From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks.

Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset or liability to a particular risk, such as interest rate risk, are considered fair value hedges. Our fair value interest rate swaps with notional amounts totaling $14.3 million matured during the first quarter of 2018. A $50.0 million notional fair value swap associated with our senior notes was terminated in December 2017 at a cost of $0.4 million. The termination cost has been recorded as a reduction to the carrying value of our long-term debt. The unamortized balance of approximately $0.2 million will be expensed in 2019.

Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. As of December 31, 2018, we have four interest rate swaps associated with $207.5 million of term loan debt. The cash flow hedges convert variable rates ranging from three-month and one-month LIBOR plus 1.90% to 2.15%, to fixed rates ranging from 3.88% to 4.82%. Our cash flow hedges are expected to be highly effective in achieving offsetting cash flows attributable to the hedged interest rate risk through the term of the hedge. As of December 31, 2018, the amount of net losses expected to be reclassified into earnings in the next 12 months is approximately $0.2 million.

In January 2019, we entered into a $150.0 million interest rate swap associated with the refinance of our Senior Notes. This cash flow hedge converted a variable rate of one-month LIBOR plus 1.85% to a fixed rate of 4.56%.

Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, commodity price movements or other identified risks, but do not meet the strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly into income. In April 2017, we entered into a lumber price swap to fix the price on a total of 36 million board feet (MMBF) of southern yellow pine. The lumber price swap expired on December 31, 2017, resulting in a realized gain of $1.1 million for the year then ended.

The fair values of our cash flow and fair value derivative instruments on our Consolidated Balance Sheets as of December 31 are as follows:

		Asset Derivatives					Liability Derivatives
(Dollars in thousands)	Location	2018		2017		Location	2018		2017
Derivatives designated in fair value hedging relationships:
Interest rate contracts	Other assets, current	$	—	$	13		$	—	$	—
Interest rate contracts	Other assets, non-current		—		—	Other long-term obligations		—		—
		$	—	$	13		$	—	$	—

Derivatives designated in cash flow hedging relationships:
Interest rate contracts	Other assets, non-current	$	1,510	$	1,156	Other long-term obligations	$	2,888	$	—

The following table details the effect of derivatives on our Consolidated Statements of Income:


(Dollars in thousands)	Location	2018			2017			2016
Derivatives designated in fair value hedging relationships:
Interest rate contracts
Realized gain (loss) on interest rate contracts¹	Interest expense	$	(191	)	$	413		$	805

Derivatives designated in cash flow hedging relationships:
Interest rate contracts
Gain (loss) recognized in other comprehensive income, net of tax		$	(3,062	)	$	(145	)	$	916
Loss reclassified from accumulated other comprehensive income¹	Interest expense	$	(647	)	$	(149	)	$	(215	)

Derivatives not designated as hedging instruments:
Lumber price contracts
Realized gain on lumber price swap	Gain on lumber price swap	$	—		$	1,088		$	—

Interest expense, net		$	35,227		$	27,049		$	28,941

Realized gains and losses on interest rate contracts consist of net cash received or paid and interest accruals on the interest rate swaps during the periods. Net cash received or paid is included in the supplemental cash flow information within interest, net of amounts capitalized in the Consolidated Statements of Cash Flows.