DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

Information about our derivative financial instruments at March 31, 2018 and December 31, 2017 is as follows (dollars in thousands):



	March 31, 2018						December 31, 2017
	Number of Instruments	Notional Amount		Fair Value			Number of Instruments	Notional Amount		Fair Value
Interest rate swaps (asset)	2	$	200,000	$	5,084		2	$	200,000	$	1,509
Interest rate swaps (liability)	1	75,000		(21		)	1	75,000		(190		)
	3	$	275,000	$	5,063		3	$	275,000	$	1,319

Our interest rate swaps have been designated as cash flow hedges and are valued using a market approach, which is a Level 2 valuation technique. At March 31, 2018 and December 31, 2017, two of our interest rate swaps were in an asset position and one was in a liability position. We are not required to post any collateral related to these agreements and are not in breach of any financial provisions of the agreements.

During 2017, we adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. Accordingly, beginning in 2017, changes in the fair value of the hedging instruments are recorded in Other comprehensive income. Amounts deferred in Other comprehensive income are reclassified to interest expense in our Condensed Consolidated Statements of Operations in the period in which the hedged item affects earnings. In the next twelve months, we estimate that $0.3 million will be reclassified from Other Comprehensive Income and recorded as a reduction to interest expense.

The table below details the location in the financial statements of the gain or loss recognized on derivative financial instruments designated as cash flow hedges (in thousands):



	For the Three Months Ended March 31,
	2018			2017
Gain recognized in accumulated other comprehensive income on derivative financial instruments	$	3,537		$	112
Loss reclassified from accumulated other comprehensive income to interest expense	$	(207	)	$	(237	)