Derivative Instruments

3 Months Ended

Mar. 31, 2020

Derivative Instruments And Hedging Activities Disclosure [Abstract]

7.	Derivative Instruments

Due to our variable-rate indebtedness, we are exposed to fluctuations in interest rates. We use fixed interest rate swaps to manage this exposure. No components of our hedging instruments were excluded from the assessment of hedge effectiveness. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional value. The gain or loss on the interest rate swap is recorded in accumulated other comprehensive loss and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

All of our derivative financial instruments are designated as hedging instruments as of March 31, 2020 and December 31, 2019. The following table summarizes our interest rate swap agreements at March 31, 2020 and December 31, 2019:

Interest Rate Swap Agreements	Maturity Date	Rate	Notional Value (in thousands)		Debt Instrument Hedged	Percentage of Term Loan Outstanding
Designated as cash flow hedge	June 1, 2023	2.81%	$	100,000	Term Loan	6%
Designated as cash flow hedge	June 1, 2025	2.87%		200,000	Term Loan	13%
Designated as cash flow hedge	June 1, 2024	2.81%		50,000	Term Loan	3%
Designated as cash flow hedge	June 1, 2025	2.85%		50,000	Term Loan	3%
Designated as cash flow hedge	June 1, 2025	2.87%		50,000	Term Loan	3%
			$	450,000		28%

We expect $8.3 million to be reclassified from accumulated other comprehensive loss into interest expense within the next twelve months.

The following table summarizes the fair values and the respective classification in the Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019. The net amount of derivative liabilities can be reconciled to the tabular disclosure of fair value in Note 8:

		Liabilities
		March 31, 2020			December 31, 2019
Interest Rate Swap Agreements	Balance Sheet Classification	(in thousands)
Designated as cash flow hedges	Other non-current liabilities	$	(24,159	)	$	(13,420	)
Designated as cash flow hedges	Accrued expenses		(10,477	)		(7,827	)
		$	(34,636	)	$	(21,247	)

The tables below presents the effect of cash flow hedge accounting on accumulated other comprehensive loss as of March 31, 2020 and 2019:

	Amount of Loss Recognized in Other Comprehensive Loss
	Three Months Ended March 31,
	2020		2019
Derivatives in Hedging Relationships	(in thousands)
Designated as Cash Flow Hedges
Interest rate swap agreements	$	14,583	$	8,031

		Amount of Loss Reclassified from Accumulated Other Comprehensive Loss
	Location of Loss	Three Months Ended March 31,
Derivatives in	Recognized on	2020		2019
Hedging Relationships	Derivative	(in thousands)
Designated as Cash Flow Hedges
Interest rate swap agreements	Interest expense, net	$	1,263	$	190

The table below presents the effect of our derivative financial instruments on the Condensed Consolidated Statements of Loss in the three months ended March 31, 2020 and 2019:

	Location of Loss on Derivative
	Interest expense, net
	Three Months Ended March 31,
	2020		2019
	(in thousands)
Total Interest Expense presented in the Statements of Loss
in which the effects of cash flow hedges are recorded	$	23,583	$	25,603
Effects of cash flow hedging:
Loss on Hedging Relationships
Interest rate swap agreements
Amount of loss reclassified from accumulated other comprehensive loss to earnings	$	1,263	$	190

All of our derivative financial instruments are designated as hedging instruments for the three months ended March 31, 2020 and 2019.

The filing of the Chapter 11 Cases constituted an event of default under the agreements governing the interest rate swaps, resulting in the acceleration of our outstanding indebtedness thereunder. See Note 21 to our condensed consolidated financial statements for further discussion.