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Interest Rate Swap Contracts | 3 Months Ended
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Mar. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Interest Rate Swap Contracts | Note 8. INTEREST RATE SWAP CONTRACTS Through March 31, 2023, the interest payments on our CAPL Credit Facility varied based on monthly changes in the one-month LIBOR and changes, if any, in the applicable margin, which is based on our leverage ratio as further discussed in Note 7. To hedge against interest rate volatility on our variable rate borrowings under the CAPL Credit Facility, on March 26, 2020, we entered into an interest rate swap contract. The interest rate swap contract has a notional amount of $150 million, a fixed rate of 0.495% and matures on April 1, 2024. On April 15, 2020, we entered into two additional interest rate swap contracts, each with notional amounts of $75 million, a fixed rate of 0.38% and that mature on April 1, 2024. All of these interest rate swap contracts have been designated as cash flow hedges and are expected to be highly effective. The fair value of these interest rate swap contracts, for which the current portion is included in other current assets and the noncurrent portion is included in other assets, totaled $13.6 million and $16.5 million at March 31, 2023 and December 31, 2022, respectively. See Note 11 for additional information on the fair value of the interest rate swap contracts. We report the unrealized gains and losses on our interest rate swap contracts designated as highly effective cash flow hedges as a component of other comprehensive income and reclassify such gains and losses into earnings in the same period during which the hedged interest expense is recorded. We recognized a net realized gain (loss) from settlements of the interest rate swap contracts of $3.1 million and $(0.2) million for the three months ended March 31, 2023 and 2022, respectively. We currently estimate that a gain of $12.6 million will be reclassified from accumulated other comprehensive income into interest expense during the next 12 months; however, the actual amount that will be reclassified will vary based on changes in interest rates. On April 4, 2023, in connection with amending and restating the CAPL Credit Facility and transitioning from LIBOR to SOFR, we also amended our three existing interest rate swap contracts to convert the reference rate from LIBOR to SOFR. As a result, the fixed rate was reduced from 0.495% to 0.4125% for the one contract and from 0.38% to 0.2975% for the other two contracts. All other critical terms remain the same and so we expect these cash flow hedges to continue to be highly effective. We have applied certain provisions and practical expedients of ASC 848–Reference Rate Reform related to the transition from LIBOR to SOFR achieved with amending and restating the CAPL Credit Facility and with amending our existing interest rate swap contracts. In April 2023, we entered into four additional interest rate swap contracts as summarized below (in thousands):
Notional Amount |  |  | Termination Date |  | Fixed Rate |
$ | 50,000 |  |  | March 30, 2028 |  |  | 3.287 | %
| 100,000 |  |  | March 31, 2028 |  |  | 3.287 | %
| 50,000 |  |  | April 8, 2028 |  |  | 3.282 | %
| 100,000 |  |  | April 1, 2028 |  |  | 2.932 | %
All of these interest rate swap contracts have been designated as cash flow hedges and are expected to be highly effective.

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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 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
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