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Derivative Instruments and Hedging Activities | 12 Months Ended
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Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities Cash Flow Hedges of Interest Rate Risk We record all derivatives at fair value. Our objective in utilizing interest rate derivatives is to add stability to our interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in our exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of the designated derivative that qualify as a cash flow hedge are recorded in Accumulated other comprehensive income (loss) on the Consolidated Balance Sheets and subsequently reclassified into earnings on the Consolidated Statements of Income and Comprehensive Income in the period that the hedged forecasted transaction affects earnings. During the year ended December 31, 2021, we entered into a three-year LIBOR Swap Agreement (the “Swap”) allowing us to trade the variable interest rate associated with our variable rate debt for a fixed interest rate. The 2021 Swap has a notional amount of $300.0 million of outstanding principal with a fixed interest rate of 0.39% per annum and matures on March 25, 2024. Based on the leverage as of December 31, 2021, our spread over LIBOR was 1.40% resulting in an estimated all-in interest rate of 1.79% per annum. During the year ended December 31, 2020, in connection with the repayment of our $200.0 million unsecured term loan (See Note 9. Borrowing Arrangements for additional information), we terminated the interest rate swap that was scheduled to mature on November 1, 2020. As a result of the interest rate swap termination, we incurred an early termination fee of $0.9 million, which was recognized in the Consolidated Statements of Income and Comprehensive Income. Our derivative financial instrument is classified as Level 2 in the fair value hierarchy. The following table presents the fair value of our derivative financial instrument:
|  |  |  | As of December 31,
(amounts in thousands) |  | Balance Sheet Location |  | 2021 |  | 2020
Interest Rate Swap |  | Other assets, net |  | $ | 3,524 |  |  | $ | — |
The table below presents the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income:
Derivatives in Cash Flow Hedging Relationship |  | Amount of (gain)/loss recognized in OCI on derivative for the year ended December 31, |  | Location of (gain)/ loss reclassified from accumulated OCI into income |  | Amount of (gain)/loss reclassified from accumulated OCI into income for the year ended December 31,
(amounts in thousands) |  | 2021 |  | 2020 |  | 2019 |  | (amounts in thousands) |  | 2021 |  | 2020 |  | 2019
Interest Rate Swap |  | $ | (2,777) |  |  | $ | 1,561 |  |  | $ | 1,847 |  |  | Interest Expense |  | $ | 746 |  |  | $ | 1,941 |  |  | $ | (832) |

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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 http://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 http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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