v3.26.1
Financial Instruments and Financial Risk
 6 Months Ended
Jun. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments and Financial Risk Financial Instruments and Financial Risk
Derivative Instruments
We do not use derivatives for trading or speculative purposes and are not a party to leveraged derivatives.
Derivatives Designated in Hedge Relationships
From time to time, the Company utilizes interest rate derivatives designated in hedge relationships to manage interest rate risk associated with our variable rate borrowings. These instruments are measured at fair value with changes in fair value recorded as a component of “Accumulated other comprehensive loss” on our Consolidated Balance Sheets.
In March 2025, we entered into an interest rate swap agreement with a notional amount of $400.0 million. The interest rate swap was effective on August 31, 2025 and expires on August 31, 2027. We receive interest at the one-month Term SOFR rate and pay a fixed interest rate under the terms of the swap agreement. In March 2023, we entered into an interest rate swap agreement with a notional amount of $400.0 million. The interest rate swap was effective on August 23, 2023 and expired on August 23, 2025. We received interest at the one-month Term SOFR rate and paid a fixed interest rate under the terms of the swap agreement.
We designated both interest rate swaps as cash flow hedges designed to hedge the variability of cash flows attributable to changes in the SOFR benchmark interest rate of our Term Loan (or any successor thereto).
Derivatives Not Designated in Hedge Relationships
The Company also enters into foreign currency forward contracts to manage foreign currency exchange rate risk of our intercompany loans in certain of our international subsidiaries and non-functional currency assets and liabilities. The foreign currency forward contracts expire on a monthly basis. These foreign currency derivatives are not designated in hedge relationships.
Embedded Derivatives
We have embedded derivatives in certain of our customer and supply contracts as a result of the currency of the contract being different from the functional currency of the parties involved. Changes in the fair value of the embedded derivatives are recognized in “Other income, net” in the Consolidated Statements of Operations and Comprehensive Income.
The following table provides a summary of the notional and fair values of our derivative instruments:
June 30, 2026December 31, 2025
(in U.S. Dollars; notional in millions, fair value in thousands)Fair ValueFair Value
Notional
Amount		Derivative
Assets		Derivative
Liabilities		Notional
Amount		Derivative
Assets		Derivative
Liabilities
Derivatives designated as hedging instruments
Interest rate swaps$400.0 $1,424 — $400.0 — $2,346 
Derivatives not designated as hedging instruments
Foreign currency forward contracts19.0 — $38 — — — 
Embedded derivatives243.0 
(a)
2,561 3,891 264.4 $1,162 1,872 
Total$662.0 $3,985 $3,929 $664.4 $1,162 $4,218 
(a)Represents the total notional amounts for certain of the Company’s supply and sales contracts accounted for as embedded derivatives.
Embedded derivatives assets/liabilities and foreign currency forward contracts are included in “Prepaid expenses and other current assets” and “Accrued liabilities” on our Consolidated Balance Sheets depending upon their position at period end. Interest rate swaps are included in “Other assets” and “Noncurrent liabilities” on the Consolidated Balance Sheets depending upon their position at period end.
The following table summarizes the activities of our derivative instruments for the periods presented, and the line item they are recorded in the Consolidated Statements of Operations and Comprehensive Income:
(thousands of U.S. dollars)Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Realized gain on interest rate derivatives recorded in interest expense, net(a)
$(2)$(334)$(45)$(673)
Unrealized (gain) loss on embedded derivatives recorded in other income, net(512)(3,599)682 (1,994)
Realized gain on foreign currency forward contracts recorded in foreign exchange (gain) loss (1,830)(7,606)(614)(8,170)
Unrealized loss (gain) on foreign currency forward contracts recorded in foreign exchange (gain) loss17 (1,144)38 (704)
(a) For the three and six months ended June 30, 2026 and 2025, amounts represent settlement payments on interest rate swaps.
Credit Risk
Certain of our financial assets, including cash and cash equivalents, are exposed to credit risk.
We are also exposed, in our normal course of business, to credit risk from our customers. As of June 30, 2026 and December 31, 2025, accounts receivable was net of an allowance for uncollectible accounts of $2.8 million and $3.0 million, respectively.
Credit risk on financial instruments arises from the potential for counterparties to default on their contractual obligations to us. We are exposed to credit risk in the event of non-performance, but do not anticipate non-performance by any of the counterparties to our financial instruments. We limit our credit risk by dealing with counterparties that are considered to be of high credit quality. In the event of non-performance by counterparties, the carrying value of our financial instruments represents the maximum amount of loss that would be incurred.
Our credit team evaluates and regularly monitors changes in the credit risk of our customers. We routinely assess the collectability of accounts receivable and maintain an adequate allowance for uncollectible accounts to address potential credit losses. The process includes a review of customer financial information and credit ratings, current market conditions as well as the expected future economic conditions that may impact the collection of trade receivables. We regularly review our customers’ past due amounts through an analysis of aged accounts receivables, specific customer past due aging amounts, and the history of trade receivables written off. Upon concluding that a receivable balance is not collectible, the balance is written off against the allowance for uncollectible accounts.
Fair Value Hierarchy
The fair value of our financial instruments is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques we would use to determine such fair values are described as follows: Level 1—fair values determined by inputs utilizing quoted prices in active markets for identical assets or liabilities; Level 2—fair values based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable; Level 3—fair values determined by unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.
The following table discloses the fair value of our financial assets and liabilities:
As of June 30, 2026Fair Value
(thousands of U.S. dollars)Carrying
Amount
Level 1
Level 2
Level 3
Derivatives designated as hedging instruments(a)
Interest rate swap asset$1,424 $— $1,424 $— 
Derivatives not designated as hedging instruments(b)
Foreign currency forward contract liabilities38 — 38 — 
Embedded derivative assets2,561 — 2,561 — 
Embedded derivative liabilities3,891 — 3,891 — 
Current portion of long-term debt(c)
Term Loan, due 203113,923 — 14,159 — 
Long-Term Debt(c)
Secured Notes, due 2031747,160 — 774,375 — 
Term Loan, due 20311,378,374 — 1,401,756 — 
Finance Lease Obligations (with current portion)(d)
95,307 — 95,307 — 
As of December 31, 2025Fair Value
(thousands of U.S. dollars)Carrying
Amount
Level 1
Level 2
Level 3
Derivatives designated as hedging instruments(a)
Interest rate swap liability$2,346 $— $2,346 $— 
Derivatives not designated as hedging instruments(b)
Embedded derivative assets1,162 — 1,162 — 
Embedded derivative liabilities1,872 — 1,872 — 
Current portion of long-term debt(c)
Term Loan, due 203113,973 — 14,327 — 
Long-Term Debt(c)
Secured Notes, due 2031746,871 — 789,375 — 
Term Loan, due 20311,379,853 — 1,410,539 — 
Finance Lease Obligations (with current portion)(d)
97,300 — 97,300 — 
(a)Derivatives designated as hedging instruments are measured at fair value with changes in fair value recorded as a component of accumulated other comprehensive income (loss). Interest rate swaps are valued using pricing models that incorporate observable market inputs including interest rate curves and yield curves.
(b)Derivatives that are not designated as hedging instruments are measured at fair value with gains or losses recognized immediately in the Consolidated Statements of Operations and Comprehensive Income. Embedded derivatives are valued using internally developed models that rely on observable market inputs, including foreign currency forward curves. Foreign currency forward contracts are valued by reference to changes in foreign currency exchange rates over the life of the contract.
(c)Carrying amounts of current portion of long-term debt and long-term debt instruments are reported net of discounts and debt issuance costs. The estimated fair value of these instruments are based upon quoted prices for the Term Loan and the Secured Notes in inactive markets as provided by an independent fixed income security pricing service.
(d)Fair value approximates carrying value.