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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 12 Months Ended
Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
 
We are exposed to interest rate risk through our variable-rate debt. We manage this risk primarily by managing the amount, sources, and duration of our debt funding and through the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage our exposure to known or expected cash payments related to our variable-rate debt. The maximum length of time over which we have hedged our exposure to variable interest rates with our existing derivative financial instruments is approximately seven years.
 
Our objectives in using derivative financial instruments are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps as part of our interest rate risk management strategy. Our interest rate swaps are designated as cash flow hedges and involve the receipt of variable-rate payments from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
 
Our agreements with our derivative counterparties contain provisions such that if we default, or can be declared in default, on any of our indebtedness, then we could also be declared in default on our derivative financial instruments.
 
Information about our derivative financial instruments at December 31, 2021 and 2020 is as follows (dollar amounts in thousands):
 
Average Annual Effective Fixed RateNotional AmountFair Value
Contract dateEffective DateExpiration DateDecember 31, 2021December 31, 2020December 31, 2021December 31, 2020
October 2, 2017January 29, 2018January 31, 20231.98 %$100,000 $100,000 $(1,617)$(3,831)
October 2, 2017January 29, 2018January 31, 20231.98 %100,000 100,000 (1,629)(3,853)
June 11, 2018September 28, 2018September 30, 20242.87 %75,000 75,000 (3,831)(7,371)
June 11, 2018December 31, 2018December 31, 20252.93 %125,000 125,000 (8,646)(15,795)
$400,000 $400,000 $(15,723)$(30,850)
 
Our interest rate swaps have been designated as cash flow hedges and are valued using a market approach, which is a Level 2 valuation technique. At December 31, 2021 and 2020, all of our interest rate swaps were in a liability position as a result of a decline in short term interest rates and a continued flattening of the forward yield curve. Our interest rate swaps are recorded in Accrued expenses and other in our Consolidated Balance Sheets. We are not required to post any collateral related to these agreements and we are not in breach of any financial provisions of the agreements.

Changes in the fair value of the hedging instruments are deferred in Other comprehensive income and are reclassified to Interest expense in our Consolidated Statements of Operations in the period in which the hedged item affects earnings. In 2022, we estimate that an additional $8.0 million will be reclassified from Other comprehensive income and recorded as an increase to Interest expense.
 
The table below details the location in the financial statements of the gain or loss recognized on derivative financial instruments designated as cash flow hedges (in thousands):
 
 202120202019
Gain (loss) recognized in Accumulated other comprehensive loss on derivative financial instruments$5,631 $(22,090)$(15,327)
Loss reclassified from Accumulated other comprehensive loss to Interest expense$(9,496)$(7,417)$(731)
Total interest expense and other finance expense presented in the Consolidated Statement of Operations in which the effects of cash flow hedges are recorded$(43,368)$(43,300)$(41,030)