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DERIVATIVE AND HEDGING INSTRUMENTS
 9 Months Ended
Sep. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE AND HEDGING INSTRUMENTS DERIVATIVE AND HEDGING INSTRUMENTS
The Company is exposed to various market risks, including the potential loss arising from adverse changes in interest rates and foreign exchange rates. The Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates and foreign exchange rates. The Company’s derivative financial instruments are used to manage differences in the amount of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s investments and borrowings.
Certain of the Company’s foreign operations expose the Company to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value in the Company’s functional currency, the U.S. dollar, of the Company’s investment in foreign operations, the cash receipts and payments related to these foreign operations and payments of interest and principal under Canadian dollar denominated debt. The Company enters into derivative financial instruments to protect the value of its foreign investments and fix a portion of the interest payments for certain debt obligations. The Company does not enter into derivatives for speculative purposes.
Cash Flow Hedges
The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and collars as part of its interest rate risk management strategy. As of September 30, 2022, approximately $3.8 million of gains, which are included in accumulated other comprehensive income, are expected to be reclassified into earnings in the next 12 months.
Net Investment Hedges
The Company is exposed to fluctuations in foreign exchange rates on investments it holds in Canada. The Company uses cross currency interest rate swaps to hedge its exposure to changes in foreign exchange rates on these foreign investments.
The following presents the notional amount of derivative instruments as of the dates indicated (in thousands):
September 30, 2022December 31, 2021
Derivatives designated as cash flow hedges:
Denominated in U.S. Dollars (1)
$436,250 $436,250 
Denominated in Canadian Dollars$125,000 $125,000 
Derivatives designated as net investment hedges:
Denominated in Canadian Dollars$56,300 $50,859 
Financial instruments designated as net investment hedges:
Denominated in Canadian Dollars$308,500 $125,000 
Derivatives not designated as net investment hedges:
Denominated in Canadian Dollars$— $5,441 
(1) Balance includes swaps with an aggregate notional amount of $175.0 million, which accretes to $262.5 million in January 2023.
Derivative and Financial Instruments Designated as Hedging Instruments
The following is a summary of the derivative and financial instruments designated as hedging instruments held by the Company at September 30, 2022 and December 31, 2021 (dollars in thousands):    
Count as of September 30, 2022
Fair Value as ofMaturity Dates
TypeDesignationSeptember 30, 2022December 31, 2021Balance Sheet Location
Assets:
Interest rate swapsCash flow6 $11,986 $1,481 2023 - 2024Accounts receivable, prepaid expenses and other assets, net
Interest rate collarsCash flow2 6,257 — 2024Accounts receivable, prepaid expenses and other assets, net
Cross currency interest rate swapsNet investment2 4,516 1,849 2025Accounts receivable, prepaid expenses and other assets, net
$22,759 $3,330 
Liabilities:
Interest rate swapsCash flow— $— $3,522 2023 - 2024Accounts payable and accrued liabilities
Interest rate collarsCash flow— — 204 2024Accounts payable and accrued liabilities
CAD borrowings under Revolving Credit FacilityNet investment1 133,551 — 2023Revolving credit facility
CAD Term LoanNet investment1 90,975 98,438 2024Term loans, net
$224,526 $102,164 
The following presents the effect of the Company’s derivative and financial instruments designated as hedging instruments on the consolidated statements of (loss) income and the consolidated statements of equity for the three and nine months ended September 30, 2022 and 2021 (in thousands):
Gain (Loss) Recognized in Other Comprehensive Income
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Cash Flow Hedges:
Interest rate products$6,817 $(3,780)$20,146 $13,995 
Net Investment Hedges:
Foreign currency products2,253 1,077 2,840 (115)
CAD borrowings under Revolving Credit Facility8,790 — 11,157 — 
CAD term loan5,988 2,500 7,463 (238)
$23,848 $(203)$41,606 $13,642 
Loss Reclassified from Accumulated Other Comprehensive Income into Income
Three Months Ended September 30,Nine Months Ended September 30,
Income Statement Location2022202120222021
Cash Flow Hedges:
Interest rate productsInterest expense$(602)$(3,373)$(5,264)$(9,916)
During the three and nine months ended September 30, 2022 and 2021, no cash flow hedges were determined to be ineffective.
Derivatives Not Designated as Hedging Instruments
As of September 30, 2022, the Company’s derivatives were all designated as hedging instruments. During the nine months ended September 30, 2022, the Company recorded $0.1 million of other expense related to the portion of derivatives not designated as hedging instruments and no such expense was recorded during the three months ended September 30, 2022. During the three and nine months ended September 30, 2021, the Company recorded $0.1 million of other income and $5,000 of other expense, respectively, related to the portion of derivatives not designated as hedging instruments.
Offsetting Derivatives
The Company enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company’s derivatives as of September 30, 2022 and December 31, 2021 (in thousands):
As of September 30, 2022
Gross Amounts of Recognized Assets / LiabilitiesGross Amounts Offset in the Balance SheetNet Amounts of Assets / Liabilities presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet
Financial InstrumentsCash Collateral ReceivedNet Amount
Offsetting Assets:
Derivatives$22,759 $— $22,759 $— $— $22,759 
Offsetting Liabilities:
Derivatives$— $— $— $— $— $— 
As of December 31, 2021
Gross Amounts of Recognized Assets / LiabilitiesGross Amounts Offset in the Balance SheetNet Amounts of Assets / Liabilities presented in the Balance SheetGross Amounts Not Offset in the Balance Sheet
Financial InstrumentsCash Collateral ReceivedNet Amount
Offsetting Assets:
Derivatives$3,330 $— $3,330 $(930)$— $2,400 
Offsetting Liabilities:
Derivatives$3,726 $— $3,726 $(930)$— $2,796 
Credit Risk-related Contingent Features
The Company has agreements with each of its derivative counterparties that contain a provision pursuant to which the Company could be declared in default on the derivative obligation if the Company defaults on any of its indebtedness, including a default where repayment of the indebtedness has not been accelerated by the lender. As of September 30, 2022, the Company had no derivatives in a net liability position related to these agreements.