v3.26.1
Debt
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Debt Disclosure Debt
2022 Credit Facility
The LLC is party to a Third Amended and Restated Credit Agreement, dated July 12, 2022, as amended from time to time, which we refer to as the “2022 Credit Facility.” As of June 30, 2026, the 2022 Credit Facility provided for revolving loans, swing line loans and letters of credit in an aggregate amount of up to $100.0 million, and term loans with an aggregate principal amount of $252.3 million outstanding. At June 30, 2026, there were $2.0 million of revolving borrowings and approximately $0.8 million of outstanding letters of credit under the 2022 Credit Facility, resulting in net availability of approximately $97.2 million. Amounts outstanding under the 2022 Credit Facility mature on July 12, 2027.
Borrowings bear interest at either a base rate or Term SOFR, plus an applicable margin based on the Company’s Consolidated Total Leverage Ratio, which applicable margin ranges from 0.50% to 2.25% for borrowings bearing interest based on the base rate and from 1.50% to 3.25% for borrowings bearing interest based on Term SOFR. The 2022 Credit Facility is secured by substantially all assets of the Company, including equity interests in, and loans to, its consolidated subsidiaries, and contains customary affirmative and negative covenants, financial covenants, restrictions on certain restricted payments and management fee payments, enhanced reporting requirements, and requirements to use net cash proceeds from certain dispositions and deleveraging transactions to repay indebtedness. In addition, on December 19, 2025, the LLC entered into a Fifth Amendment to the 2022 Credit Facility (the “Fifth Amendment”) and a related transaction letter (the “Transaction Letter”). Under the Transaction Letter, the applicable milestone fee is waived for a specific quarter if either the Consolidated Total Leverage Ratio is not greater than 4.50:1.00 or the Consolidated Senior Secured Leverage Ratio is not greater than 1:00:1:00. The milestone fees for the fiscal quarters ending June 30, 2026, September 30, 2026, December 31, 2026 and March 31, 2027, are $5.0 million, $6.5 million, $8.0 million and $9.5 million, respectively, subject to the terms and conditions of the Transaction Letter. At June 30, 2026, the Consolidated Senior Secured Leverage Ratio was 0.66:1.00. Accordingly, no milestone fee was payable for the quarter ended June 30, 2026.
Senior Notes
The Company has outstanding $1,029.4 million aggregate principal amount of 5.250% Senior Notes due April 15, 2029 (the “2029 Senior Notes”) and $308.8 million aggregate principal amount of 5.000% Senior Notes due January 15, 2032 (the “2032 Senior Notes”), which we refer to collectively as the “Senior Notes.” Interest on the 2029 Senior Notes is payable in cash semi-annually on April 15 and October 15 of each year, and interest on the 2032 Senior Notes is payable in cash semi-annually on January 15 and July 15 of each year. The outstanding principal amounts of the Senior Notes reflect paid-in-kind payments made in 2025 in connection with an indenture forbearance arrangement which was described in detail in the 2025 Form 10-K.
The Senior Notes rank equal in right of payment with all of the Company’s existing and future senior unsecured indebtedness and senior in right of payment to all of the Company’s future subordinated indebtedness, if any. The Senior Notes are effectively subordinated to the Company’s existing and future secured indebtedness, including indebtedness under the 2022 Credit Facility, to the extent of the value of the assets securing such indebtedness. The indentures governing the Senior Notes contain customary restrictive covenants, subject to certain exceptions, including limitations on the incurrence of additional indebtedness, restricted payments, transactions with affiliates, asset sales, mergers and consolidations, subsidiary guarantees, liens, sale-leaseback transactions and certain investments.
Lugano Financing Arrangements
Lugano entered into various financing arrangements with third parties that were not recorded in the financial statements of Lugano as debt. In connection with the Lugano Investigation, the Company determined that the inventory and sales transactions recorded in connection with these financing agreements were invalid because they were inconsistent with the underlying substance of the agreements. These financing arrangements represented debt and the financing arrangements and related interest expense were recorded in the consolidated financial statements. Interest expense was determined based on documentation related to the underlying arrangement or, when no documentation existed related to the financing arrangement, imputed based on various factors associated with the arrangement. Lugano recorded $15.8 million in interest expense in the six months ended June 30, 2025 related to these financing arrangements which is included in interest expense in the consolidated statement of operations.
Covenants
The Company is subject to customary affirmative and restrictive covenants under the 2022 Credit Facility, including financial maintenance covenants. The following table reflects the financial covenant requirements and actual ratios as of June 30, 2026 under the 2022 Credit Facility, as amended by the Fifth Amendment:
Description of Required Covenant RatioCovenant Ratio RequirementActual Ratio
Consolidated Fixed Charge Coverage RatioGreater than or equal to 1.00:1.00
1.60:1:00
Consolidated Senior Secured Leverage RatioLess than or equal to 2.50: 1.00
0.66:1:00
Consolidated Total Leverage RatioLess than or equal to 5.75: 1.00
4.82:1:00
The following table provides the Company’s outstanding long-term debt and effective interest rates at June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026December 31, 2025
Effective Interest RateAmountEffective Interest RateAmount
2029 Senior Notes5.25%$1,029,371 8.15%$1,029,371 
2032 Senior Notes5.00%308,811 7.93%308,811 
2022 Credit Facility - Term Loan7.13%252,250 10.14%552,500 
2022 Credit Facility - Revolving Loans8.52%2,000 —%— 
Unamortized premiums and debt issuance costs (10,502)(13,365)
Total debt$1,581,930 $1,877,317 
Less: Current portion of long-term debt(43,250)(37,500)
Long-term debt$1,538,680 $1,839,817 
The contractual annual maturities of the Company's debt obligations at June 30, 2026 are as follows (in thousands):
Remainder of 2026$30,000 
2027224,250 
2028— 
20291,029,371 
2030— 
2031 and thereafter308,811 
$1,592,432 
The Senior Notes consisted of the following carrying value and estimated fair value (in thousands):
Fair Value Hierarchy LevelJune 30, 2026
Maturity DateRateCarrying ValueFair Value
2032 Senior NotesJanuary 15, 20325.000 %2$308,811 $274,842 
2029 Senior NotesApril 15, 20295.250 %2$1,029,371 $975,329 
Debt Issuance Costs
Deferred debt issuance costs represent the costs incurred in connection with the Company's financing arrangements. Debt issuance costs associated with the revolving loan commitments under the 2022 Credit Facility are recorded in other non-current assets because the commitments are available under a revolving credit arrangement. Debt issuance costs associated with term loans under the 2022 Credit Facility and the Senior Notes are recorded as a reduction of the related debt balances. Deferred debt issuance costs at June 30, 2026 included approximately $5.0 million of costs incurred in connection with the Fifth Amendment to the 2022 Credit Facility.
The following table summarizes debt issuance costs at June 30, 2026 and December 31, 2025, and the balance sheet classification in each of the periods presented (in thousands):
June 30, 2026December 31, 2025
Deferred debt issuance costs $38,906 $38,906 
Accumulated amortization(25,943)(21,849)
Deferred debt issuance costs, net$12,963 $17,057 
Balance sheet classification:
Other noncurrent assets$2,461 $3,692 
Long-term debt10,502 13,365 
$12,963 $17,057