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Derivative Instruments
 12 Months Ended
Dec. 31, 2022
Summary of Derivative Instruments [Abstract]  
Derivative Instruments Derivative Instruments
All derivatives are recognized at fair value in the consolidated balance sheets within the line items "Other assets" and "Accounts payable and accrued liabilities" as applicable. The Company has elected not to offset its derivative position for purposes of balance sheet presentation and disclosure. The Company had derivative assets of $11.4 million at December 31, 2022 and no derivative assets at December 31, 2021. The Company had derivative liabilities of $4.9 million at December 31, 2021 and no derivative liabilities at December 31, 2022. The Company has not posted or received collateral with its derivative counterparties as of December 31, 2022 and 2021. See Note 10 for disclosures relating to the fair value of the derivative instruments.

Risk Management Objective of Using Derivatives
The Company is exposed to certain risk arising from both its business operations and economic conditions including the effect of changes in foreign currency exchange rates on foreign currency transactions and interest rates on its SOFR based borrowings. The Company manages this risk by following established risk management policies and procedures including the use of derivatives. The Company’s objective in using derivatives is to add stability to reported earnings and to manage its exposure to foreign exchange and interest rate movements or other identified risks. To accomplish this objective, the Company primarily uses interest rate swaps, cross-currency swaps and foreign currency forwards.

Cash Flow Hedges of Interest Rate Risk
The Company uses interest rate swaps as its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt or payment of variable-rate amounts from a counterparty which results in the Company recording net interest expense that is fixed over the life of the agreements without exchange of the underlying notional amount.

During the year ended December 31, 2021, the Company terminated four of its interest rate swap agreements in connection with the payoff of the related unsecured term loan facility. These interest rate swaps had a combined notional amount of $400.0 million at termination and $3.2 million was reclassified into earnings as expense during the year ended December 31, 2021, as the forecasted future transactions were no longer probable.

During the year ended December 31, 2022, the Company amended and restated its interest rate swap agreement on its variable rate secured bonds with a notional amount of $25.0 million. This amendment changed the index rate from LIBOR to SOFR and extended the termination date by two years to September 30, 2026. The fixed rate of 1.3925% indexed to LIBOR was modified to 2.5325% indexed to SOFR. The Company used a strategy commonly referred to as blend and extend which allows the asset position of the terminated interest rate swap agreement of approximately $1.4 million to be effectively blended into the new interest rate swap agreement. At December 31, 2022, the Company had only this interest rate swap agreement designated as a cash flow hedge of interest rate risk. The interest rate swap agreement outstanding as of December 31, 2022 is summarized below:

Fixed rateNotional Amount (in millions)IndexMaturity
2.5325%$25.0 USD SOFRSeptember 30, 2026

The change in the fair value of interest rate derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (AOCI) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction.

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. As of December 31, 2022, the Company estimates that during the twelve months ending December 31, 2023, $1.0 million of gains will be reclassified from AOCI to interest expense.
Cash Flow Hedges of Foreign Exchange Risk
The Company is exposed to foreign currency exchange risk against its functional currency, USD, on CAD denominated cash flow from its six Canadian properties. The Company uses cross-currency swaps to mitigate its exposure to fluctuations in the USD-CAD exchange rate on cash inflows associated with these properties which should hedge a significant portion of the Company's expected CAD denominated cash flows. As of December 31, 2022, the Company had the following cross-currency swaps:
Fixed rateNotional Amount (in millions, CAD)Annual Cash Flow (in millions, CAD)Maturity
$1.26 CAD per USD
$150.0 $10.8 October 1, 2024
$1.28 CAD per USD
200.0 4.5 October 1, 2024
$1.30 CAD per USD
90.0 8.1 December 1, 2024
$440.0 $23.4 

The change in the fair value of foreign currency derivatives designated and that qualify as cash flow hedges of foreign exchange risk is recorded in AOCI and reclassified into earnings in the period that the hedged forecasted transaction affects earnings within the same income statement line item as the earnings effect of the hedged transaction. As of December 31, 2022, the Company estimates that during the twelve months ending December 31, 2023, $0.9 million of gains will be reclassified from AOCI to other income.

Net Investment Hedges
The Company is exposed to fluctuations in the USD-CAD exchange rate on its net investments in Canada. As such, the Company uses currency forward agreements to manage its exposure to changes in foreign exchange rates on certain of its foreign net investments. As of December 31, 2022, the Company had the following foreign currency forwards designated as net investment hedges:
Fixed rateNotional Amount (in millions, CAD)Maturity
$1.28 CAD per USD
$200.0 October 1, 2024
$1.30 CAD per USD
90.0 December 2, 2024
Total$290.0 

The Company previously also used CAD to USD cross-currency swaps that were designated as net investment hedges. The cross-currency swaps included a monthly settlement feature to lock in an exchange rate of CAD to USD. On April 29, 2022, the Company terminated its CAD to USD cross-currency swaps in conjunction with entering into new agreements. The Company paid $3.8 million in connection with the settlement of the CAD to USD cross-currency swap agreements, which continues to be reported in AOCI until the net investment is sold or liquidated.

For qualifying foreign currency derivatives designated as net investment hedges, the change in the fair value of the derivatives are reported in AOCI as part of the cumulative translation adjustment. Amounts are reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with the Company's accounting policy election. The earnings recognition of excluded components are presented in other income.
Below is a summary of the effect of derivative instruments on the consolidated statements of changes in equity and income for the years ended December 31, 2022, 2021 and 2020:

Effect of Derivative Instruments on the Consolidated Statements of Changes in Equity and Comprehensive Income (Loss) for the Years Ended December 31, 2022, 2021 and 2020
(Dollars in thousands)
 Year Ended December 31,
Description202220212020
Cash Flow Hedges
Interest Rate Swaps
Amount of Gain (Loss) Recognized in AOCI on Derivative$1,539 $(2,944)$(11,612)
Amount of Income (Expense) Reclassified from AOCI into Earnings (1)96 (9,156)(6,159)
Cross Currency Swaps
Amount of Gain (Loss) Recognized in AOCI on Derivative1,898 (99)5 
Amount of Income (Expense) Reclassified from AOCI into Earnings (2)276 (262)441 
Net Investment Hedges
Cross Currency Swaps
Amount of Gain (Loss) Recognized in AOCI on Derivative665 (518)(4,664)
Amount of Income Recognized in Earnings (2) (3)170 367 599 
Currency Forward Agreements
Amount of Gain Recognized in AOCI on Derivative8,686 — — 
Total
Amount of Gain (Loss) Recognized in AOCI on Derivative$12,788 $(3,561)$(16,271)
Amount of Income (Expense) Reclassified from AOCI into Earnings372 (9,418)(5,718)
Amount of Income Recognized in Earnings170 367 599 
Interest expense, net in accompanying consolidated statements of income (loss) and comprehensive income (loss)$131,175 $148,095 $157,675 
Other income in accompanying consolidated statements of income (loss) and comprehensive income (loss)$47,382 $18,816 $9,139 
(1)    Included in “Interest expense, net” in accompanying consolidated statements of income (loss) and comprehensive income (loss) except for a cash settlement of approximately $3.2 million for the year ended December 31, 2021 which is included in “Costs associated with loan refinancing or payoff” in accompanying consolidated statements of income (loss) and comprehensive income (loss) related to the termination of the interest rate swap agreements.
(2)    Included in "Other income" in the accompanying consolidated statements of income (loss) and comprehensive income (loss).
(3)    Amounts represent derivative gains excluded from the effectiveness testing.

Credit-risk-related Contingent Features
The Company has an agreement with its interest rate derivative counterparty that contains a provision where if the Company defaults on any of its obligations for borrowed money or credit in an amount exceeding $50.0 million and such default is not waived or cured within a specified period of time, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its interest rate derivative obligations.

As of December 31, 2022, the Company had no derivatives in a liability position related to these agreements. As of December 31, 2022, the Company had not posted any collateral related to these agreements and was not in breach of any provisions in these agreements.