FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 12 – FAIR VALUE MEASUREMENTS

The carrying amounts of certain of the Company’s financial instruments including cash equivalents, accounts receivable, accounts payable, and accrued liabilities approximate fair value due either to length of maturity or interest rates that approximate prevailing market rates. The carrying value of derivative financial instruments equal fair value in accordance with U.S. GAAP. Determining which category an asset or liability falls within the hierarchy requires significant judgment. We evaluate hierarchy disclosures each reporting period.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents the assets and liabilities recorded that are reported at fair value on our Consolidated Balance Sheets on a recurring basis.

June 30, 2024
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Derivative assets	$	—	$	24,293	$	—	$	24,293
Liabilities
Derivative liabilities	$	—	$	348	$	—	$	348

December 31, 2023
(In thousands)	Level 1		Level 2		Level 3		Total
Assets
Derivative assets	$	—	$	20,952	$	—	$	20,952
Liabilities
Derivative liabilities	$	—	$	2,968	$	—	$	2,968

Derivative Financial Instruments

Currently, we use interest rate swaps to manage our interest rate risk associated with our notes payable. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves.

The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

To comply with the provisions of ASC 820, we incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts and guarantees.

Although we have determined that the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. We have determined that the significance of the impact of the credit valuation adjustments made to our derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all of our derivatives held at June 30, 2024, and December 31, 2023 were classified as Level 2 of the fair value hierarchy.

Fair Value of Certain Financial Liabilities

The following table presents the carrying value and fair value of certain financial liabilities that are recorded on our Consolidated Balance Sheets. The fair value of the debt (Level 2) is determined using the present value of the contractual cash flows, discounted at the current market cost of debt.

	June 30, 2024				December 31, 2023
(In thousands)	Carrying Value(1)		Fair Value		Carrying Value(1)		Fair Value
Term loan due November 2025	$	150,000	$	149,806	$	150,000	$	149,496
Term loan due November 2026		100,000		100,051		100,000		99,799
Term loan due January 2027		90,000		89,806		90,000		89,524
Term loan due March 2027		85,000		86,176		—		—
Term loan due January 2028		90,000		90,741		90,000		89,208
Senior fixed note due June 2024		—		—		50,000		49,641
Senior fixed note due December 2026		50,000		48,761		50,000		49,227
Senior fixed note due June 2027		75,000		73,392		75,000		74,282
Senior fixed note due December 2028		50,000		48,416		50,000		49,195
Senior fixed note due April 2029		50,000		44,341		50,000		44,742
Senior fixed note due June 2029		50,000		44,990		50,000		45,473
Senior fixed note due April 2030		75,000		66,455		75,000		67,262
Senior fixed note due March 2031		50,000		42,526		50,000		43,313
Senior fixed note due April 2031		50,000		42,825		50,000		43,441
Senior fixed note due March 2032		75,000		63,654		75,000		64,818
Senior fixed note due July 2033		100,000		106,168		100,000		109,521
Revolving credit facility due November 2025		27,000		14,965		16,000		15,946

(1)Carrying values exclude deferred financing costs