XML 21 R11.htm IDEA: XBRL DOCUMENT v3.22.1
Financial Instruments
 3 Months Ended
Mar. 31, 2022
Investments, All Other Investments [Abstract]  
Financial Instruments FINANCIAL INSTRUMENTS
Available-For-Sale Debt Securities - In connection with certain services provided by our payroll operations, we collect funds from our clients’ accounts in advance of paying client obligations. These funds held for clients are segregated and invested in accordance with our investment policy, which requires all investments carry an investment grade rating at the time of initial investment. These investments, primarily consisting of corporate and municipal bonds, are classified as available-for-sale and are included in the “Funds held for clients” line item on the accompanying Condensed Consolidated Balance Sheets. The par value of these investments totaled $43.1 million and $37.0 million at March 31, 2022 and December 31, 2021, respectively, and had maturity or callable dates ranging from April 2022 through November 2025.
At March 31, 2022, unrealized losses on the securities were not material and have not been recognized as a credit loss because the bonds are investment grade quality and management is not required or does not intend to sell prior to an expected recovery in value. The bond issuers continue to make timely principal and interest payments.
The following table summarizes activities related to these investments for the three months ended March 31, 2022 and the twelve months ended December 31, 2021 (in thousands):
Three Months Ended March 31, 2022Twelve Months Ended December 31, 2021
Fair value at beginning of period$38,670 $25,708 
Purchases8,450 26,980 
Redemptions(400)(6,530)
Maturities (1,970)(8,347)
Change in bond premium206 1,517 
Fair market value adjustment(1,291)(658)
Fair value at end of period$43,665 $38,670 
In addition to the available-for-sale debt securities discussed above, we also held other depository assets in the amount of $0.9 million and $1.1 million at March 31, 2022 and December 31, 2021, respectively. Those depository assets are classified as Level 1 in the fair value hierarchy.
Interest Rate Swaps - We utilize interest rate swaps to manage interest rate risk exposure associated with our floating-rate debt under the 2018 credit facility, or the forecasted acquisition of such liability. We do not purchase or hold any derivative instruments for trading or speculative purposes. Refer to the Annual Report on Form 10-K for the year ended December 31, 2021 for further discussion on our interest rate swaps.
As of March 31, 2022, we have four interest rate swaps outstanding. Under the terms of the interest rate swaps, we pay interest at a fixed rate of interest plus applicable margin as stated in the agreements, and receive interest that varies with the one-month LIBOR. The notional value, fixed rate of interest and expiration date of each interest rate swap as of March 31, 2022 is (i) $20.0 million – 1.770% - May 2022, (ii) $15.0 million – 2.640% - June 2023, (iii) $50.0 million - 0.885% - April 2025 and (iv) $30.0 million - 1.249% - December, 2026. Refer to Note 7, Fair Value Measurements, for additional disclosures regarding fair value measurements.
The following table summarizes our outstanding interest rate swaps and their classification in the accompanying Condensed Consolidated Balance Sheets at March 31, 2022 and December 31, 2021 (in thousands):
March 31, 2022
Notional
Amount		Fair
Value		Balance Sheet Location
Interest rate swap$20,000 $(32)Other current liability
Interest rate swap$15,000 $(128)Other non-current liability
Interest rate swaps$80,000 $3,738 Other non-current assets
December 31, 2021
Notional
Amount		Fair
Value		Balance Sheet Location
Interest rate swap$20,000 $(120)Other current liability
Interest rate swaps$45,000 $(496)Other non-current liabilities
Interest rate swap$50,000 $405 Other non-current asset
The following table summarizes the effects of the interest rate swaps on the accompanying Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2022 and 2021 (in thousands):
Gain Recognized
in AOCI, net of tax		Loss Reclassified
from AOCL into Expense
Three Months Ended
March 31,		Three Months Ended
March 31,
2022202120222021
Interest rate swaps$2,607 $961 $(343)$(285)