v3.26.1
Derivatives
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
We utilize derivative instruments, including interest rate swap agreements, to manage our exposure to interest rate risk. We only hold such instruments for economic hedging purposes, not for speculative or trading purposes. Our derivative instruments are transacted only with highly-rated institutions, which reduces our exposure to credit risk in the event of nonperformance.

Interest Rate Swaps

We are exposed to interest rate risk associated with fluctuations in interest rates on the floating-rate Term Loan Facility, FLSO Term Loan Facility, and FLFO Term Loan Facility. The objective in using interest rate derivatives is to manage our exposure to interest rate movements. To accomplish this objective, we have entered into interest rate swap agreements as part of our interest rate risk management strategy. Interest rate swaps involve the receipt of variable amounts from a counterparty in exchange for the company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

On February 9, 2021, we entered into a $1.35 billion pay-fixed interest rate swap that matured in February 2026. The pay-fixed interest rate swap qualified as a hybrid instrument in accordance with ASC No. 815, Derivatives and Hedging, consisting of a loan and an embedded at-market derivative that was designated as a cash flow hedge. The loan was accounted for at amortized cost over the life of the swap while the embedded at-market derivative was accounted for at fair value. The $1.35 billion swap was indexed to one-month Term SOFR and net settled on a monthly basis with the counterparty for the difference between the fixed rate of 2.34150% and the variable rate based upon one-month Term SOFR (subject to a floor of 0.75%) as applied to the notional amount of the swap. The cash flows related to the portion treated as debt was classified as financing activities in the Condensed Consolidated Statements of Cash Flows while the portion treated as an at-market derivative was classified as operating activities.

Our interest rate swap agreement, excluding the portion treated as debt, was recognized at fair value in the Condensed Consolidated Balance Sheets and was valued using pricing models that rely on market observable inputs such as yield curve data, which are classified as Level 2 inputs within the fair value hierarchy.

As of December 31, 2025 the cash flow hedge was highly effective. Our interest rate swap matured on February 9, 2026. Therefore, as of March 31, 2026, we do not have any interest rate swaps outstanding.

Fair Values of Derivatives on the Condensed Consolidated Balance Sheets

The fair value of our derivative and its location on the Condensed Consolidated Balance Sheets as of December 31, 2025 was as follows:
    
December 31, 2025
(In millions)AssetsLiabilities
Derivatives designated as hedging instrumentsLocation
Interest rate swapsOther current assets$4.0 $— 
Interest rate swaps
Other current liabilities (1)
— 3.0 
Total$4.0 $3.0 
(1)    The entire balance is comprised of the financing component of the pay-fixed interest rate swap.
For financial statement presentation purposes, we do not offset assets and liabilities under master netting arrangements and all amounts above are presented on a gross basis. The following table, however, is presented on a net asset and net liability basis:

December 31, 2025
(In millions)Gross Amounts on Balance SheetEffects of Counterparty NettingNet Amounts
Assets
Interest rate swaps$4.0 $(3.0)$1.0 
Liabilities
Interest rate swaps$3.0 $(3.0)$— 

Effect of Derivatives on the Condensed Consolidated Statements of Comprehensive Loss

The effect of our derivative and its location on the Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2025 and 2026 was as follows:

Three Months Ended March 31,
(In millions)20252026
Derivatives designated as hedging instrumentsLocation
Interest rate swapsInterest income (expense)$11.4 $4.0 

See Note 12, "Accumulated Other Comprehensive Income (Loss)," for information regarding changes in fair value of our derivatives designated as hedging instruments.