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Derivatives and Hedging Activities
 3 Months Ended
Mar. 31, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities
Note 7 - Derivatives and Hedging Activities
For a description of our derivative instruments and hedging policies, refer to Note 7 – Derivatives and Hedging Activities in our 2025 Form 10-K.
Interest Rate Hedges
We are exposed to risks from changes in interest rates related to the First Lien Term Loan (See Note 6 - Financing Arrangements). The Company uses derivative financial instruments, specifically interest rate swap contracts, in order to manage its exposure to interest rate movements. Interest rate swaps designated as cash flow hedges 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. Our primary objective in holding derivatives is to reduce the volatility of cash flows associated with changes in interest rates. The Company does not enter into derivative transactions for speculative or trading purposes.
As of March 31, 2026, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Interest Rate Derivatives (Level 2)Number of Instruments
Notional Aggregate Principal Amount (in millions)
Fixed Rate
Maturity Date
Interest rate swap contractsTwo$425.0 3.280 %February 28, 2028
The Company expects to recognize approximately $1.6 million of net pre-tax gains from Accumulated other comprehensive income ("AOCI") as a reduction of Interest expense, net in the next twelve months associated with its interest rate swap. Refer to the Company’s Consolidated Statements of Comprehensive Income (Loss) for amounts reclassified into earnings related to the Company’s derivative instruments designated as cash flow hedging instruments for each of the reporting periods.
The following table summarizes the fair value and presentation on our Consolidated Balance Sheets for derivatives as of March 31, 2026 and December 31, 2025 (in millions):
March 31, 2026December 31, 2025
InstrumentDerivative AssetsDerivative LiabilitiesDerivative AssetsDerivative Liabilities
Derivatives designated as hedging instruments:
Interest rate swap contracts(1)
$1.6 $— $1.4 $— 
Interest rate swap contracts(2)
0.9 — — — 
Total designated derivative fair value$2.5 $— $1.4 $— 
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(1)Included in Prepaid expenses and other current assets on our Consolidated Balance Sheets.
(2)Included in Deferred costs and other assets, net of current portion on our Consolidated Balance Sheets.
The Company's interest rate swap agreements contain credit-risk related contingent features, including cross-default provisions, credit event upon merger provisions, and additional termination events tied to the Company's First Lien Credit Agreement, which could give rise to early termination. To mitigate counterparty credit risk, the Company transacts only with major financial institutions with high credit ratings and monitors counterparty risk on an ongoing basis. The Company is not required to pledge collateral related to these derivative instruments.