DERIVATIVE INSTRUMENTS

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Our objective in using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate fluctuations. To accomplish this objective, we primarily use interest rate swap contracts to fix the variable rate interest on our term loans and a portion of our primary line of credit. The interest rate swap contracts qualify as cash flow hedges.

The ineffective portion of a hedging instrument is not recognized currently in earnings or disclosed. Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income and subsequently reclassified into earnings in the period that the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income for our interest rate swap will be reclassified to interest expense as interest payments are made on our term loan and line of credit. During the next 12 months, we estimate an additional $4.4 million will be reclassified as an increase to interest expense.

At December 31, 2020, we had three interest rate swap contracts in effect with a notional amount of $195.0 million and one additional interest rate swap that becomes effective on January 31, 2023 with a notional amount of $70.0 million.

The fair value of our derivative financial instruments as well as their classification on our consolidated balance sheets as of December 31, 2020 and 2019 is detailed below.

		(in thousands)
		December 31, 2020		December 31, 2019
	Balance Sheet Location	Fair Value		Fair Value
Total derivative instruments designated at hedging instruments - interest rate swaps	Accounts Payable and Accrued Expenses	$	15,905	$	7,607

The effect of the Company's derivative financial instruments on the consolidated statements of operations as of December 31, 2020, December 31, 2019, December 31, 2018, and April 30, 2018 is detailed below.

	(in thousands)
	Gain (Loss) Recognized in OCI								Location of Gain (Loss) Reclassified from Accumulated OCI into Income	Gain (Loss) Reclassified from Accumulated OCI into Income
	Year Ended December 31,				Transition Period Ended December 31,		Fiscal Year Ended April 30,			Year Ended December 31,				Transition Period Ended December 31,		Fiscal Year Ended April 30,
	2020		2019		2018		2018			2020		2019		2018		2018
Total derivatives in cash flow hedging relationships - interest rate swaps	$	(11,068)	$	(7,040)	$	(2,794)	$	1,627	Interest expense	$	(2,770)	$	(289)	$	(159)	$	(152)