Derivative Financial Instruments

12 Months Ended

Dec. 31, 2013

Derivative Financial Instruments

10. Derivative Financial Instruments

During the year ended December 31, 2013, Armada Hoffler entered into four LIBOR interest rate cap agreements on an aggregate notional amount of $121.5 million with strike prices ranging between 1.50% and 3.50% for collective premiums totaling $0.3 million. All four interest rate cap agreements expire in 2016.

Armada Hoffler’s derivatives comprised the following as of December 31, 2013 and 2012 (in thousands):

	December 31,
	2013							2012
	Notional Amount		Fair Value					Notional Amount		Fair Value
			Asset		Liability					Asset		Liability
Pay fixed interest rate swaps	$	705	$	—	$	(16	)	$	11,721	$	—	$	(239	)
Interest rate caps		130,672		102		—			9,356		9		—
Total	$	131,377	$	102	$	(16	)	$	21,077	$	9	$	(239	)

The changes in the fair value of Armada Hoffler’s derivatives during each of the three years ended December 31, 2013 was as follows (in thousands):

	Years Ended December 31,
	2013			2012			2011
Pay fixed interest rate swaps	$	152		$	445		$	436
Interest rate caps		(164	)		(37	)		—
Other (expense) income	$	(12	)	$	408		$	436

Subsequent to December 31, 2013

On March 14, 2014, the Company executed a LIBOR interest rate cap agreement on a notional amount of $50.0 million and a strike price of 1.25% for a premium of $0.4 million. The interest rate cap agreement expires on March 1, 2017.