Redeemable Preferred Units Embedded Derivatives

As discussed in Note 10, Stockholders' and Members' Equity, the Company's IPO in July 2021 was a realization event triggering the payment of the make-whole provision related to the Redeemable Preferred Units to Onex. Consequently, the embedded derivatives related to the make-whole provision were no longer outstanding as of September 30, 2022. The Company recognized $16.3 million and $36.9 million of loss related to the Redeemable Preferred Units embedded derivatives during the three and nine months ended September 30, 2021. The losses were recognized in Other non-operating loss (income) within the Consolidated Statements of Income. The Company recognized the $36.9 million of loss related to the nine months ended September 30, 2021 in Other current assets and accrued liabilities on the Consolidated Statements of Cash Flows.

Interest Rate Cap

On April 7, 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. As of September 30, 2022, the fair value of the interest rate cap was $46.5 million, which is included in Other non-current assets on the Consolidated Balance Sheets. At inception, the Company formally designated the interest rate cap as a cash flow hedge. As of September 30, 2022, the interest rate cap continued to be an effective hedge. The Company elected to exclude the change in the time value of the interest rate cap from the assessment of hedge effectiveness and will amortize the initial value of the premium over the life of the instrument. The premium amortization is recognized in Interest expense, net on the Consolidated Statements of Income.

For the three months ended September 30, 2022, the $21.9 million increase in the fair value of the interest rate cap and $1.7 million of premium amortization were recognized in Other comprehensive income (loss). For the nine months ended September 30, 2022, the $21.0 million increase in the fair value of the interest rate cap and $2.9 million of premium amortization were recognized in Other comprehensive income (loss). As of September 30, 2022, the Company expects $14.6 million of unrealized gains from the interest rate cap to be reclassified into earnings over the next twelve months.