NOTE M—DERIVATIVE INSTRUMENTS

Cash Flow Hedges of Interest Rate Risk

We enter into interest rate cap agreements in connection with our term loan facility (the "Term Loan") to add stability to interest expense and to manage our exposure to interest rate movements. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an upfront premium.

The following table summarizes the fair value of our derivative instruments (in thousands, except contract/notional amount). See Note L - Fair Value Accounting for additional disclosures regarding the estimated fair values of our derivative instruments at June 30, 2018 and December 31, 2017.



		June 30, 2018								December 31, 2017
	Maturity Date	Contract/Notional Amount			Carrying Amount		Fair Value		Maturity Date	Contract/Notional Amount			Carrying Amount		Fair Value
Interest rate cap agreement⁽¹⁾	2019		$249	million	$	—	$	—	2019		$249	million	$	—	$	—

⁽¹⁾Agreements limit the LIBOR floating interest rate base to 4%.

We have designated these contracts 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. During the six months ended June 30, 2018, we had no material ineffectiveness for such contract. During the six months ended June 30, 2017, we had no ineffectiveness for such contract.

The following table summarizes the effect of derivatives instruments (in thousands) on our income statements and our consolidated statements of comprehensive income for the three months ended June 30, 2018 and 2017.



	June 30, 2018			June 30, 2017
Deferred losses from derivatives in OCI, beginning of period	$	(76	)	$	(32	)
Loss recognized in OCI from derivative instruments	—			(39		)
Gain reclassified from Accumulated OCI	6			—
Deferred losses from derivatives in OCI, end of period	$	(70	)	$	(71	)