The Company from time to time enters into derivative financial instruments, such as interest rate collar agreements (“Collars”), to manage its exposure to fluctuations in interest rates under the Company’s variable rate debt.

As of March 31, 2023, the Company had the following derivative instruments which qualified as a cash flow hedge that qualified for hedge accounting treatment. The Company settled this transaction in November 2023 which was earlier than its original expiration date of June 28, 2024. After exiting the position, the Company had no derivative instruments qualifying for hedge accounting treatment.

Type
Of
Hedge

Notional
Amount

Effective
Date

Collar

Fixed
SOFR
Rate

Expiration
Date

(amounts
in millions)

Cap

2.75%

Collar(1)

220.0

Jun. 25, 2019

Floor

0.402%

Jun. 28, 2024

Total

220.0

(1)The notional amount of this derivative decreased to $90.0 million in June 2023 and the Company settled the transaction in November 2023.

For the three months ended March 31, 2023, the Company recorded the net change in the fair value of this derivative as a loss of $0.8 million (net of tax benefit of $0.3 million as of March 31, 2023) to the condensed consolidated statement of comprehensive income (loss). The fair value of this derivative was determined using observable market-based inputs (a Level 2 measurement) and the impact of credit risk on a derivative’s fair value (the creditworthiness of the Company for liabilities). As of March 31, 2023, the fair value of this derivative was an asset of $2.1 million, and was recorded in Other assets.


Other Comprehensive Income (Loss)
Net Change in Accumulated Derivative Unrealized Gain (Loss)		Net Amount of Accumulated Derivative Gain (Loss) Reclassified to the Consolidated Statement of Operations
Three Months Ended March 31,
2023		2023
(amounts in thousands)
$	(840)	$	—

The Company was subject to equity market risks due to changes in the fair value of the notional investments selected by its employees as part of its non-qualified deferred compensation plans. During the quarter ended June 30, 2020, the Company entered into a Total Return Swap ("TRS") in order to manage the market risks associated with its non-qualified deferred compensation plan liabilities. The Company paid floating rate, based on the SOFR, on the notional amount of the TRS. The TRS was designed to substantially offset changes in its non-qualified deferred compensation plan's liabilities due to changes in the value of the investment options made by employees. The Company did not designate the TRS as an accounting hedge. Rather, the Company recorded all changes in the fair value of the TRS to earnings to offset the market value changes of its non-qualified deferred compensation plan liabilities. The contract term of the TRS expired April 2023 and was not renewed.