XML 33 R23.htm IDEA: XBRL DOCUMENT
v3.22.1

DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS | 3 Months Ended
--- | ---
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS | DERIVATIVE CONTRACTS AND COLLATERALIZED INDEBTEDNESS Prepaid Forward Contracts The Company has entered into various transactions to limit the exposure against equity price risk on its shares of Comcast Corporation ("Comcast") common stock. The Company has monetized all of its stock holdings in Comcast through the execution of prepaid forward contracts, collateralized by an equivalent amount of the respective underlying stock. At maturity, the contracts provide for the option to deliver cash or shares of Comcast stock with a value determined by reference to the applicable stock price at maturity. These contracts, at maturity, are expected to offset declines in the fair value of these securities below the hedge price per share while allowing the Company to retain upside appreciation from the hedge price per share to the relevant cap price. The Company received cash proceeds upon execution of the prepaid forward contracts discussed above which has been reflected as collateralized indebtedness in the accompanying consolidated balance sheets. In addition, the Company separately accounts for the equity derivative component of the prepaid forward contracts. These equity derivatives have not been designated as hedges for accounting purposes. Therefore, the net fair values of the equity derivatives have been reflected in the accompanying consolidated balance sheets as an asset or liability and the net increases or decreases in the fair value of the equity derivative component of the prepaid forward contracts are included in gain (loss) on derivative contracts in the accompanying consolidated statements of operations. All of the Company's monetization transactions are obligations of its wholly-owned subsidiaries that are not part of the Restricted Group; however, CSC Holdings has provided guarantees of the subsidiaries' ongoing contract payment expense obligations and potential payments that could be due as a result of an early termination event (as defined in the agreements). If any one of these contracts was terminated prior to its scheduled maturity date, the Company would be obligated to repay the fair value of the collateralized indebtedness less the sum of the fair values of the underlying stock and equity collar, calculated at the termination date. As of March 31, 2022, the Company did not have an early termination shortfall relating to any of these contracts. The Company monitors the financial institutions that are counterparties to its equity derivative contracts. All of the counterparties to such transactions carry investment grade credit ratings as of March 31, 2022. In January 2021, the Company settled collateralized indebtedness and an equity derivative contract aggregating $185,105 upon maturity related to 5,337,750 shares of Comcast common stock held by us, with proceeds of $185,105 received in the current period pursuant to the synthetic monetization closeout transaction in November 2019. In connection with this transaction the Company recorded (i) a decrease in notes payable of $59,451 and (ii) an increase in collateralized debt of $59,451. Interest Rate Swap Contracts To manage interest rate risk, we have from time to time entered into interest rate swap contracts to adjust the proportion of total debt that is subject to variable and fixed interest rates. Such contracts effectively fix the borrowing rates on floating rate debt to provide an economic hedge against the risk of rising rates and/or effectively convert fixed rate borrowings to variable rates to permit the Company to realize lower interest expense in a declining interest rate environment. We monitor the financial institutions that are counterparties to our interest rate swap contracts and we only enter into interest rate swap contracts with financial institutions that are rated investment grade. All such contracts are carried at their fair market values on our consolidated balance sheets, with changes in fair value reflected in the consolidated statements of operations. As of March 31, 2022, the Company did not hold and has not issued derivative instruments for trading or speculative purposes. The following represents the location of the assets and liabilities associated with the Company's derivative instruments within the consolidated balance sheets:
Derivatives Not Designated as Hedging Instruments |  | Balance Sheet Location |  | Fair Value at
|  | March 31, 2022 |  | December 31, 2021
Asset Derivatives: |  |  |  |  |  |
Interest rate swap contracts |  | Prepaid expenses and other current assets |  | $ | — |  |  | $ | 2,993 |
Interest rate swap contracts |  | Other asset, long-term |  | 53,539 |  |  | — |
|  |  |  | 53,539 |  |  | 2,993 |
Liability Derivatives: |  |  |  |  |  |
Interest rate swap contracts |  | Other current liabilities |  | — |  |  | (3,441) |
Prepaid forward contracts |  | Liabilities under derivative contracts, long-term |  | (60,868) |  |  | (161,942) |
Interest rate swap contracts |  | Liabilities under derivative contracts, long-term |  | (30,084) |  |  | (114,991) |
|  |  |  | $ | (90,952) |  |  | $ | (280,374) |
The following table presents certain consolidated statement of operations data related to our derivative contracts and the underlying common stock:
| Three Months Ended March 31,
| 2022 |  | 2021
Gain (loss) on derivative contracts related to change in the value of equity derivative contracts related to Comcast common stock | $ | 101,074 |  |  | $ | (53,565) |
Change in the fair value of Comcast common stock included in gain (loss) on investments | (150,773) |  |  | 73,453 |
Gain on interest rate swap contracts | 123,147 |  |  | 75,653 |
The following is a summary of interest rate swap contracts outstanding at March 31, 2022:
Trade Date |  | Maturity Date |  | Notional Amount |  | Company Pays |  | Company Receives
March 2020 |  | January 2025 |  | $ | 500,000 |  |  | Fixed rate of 1.53% |  | Three-month LIBOR
December 2018 |  | January 2025 |  | 500,000 |  |  | Fixed rate of 1.625% |  | Three-month LIBOR
March 2020 |  | January 2025 |  | 500,000 |  |  | Fixed rate of 1.458% |  | Three-month LIBOR
December 2018 |  | December 2026 |  | 750,000 |  |  | Fixed rate of 2.9155% |  | Three-month LIBOR
December 2018 |  | December 2026 |  | 750,000 |  |  | Fixed rate of 2.9025% |  | Three-month LIBOR

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
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 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 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration