Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2017

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

6.    Accumulated Other Comprehensive Loss

The following table presents the components of comprehensive income (in thousands):

	Three Months Ended  March 31,
	2017		2016
Net income	$	4,620	$	4,066
Mark to market of foreign exchange hedges		49		—
Deferred income tax expense		(18)		—
Comprehensive income	$	4,651	$	4,066

In November 2016, to hedge against potential losses due to changes in the Euro to U.S. Dollar exchange rates, the Company entered into foreign exchange (“FX”) hedges with Wells Fargo Bank, N.A. as the counterparty to the hedges to fix the exchange rate for approximately 5.5 million Euros in connection with a contractual obligation related to the St. Clair kiln project.  The Company will be exposed to credit losses in the event of non-performance by the counterparty to the FX hedges.  The FX hedges have been effective as defined under applicable accounting rules.  Therefore, changes in fair value of the FX hedges are reflected in comprehensive income.  Due to the strengthening of the U.S. Dollar, compared to the Euro, in the period since the Company entered into the FX hedges, the fair value of the FX hedges resulted in a liability of $303 thousand and $352 thousand at March 31, 2017 and December 31, 2016, respectively, which is included in accrued expenses ($265 thousand and $309 thousand, at March 31, 2017 and December 31, 2016, respectively) and other liabilities ($38 thousand and $43 thousand, at March 31, 2017 and December 31, 2016, respectively).