XML 36 R24.htm IDEA: XBRL DOCUMENT v3.22.1
Derivatives
 3 Months Ended
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
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 March 31, 2022 and December 31, 2021. These derivatives were designated as effective cash flow hedges for accounting purposes. The Company had one interest rate cap contract with an aggregate notional amount $1.1 billion of March 31, 2022 and December 31, 2021. The interest rate cap is not designated under hedge accounting and is accounted for under mark-to-market accounting. 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 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 March 31, 2022 and December 31, 2021:
Interest Rate Range(1)
Fair Value Assets (Liabilities)
Underlying Debt InstrumentNumber of DerivativesNotional AmountEffective DateMaturity DateLowHighMarch 31, 2022December 31, 2021
Interest rate swaps
Hollywood Media Portfolio(2)
2$350,000 April 2015April 20222.96%3.46%$— $(1,413)
Hollywood Media Portfolio(2)
1125,000 June 2016November 20222.63%3.13%(53)(1,122)
Interest rate capStrike rate
Hollywood Media Portfolio11,100,000 August 2021August 20233.50%$2,739 368 
TOTAL$2,686 $(2,167)
_____________ 
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.

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 March 31, 2022, the Company expects $0.2 million of unrealized loss included in accumulated other comprehensive loss will be reclassified as an increase to interest expense in the next 12 months.