Market risks relating to the Company’s operations result primarily from changes in interest rates. The Company’s exposure to

interest rate risk results from the entry into financial debt instruments that arose from transactions entered into during the

normal course of business. As part of an overall risk management program, the Company evaluates and manages exposure to

changes in interest rates on an ongoing basis. The Company has no intention of entering into financial derivative contracts,

other than to hedge a specific financial risk. To mitigate the Company’s exposure to fluctuations in interest rates, the

Company uses pay-fixed interest rate swaps, generally designated as cash flow hedges of interest payments on floating rate

borrowings. Pay-fixed swaps effectively convert floating-rate borrowings to fixed-rate borrowings. Unrealized gains or losses

from the designated cash flow hedges and related tax effects are deferred in accumulated other comprehensive income

(“AOCI”) and recognized in earnings as the interest payments occur. Hedges and derivative financial instruments may

continue to be used in the future in order to manage interest rate exposure.

The Company has entered into interest rate swap agreements to manage its exposure to fluctuations in interest rates. The

valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow

analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives,

including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied

volatilities. The Company has determined the inputs used to value its derivatives fall within Level 2 of the fair value

On October 8, 2021, the Company executed interest rate swap agreements (the “October 2021 Agreements”) with Barclays

Bank PLC and Bank of America, N.A. as counterparties, with notional amounts totaling $529.0 million and an effective date

of August 31, 2023 and expiring June 30, 2026. Under the October 2021 Agreements, the Company was required to make

monthly fixed rate payments at annual rates ranging from 1.53% to 1.55%, and the counterparties were obligated to make

monthly floating rate payments to the Company based on one-month LIBOR, each subject to a floor of 0.50%. Effective

August 31, 2023, the Company amended the October 2021 Agreements to adjust the fixed rates and replace the LIBOR

floating interest rate options with Term SOFR floating rate options. Under the amended October 2021 Agreements, the

Company is required to make monthly fixed rate payments at annual rates ranging from 1.47% to 1.48%, and the

counterparties are obligated to make monthly floating rate payments to the Company based on one-month Term SOFR, each

On February 5, 2025, the Company executed new interest rate swap agreements (the "February 2025 Agreements") with

Truist Bank and Royal Bank of Canada, as counterparties, with an effective date of June 30, 2025 and expiring June 30, 2029.

As of the effective date, the notional amounts will total $0.6 million, and will accrete up to $400.4 million by June 30, 2026,

when the October 2021 Agreements expire. Under the February 2025 Agreements, the Company is required to make monthly

fixed payments at annual rates ranging from 3.97% to 3.98% and the counterparties are required to make monthly floating

rate payments to the Company based on one-month Term SOFR, each subject to a floor of 0.50%.

The Company accounts for its interest rate swap agreements in accordance with ASC 815, Derivatives and Hedging. The

October 2021 Agreements and February 2025 Agreements are designated as cash flow hedges and recorded at fair value on

the Company’s unaudited condensed consolidated balance sheets with changes in fair value included in AOCI as a

component of equity and reclassified into interest expense in the same periods during which the hedge transactions affect

The Company performs assessments of effectiveness for its cash flow hedges on a quarterly basis to confirm that the hedges

continue to meet the highly effective criteria required to continue applying cash flow hedge accounting. During the three

months ended March 31, 2025 and the year ended December 31, 2024, these hedges were highly effective. Accordingly, no

unrealized gain or loss related to these hedges was reflected in the accompanying unaudited condensed consolidated income

statements, and the change in fair value was included in AOCI as a component of equity. Realized gains and losses during the

The following table presents the effects of derivatives in cash flow hedging relationships on the Company’s AOCI and


		Three Months Ended March 31,
	Classification	2025	2024
Unrealized (loss) income recognized	AOCI	$(4,986)	$6,087
Reclassification from AOCI into earnings	Interest expense, net	(2,875)	(5,136)
Net change in AOCI		$(7,861)	$951

In the 12 months following March 31, 2025, the Company estimates that an additional $8.6 million will be reclassified as a

As of March 31, 2025 and December 31, 2024, the fair value of the Company’s interest rate swap agreements reflected a net

asset balance of $5.3 million and $13.2 million, respectively. The following table presents the fair value of the Company’s

interest rate swap agreements as recorded in the unaudited condensed consolidated balance sheets (in thousands):


Classification	March 31, 2025	December 31, 2024
Assets:
Other current assets	$8,588	$9,914
Other assets	1,356	3,264
Total interest rate swap assets	9,944	13,178
Liabilities:
Other accrued expenses and liabilities	150	—
Other long-term liabilities	4,476	—
Total interest rate swap liabilities	4,626	—
Fair value of interest rate swap agreements	$5,318	$13,178