Derivative Instruments

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS

NOTE M—DERIVATIVE INSTRUMENTS

Cash Flow Hedges of Interest Rate Risk

We enter into interest rate swap agreements in connection with our Term Loan to add stability to interest expense and to manage our exposure to interest rate movements. The derivative instruments are recorded on the balance sheet within other assets or liabilities at their fair values. As of March 31, 2020, the fair values of our two interest rate swaps were a liability of $2.6 million and a liability of $1.2 million and were classified within accounts payable and accrued liabilities on our balance sheets. At December 31, 2019, the fair values of our two interest rate swaps were a liability of $2.8 million and a liability of $1.3 million and were classified within accounts payable and accrued liabilities on our balance sheets. We have designated the interest rate swap agreements as qualified cash flow hedges. Accordingly, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and recognized in earnings in the same period or periods during which the hedged transaction affects earnings.

The following table summarizes the fair value of our derivative instruments (in thousands, except contract/notional amount). See Note L - Fair Value Accounting for more information regarding the estimated fair values of our derivative instruments at March 31, 2020 and December 31, 2019.

	March 31, 2020										December 31, 2019
	Maturity Date	Contract/Notional Amount			Carrying Amount			Fair Value			Maturity Date	Contract/Notional Amount			Carrying Amount			Fair Value
LIBOR(1) interest rate swap agreement	2020		$440	million	$	(2,576	)	$	(2,576	)	2020		$440	million	$	(2,768	)	$	(2,768	)
LIBOR(1) interest rate swap agreement	2020		$200	million	$	(1,172	)	$	(1,172	)	2020		$200	million	$	(1,259	)	$	(1,259	)

⁽¹⁾ Agreements fix the LIBOR interest rate base to 2.74%.

During the three months ended March 31, 2020, we had no ineffectiveness for the interest rate swap derivatives.

The following table summarizes the effect of derivative instruments (in thousands) on our income statements and our consolidated statements of comprehensive income for the three months ended March 31, 2020 and 2019:

	Three Months Ended   March 31,
	2020			2019
Deferred losses from derivatives in OCI, beginning of period	$	(3,053	)	$	(1,621	)
Gain (loss) recognized in OCI from derivative instruments	211			(940		)
Deferred losses from derivatives in OCI, end of period	$	(2,842	)	$	(2,561	)