To reduce exposure to variability in expected future cash outflows on variable rate debt attributable to the changes in one-month LIBOR, the Company has historically entered into interest rate derivative instruments to economically offset a portion of this risk and may do so in the future. In June 2023, the Company transitioned the reference rate for its interest rate derivative agreements from one-month LIBOR to one-month SOFR.

As of March 31, 2024, the Company had the following outstanding derivatives that were not designated as a hedge in qualifying hedging relationships:


Product	Effective Date	Maturity Date	Notional	Rate
Interest rate swap(a)	June 30, 2023	February 28, 2026	$100.0 million	4.32%
Interest rate swap	December 29, 2023	December 31, 2026	$150.0 million	3.86%
Interest rate swap	March 1, 2024	December 31, 2026	$150.0 million	3.76%

(a)

In conjunction with the June 2023 transition of the reference rate from LIBOR to SOFR, the fixed rate was reduced from 4.36% to 4.32%.

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements; however, the Company has not elected to apply hedge accounting for these instruments.

The following is a summary of location and fair value of the financial positions recorded related to the derivative instruments (in thousands):


		Fair Value
Derivatives not designated as hedging instruments	Balance Sheet Location	As of March 31, 2024		As of December 31, 2023
Interest rate swaps	Accrued liabilities	$	—	$	1,576
Interest rate swaps	Prepaid expenses and other current assets	$	3,876	$	—

The following is a summary of location and amount of gains and (losses) recorded related to the derivative instruments (in thousands):


		Gain/(loss)
		Three Months Ended March 31,
Derivatives not designated as hedging instruments	Income Statement Location	2024		2023
Interest rate collars	Interest expense, net	$	951	$	(435	)
Interest rate swaps	Interest expense, net	$	6,094	$	(1,444	)