Derivatives

9 Months Ended

Sep. 30, 2024

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

The following tables detail our outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of September 30, 2024 and December 31, 2023. During the quarter ended September 30, 2024, we entered into eight forward-starting interest rate swap agreements for an aggregate notional amount of $400.0 million to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance of senior unsecured notes expected to be issued in connection with the refinancing of our senior unsecured notes maturing in 2025.

($ In thousands)	September 30, 2024
Instrument	Number of Instruments	Fixed Rate	Notional		Index	Maturity
Forward-starting interest rate swap	6	3.3072%	$	300,000	USD SOFR-COMPOUND	December 10, 2031
Forward-starting interest rate swap	1	3.6170%	50,000		USD SOFR-COMPOUND	May 14, 2032
Forward-starting interest rate swap	1	3.2280%	50,000		USD SOFR-COMPOUND	March 27, 2035

($ In thousands)	December 31, 2023
Instrument	Number of Instruments	Fixed Rate	Notional		Index	Maturity
Forward-starting interest rate swap	7	3.6685%	$	500,000	USD SOFR-COMPOUND	March 6, 2034

Forward-Starting Derivatives

We have entered into, and subsequently settled, the following forward-starting derivatives and U.S. Treasury Rate Lock agreements to hedge against changes in future cash flows resulting from changes in interest rates from the trade date through the forecasted issuance of the respective senior unsecured notes. In each case, the derivatives were designated as cash-flow hedges and, accordingly, the unrealized gain in Accumulated other comprehensive income is amortized over the term of the respective derivative instruments, which matches that of the underlying note, as a reduction in interest expense.

•In connection with our March 2024 Notes offering, we entered into seven forward-starting interest rate swap agreements for a total aggregate notional amount of $500.0 million, which we settled in March 2024 for total net proceeds of $2.8 million.

•In connection with our April 2022 Notes offering, we entered into five forward-starting interest rate swap agreements with an aggregate notional amount of $2.5 billion and two U.S. Treasury Rate Lock agreements with an aggregate notional amount of $500.0 million, which we settled in April 2022 for total net proceeds of $206.8 million.

The following table presents the effect of our forward-starting derivative financial instruments on our Statement of Operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2024		2023		2024		2023
Unrealized (loss) gain recorded in other comprehensive income	$	(2,714)	$	20,109	$	9,768	$	20,289
Reduction in interest expense related to the amortization of the forward-starting interest rate swaps and treasury locks	(6,100)		(6,037)		(18,530)		(18,111)

Net Investment Hedges

In connection with our foreign transactions in Canada and the United Kingdom, we currently have C$200.0 million and £14.5 million, respectively, outstanding on the Revolving Credit Facility, which funds were used to reduce the impact of exchange rate variations associated with our investments, and, accordingly, have been designated as a hedge of the net investment in such entities. As non-derivative net investment hedges, the impact of changes in foreign currency exchange rates on the principal balances are recognized as a cumulative translation adjustment within accumulated other comprehensive income. For the three and nine months ended September 30, 2024, we recognized $2.4 million in unrealized losses and $2.4 million in unrealized gains, respectively, related to such net investment hedges, and for the three and nine months ended September 30, 2023, we recognized $2.9 million and $1.7 million, respectively, in unrealized losses related to such net investment hedges, which were recorded as a component of Foreign currency translation adjustments in the Statement of Operations.