XML 24 R15.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Derivative Instruments | 9 Months Ended
--- | ---
Sep. 30, 2022
Derivative Instrument Detail [Abstract] |
Derivative Instruments | NO TE 6. DERIVATIVE INSTRUMENTS From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks. Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. All our cash flow hedges are expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedges. As of September 30, 2022, we have interest rate swaps associated with $403.5 million of LIBOR based term loans. These swaps are cash flow hedges that convert variable rates ranging from one-month and three-month LIBOR plus 1.68% to 2.10%, to fixed rates ranging from 3.04% to 4.75% before patronage credits from lenders. We held $567.5 million of one-month LIBOR based forward starting interest rate swaps designated as cash flow hedges prior to the termination of certain forward starting swaps noted below. These forward starting interest rate swaps were entered into in March 2020, to effectively hedge the variability in future benchmark interest payments attributable to changes in interest rates on $567.5 million of expected future debt refinances through January 2029, with expected interest payments through January 2039, by converting the benchmark interest rate. On September 15, 2022, we terminated $277.5 million of these forward starting interest rate swaps and transferred the value realized from their termination into two new swaps to hedge the variability in future cash flows on the SOFR based New Term Loans of $277.5 million. These two new one-month SOFR based interest rate swaps with a notional amount of $138.75 million each effectively fix the interest rates at 2.50% and 2.66% on the New Term Loans before patronage credits from lenders. See Note 5: Debt for additional information. As of September 30, 2022, we have $290.0 million of remaining forward starting interest rate swaps. These cash flow hedges for expected future debt refinances require settlement on the stated maturity date. Additionally, in connection with the CatchMark merger, we acquired two LIBOR based interest rate swaps with a combined notional amount of $275.0 million which were used to fix the interest rates on CatchMark’s long-term debt. These interest rate swaps had a fair value of $19.2 million at the date of the CatchMark merger. We terminated these interest rate swaps and transferred the value realized from their termination into an existing $150.0 million LIBOR based interest rate swap associated with a $150.0 million term loan maturing January 1, 2029, resulting in the reduction of the LIBOR based swap rate from 2.71% to 0.49%. At September 30, 2022, the amount of net gains expected to be reclassified into earnings in the next 12 months is approximately $11.5 million. However, this expected amount to be reclassified into earnings is subject to volatility as the ultimate amount recognized in earnings is based on the LIBOR and SOFR rates, as applicable, at the time of net swap cash payments. The gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets are as follows:
|  |  |  | Asset Derivatives |  |  |  |  | Liability Derivatives |
(in thousands) |  | Location |  | September 30, 2022 |  |  | December 31, 2021 |  |  | Location |  | September 30, 2022 |  |  | December 31, 2021 |
Derivatives designated in cash flow hedging relationships: |  |  |  |  |  |  |  |  |
Interest rate contracts |  | Other assets, current 1 |  | $ | 8,889 |  |  | $ | 2,191 |  |  | Accounts payable and accrued liabilities 1 |  | $ | — |  |  | $ | — |
Interest rate contracts |  | Other assets, non-current |  |  | 138,795 |  |  |  | 31,306 |  |  | Other long-term obligations |  |  | — |  |  |  | 24,060 |
|  |  |  | $ | 147,684 |  |  | $ | 33,497 |  |  |  |  | $ | — |  |  | $ | 24,060 |
1 | Derivative instruments that mature within one year, as a whole, are classified as current.
The following table details the effect of derivatives on our Condensed Consolidated Statements of Operations:
|  |  |  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
(in thousands) |  | Location |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Derivatives designated in cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income recognized in other comprehensive income, net of tax |  |  |  | $ | 32,895 |  |  | $ | 4,310 |  |  | $ | 115,256 |  |  | $ | 32,741 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax 1 |  | Interest expense |  | $ | 170 |  |  | $ | (2,326 | ) |  | $ | (3,274 | ) |  | $ | (6,839 | )
Interest expense, net |  |  |  | $ | 8,280 |  |  | $ | 8,641 |  |  | $ | 18,593 |  |  | $ | 20,414 |
1 | Realized gains and losses on interest rate contracts consist of realized net cash received or paid and interest accruals on the interest rate swaps during the periods in addition to amortization of amounts out of other comprehensive income related to certain terminated hedges and adjustments to interest expense resulting from amortization of inception value of certain off-market designated hedges. Net cash received or paid is included in the supplemental cash flow information within interest, net of amounts capitalized in the Condensed Consolidated Statements of Cash Flows.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentDetailAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration