v3.26.3
DERIVATIVES AND HEDGING ACTIVITIES
 9 Months Ended
Sep. 30, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES AND HEDGING ACTIVITIES
7. DERIVATIVES AND HEDGING ACTIVITIES
Risk Management Objective of Using Derivatives—We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposure to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding, and through the use of derivative financial instruments. Specifically, we enter into interest rate swaps to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings.
Cash Flow Hedges of Interest Rate Risk—Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for our making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The changes in the fair value of derivatives designated, and that qualify, as cash flow hedges are recorded in AOCI and are subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the nine months ended September 30, 2026 and 2025, such derivatives were used to hedge the variable cash flows associated with certain variable-rate debt. Amounts reported in AOCI related to these derivatives were reclassified to Interest Expense, Net as interest payments were made on the variable-rate debt. There were no interest rate swaps outstanding as of September 30, 2026.
The following is a summary of our interest rate swap that was designated as a cash flow hedge of interest rate risk as of December 31, 2025 (dollars in thousands):
December 31, 2025
Count1 
Notional amount$200,000 
Fixed SOFR
3.4%
Maturity date
2026
Weighted-average term (in years)0.7
The table below details the nature of the gain and loss recognized on interest rate derivatives designated as cash flow hedges in the consolidated statements of operations (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
  2026202520262025
Amount of (loss) gain recognized in Other Comprehensive Income$(17)$217 $198 $246 
Amount of gain reclassified from AOCI into Interest Expense, Net(100)(1,329)(396)(3,920)