| Derivative Instruments |
Note 9. Derivative Instruments The Company, through its wholly owned subsidiaries, has entered into interest rate swaps as part of its interest rate risk management strategy. The interest rate swaps involve the receipt of variable rate amounts from a counterparty in exchange for the Company making payments at fixed rates. These fixed rates range between 0.41% and 4.10%. The interest rate swaps have maturities between 2026 and 2051. Following the voluntarily dedesignation on October 1, 2024, changes in the fair value of the derivatives are recognized directly in Interest expense, net. Amounts recorded in Accumulated other comprehensive income prior to dedesignation are reclassified into earnings either immediately if the related forecasted transactions are probable of not occurring, or as those transactions occur if they remain not probable of not occurring. As of June 30, 2026, a total balance of $33.9 million remains in Accumulated other comprehensive income to be amortized over the remaining term of the derivative contracts. During 2024, the Company entered into an option contract with a counterparty for the right, but not the obligation, to enter into an interest rate swap with the counterparty with a notional amount of $242.2 million in exchange for a premium of $2.6 million. The option expired on March 27, 2025 without exercise. The following tables reflect the location and estimated fair value positions of derivative contracts at: | | | | | | | | | | | | | | | | | | | | | | | | (in thousands) | | | June 30, 2026 | | Balance sheet location | | Outstanding notional amount | | Fair Value - Assets | | Fair Value - (Liabilities) | | | | | | | | | | | Derivatives Not Designated as Hedging Instruments | | Interest rate swap contracts | Derivative assets, current / Derivative assets / (Other current liabilities) | | $ | 1,271,137 | | | $ | 79,164 | | | $ | (74) | | | Total | | | $ | 1,271,137 | | | $ | 79,164 | | | $ | (74) | |
| | | | | | | | | | | | | | | | | | | | | | | | (in thousands) | | | December 31, 2025 | | Balance sheet location | | Outstanding notional amount | | Fair Value - Assets | | Fair Value - (Liabilities) | | Derivatives Not Designated as Hedging Instruments | | | | | | | | Interest rate swap contracts | Derivative assets, current / Derivative assets / (Other current liabilities) / (Other noncurrent liabilities) | | $ | 999,302 | | | $ | 74,627 | | | $ | (2,817) | | | | | | | | | | | Total | | | $ | 999,302 | | | $ | 74,627 | | | $ | (2,817) | |
The following tables provide information on the change in fair value of derivative contracts as recorded in the Consolidated Statements of Comprehensive Income (Loss) and Consolidated Statements of Operations: | | | | | | | | | | | | | | | | | | | | | | | | | Three months ended June 30, 2026 | | Six months ended June 30, 2026 | (in thousands) | Derivatives Previously Designated as Hedging Instruments | | Derivatives Not Designated as Hedging Instruments | | Derivatives Previously Designated as Hedging Instruments | | Derivatives Not Designated as Hedging Instruments | | Consolidated Other Comprehensive Income (Loss) | | | | | | | | | Gain (loss) in other comprehensive income (loss) reclassified to earnings from termination of interest rate swaps, net | $ | — | | | $ | — | | | $ | 42 | | | $ | — | | | Amortization of derivatives | (1,079) | | | — | | | (2,198) | | | — | | | Less: Taxes on total net gain (loss) recognized in other comprehensive income (loss) | 284 | | | — | | | 567 | | | — | | | | | | | | | | | Consolidated Statements of Operations | | | | | | | | Interest expense, net | | | | | | | | | Change in fair value of interest rate swaps, net | — | | | 6,542 | | | $ | — | | | $ | 7,187 | | Gain (loss) on interest rate swaps, net(1) | — | | | — | | | — | | | (42) | |
| | | | | | | | | | | | | | | | | | | | | | | | | Three months ended June 30, 2025 | | Six months ended June 30, 2025 | (in thousands) | Derivatives Previously Designated as Hedging Instruments | | Derivatives Not Designated as Hedging Instruments | | Derivatives Previously Designated as Hedging Instruments | | Derivatives Not Designated as Hedging Instruments | | Consolidated Other Comprehensive Income (Loss) | | | | | | | | | Gain (loss) recognized in other comprehensive income (loss) | $ | (659) | | | $ | — | | | $ | (659) | | | $ | — | | | Amortization of derivatives | (1,480) | | | — | | | (3,173) | | | — | | | Less: Taxes on total net gain (loss) recognized in other comprehensive income (loss) | 563 | | | — | | | 1,009 | | | — | | | | | | | | | | | Consolidated Statements of Operations | | | | | | | | Interest expense, net | | | | | | | | | Change in fair value of interest rate swaps, net | — | | | (12,381) | | | — | | | (34,122) | | Gain (loss) on interest rate swaps, net(1) | — | | | 659 | | | $ | — | | | $ | 659 | |
(1)The gain (loss) on interest rate swaps, net, represents gains and losses reclassified into earnings as a result of the discontinuance of cash flow hedges when the Company determines that it is probable that the original forecasted transactions will not occur by the end of the originally specified time period.
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