XML 22 R12.htm IDEA: XBRL DOCUMENT
v3.22.2.2

Financial Instruments: Derivatives and Hedging | 9 Months Ended
--- | ---
Sep. 30, 2022
Financial Instruments: Derivatives and Hedging |
Financial Instruments: Derivatives and Hedging | 4.  Financial Instruments: Derivatives and Hedging ​ On July 22, 2016, the Company entered into interest rate swap transactions that fixed the interest rate for the period beginning on September 27, 2017 and ended on September 27, 2021 on the BofA Term Loan (the “2017 Interest Rate Swap”). On March 7, 2019, the Company entered into interest rate swap transactions that fixed the interest rate for the period beginning on March 29, 2019 and ending on November 30, 2021 on a $100 million portion of the JPM Term Loan (the “2019 JPM Interest Rate Swap”). On February 20, 2019, the Company entered into interest rate swap transactions that fixed the interest rate for the period beginning August 26, 2020 and ending January 31, 2024 on the BMO Term Loan (the “2019 BMO Interest Rate Swap”). The variable rates that were fixed under the 2017 Interest Rate Swap, the 2019 JPM Interest Rate Swap and the 2019 BMO Interest Rate Swap (collectively referred to as the “Interest Rate Swaps”) are described in Note 3. ​ On June 4, 2021, the Company paid approximately $1.2 million to terminate the 2019 JPM Interest Rate Swap that was scheduled to mature on November 30, 2021 and approximately $0.6 million to terminate a portion of the 2019 BMO Interest Rate Swap that was scheduled to mature on November 30, 2021. As a result of the terminations, approximately $1.9 million of the balance held in accumulated other comprehensive income (loss) was reclassified into earnings. The JPM Term Loan and a portion of the BMO Term Loan related to these interest rate swaps was also repaid on June 4, 2021, which is described in Note 3. ​ The Interest Rate Swaps qualify as cash flow hedges and have been recognized on the consolidated balance sheets at fair value. If a derivative qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings, which may increase or decrease reported net income and stockholders’ equity prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. ​ The following table summarizes the notional and fair value of the Company’s derivative financial instrument at September 30, 2022 and December 31, 2021. The notional value is an indication of the extent of the Company’s involvement in this instrument at that time, but does not represent exposure to credit, interest rate or market risks. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | Notional |  | Strike |  | Effective |  | Expiration |  | Fair Value (2) at |
(in thousands) | ​ | Value | ​ | Rate | ​ | Date | ​ | Date | ​ | September 30, 2022 |  | December 31, 2021 |
2019 BMO Interest Rate Swap (1) | ​ | $ | 165,000 |  | 2.39 | % | Aug-20 |  | Jan-24 | ​ | $ | 4,266 | ​ | $ | (5,239) | ​
(1) The Notional Value decreased to $165 million on June 4, 2021. | ​
(2) Classified within Level 2 of the fair value hierarchy. | ​
​ The 2019 BMO Interest Rate Swap was reported as an asset with a fair value of approximately $4.3 million and a liability of approximately $5.2 million at September 30, 2022 and December 31, 2021, respectively. The balance is included in other assets: derivative asset and other liabilities: derivative liabilities in the consolidated balance sheet at September 30, 2022 and December 31, 2021, respectively. ​ The gain/(loss) on the Company’s Interest Rate Swaps that was recorded in other comprehensive income (loss) (OCI) and the accompanying consolidated statements of operations as a component of interest expense for the nine months ended September 30, 2022 and 2021, respectively, was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Nine Months Ended September 30,
Interest Rate Swaps in Cash Flow Hedging Relationships: |  | 2022 |  | 2021
​ | ​ | ​ | ​ | ​ | ​ | ​
Amounts of gain recognized in OCI | ​ | $ | 7,835 | ​ | $ | 2,410
Amounts of previously recorded loss reclassified from OCI into Interest Expense | ​ | $ | (1,669) | ​ | $ | (7,318)
​ | ​ | ​ | ​ | ​ | ​ | ​
Total amount of Interest Expense presented in the consolidated statements of operations | ​ | $ | 17,140 | ​ | $ | 26,582
​ Over time, the unrealized gains and losses held in accumulated other comprehensive income will be reclassified into earnings as an increase or reduction to interest expense in the same periods in which the hedged interest payments affect earnings. The Company estimates that approximately $3.2 million of the current balance held in accumulated other comprehensive income (loss) will be reclassified into earnings within the next 12 months. ​ The Company is hedging the exposure to variability in anticipated future interest payments on existing debt. ​ The BMO Term Loan hedging transaction uses derivative instruments that involve certain additional risks such as counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract. The Company requires its derivatives contracts to be with counterparties that have investment grade ratings. As a result, the Company does not anticipate that any counterparty will fail to meet its obligations. However, there can be no assurance that the Company will be able to adequately protect against the foregoing risks or that it will ultimately realize an economic benefit that exceeds the related amounts incurred in connection with engaging in such hedging strategies. ​ The fair value of the Company’s derivative instruments are determined using the net discounted cash flows of the expected cash flows of the derivative based on the market based interest rate curve and are adjusted to reflect credit or nonperformance risk. The risk is estimated by the Company using credit spreads and risk premiums that are observable in the market. These financial instruments were classified within Level 2 of the fair value hierarchy and were classified as an asset or liability on the consolidated balance sheets. ​ The Company’s derivatives are recorded at fair value in other assets: derivative asset and other liabilities: derivative liability in the consolidated balance sheets and the effective portion of the derivatives’ fair value is recorded to other comprehensive income (loss) in the consolidated statements of comprehensive income (loss). ​

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 derivatives and fair value of assets and liabilities. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI https://asc.fasb.org/topic&trid=2155941 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI https://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativesAndFairValueTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration