Interest Rate Swap |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest Rate Swap | NOTE 13 – INTEREST RATE SWAP The Company assesses interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely affect expected future cash flows and by evaluating hedging opportunities. The Company entered an interest rate swap with Rocky Mountain Bank, now known as UMB Bank (“UMB”) on March 12, 2020 to reduce risk related to variable-rate debt from the term loan, which was subject to changes in market rates of interest as discussed in “Note 15 – Long-Term Debt” included in this Annual Report on Form 10-K. The interest rate swap was designated as a cash flow hedge. The Company recorded its corresponding derivative asset on a gross basis in Other noncurrent assets at fair value on the Consolidated Balance Sheets. Each month, the Company made interest payments to UMB under its loan agreement. Effective July 1, 2023, LIBOR was replaced by 1-month CME Term Secured Overnight Financing Rate (“SOFR”) plus 0.11448% tenor spread adjustment plus the 2.5% contractual SOFR margin then in effect with respect to the term loan. At the end of each calendar month, the Company receives or makes payments on the interest rate swap difference, if any, based on the received interest rate set forth in the table below. Interest payments on the Company’s term loan and payments received or made on the interest rate swap were reported net on the Consolidated Statements of Operations as interest expense. The Company accounted for the interest rate swap as a cash flow hedge for accounting purposes under GAAP. The Company had the following interest rate swap designated as a cash flow hedge (dollars in thousands) for the year ended December 31, 2024:
Concurrent with the October 2025 Refinancing, refer to “Note 15 – Long-Term Debt,” a portion of the proceeds from the refinancing transaction were used to pay off the amount outstanding under the Company’s prior variable-rate debt with UMB for the construction of the Company’s airplane hangars, dated September 30, 2019. As such, the remaining obligation to make any further payments under the swap agreement was terminated. Fair value adjustments were historically recorded within Other comprehensive income. Upon termination of the interest rate swap in October 2025, the life-to-date accumulated gain of $0.7 million related to the interest rate swap was reclassified from Accumulated other comprehensive income to Other income on the Consolidated Statements of Operations for the year ended December 31, 2025.
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