Quarterly report pursuant to Section 13 or 15(d)

Derivative and Hedging Activities

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Derivative and Hedging Activities
 3 Months Ended
Mar. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative and Hedging Activities
Note 7 – Derivatives and Hedging Activities
Cash Flow Hedges of Interest Rate Risk
As of March 31, 2024 and December 31, 2023, the Company had outstanding derivative agreements with an aggregate notional amount of $60.0 million, which were designated as cash flow hedges under U.S. GAAP. The interest rate derivative agreements comprise interest rate collar agreements entered into in order to hedge interest rate volatility with respect to the Company’s borrowings under the Revolving Facility. Under the agreements, the benchmark rate for the Revolving Facility will float between 5.50% per annum and 4.20% per annum on $25.0 million, and 5.50% per annum and 4.035% per annum on $35.0 million, effective from November 13, 2023 until May 12, 2025.
The Company was previously party to derivative agreements with an aggregate notional amount of $175.0 million, which were also designated as cash flow hedges under U.S. GAAP. The interest rate derivative agreements, which expired on November 12, 2023, comprised interest rate swap agreements which effectively fixed the interest rate on the Company’s borrowings under the Revolving Facility (or, until June 29, 2023, the Term Loan Facility) until November 12, 2023.
The table below presents the fair value of the Company’s derivative financial instruments designated as cash flow hedges as well as their classification in the Company’s consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands):
Derivatives Designated as Hedging Instruments Balance Sheet Location March 31, 2024 December 31, 2023
Interest rate collars Other liabilities, net $ (45) $ (264)
During the three months ended March 31, 2024, the Company recorded net unrealized gains of $0.2 million for changes in the fair value of its cash flow hedges in accumulated other comprehensive loss. During the three months ended March 31, 2023, the Company recorded unrealized losses of less than $0.1 million for changes in the fair value of its cash flow hedges in accumulated other comprehensive loss.
During the three months ended March 31, 2024, the Company did not reclassify any previous net gains or losses from accumulated other comprehensive loss into interest expense as a result of the hedged transactions impacting earnings. During the three months ended March 31, 2023, the Company reclassified previous net gains of $1.7 million from accumulated other comprehensive income into interest expense as a result of the hedged transactions impacting earnings.
During the next twelve months, the Company estimates that no amounts will be reclassified from other comprehensive income to interest expense.
Derivatives Not Designated as Hedging Instruments
As of each of March 31, 2024 and December 31, 2023, the Company had no derivatives that were not designated as qualifying hedging relationships.
Tabular Disclosure of Offsetting Derivatives
The table below details a gross presentation, the effects of offsetting and a net presentation of the Company’s derivatives as of March 31, 2024 and December 31, 2023 (in thousands). The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value.
Offsetting of Derivative Assets and Liabilities
Gross Amounts of Recognized Assets Gross Amounts of Recognized Liabilities Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts of Assets Presented in the Consolidated Balance Sheets Net Amounts of Liabilities Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral Received Net Amount
March 31, 2024 $ —  $ (45) $ —  $ —  $ (45) $ —  $ —  $ (45)
December 31, 2023 $ —  $ (264) $ —  $ —  $ (264) $ —  $ —  $ (264)