XML 42 R32.htm IDEA: XBRL DOCUMENT v3.22.1
Derivative Instruments and Hedging Activities (Tables)
 3 Months Ended
Mar. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of the notional and fair value of derivative financial instruments
The following table summarizes certain terms of the Company’s derivative contracts:
      Fair Value Asset (Liability)
thousands Balance Sheet LocationNotional AmountFixed Interest Rate (a)Effective DateMaturity DateMarch 31, 2022December 31, 2021
Derivative instruments not designated as hedging instruments: (b)
Interest rate cap(c)Prepaid expenses and other assets, net$285,000 2.00 %3/12/20219/15/2023$2,577 $300 
Interest rate cap(c)Prepaid expenses and other assets, net83,200 2.00 %3/12/20219/15/2023753 87 
Interest rate capPrepaid expenses and other assets, net75,000 5.00 %8/31/202010/17/2022— — 
Interest rate cap(d)Prepaid expenses and other assets, net75,000 2.50 %10/12/20219/29/20251,862 485 
Interest rate cap(e)Prepaid expenses and other assets, net59,500 2.50 %10/12/20219/29/20251,477 385 
Derivative instruments designated as hedging instruments:
Interest rate swap(f)Accounts payable and accrued expenses$615,000 2.96 %9/21/20189/18/2023$(7,193)$(23,477)
Interest rate swap(g)Prepaid expenses and other assets, net40,800 3.43 %3/1/20222/18/2027996 — 
Interest rate swap(h)Accounts payable and accrued expenses35,479 4.89 %11/1/20191/1/2032(420)(2,975)
Total fair value derivative assets$7,665 $1,257 
Total fair value derivative liabilities(7,613)(26,452)
Total fair value derivatives, net $52 $(25,195)
(a)These rates represent the strike rate on HHC’s interest swaps and caps.
(b)Interest expense included in the Condensed Statements of Operations for the three months ended March 31, 2022, and the year ended December 31, 2021, related to these contracts was not material.
(c)Concurrent with the closing of the $368.2 million construction loan for Victoria Place in 2021, the Company entered into two new LIBOR interest rate caps.
(d)Concurrent with the closing of the $75.0 million construction loan for 1700 Pavilion in 2021, the Company entered into this interest rate cap.
(e)Concurrent with the closing of the $59.5 million construction loan for Tanager Echo in 2021, the Company entered into this interest rate cap.
(f)Concurrent with the funding of the $615.0 million Term Loan in September 2018, the Company entered into this interest rate swap which is designated as a cash flow hedge. This swap covers the outstanding balance on the Term Loan in addition to other LIBOR-based debt held by the Company.
(g)Concurrent with the closing of the $40.8 million financing of Two Summerlin in the first quarter of 2022, the Company entered into this interest rate swap which is designated as a cash flow hedge.
(h)Concurrent with the closing of the $35.5 million construction loan for 8770 New Trails in 2019, the Company entered into this interest rate swap which is designated as a cash flow hedge.
Summary of effect of derivative financial instruments on the condensed consolidated statements of operations
The tables below present the effect of the Company’s derivative financial instruments on the Condensed Consolidated Statements of Operations for the three months ended March 31, 2022, and 2021:
Amount of Gain (Loss) Recognized in AOCI on Derivatives
Derivatives in Cash Flow Hedging RelationshipsThree Months Ended March 31,
thousands20222021
Interest rate derivatives$11,742 $3,383 
 
Amount of Gain (Loss) Reclassified from AOCI into Operations
Location of Gain (Loss) Reclassified from AOCI into OperationsThree Months Ended March 31,
thousands20222021
Interest expense$(3,335)$(2,973)

Total Interest Expense Presented in the Results of Operations in which the Effects of Cash Flow Hedges are Recorded
Interest Expense Presented in Results of OperationsThree Months Ended March 31,
thousands20222021
Interest expense$27,438 $34,210