XML 25 R14.htm IDEA: XBRL DOCUMENT v3.23.2
Derivative Instruments
6 Months Ended
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments
DERIVATIVE INSTRUMENTS
During the periods covered by this report, the Company has made no changes to its policies or strategies for the use of derivative instruments and there has been no change in related accounting methods. Derivative instruments, which are designated as cash flow hedges, gains and losses are initially reported as a component of accumulated other comprehensive income (loss) and subsequently recognized in earnings with the corresponding hedged item.
Interest Rate Derivative Instruments
The Company is exposed to the risk that the earnings and cash flows could be adversely impacted due to fluctuations in interest rates. To mitigate this risk, the Company entered into $350.0 million of interest rate swap contracts during the first six months of 2023. These contracts had a notional value of $348.4 million as of June 30, 2023. These contracts are designated and qualify as effective cash flow hedges.
The following table summarizes the amount at fair value and location of the derivative instruments for interest rate hedges in the Condensed Consolidated Balance Sheets as of June 30, 2023:
(In thousands)Fair Value (level 2)
Balance sheet captionAmount
Interest rate swap designated as cash flow hedgeOther current assets$5,381 
Interest rate swap designated as cash flow hedgeOther non-current assets$269 
Interest rate swap designated as cash flow hedgeOther non-current liabilities$339 
Interest rate swap designated as cash flow hedgeAccumulated other comprehensive income$5,311 
There were no interest rate swaps designated as cash flow hedges for the period ended December 31, 2022.
The Company regularly assesses the creditworthiness of the counterparty. As of June 30, 2023, the counterparty to the interest rate swaps had performed in accordance with its contractual obligations. Both the counterparty credit risk and the Company's credit risk were considered in the fair value determination.
Net interest rate derivative gains of $1.2 million were recognized in interest expense, net, in the Condensed Consolidated Statements of Income (Loss) during the three and six months ended June 30, 2023. Net interest rate derivative losses of $0.4 million were recognized in the Condensed Consolidated Statements of Income (Loss) during the first six months of 2022. The Company expects $5.4 million of existing interest rate swap gains reported in accumulated other comprehensive income as of June 30, 2023 to be recognized in earnings within the next 12 months.