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Derivatives

12 Months Ended

Dec. 31, 2021

Derivatives

Derivatives

22. Derivatives

We use derivative instruments to manage our exposure to fluctuations in the variable interest rate of our Credit Facility. As of December 31, 2021, we had $300.0 million notional value of interest rate swaps outstanding, which expire in March 2022. We entered into these swaps to offset changes in expected cash flows due to fluctuations in the associated variable interest rates and designated them as cash flow hedges. The counterparties to these derivative agreements are major financial institutions. We monitor the credit quality of these financial institutions and do not expect nonperformance by any counterparty, although such nonperformance could have an adverse effect on us. We have no collateral posted for our derivative instruments.

During the year ended December 31, 2021, we dedesignated $125.0 million notional value of our interest rate swaps. The fair value of this interest rate swap immediately prior to dedesignation was a liability of $1.6 million. The associated amount in accumulated other comprehensive loss related to this interest rate swap is being amortized into interest expense over the remaining term of the swap through March 2022. Changes in the fair value of the dedesignated interest rate swap subsequent to dedesignation are recorded in interest expense.

The remaining $175.0 million notional value of our interest rate swaps continue to be designated as cash flow hedging instruments. We expect the hedging relationship to be highly effective as the interest rate swap terms substantially coincide with the hedged item and are expected to offset changes in expected cash flows due to fluctuations in the variable rate. We estimate that $1.2 million of the deferred pre-tax loss attributable to interest rate swaps included in accumulated other comprehensive loss at December 31, 2021 will be reclassified into earnings as interest expense at then-current values during the next 12 months as the underlying hedged transactions occur.

As of December 31, 2021, the weighted average effective fixed interest rate of our interest rate swaps was 1.8%.

The following table presents the effect of our derivative instruments on our consolidated balance sheets:

​

​	​	​	​	​	​	​
​	​	December 31,
(in thousands)	​	2021		​	​	2020
Interest rate swaps designated as cash flow hedging instruments	​	​	​	​	​	​
Accrued liabilities	​	$	727	​	$	4,810
Other liabilities	​		—	​		1,527
Total derivatives designated as cash flow hedging instruments	​	​	727	​	​	6,337
​	​	​	​	​	​	​
Interest rate swaps not designated as hedging instruments	​	​	​	​	​	​
Accrued liabilities	​	​	523	​	​	—
​	​	​	​	​	​	​
Total derivative liabilities	​	$	1,250	​	$	6,337

​

The following table presents the effect of our derivative instruments on our consolidated statements of operations:

​

​	​	​	​	​	​	​	​	​	​
​	​	Year Ended December 31,
(in thousands)	​	2021			2020			2019
Total amount of interest expense in which the effects of cash flow hedges and undesignated interest rate swaps are recorded	​	$	108,135	​	$	105,716	​	$	104,681
​	​	​	​	​	​	​	​	​	​
Interest rate swaps designated as cash flow hedging instruments	​	​	​	​	​	​	​	​	​
Pre-tax loss recognized in other comprehensive income (loss)	​	$	(1,219)	​	$	(8,459)	​	$	(6,785)
Pre-tax gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense	​		(6,308)	​		(3,878)	​		2,278
​	​	​	​	​	​	​	​	​	​
Interest rate swaps not designated as hedging instruments	​	​	​	​	​	​	​	​	​
Gain recognized in interest expense	​	$	1,088	​	$	—	​	$	—

​

See Note 2 (“Basis of Presentation and Significant Accounting Policies”), Note 15 (“Accumulated Other Comprehensive Income (Loss)”) and Note 23 (“Fair Value Measurements”) for further details on our derivative instruments.

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- References

No definition available.

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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

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