Derivative Financial Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments:

Derivative financial instruments are used within our overall risk management program to manage certain interest rate and foreign currency risks. By utilizing a derivative instrument to hedge exposure to LIBOR rate changes, we are exposed to counterparty credit risk, in particular the failure of the counterparty to perform under the terms of the derivative contract. To mitigate this risk, hedging instruments are placed with a counterparty that we believe poses minimal credit risk. We do not use derivative financial instruments for trading purposes.

We had four interest rate swap agreements that matured on December 31, 2020 and converted $500 million of variable-rate debt to a fixed rate of 4.39%. We have four additional interest rate swap agreements that convert the same notional amount to a fixed rate of 4.63% for the period December 31, 2020 through December 31, 2023. None of the interest rate swap agreements are designated as hedging instruments. The fair value of our swap portfolio for the periods presented were as follows:

(In thousands)	Balance Sheet Location	December 31, 2020		December 31, 2019
Derivatives not designated as hedging instruments:
Interest rate swaps	Other accrued liabilities	$	—	$	(5,129)
	Derivative Liability	(39,086)		(18,108)
		$	(39,086)	$	(23,237)

Instruments that do not qualify for hedge accounting or were de-designated are prospectively adjusted to fair value each reporting period through "Net effect of swaps" within the consolidated statements of operations and comprehensive (loss) income. Previously existing interest rate swap agreements were de-designated, and amounts previously recorded in AOCI were amortized into earnings through an original December 31, 2018 maturity date. Therefore, all losses in AOCI related to effective cash flow hedge contracts prior to de-designation were reclassified to earnings as of December 31, 2018.

The (gains) losses recognized in net (loss) income on derivatives not designated as cash flow hedges were recorded in "Net effect of swaps" for the periods presented as follows:

	Years Ended December 31,
(In thousands)	2020		2019		2018
Change in fair market value	$	15,849	$	16,532	$	(2,017)
Amortization of amounts in AOCI	—		—		9,459
Net effect of swaps	$	15,849	$	16,532	$	7,442