Derivatives

3 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

5. Derivatives

We manage exposure to changes in market interest rates. Our use of derivative instruments is limited to highly effective interest rate swaps to hedge the risk of changes in cash flows (future interest payments) attributable to changes in LIBOR swap rates with the designated benchmark interest rate being hedged on certain of our LIBOR indexed variable rate debt and a variable rate operating lease. The interest rate swaps effectively fix our interest payments on certain LIBOR indexed variable rate debt. We monitor our positions and the credit ratings of our counterparties and do not currently anticipate non-performance by the counterparties. Interest rate swap agreements are not entered into for trading purposes. The following is a summary of our interest rate swap agreements as of June 30, 2019:

The derivative fair values reflected in prepaid expense and accounts payable and accrued expenses in the balance sheet were as follows:

		Derivatives Fair Values as of
		June 30, 2019		March 31, 2019
		(Unaudited)
		(In thousands)
Interest rate contracts designated as hedging instruments:
Assets	$	64	$	139
Liabilities	$	1,181	$	0
Notional amount	$	249,625	$	22,792

		The Effect of Interest Rate Contracts on the Statements of Operations for the Quarters Ended
		June 30, 2019		June 30, 2018
		(Unaudited)
		(In thousands)
Gain recognized in AOCI on interest rate contracts	$	1,253	$	(560)
Loss reclassified from AOCI into income	$	3	$	516

Gains or losses recognized in income on derivatives are recorded as interest expense in the statements of operations. During the first quarter of fiscal 2020, we recognized a decrease in the fair value of our cash flow hedges of $0.9 million, net of taxes. No (gains) or losses were reclassified from AOCI to interest expense during the first quarter of fiscal 2020. As of June 30, 2019, we expect to reclassify $1.7 million of net gains on interest rate contracts from AOCI to earnings as interest expense over the next twelve months.