THE NHP FOUNDATION AND ITS AFFILIATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED YEARS ENDED DECEMBER 31, 2019 and 2018
Preservation pays a fixed interest rate of 3.81% per annum and receives a floating rate based on the USD-SIFMA Municipal Swap Index (1.61% and 1.71% at December 31, 2019 and 2018, respectively). This swap matures on December 1, 2025. Under the St. Luke’s Preservation contract, St. Luke’s Preservation pays a fixed interest rate of 3.68% per annum and receives a floating interest rate based on the USD-SIFMA Municipal Swap Index (1.61% and 1.71% at December 31, 2019 and 2018, respectively). This swap contract matures on December 1, 2026. The fair value of the interest rate swap liability represents an estimate of the amount that the affiliated entities would have to pay the other party to the swap contracts to cancel the swaps as of December 31, 2019 and 2018 and is based on current interest rates for similar contracts. The recorded amount of the liability or asset representing the fair value of the swap contracts will vary from year-to-year with fluctuations in the interest rates and the swaps move closer to their maturity dates. The change in the fair value of the interest rate swaps is recorded in interest expense on the consolidated statement of activities and statement of functional expenses for the years ended December 31, 2019 and 2018. At December 31, 2019 and 2018, the interest rate swap contracts represent a liability of $2,093,365 and $1,734,349, which is included in other liabilities on the consolidated statements of financial position. NOTE 12 - LEASES NHPF leased office space under a standard commercial operating lease extending through October 31, 2018 for its main office in New York, NY. The lease agreement was subsequently amended to reflect new office space and the lease was extended through November 1, 2028. NHPF leases office space under a standard commercial operating leases extending through December 31, 2026 for its Washington, DC office. Rent expense for the years ended December 31, 2019 and 2018 totaled $1,324,382 and $945,065, respectively, which is net of all sublease payments and rent concessions and is included in facilities and maintenance in the accompanying statements of functional expenses.
Future minimum lease commitments at December 31, 2019, are as follows:
2020 2021 2022 2023 2024
$
975,025 998,066
1,053,757 1,089,327 1,115,024 2,777,234
Thereafter
$
8,008,433
NOTE 13 - FAIR VALUE Accounting standards require disclosure of fair value information about financial instruments when it is practicable to estimate that value. Mortgage and other notes payable that were issued in conjunction with a regulatory agreement with various mortgage lenders, whereby the project receives
- 36 -
Powered by FlippingBook