v3.25.2
FAIR VALUE MEASUREMENTS
 6 Months Ended
Jun. 30, 2025
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, accrued liabilities, and derivative financial instruments 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.

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

Derivative Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

—

 

 

$

11,838

 

 

$

—

 

 

$

11,838

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

—

 

 

$

5,404

 

 

$

—

 

 

$

5,404

 

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Assets

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

—

 

 

$

20,733

 

 

$

—

 

 

$

20,733

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

—

 

 

$

473

 

 

$

—

 

 

$

473

 

 

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, 2025 and December 31, 2024 were classified as Level 2 of the fair value hierarchy.

The following table presents the carrying value and fair value of certain financial liabilities that are recorded on our Consolidated Balance Sheets.

Fair Value of Certain Financial Liabilities

 

 

June 30, 2025

 

 

December 31, 2024

 

(In thousands)

 

Carrying Value(1)

 

 

Fair Value

 

 

Carrying Value(1)

 

 

Fair Value

 

Term loan due November 2025

 

$

—

 

 

$

—

 

 

$

150,000

 

 

$

149,913

 

Term loan due November 2026

 

 

100,000

 

 

 

100,072

 

 

 

100,000

 

 

 

100,112

 

Term loan due February 2027

 

 

90,000

 

 

 

89,924

 

 

 

90,000

 

 

 

89,902

 

Term loan due March 2027

 

 

85,000

 

 

 

85,781

 

 

 

85,000

 

 

 

86,027

 

Term loan due February 2028

 

 

90,000

 

 

 

90,626

 

 

 

90,000

 

 

 

90,744

 

Term loan due February 2029

 

 

225,000

 

 

 

224,496

 

 

 

—

 

 

 

—

 

Senior fixed note due December 2026

 

 

50,000

 

 

 

49,844

 

 

 

50,000

 

 

 

49,432

 

Senior fixed note due June 2027

 

 

75,000

 

 

 

75,058

 

 

 

75,000

 

 

 

74,248

 

Senior fixed note due December 2028

 

 

50,000

 

 

 

49,849

 

 

 

50,000

 

 

 

48,788

 

Senior fixed note due April 2029

 

 

50,000

 

 

 

46,516

 

 

 

50,000

 

 

 

45,003

 

Senior fixed note due June 2029

 

 

50,000

 

 

 

47,033

 

 

 

50,000

 

 

 

45,566

 

Senior fixed note due April 2030

 

 

75,000

 

 

 

69,550

 

 

 

75,000

 

 

 

67,137

 

Senior fixed note due March 2031

 

 

50,000

 

 

 

44,437

 

 

 

50,000

 

 

 

42,733

 

Senior fixed note due April 2031

 

 

50,000

 

 

 

44,897

 

 

 

50,000

 

 

 

43,172

 

Senior fixed note due March 2032

 

 

75,000

 

 

 

66,515

 

 

 

75,000

 

 

 

63,965

 

Senior fixed note due July 2033

 

 

100,000

 

 

 

107,916

 

 

 

100,000

 

 

 

105,308

 

Revolving credit facility due February 2029

 

 

—

 

 

 

—

 

 

 

5,000

 

 

 

4,997

 

 

(1)
Carrying values exclude deferred financing costs

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.