Derivatives

12 Months Ended

Dec. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The Company enters into derivatives in order to hedge interest rate risk.

The Company had three interest rate swaps with aggregate notional amounts of $0.5 billion as of December 31, 2021 and four interest rate swaps with aggregate notional amounts of $0.5 billion as of December 31, 2020. These derivatives were designated as effective cash flow hedges for accounting purposes. The derivative assets are recorded in prepaid expenses and other assets and derivative liabilities are recorded in accounts payable, accrued liabilities and other on the Consolidated Balance Sheets.

The Company had one interest rate cap contract with an aggregate notional amount $1.1 billion of December 31, 2021 and one interest rate cap contract with an aggregate notional amount of $0.9 billion as of and December 31, 2020. The interest rate caps are not designated under hedge accounting and are accounted for under mark-to-market accounting.

The Company has agreements with its derivative counterparties that contain a provision where the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.

The Company’s derivatives are classified as Level 2 and their fair values are derived from estimated values obtained from observable market data for similar instruments.

The fair market value of derivatives is presented on a gross basis on the Consolidated Balance Sheets. The following table summarizes the Company’s derivative instruments as of December 31, 2021 and December 31, 2020:


Underlying Debt Instrument	Number of Derivatives	Notional Amount		Effective Date	Maturity Date	Interest Rate Range(1)				Fair Value (Liabilities)/Assets
						Low		High		2021		2020
Interest rate swaps
Hollywood Media Portfolio(2)	2	350,000		April 2015	April 2022	2.96	%	3.46	%	(1,413)		(7,112)
Hollywood Media Portfolio(2)	1	125,000		June 2016	November 2022	2.63	%	3.13	%	(1,122)		(2,994)
Interest rate cap						Strike rate
Hollywood Media Portfolio(3)	1	$	900,000	July 2020	Terminated August 2021	3.50%				$	—	$	5
Hollywood Media Portfolio(3)	1	$	1,100,000	August 2021	August 2023	3.50%				$	368	$	—
TOTAL										$	(2,167)	$	(10,101)

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1.The rate is based on the fixed rate from the swap and the spread based on the operating partnership’s leverage ratio.

2.The swaps were designated under the first payments approach within hedge accounting, where the Company elected to designate a cash flow (LIBOR-based interest payments) instead of a specific piece of debt.

3.The Hollywood Media Portfolio debt was refinanced during the year ended December 31, 2021 with the loan amount being increased to $1.1 billion. Concurrently with the refinance, the interest rate cap associated with the original $900.0 million loan was early-terminated and replaced with an interest rate cap with a notional amount of $1.1 billion and a maturity in August 2023.

The Company reclassifies unrealized gains and losses related to cash flow hedges into earnings in the same period during which the hedged forecasted transaction affects earnings. As of December 31, 2021, the Company expects $2.6 million of unrealized loss included in accumulated other comprehensive income will be reclassified as an increase to interest expense in the next 12 months.