DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

Information about our derivative financial instruments at June 30, 2018 and December 31, 2017 is as follows (dollars in thousands):



			Notional Amount					Fair Value
Contract date	Effective Date	Expiration Date	June 30, 2018			December 31, 2017		June 30, 2018			December 31, 2017
September 5, 2013	January 2, 2014	October 1, 2018	$	75,000	⁽¹⁾	$	75,000	$	14		$	(190	)
October 2, 2017	January 29, 2018	January 31, 2023	100,000		⁽²⁾	100,000		3,231			722
October 2, 2017	January 29, 2018	January 31, 2023	100,000		⁽²⁾	100,000		3,299			787
June 11, 2018	September 28, 2018	September 30, 2024	75,000		⁽³⁾	—		(347		)	—
June 11, 2018	December 31, 2018	December 31, 2025	125,000		⁽⁴⁾	—		(772		)	—
			$	475,000		$	275,000	$	5,425		$	1,319


(1)	Interest rate swap is related to a portion of our 2016 Unsecured Credit Facility and converts LIBOR from a floating rate to an average annual fixed rate of 2.04%.


(2)	Interest rate swap partially fixes the interest rate on a portion of our variable interest rate unsecured indebtedness and converts LIBOR from a floating rate to an average annual fixed rate of 1.98%.


(3)	Interest rate swap partially fixes the interest rate on a portion of our variable interest rate unsecured indebtedness and converts LIBOR from a floating rate to an average annual fixed rate of 2.87%.


(4)	Interest rate swap partially fixes the interest rate on a portion of our variable interest rate unsecured indebtedness and converts LIBOR from a floating rate to an average annual fixed rate of 2.93%.

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 June 30, 2018, three of our interest rate swaps were in an asset position and two were in a liability position. At 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 $0.4 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 June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
Gain(loss) recognized in Accumulated other comprehensive income on derivative financial instruments	$	309		$	(22	)	$	3,846		$	90
Loss reclassified from Accumulated other comprehensive income to Interest expense	$	(53	)	$	(196	)	$	(260	)	$	(433	)