Derivative Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]


12.			Derivative Instruments

The Company is exposed to certain market risks relating to its ongoing business operations. From time to time, the Company enters into derivative instrument arrangements to manage various risks including interest rate risk.

As of December 31, 2019, the Company had seven interest rate swap contracts in effect with a collective notional amount at inception of $1.5 billion, with maturity dates from December 31, 2020 to March 12, 2023, at interest rates between 1.108 percent and 2.425 percent. During the second quarter of 2020, the Company amended and extended the terms of five of its interest rate swaps with a collective notional amount of $935.0 million. These amendments merged two of the previously existing interest rate swap agreements into one, reduced the effective fixed interest rates payable and extended the maturity date of each previously existing agreement by a period of one year. As of December 31, 2020, outstanding interest rate swap contracts are intended to fix the future interest payments associated with $1.4 billion of the $2.3 billion of outstanding borrowings under the Company’s 2016 Credit Agreement.

The following table presents relevant information for the interest rate swap agreements outstanding during 2020:


	Tranche A	Tranche B	Tranche C1	Tranche D1	Tranche E	Tranche F2
Notional amount at inception (in thousands)	$150,000	$100,000	$200,000	$300,000	$200,000	$485,000
Maturity date	3/13/2023	3/12/2023	3/12/2023	12/30/2022	12/30/2023	12/31/2021
Fixed interest rate	1.954%	1.956%	2.413%	2.204%	1.862%	0.743%

1 Not amended or extended.

2 Result of the merging of tranches F and G, which were disclosed within the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The following table presents information on the location and amounts of interest rate swap gains and losses:


(In thousands)		Year ended December 31,
Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Consolidated Statements of Income	2020		2019		2018
Interest rate swap agreements – unrealized portion	Net unrealized (loss) gain on financial instruments	$	(27,569)	$	(35,363)	$	3,772
Interest rate swap agreements – realized portion	Financing interest expense	$	15,842	$	(5,411)	$	(6,160)

Derivative instruments and their related gains and losses are reported within cash flows from operating activities within the consolidated statements of cash flows. See Note 19, Fair Value, for more information regarding the valuation of the Company’s interest rate swaps.