Derivatives |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives |
Derivatives Deal-Contingent Foreign Currency Forward
In December 2023, the Company entered into the deal-contingent foreign currency forward (the “Deal-Contingent
Forward”) to manage the risk of appreciation of the GBP-denominated purchase price of the acquisition of Castel. The
Deal-Contingent Forward had a 200.0 million GBP notional amount and was executed when the Castel acquisition closed
on May 1, 2024. As the Deal-Contingent Forward was an economic hedge and had not been designated as an accounting
hedge, losses resulting from the Deal-Contingent Forward were recognized through earnings in the periods incurred.
Interest Rate Cap
In April 2022, the Company entered into an interest rate cap agreement to manage its exposure to interest rate fluctuations
related to the Company’s Term Loan in the amount of $25.5 million. The interest rate cap has a $1,000.0 million notional
amount, 2.75% strike, and terminates on December 31, 2025. At inception, the Company formally designated the interest
rate cap as a cash flow hedge. As of March 31, 2025, the interest rate cap continued to be an effective hedge.
For the three months ended March 31, 2025 and 2024, the decrease of $4.1 million and increase of $3.7 million,
respectively, in the fair value of the interest rate cap were recognized in other comprehensive income (loss) (“OCI”). As of
March 31, 2025, the Company expects $9.9 million of unrealized gains from the interest rate cap to be reclassified into
earnings over the next nine months through the instrument’s expiration date. See Note 15, Income Taxes, for further
information on the tax effects on other comprehensive income related to the interest rate cap.
The location and gains (losses) on derivatives are reported in the Consolidated Statements of Income (Loss) as follows:
The location and fair value of derivatives designated as hedging instruments are reported on the Consolidated Balance
Sheets as follows:
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