539 |
Liability derivatives |  | Location |  |  |  |
Foreign currency contracts (2) |  | Accrued expenses |  | $ | — |  |  | $ | 423 |
(1) The fair values of interest rate swap contracts are measured on a recurring basis by netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves (Level 2). (2) The fair values of foreign currency contracts are measured at each reporting period by comparison to available market information on similar contracts (Level 2). A summary of the gains and losses related to interest rate and foreign currency instruments on the condensed consolidated statements of operations is as follows:
|  |  |  | Three Months Ended |  | Nine Months Ended
(In thousands) |  |  |  | September 30, 2023 |  | September 30, 2022 |  | September 30, 2023 |  | September 30, 2022
(Gain) Loss on derivative contracts designated as cash flow hedges |  | Location |  |  |  |  |  |  |  |
Interest rate swap contracts |  | Interest expense, net |  | $ | (6,098) |  |  | $ | (1,325) |  |  | $ | (16,399) |  |  | $ | 560 |
Foreign currency contracts |  | Cost of goods sold |  | 132 |  |  | 137 |  |  | 494 |  |  | 137 |
|  |  |  | $ | (5,966) |  |  | $ | (1,188) |  |  | $ | (15,905) |  |  | $ | 697 |

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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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