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Derivative Instruments, Hedging Activities and Other Comprehensive Income | 12 Months Ended
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Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments, Hedging Activities and Other Comprehensive Income | Derivative Instruments, Hedging Activities and Other Comprehensive Income In order to manage potential future variable interest rate risk, we enter into interest rate derivative agreements from time to time. We do not use such agreements for trading or speculative purposes nor do we have any that are not designated as cash flow hedges. The agreements with each of our derivative counterparties provide that, in the event of default on any of our indebtedness, we could also be declared in default on our derivative obligations. As of December 31, 2019, we were party to various cash flow derivative agreements with notional amounts totaling $266.2 million. These derivative agreements effectively fix the interest rate underlying certain variable rate debt instruments over expiration dates through 2025. Utilizing a weighted average interest rate spread over LIBOR on all variable rate debt resulted in fixing the weighted average interest rate at 3.68%. These interest rate derivative agreements are the only assets or liabilities that we record at fair value on a recurring basis. The valuation of these assets and liabilities is determined using widely accepted techniques including discounted cash flow analysis. These techniques consider the contractual terms of the derivatives (including the period to maturity) and use observable market-based inputs such as interest rate curves and implied volatilities. We also incorporate credit valuation adjustments into the fair value measurements to reflect nonperformance risk on both our part and that of the respective counterparties. We determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, although the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by us and our counterparties. As of December 31, 2019 and December 31, 2018, we assessed the significance of the impact of the credit valuation adjustments on the overall valuation of our derivative positions and determined the credit valuation adjustments were not significant to the overall valuation of our derivatives. As a result, we determined our derivative valuations were classified within Level 2 of the fair value hierarchy. As of December 31, 2019, the estimated fair value of our interest rate derivatives represented a liability of $16.8 million, including accrued interest of $0.1 million. As of December 31, 2019, this balance is reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheet. At December 31, 2018 the estimated fair value of our interest rate derivatives was a net liability of $3.5 million, including accrued interest receivable of $0.1 million. As of December 31, 2018, $3.6 million is reflected in prepaid and other assets and $7.1 million is reflected in accounts payable and accrued expenses on the accompanying consolidated balance sheet. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to earnings over time as the hedged items are recognized in earnings. Approximately $0.6 million was reclassified as an increase to earnings during the year ended December 31, 2019. Approximately $0.8 million and $2.5 million was reclassified as a reduction to earnings during the years ended December 31, 2018 and 2017, respectively. As the interest payments on our derivatives are made over the next 12 months, we estimate the increase to interest expense to be $1.5 million, assuming the current LIBOR curve. Unrealized gains and losses on our interest rate derivative agreements are the only components of the change in accumulated other comprehensive loss.

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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 + Details
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