DERIVATIVE INSTRUMENTS (Notes)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

The Company purchased an interest rate cap for $6.2 million, which was effective October 10, 2014, to hedge the future payments on the first $200.0 million of variable rate borrowings for a period of time from October 10, 2014 through September 10, 2019. The primary goal of the Company’s risk management practices related to interest rate risk is to prevent changes in interest rates from adversely impacting the Company’s ability to achieve its earnings objectives. The Company does not enter into the derivatives for speculative purposes.

At inception, the interest rate cap was deemed to be highly effective in achieving offsetting cash flows attributable to the variability in the interest rate during the term of the hedge. As of December 31, 2014, the Company had over $200.0 million of variable rate borrowings and the interest rate cap was deemed to be highly effective. During the year ended December 31, 2014, the Company recorded a $1.5 million fair value adjustment related to the interest rate cap and included this amount in unrealized loss on cash flow hedge on the accompanying consolidated statements of comprehensive income. As of December 31, 2014, the fair value of the interest rate cap was $4.6 million and this amount is included in prepaid expenses, deferred financing costs and other assets on the accompanying consolidated balance sheets. Approximately $24,000 of losses, which are included in accumulated other comprehensive income, are expected to be reclassified into earnings in the next 12 months.

The following table illustrates the effect on the fair value of the interest rate cap as a result of movements in the interest rate market (dollars in thousands):

Effects of Change in Interest Rates
+50 Basis Points		-50 Basis Points			+100 Basis Points		-100 Basis Points
$	2,546	$	(2,051	)	$	5,521	$	(3,535	)