Derivatives

During the three months ended March 31, 2017, the Company entered into four interest rate swap agreements with a combined notional amount of $300.0 million to help mitigate interest rate risk related to the variable-rate Term Loan Facility. The swap agreements expire at various dates from February 2020 through March 2022 and are accounted for as cash flow hedges. Gains or losses resulting from changes in the fair value of the swaps are recorded in other comprehensive income to the extent that the swaps are effective as hedges. Gains and losses resulting from changes in the fair value applicable to the ineffective portion, if any, are reflected in income. Gains and losses recorded in other comprehensive income are reclassified into and recognized in income when the interest expense on the Term Loan Facility is recognized.

On June 29, 2017, the Company removed the interest rate floor component of the interest-rate swaps to align the swaps with the Term Loan Facility terms after the modification of the Term Loan Facility in March 2017 with TLB Amendment No. 1. In connection with the modification of the swaps’ terms, the Company received cash proceeds of $0.5 million. During the three and nine months ended June 30, 2017, the Company recognized approximately $0.6 million of interest expense related to ineffectiveness of the interest-rate swaps prior to June 29, 2017. The interest rate swaps continue to be accounted for as cash flow hedges and there was no material ineffectiveness related to the swaps after the modification of the terms described above.

Derivative assets and liabilities at June 30, 2017 and September 30, 2016 consisted of the following:



	Recorded to	June 30, 2017		September 30, 2016
Long-term derivative asset	Other non-current assets	$	0.1	$	—
Short-term derivative liability	Accrued expenses and other liabilities	$	1.5	$	—
Long-term derivative liability	Other non-current liabilities	$	0.4	$	—
Other Comprehensive Income/Loss	Accumulated other comprehensive loss	$	0.4	$	—

Prior to the Business Combination, the Predecessor was a party to interest rate swap agreements to mitigate the exposure to interest rate risk related to the variable-rate Predecessor Term Loan Facility. The agreements had varying expiration dates through March 2017, and were accounted for as cash flow hedges. Accordingly, gains or losses resulting from changes in the fair value of the swaps were recorded in other comprehensive income to the extent that the swaps are effective as hedges. Gains and losses resulting from changes in the fair value applicable to the ineffective portion, if any, were reflected in income. Gains and losses recorded in other comprehensive income were reclassified into and recognized in income when the interest expense on the Predecessor Term Loan Facility was recognized.

Gains and losses (net of reclassifications into income, including any ineffective portion) related to the interest rate swaps of the Company and the Predecessor were as follows:



		Successor						Predecessor
	Recorded to	Three Months Ended June 30, 2017			Nine Months Ended June 30, 2017			April 1 Through June 8, 2016		October 1, 2015 Through June 8, 2016
Realized loss	Interest expense	$	1.2		$	1.5		$	0.1	$	0.3
Unrealized gain (loss), net of tax	Other comprehensive income(loss)	$	(0.7	)	$	(0.4	)	$	0.1	$	0.3

Unrealized losses related to the interest-rate swaps for the three and nine months ended June 30, 2017 were net of a tax benefit impact of $0.3 million. There was no material tax impact for the Predecessor periods presented. At June 30, 2017, $1.3 million in unrealized losses were expected to be realized and recognized in income within the next twelve months.

See Note 9 for additional information on the fair value of the Predecessor’s derivative instruments.