Derivatives and Hedging Activities	12 Months Ended
Dec. 31, 2018
Derivatives and Hedging Activities
Derivatives and Hedging Activities	9. Derivatives and Hedging Activities On December 6, 2018, we entered into a $175 million forward starting seven-year interest rate swap agreement, effective upon issuance of future indebtedness within the terms of the agreement, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $175 million of fixed or floating rate debt and effectively fixes the interest rate at approximately 2.91% per annum plus an applicable spread determined at the time of the future debt issuance. On April 19, 2018, we entered into a $75 million forward starting five-year interest rate swap agreement, effective May 5, 2018, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $75 million of one-month LIBOR variable rate debt and effectively fixes the interest rate at approximately 4.12% per annum. On April 21, 2017, we terminated $50 million of our previously existing $100 million five-year interest rate swap agreement that reduces our exposure to variability in cash flows relating to interest payments based on one-month LIBOR variable rate debt, resulting in a remaining $50 million interest rate swap effective through January 31, 2019, at approximately 2.88% per annum and 2.98% per annum for the years ending December 31, 2018, and 2017, respectively. Effective January 31, 2019, the interest rate swap was terminated. On April 9, 2015, we entered into a $75 million forward starting five-year interest rate swap agreement, effective May 5, 2015, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $75 million of one-month LIBOR variable rate debt and effectively fixes the interest rate at approximately 2.83% and 2.93% per annum as of December 31, 2018, and 2017, respectively. All of these interest rate swap agreements were designated as effective cash flow hedges of interest rate risk for hedge accounting. Risk Management Objective of Using Derivatives We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings. Cash Flow Hedges of Interest Rate Risk Our objectives in using interest rate derivatives are to reduce variability in interest expense and to manage our exposure to adverse interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated and that qualify as effective cash flow hedges is recorded in accumulated other comprehensive income or loss on the consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The amounts recorded in other comprehensive income or loss related to the unrealized gain or loss on derivative contracts were a loss of $3.7 million, a gain of $0.6 million, and a loss of $1.1 million for the years ended December 31, 2018, 2017, and 2016, respectively. The amounts reclassified from other comprehensive income (loss) to interest expense on the consolidated statements of operations were ($0.3) million, $0.6 million, and $1.7 million for the years ended December 31, 2018, 2017, and 2016, respectively. Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded were $35.5 million, $24.1 million, and $12.6 million for the years ended December 31, 2018, 2017, and 2016, respectively. Amounts reported in accumulated other comprehensive income or loss related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the subsequent twelve months, beginning January 1, 2019, we estimate that $0.5 million will be reclassified as an increase to interest expense. Derivatives are recorded at fair value in our consolidated balance sheets in other assets or unearned revenue, prepaid rent and other liabilities, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and disclosure. We had $4.1 million and zero in derivative liabilities recognized in unearned revenue, prepaid rent and other liabilities in our consolidated balance sheets as of December 31, 2018, and 2017, respectively. We also had $1.1 million derivative assets recognized in other assets in our consolidated balance sheet as of both December 31, 2018, and 2017.

9. Derivatives and Hedging Activities

On December 6, 2018, we entered into a $175 million forward starting seven-year interest rate swap agreement, effective upon issuance of future indebtedness within the terms of the agreement, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $175 million of fixed or floating rate debt and effectively fixes the interest rate at approximately 2.91% per annum plus an applicable spread determined at the time of the future debt issuance.

On April 19, 2018, we entered into a $75 million forward starting five-year interest rate swap agreement, effective May 5, 2018, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $75 million of one-month LIBOR variable rate debt and effectively fixes the interest rate at approximately 4.12% per annum.

On April 21, 2017, we terminated $50 million of our previously existing $100 million five-year interest rate swap agreement that reduces our exposure to variability in cash flows relating to interest payments based on one-month LIBOR variable rate debt, resulting in a remaining $50 million interest rate swap effective through January 31, 2019, at approximately 2.88% per annum and 2.98% per annum for the years ending December 31, 2018, and 2017, respectively. Effective January 31, 2019, the interest rate swap was terminated.

On April 9, 2015, we entered into a $75 million forward starting five-year interest rate swap agreement, effective May 5, 2015, to protect against adverse fluctuation in interest rates. The swap reduces our exposure to variability in cash flows relating to interest payments on $75 million of one-month LIBOR variable rate debt and effectively fixes the interest rate at approximately 2.83% and 2.93% per annum as of December 31, 2018, and 2017, respectively. All of these interest rate swap agreements were designated as effective cash flow hedges of interest rate risk for hedge accounting.

Risk Management Objective of Using Derivatives

We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we enter into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known or uncertain cash amounts, the value of which are determined by interest rates. Our derivative financial instruments are used to manage differences in the amount, timing, and duration of our known or expected cash receipts and our known or expected cash payments principally related to our investments and borrowings.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to reduce variability in interest expense and to manage our exposure to adverse interest rate movements. To accomplish this objective, we primarily use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The changes in the fair value of derivatives designated and that qualify as effective cash flow hedges is recorded in accumulated other comprehensive income or loss on the consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The amounts recorded in other comprehensive income or loss related to the unrealized gain or loss on derivative contracts were a loss of $3.7 million, a gain of $0.6 million, and a loss of $1.1 million for the years ended December 31, 2018, 2017, and 2016, respectively. The amounts reclassified from other comprehensive income (loss) to interest expense on the consolidated statements of operations were ($0.3) million, $0.6 million, and $1.7 million for the years ended December 31, 2018, 2017, and 2016, respectively. Total interest expense presented in the consolidated statements of operations in which the effects of cash flow hedges are recorded were $35.5 million, $24.1 million, and $12.6 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Amounts reported in accumulated other comprehensive income or loss related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the subsequent twelve months, beginning January 1, 2019, we estimate that $0.5 million will be reclassified as an increase to interest expense.

Derivatives are recorded at fair value in our consolidated balance sheets in other assets or unearned revenue, prepaid rent and other liabilities, as applicable. We do not net our derivative position by counterparty for purposes of balance sheet presentation and disclosure. We had $4.1 million and zero in derivative liabilities recognized in unearned revenue, prepaid rent and other liabilities in our consolidated balance sheets as of December 31, 2018, and 2017, respectively. We also had $1.1 million derivative assets recognized in other assets in our consolidated balance sheet as of both December 31, 2018, and 2017.