v3.26.1
Derivatives
 6 Months Ended
Jun. 30, 2026
Derivative [Abstract]  
Derivatives
Note 6 — Derivatives
To manage interest rate volatility, the Company has entered into interest rate swap agreements (the “Swaps”) to hedge a portion of the floating-rate interest payments associated with the credit agreements described in Note 5 — Debt. These include Swaps entered into by Phase 1 LLC in July 2023 and by Train 4 LLC, Train 5 LLC, and FinCo in the second half of 2025 for their respective debt obligations.
In June 2026, the Company reduced the notional amount of certain of the Phase 1 Swaps, resulting in an approximate $109.2 million receivable due to us based on the fair value of the notional reduction as of the transaction date less transaction costs of approximately $2.6 million. This receivable is classified within Prepaid expenses and other current assets within our Consolidated Balance Sheet. See Note 11 — Subsequent Events for additional information about the receivable.
As of June 30, 2026, the Company had the following Swaps outstanding (in thousands):
Initial Notional AmountMaximum Notional Amount
Maturity (1)
Weighted Average Fixed Interest Rate PaidVariable Interest Rate Received
Phase 1 Swaps$123,000 $6,194,213 20483.4%USD - SOFR
Train 4 Swaps186,900 3,230,000 20504.3%USD - SOFR
Train 5 Swaps17,709 3,050,650 20514.2%USD - SOFR
FinCo Swaps7,852 1,389,854 20354.0%USD - SOFR
(1) Phase 1, Train 4, Train 5, and FinCo Swaps, have early mandatory termination dates in July 2030, September 2032, October 2032, and October 2031, respectively.
The Swaps are measured at fair value each reporting period using an income approach (Level 2) based on observable market inputs, including SOFR forward curves. Changes in fair value are recorded within our Consolidated Statement of Operations.
Series A Exchange Option
The Series A Exchange Option (see Note 5 — Debt) is measured at fair value each reporting period using a lattice model (Level 2), and changes in fair value are recorded within our Consolidated Statement of Operations.
Warrants
The Company issued approximately 9.2 million warrants (the “Warrants”) in connection with the A&R Corporate Credit Agreement that consist of approximately 3.6 million warrants with an exercise price of $7.15 per share and approximately 5.6 million warrants with an exercise price of $9.30 per share. Approximately 7.2 million of the Warrants mature in 2031 and the approximately 2.0 million remaining warrants mature in 2032. The Warrants may be exercised by the holder solely on a cashless exercise basis at any time prior to their expiration.
Subject to certain liquidity conditions, the Company may cause the cash exercise of approximately 3.6 million of these warrants if the 30-day volume weighted average price of the Company’s common stock and the closing price of the Company’s common stock immediately prior to the date of exercise equals or exceeds $13.50 per share or $15.00 per share during specified periods in 2026 and 2027, respectively.
The Warrants are accounted for as derivative liabilities and are remeasured each period using either a Black-Scholes model or Monte Carlo, depending on the terms of the instrument (Level 2). Changes in fair value are recorded within our Consolidated Statement of Operations.
Consolidated Balance Sheet and Statement of Operations presentation
The fair value of the Company’s derivative instruments was recorded in the Consolidated Balance Sheets as follows (in thousands):
June 30, 2026
SwapsSeries A Exchange OptionWarrantsTotal
Derivatives - current assets$12,103 $— $— $12,103 
Derivatives - noncurrent assets479,177 — — 479,177 
Accrued and other current liabilities2,451 — — 2,451 
Derivatives - noncurrent liabilities88,619 28,037 43,918 160,574 
December 31, 2025
SwapsSeries A Exchange OptionWarrantsTotal
Derivatives - noncurrent assets$532,245 $— $— $532,245 
Accrued and other current liabilities6,422 — — 6,422 
Derivatives - noncurrent liabilities85,888 15,720 33,912 135,520 
The gains (losses) on the Company’s derivative instruments as presented in the Consolidated Statements of Operations are as follows (in thousands):
Three Months Ended June 30,Six Months Ended June 30,
2026202520262025
Swaps$111,899 $25,897 $76,288 $(141,612)
Series A Exchange Option949—(12,317)—
Warrants3,227—(10,006)—
Other—(740)—(1,931)
Derivative gain (loss), net$116,075 $25,157 $53,965 $(143,543)