Estimated hedging losses to be reclassified from accumulated other comprehensive loss into earnings within the next twelve months

[Table of](#ia143979d54ef4089bc700f871e6b0e92_7) [Contents](#ia143979d54ef4089bc700f871e6b0e92_7)The following table summarizes the consolidated derivative positions at June 30, 2022 (dollars in thousands):

|  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |
|  | Non-designated Hedges | Cash Flow Hedges |
|  | Interest Rate Caps | Interest Rate Swaps |
| Notional balance | $ | 402,670 | $ | 150,000 |
| Weighted average interest rate (1) | 2.5  | % | N/A |
| Weighted average swapped/capped interest rate | 6.1  | % | 1.4  | % |
| Earliest maturity date | January 2024 | November 2022 |
| Latest maturity date | November 2026 | November 2022 |

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_(1)For debt hedged by interest rate caps, represents the weighted average interest rate on the hedged debt prior to any impact of the associated interest rate caps.  
As of June 30, 2022, the Company had $150,000,000 in aggregate outstanding pay fixed interest rate swap agreements that were entered into as hedges of changes in interest rates for our anticipated future debt issuance activity. At the time of the future debt issuance activity, the Company expects to cash settle the swaps and either pay or receive cash for the then current fair value. Assuming that the Company issues the debt as expected, the hedging impact from these positions will then be recognized over the life of the issued debt as a yield adjustment.  
The Company had five derivatives not designated as hedges at June 30, 2022 for which the fair value changes for the three and six months ended June 30, 2022 and 2021 were not material. The Company did not have any derivatives designated as fair value hedges as of June 30, 2022 and 2021.  
The following table summarizes the deferred losses reclassified from accumulated other comprehensive loss into earnings (dollars in thousands):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | For the three months ended |  | For the six months ended |
|  | 6/30/2022 |  | 6/30/2021 |  | 6/30/2022 |  | 6/30/2021 |
|  |  |  |  |  |  |  |  |
| Cash flow hedge losses reclassified to earnings | $ | 1,013  |  |  | $ | 2,366  |  |  | $ | 2,026  |  |  | $ | 4,733  |  |

  
The Company anticipates reclassifying approximately $4,051,000 of net hedging losses from accumulated other comprehensive loss into earnings within the next 12 months as an offset to the hedged item during this period.  
Redeemable Noncontrolling Interests  
The Company issued and has outstanding 7,500 units of limited partnership interest in a DownREIT which can be presented for cash redemption as determined by the partnership agreement. Under the DownREIT agreement, for each limited partnership unit, the limited partner is entitled to receive cash in the amount equal to the fair value of the Company's common stock on or about the date of redemption. In lieu of cash redemption, the Company may elect to exchange such units for an equal number of shares of the Company's common stock. The limited partnership units in the DownREIT are valued using the market price of the Company's common stock, a Level 1 price under the fair value hierarchy.  
Financial Instruments Not Carried at Fair Value  
Cash and Cash Equivalents  
Cash and cash equivalent balances are held with various financial institutions within accounts designed to preserve principal. The Company monitors credit ratings of these financial institutions and the concentration of cash and cash equivalent balances with any one financial institution and believes the likelihood of realizing material losses related to cash and cash equivalent balances is remote. Cash and cash equivalents are carried at their face amounts, which reasonably approximate their fair values and are Level 1 within the fair value hierarchy.  
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