Derivative Instruments

3 Months Ended

Mar. 31, 2019

Derivative Instrument Detail [Abstract]

Derivative Instruments

NOTE 10. DERIVATIVE INSTRUMENTS

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. 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 March 31, 2019, we have five interest rate swaps associated with $357.5 million of term loan debt. The cash flow hedges convert variable rates ranging from three-month and one-month LIBOR plus 1.85% 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. At March 31, 2019, the amount of net losses expected to be reclassified into earnings in the next 12 months is approximately $1.1 million.

The following table presents the gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets:

		Asset Derivatives					Liability Derivatives
(in thousands)	Location	March 31, 2019		December 31, 2018		Location	March 31, 2019		December 31, 2018
Derivatives designated in cash flow hedging relationships:
Interest rate contracts	Other assets, non-current	$	955	$	1,510	Other long-term obligations	$	11,210	$	2,888

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

		Three Months Ended March 31,
(in thousands)	Location	2019			2018
Derivatives designated in fair value hedging relationships:
Interest rate contracts
Realized loss on interest rate contracts1	Interest expense	$	(18	)	$	(36	)
Loss on hedged debt basis adjustment included in debt extinguishment			(165	)		-
		$	(183	)	$	(36	)
Derivatives designated in cash flow hedging relationships:
Interest rate contracts
Loss recognized in other comprehensive (loss) income, net of tax		$	(8,594	)	$	(992	)
Loss reclassified from accumulated other comprehensive (loss) income1	Interest expense	$	(81	)	$	(2	)
Interest expense, net		$	5,464		$	5,660

¹ Realized gain (loss) on hedging instruments consist of net cash settlements and interest accruals on interest rate swaps during the periods. Net cash settlements are included in the supplemental cash flow information within interest, net of amounts capitalized in the Condensed Consolidated Statements of Cash Flows.