v3.26.1
Derivative Financial Instruments and Hedging Activities
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments and Hedging Activities
Note 8: Derivative Financial Instruments and Hedging Activities
The Company is exposed to certain risks arising from both business operations and economic conditions, including interest rate risk and foreign exchange risk. To mitigate the impact of interest rate and foreign exchange risk, the Company enters into derivative financial instruments. The Company converts the majority of its overall interest rate exposure on floating rate borrowings to a fixed-rate basis, primarily with interest rate swap agreements. The Company manages exposure to foreign exchange fluctuations primarily through short-term forward contracts.
There have been no significant changes to the interest rate and foreign exchange risk management objectives from those disclosed in the Company’s audited Consolidated Financial Statements for the year ended December 31, 2025.
Interest Rate Derivative Instruments
In June 2026, the Company entered into seven new interest rate swap agreements. The Company concurrently designated these derivative instruments as cash flow hedges.
As of June 30, 2026, the Company’s interest rate hedging instruments consisted of 18 interest rate swap agreements all designated as cash flow hedges, which included five interest rate swaps with a notional amount of $400.0 million expiring on August 21, 2027, six interest rate swaps with a notional amount of $550.0 million expiring on May 31, 2028, one interest rate swap with a notional amount of $125.0 million expiring on June 29, 2029 and six interest rate swaps with a notional amount of $425.0 million expiring on June 30, 2029.
The Company had previously elected to terminate certain interest rate swap agreements (or a portion thereof) in November 2022, June 2023 and March 2025. Amounts relating to these terminated derivative instruments recorded in Accumulated other comprehensive loss were amortized into earnings over the remaining life of the original swap agreements, which expired on August 21, 2025.
The Company records changes in the fair value of derivatives designated and qualifying as cash flow hedges in Accumulated other comprehensive loss in the Condensed Consolidated Balance Sheets and subsequently reclassifies the changes into earnings in the period that the hedged forecasted transaction affects earnings. As of June 30, 2026 and December 31, 2025, there were $8.4 million and $1.8 million in pre-tax gains and losses, respectively, included in Accumulated other comprehensive loss related to these agreements, which will be reclassified to Interest expense, net of interest income as interest payments are made in accordance with the Credit Agreement; refer to Note 9: Long-Term Debt and Other Borrowings for discussion of the Credit Agreement (which is defined therein). During the next twelve months, the Company estimates that pre-tax gains of $5.8 million will be reclassified to Interest expense, net of interest income in the Condensed Consolidated Statements of Operations.
Non-Designated Foreign Exchange Derivative Instruments
Additionally, the Company enters into short-term forward contracts to mitigate the risk of fluctuations in foreign currency exchange rates that would adversely impact certain of the Company’s foreign currency denominated transactions and assets. Hedge accounting was not elected for any of these contracts. As such, changes in the fair values of these contracts are recorded directly in earnings. The Company recognized a realized gain of $0.3 million and $6.6 million and an unrealized gain of $0.6 million and $0.3 million during the three and six months ended June 30, 2026, respectively. The Company recognized a realized loss of $2.3 million and $3.2 million and an unrealized loss of $0.3 million and $0.6 million during the three and six months ended June 30, 2025, respectively.
As of June 30, 2026 and December 31, 2025, the Company had 28 and 26 foreign currency exchange forward contracts outstanding covering a notional amount of $870.8 million and $758.3 million, respectively. As of June 30, 2026 and December 31, 2025, the Company had not posted, and did not hold, any collateral related to these agreements.
The following table presents the fair value of derivatives as of June 30, 2026 and December 31, 2025 (in millions):
June 30, 2026December 31, 2025
June 30, 2026AssetsLiabilitiesAssetsLiabilities
Derivative InstrumentNotionalFair ValueFair ValueFair ValueFair Value
Designated:
Cash flow hedges:
Interest rate swaps$1,500.0 $8.5 $— $— $1.8 
Non-designated:
Foreign currency forward contracts$870.8 $0.8 $0.8 $1.0 $1.3 
The fair value of interest rate swaps is included within Other non-current assets and Other non-current liabilities, respectively, in the Condensed Consolidated Balance Sheets. The fair value of foreign currency forward contracts is included in Prepaid expenses and other current assets and Other current liabilities in the Condensed Consolidated Balance Sheets. The Company does not net derivatives in the Condensed Consolidated Balance Sheets.
The following table presents the effect of derivatives designated as cash flow hedges in the Condensed Consolidated Statements of Operations for the three months ended June 30, 2026 and 2025 (in millions):
Beginning Accumulated Other Comprehensive (Gain) Loss(1)
Amount of (Gain) Loss Recognized in Other Comprehensive Loss on Derivatives(2)
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Statement of Operations(3)
Ending Accumulated Other Comprehensive (Gain) Loss
Three Months Ended June 30, 2026
Interest rate cash flow hedges$(2.5)$(4.1)$0.5 $(6.1)
Three Months Ended June 30, 2025
Interest rate cash flow hedges$(15.8)$1.6 $5.6 $(8.6)
(1) Amount is net of related deferred tax expense of $1.0 million and benefit of $4.6 million for the three months ended June 30, 2026 and 2025, respectively.
(2) Amount is net of related deferred tax expense of $1.5 million and benefit of $0.8 million for the three months ended June 30, 2026 and 2025, respectively.
(3) Amount is net of related deferred tax expense of $0.2 million and $0.7 million for the three months ended June 30, 2026 and 2025, respectively.
During the three months ended June 30, 2026 and 2025, gains of $0.5 million and $5.6 million, respectively, related to interest rate hedges were reclassified into earnings and recognized in Interest expense, net of interest income in the Condensed Consolidated Statements of Operations.
The following table presents the effect of derivatives designated as hedges in the Condensed Consolidated Statements of Operations for the six months ended June 30, 2026 and 2025 (in millions):
Beginning Accumulated Other Comprehensive Loss (Gain)\(1)
Amount of (Gain) Loss Recognized in Other Comprehensive Loss on Derivatives(2)
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Statement of Operations(3)
Ending Accumulated Other Comprehensive (Gain) Loss
Six Months Ended June 30, 2026
Interest rate cash flow hedges$1.3 $(8.4)$1.0 $(6.1)
Six Months Ended June 30, 2025
Interest rate cash flow hedges$(25.2)$5.6 $11.0 $(8.6)
(1) Amount is net of related deferred tax benefit of $0.5 million and $2.5 million for the six months ended June 30, 2026 and 2025, respectively.
(2) Amount is net of related deferred tax expense of $3.2 million and benefit of $2.0 million for the six months ended June 30, 2026 and 2025, respectively.
(3) Amount is net of related deferred tax expense of $0.4 million and $1.6 million for the six months ended June 30, 2026 and 2025, respectively.
During the six months ended June 30, 2026 and 2025, gains of $1.0 million and $11.0 million, respectively, related to interest rate hedges were reclassified into earnings and recognized in Interest expense, net of interest income in the Condensed Consolidated Statements of Operations.