| Derivative Instruments and Hedging Activities |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIESDuring the six months ended June 30, 2023, we adopted ASU 2020-04, Reference Rate Reform, for six interest rate swap contracts with the transition from LIBOR to SOFR as the reference rate. In March 2023, we dedesignated one interest rate swap contract for a previous loan facility and entered into a new interest rate swap contract to hedge $14,084 of the extended loan facility. The new interest rate swap was designated as a cash flow hedge. In June 2023, we prepaid one loan facility and terminated the related swap prior to its maturity date.
The following table presents information about the fair value amounts of our cash flow derivative instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
Derivatives as of |
| |
|
|
June 30, 2023 |
|
December 31, 2022 |
| |
Balance Sheet Location |
|
Fair Value |
|
Fair Value |
| Derivatives Designated as Hedging Instruments: |
|
|
|
|
|
| Interest rate swap contracts |
Other assets |
|
$ |
1,676 |
|
|
$ |
1,748 |
|
| Interest rate swap contracts |
Other liabilities |
|
$ |
— |
|
|
$ |
9 |
|
| Derivatives Not Designated as Hedging Instruments: |
|
|
|
|
|
| Interest rate swap contracts |
Other assets |
|
$ |
3,328 |
|
|
$ |
3,454 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Make-whole provisions |
Other liabilities |
|
$ |
8,096 |
|
|
$ |
5,348 |
|
As of June 30, 2023 and December 31, 2022, all but two of our freestanding derivatives were designated as hedging instruments.
The following table presents information about the effects of our derivative instruments on our condensed consolidated statements of income and condensed consolidated statements of comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Loss (Gain) Recognized in Net Income |
|
Location of Loss (Gain) Recognized in Net Income |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2023 |
|
2022 |
|
2023 |
|
2022 |
| Derivatives Designated as Hedging Instruments: |
|
|
|
|
|
|
|
|
| Interest rate swap contracts |
Other expenses, net |
|
$ |
(222) |
|
|
$ |
360 |
|
|
$ |
(211) |
|
|
$ |
841 |
|
| Derivatives Not Designated as Hedging Instruments: |
|
|
|
|
|
|
|
|
| Interest rate swap contracts |
Other expenses, net |
|
$ |
(338) |
|
|
$ |
(759) |
|
|
$ |
182 |
|
|
$ |
(2,021) |
|
| Commodity swap contracts |
Other expenses, net |
|
$ |
— |
|
|
$ |
(92) |
|
|
— |
|
|
2,514 |
|
| Make-whole provisions |
Other expenses, net |
|
$ |
(86) |
|
|
$ |
(216) |
|
|
(443) |
|
|
62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the changes in Accumulated Other Comprehensive Loss (“AOCL”), net of taxes, from our hedging instruments:
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2023 |
|
|
| Derivatives Designated as Hedging Instruments: |
|
|
|
| Accumulated gain in AOCL at the beginning of the period |
$ |
1,284 |
|
|
|
|
|
|
|
| Unrealized loss recognized in AOCL |
163 |
|
|
|
| Loss reclassified from AOCL to other expenses, net |
(211) |
|
|
|
| Loss on derivatives |
(48) |
|
|
|
| Accumulated gain in AOCL at the end of the period |
$ |
1,236 |
|
|
|
The following tables present all of our active derivative instruments as of June 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Active Interest Rate Swaps |
|
Effective Date |
|
Expiration Date |
|
Initial Notional
Amount ($) |
|
Status |
11-Year, 5.77% Fixed |
|
October 2018 |
|
October 2029 |
|
$ |
9,200 |
|
|
Designated |
15-Year, 5.24% Fixed |
|
June 2018 |
|
June 2033 |
|
$ |
10,000 |
|
|
Designated |
10-Year, 4.74% Fixed |
|
June 2017 |
|
December 2027 |
|
$ |
14,100 |
|
|
Designated |
8-Year, 3.49% Fixed |
|
March 2020 |
|
June 2028 |
|
$ |
14,643 |
|
|
Designated |
8-Year, 3.49% Fixed |
|
March 2020 |
|
June 2028 |
|
$ |
10,734 |
|
|
Designated |
13-Year, 0.72% Fixed |
|
May 2020 |
|
March 2033 |
|
$ |
9,505 |
|
|
Not Designated |
13-Year, 0.72% Fixed |
|
May 2020 |
|
March 2033 |
|
$ |
6,968 |
|
|
Not Designated |
7.75-Year, 3.16% Fixed |
|
March 2023 |
|
December 2040 |
|
$ |
14,084 |
|
|
Designated |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Derivatives |
|
Classification |
|
Effective Date |
|
Expiration Date |
|
Fair Value ($) |
| Make-whole provisions |
|
Liability |
|
June/August 2018 |
|
December 2038 |
|
$ |
566 |
|
| Make-whole provisions |
|
Liability |
|
August 2016 |
|
April 2031 |
|
$ |
76 |
|
| Make-whole provisions |
|
Liability |
|
April 2017 |
|
February 2034 |
|
$ |
59 |
|
| Make-whole provisions |
|
Liability |
|
November 2020 |
|
December 2027 |
|
$ |
51 |
|
| Make-whole provisions |
|
Liability |
|
October 2011 |
|
May 2028 |
|
$ |
16 |
|
| Make-whole provisions |
|
Liability |
|
May 2021 |
|
April 2045 |
|
$ |
144 |
|
| Make-whole provisions |
|
Liability |
|
July 2021 |
|
March 2046 |
|
$ |
2,963 |
|
| Make-whole provisions |
|
Liability |
|
June 2022 |
|
March 2042 |
|
$ |
1,157 |
|
| Make-whole provisions |
|
Liability |
|
March 2023 |
|
December 2047 |
|
$ |
3,064 |
|
|