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Derivative financial instruments | 6 Months Ended
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Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative financial instruments | Derivative financial instruments We have entered into interest rate derivatives to hedge the current and future interest rate payments on our variable rate debt. These derivative financial instruments can include interest rate swaps, caps, floors, options and forward contracts. As of June 30, 2022, we had interest rate caps and swaps outstanding, with underlying variable benchmark interest rates ranging from one to six-month U.S. dollar LIBOR or Term SOFR, as applicable. Some of our agreements with derivative counterparties require a two-way cash collateralization of derivative fair values. We had not advanced any cash collateral to counterparties as of June 30, 2022 or December 31, 2021. The counterparties to our interest rate derivatives are primarily major international financial institutions. We continually monitor our positions and the credit ratings of the counterparties involved and limit the amount of credit exposure to any one party. We could be exposed to potential losses due to the credit risk of non-performance by these counterparties. We have not experienced any material losses to date. Our derivative assets are recorded in other assets and our derivative liabilities are recorded in accounts payable, accrued expenses and other liabilities in our Condensed Consolidated Balance Sheets. The following tables present notional amounts and fair values of derivatives outstanding as of June 30, 2022 and December 31, 2021:
| June 30, 2022 |  | December 31, 2021
| Notional amount (a) |  | Fair value |  | Notional amount (a) |  | Fair value
Derivative assets not designated as accounting cash flow hedges: |  |  |  |  |  |  |
Interest rate swaps | $ | 200,000 |  |  | $ | 106 |  |  | $ | — |  |  | $ | — |
Interest rate caps | 1,292,000 |  |  | 46,779 |  |  | 2,703,500 |  |  | 14,203 |
Derivative assets designated as accounting cash flow hedges: |  |  |  |  |  |  |
Interest rate swaps | $ | 1,347,000 |  |  | $ | 13,278 |  |  | $ | — |  |  | $ | — |
Interest rate caps | 675,000 |  |  | 36,136 |  |  | 475,000 |  |  | 2,706 |
Total derivative assets |  |  | $ | 96,299 |  |  |  |  | $ | 16,909 |
(a)The notional amount is excluded for caps and swaps which are not yet effective.
| June 30, 2022 |  | December 31, 2021
| Notional amount (a) |  | Fair value |  | Notional amount (a) |  | Fair value
Derivative liabilities not designated as cash flow hedges: |  |  |  |  |  |  |
Interest rate swaps | $ | — |  |  | $ | — |  |  | $ | 500,000 |  |  | $ | 6,627 |
Derivative liabilities designated as accounting cash flow hedges: |  |  |  |  |  |  |
Interest rate swaps | $ | 924,000 |  |  | $ | 1,325 |  |  | $ | 2,616,000 |  |  | $ | 64,570 |
Total derivative liabilities |  |  | $ | 1,325 |  |  |  |  | $ | 71,197 |
(a)The notional amount is excluded for caps and swaps which are not yet effective. We recorded the following in other comprehensive gain or loss related to derivative financial instruments for the three and six months ended June 30, 2022 and 2021:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Gain (Loss) |  |  |  |  |  |  |
Effective portion of change in fair market value of derivatives designated as accounting cash flow hedges: |  |  |  |  |  |  |
Interest rate swaps | $ | 25,774 |  |  | $ | 17,656 |  |  | $ | 76,524 |  |  | $ | 39,943 |
Interest rate caps | 5,753 |  |  | (323) |  |  | 15,148 |  |  | 1,142 |
Derivative premium and amortization | 1,174 |  |  | 861 |  |  | 2,341 |  |  | 1,626 |
Income tax effect | (4,088) |  |  | (2,274) |  |  | (11,752) |  |  | (5,339) |
Net gain on derivatives, net of tax | $ | 28,613 |  |  | $ | 15,920 |  |  | $ | 82,261 |  |  | $ | 37,372 |
We expect to reclassify approximately $13 million from accumulated other comprehensive income (“AOCI”) as an increase in interest expense in our Condensed Consolidated Income Statements over the next 12 months. The following table presents the effect of derivatives recorded in interest expense in our Condensed Consolidated Income Statements for the three and six months ended June 30, 2022 and 2021:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2022 |  | 2021 |  | 2022 |  | 2021
Gain (Loss) |  |  |  |  |  |  |
Derivatives not designated as accounting hedges: |  |  |  |  |  |  |
Interest rate caps and swaps | $ | 3,239 |  |  | $ | (62) |  |  | $ | 39,309 |  |  | $ | 9,689 |
Reclassification to Condensed Consolidated Income Statements: |  |  |  |  |  |  |
Reclassification of amounts previously recorded within AOCI | (10,781) |  |  | (16,513) |  |  | (30,072) |  |  | (37,810) |
(Loss) gain recognized in interest expense | $ | (7,542) |  |  | $ | (16,575) |  |  | $ | 9,237 |  |  | $ | (28,121) |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI https://asc.fasb.org/extlink&oid=126731327&loc=d3e90205-114008 + Details
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