9. FINANCIAL INSTRUMENTS

Secured Commercial Loans Interest Rate Swap

The Company has an interest rate swap designated as a cash flow hedge of interest rate risk on its variable rate debt related to the Secured Commercial Loans. The fair value of the swap was $0.3 million and $0.7 million as of March 31, 2025 and December 31, 2024, respectively, and was included in other assets in the consolidated balance sheets. The total change in fair value of the swap’s asset position included in accumulated other comprehensive income was an increase of $0.4 million and $0.6 million for the three months ended March 31, 2025 and March 31, 2024, respectively. The Company reclassified less than $0.1 million during both the three months ended March 31, 2025 and March 31, 2024, representing the amortization of the cash flow hedge fair value to net income.

Forward Foreign Exchange Contracts

The Company enters into forward foreign exchange contracts to economically hedge certain foreign currency exposures. These contracts are not designated as cash flow hedges. For forward foreign exchange contracts not designated as cash flow hedges, the Company recorded net gains (losses) of $0.1 million and ($0.2) million for the three months ended March 31, 2025 and March 31, 2024, respectively. These amounts were included in other expense, net in the consolidated statements of operations.

In certain circumstances, the Company enters into contracts that are settled in currencies other than the functional or local currencies of the contracting parties. Accordingly, these contracts consist of the underlying operational contract and an embedded foreign currency derivative element. Hedge accounting is not applied to the embedded foreign currency derivative element. The Company recorded net gains (losses) of ($0.4) million and $0.8 million for the three months ended March 31, 2025 and March 31, 2024, respectively, in other expense, net in the consolidated statements of operations