v3.25.2
DERIVATIVE FINANCIAL INSTRUMENTS
 6 Months Ended
Jun. 30, 2025
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
The Company's derivative financial instruments primarily consist of interest rate swap contracts, which were entered into with the objective of managing exposure to variability in interest rates on the Company's debt. SOFR is the applicable benchmark for all of the Company's interest rate swap contracts. All interest rate swap contracts are reported at fair value in the Condensed Consolidated Balance Sheets.
For interest rate swap contracts that are:
•Not designated as cash flow hedges: Unrealized gains and losses are recognized in interest expense, net, and other income (expense) depending on the nature of the underlying that the swaps are economically hedging.
•Designated as cash flow hedges: Unrealized gains and losses are recognized as a component of accumulated other comprehensive income (loss) (“AOCI”) and are reclassified into interest expense, net, in the same period in which the related interest on debt affects earnings.
For interest rate swap contracts that have been de-designated as cash flow hedges and for which forecasted cash flows are:
•Probable or reasonably possible of occurring: Unrealized gains and losses previously recognized as a component of AOCI are reclassified into interest expense, net, in the same period in which the related interest on variable-rate debt affects earnings through the original maturity date of the related interest rate swap contracts.
•Probable of not occurring: Unrealized gains and losses previously recognized as a component of AOCI are immediately reclassified into interest expense, net.
The cash flows associated with interest rate swap contracts that were entered into with the intention of offsetting the economic overhedged position of a portion of the Company’s existing interest rate swaps are reflected as cash flows from investing activities.
The cash flows associated with interest rate swap contracts that included an other-than-insignificant financing element at inception are reflected as cash flows from financing activities.
The Company’s interest rate swaps consist of the following (notional amounts in thousands):
ExecutionMaturityDesignationJune 30, 2025December 31, 2024
October 2019September 2026Not designated$2,800,000 $2,800,000 
March 2023March 2028Not designated100,000 100,000 
April 2023March 2028Not designated200,000 200,000 
December 2023September 2026Not designated700,000 700,000 
June 2025
March 2032
Cash flow hedge
550,000 — 
Total notional amount$4,350,000 $3,800,000 
During June 2025, the Company entered into derivative instruments with the objective of reducing the variability in future expected interest payments on a portion of the Company’s First Lien Term Loan B-2 due 2032. The Company designated these instruments as qualifying cash flow hedges. The instruments were highly effective at the inception of the hedge relationship and are expected to continue to be highly effective.
Subsequent event - During July 2025, the Company entered into derivative instruments with a notional amount of $600 million with the objective of reducing the variability in future expected interest payments on a portion of the Company’s First Lien Term Loan B-2 due 2032. The Company designated $500 million of these instruments as qualifying cash flow hedges. The instruments were highly effective at the inception of the hedge relationship and are expected to continue to be highly effective.
Balance Sheet Classification (in thousands)
June 30, 2025December 31, 2024
Prepaid expenses and other current assets$47,752 $56,164 
Other assets21,664 54,102 
Accrued expenses and other current liabilities(170)(1,466)
Other liabilities(5,821)(208)
Fair value of interest rate swaps - net asset (liability)$63,425 $108,592 
Unrealized gains (losses) on the Company’s derivatives classified as cash flow hedges that were recognized in accumulated other comprehensive income (loss) were not material during the second quarter of 2025.
Unrealized gains (losses) on the Company’s derivatives not classified as cash flow hedges that were recognized in the Statements of Operations were as follows:
Three Months Ended June 30,Six Months Ended June 30,
Classification (in thousands)
2025202420252024
Interest expense, net$(13,022)$(5,125)$(34,031)$11,622 
Other income (expense)$(3,813)$(3,277)$(7,845)$(9,878)
The following table includes reclassifications related to previously designated cash flow hedges and unrealized gains (losses) on interest rate swaps designated as cash flow hedges:
Three Months Ended June 30,Six Months Ended June 30,
Changes in AOCI (in thousands)
2025202420252024
Interest expense, net$(1,591)$1,985 $195 $4,114 
Income tax (benefit) expense$384 $(481)$(48)$(993)
As of June 30, 2025 and December 31, 2024, AOCI, net of tax, related to previously designated cash flow hedges was not material.