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Interest Rate Contracts | 3 Months Ended
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Mar. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Interest Rate Contracts | Interest Rate Contracts Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both business operations and economic conditions. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future known and uncertain cash amounts, the values of which are determined by expected cash payments principally related to borrowings and interest rates. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company does not use derivatives for trading or speculative purposes. Derivative Instruments On July 9, 2015, the Company executed one interest rate swap agreement to hedge the variable cash flows associated with LIBOR. The interest rate swap was effective for the period from July 9, 2015 to July 1, 2020 with a notional amount of $425.0 million, which matured during the third quarter of 2020. On August 31, 2018, the Company executed four interest rate swap agreements to hedge future variable cash flows associated with LIBOR. The forward-starting interest rate swaps with a total notional amount of $425.0 million became effective on July 1, 2020 and have a term of five years. On March 10, 2020, the Company entered into three interest rate swap agreements to hedge variable cash flows associated with LIBOR. The swap agreements became effective on March 10, 2020, and have a term of approximately five years with notional amounts of $150.0 million, $100.0 million and $75.0 million. The Company also has entered into interest rate swap agreements to hedge the variable cash flows associated with certain existing or forecasted LIBOR based variable-rate debt, including the Company's KeyBank Loans. The change in the fair value of derivatives designated and qualifying as cash flow hedges is initially recorded in accumulated other comprehensive income ("AOCI") and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company's variable-rate debt. The following table sets forth a summary of the interest rate swaps at March 31, 2021 and December 31, 2020:
|  |  |  |  |  |  |  | Fair Value (1) |  | Current Notional Amounts
Derivative Instrument |  | Effective Date |  | Maturity Date |  | Interest Strike Rate |  | March 31, 2021 |  | December 31, 2020 |  | March 31, 2021 |  | December 31, 2020
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Swap |  | 3/10/2020 |  | 7/1/2025 |  | 0.83% |  | $ | (216) |  |  | $ | (2,963) |  |  | $ | 150,000 |  |  | $ | 150,000 |
Interest Rate Swap |  | 3/10/2020 |  | 7/1/2025 |  | 0.84% |  | (197) |  |  | (2,023) |  |  | 100,000 |  |  | 100,000 |
Interest Rate Swap |  | 3/10/2020 |  | 7/1/2025 |  | 0.86% |  | (201) |  |  | (1,580) |  |  | 75,000 |  |  | 75,000 |
Interest Rate Swap |  | 7/1/2020 |  | 7/1/2025 |  | 2.82% |  | (10,816) |  |  | (13,896) |  |  | 125,000 |  |  | 125,000 |
Interest Rate Swap |  | 7/1/2020 |  | 7/1/2025 |  | 2.82% |  | (8,690) |  |  | (11,140) |  |  | 100,000 |  |  | 100,000 |
Interest Rate Swap |  | 7/1/2020 |  | 7/1/2025 |  | 2.83% |  | (8,684) |  |  | (11,148) |  |  | 100,000 |  |  | 100,000 |
Interest Rate Swap |  | 7/1/2020 |  | 7/1/2025 |  | 2.84% |  | (8,755) |  |  | (11,225) |  |  | 100,000 |  |  | 100,000 |
Total |  |  |  |  |  |  |  | $ | (37,559) |  |  | $ | (53,975) |  |  | $ | 750,000 |  |  | $ | 750,000 |
(1)The Company records all derivative instruments on a gross basis in the consolidated balance sheets, and accordingly there are no offsetting amounts that net assets against liabilities. As of March 31, 2021, derivatives in a liability position are included in the line item "Interest rate swap liability" in the consolidated balance sheets at fair value. The LIBO rate as of March 31, 2021 (ef fe ctive date) was 0.12%. The following table sets forth the impact of the interest rate swaps on the consolidated statements of operations for the periods presented:
| Three Months Ended March 31,
| 2021 |  | 2020
Interest Rate Swap in Cash Flow Hedging Relationship: |  |  |
Amount of (loss) gain recognized in AOCI on derivatives | $ | (16,447) |  |  | $ | (30,869) |
Amount of (gain) loss reclassified from AOCI into earnings under “Interest expense” | $ | 16,416 |  |  | $ | 42 |
Total interest expense presented in the consolidated statement of operations in which the effects of cash flow hedges are recorded | $ | 20,685 |  |  | $ | 19,961 |
During the twelve months subsequent to March 31, 2021, the Company estimates that an additio nal $13.8 million of its expense will be recognized from AOCI into earnings. Certain agreements with the derivative counterparties contain a provision that if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender within a specified time period, then the Company could also be declared in default on its derivative obligations. As of March 31, 2021 and December 31, 2020, the fair value of interest rate swaps that were in a liability position, which excludes any adjustment for nonperformance risk related to these agreements, was approximately $37.6 million and $54.0 million, respectively. As of March 31, 2021 and December 31, 2020, the Company had not posted any collateral related to these agreements.

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- References No definition available. + Details
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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 http://asc.fasb.org/topic&trid=2229140 + Details
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