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Derivative Financial Instruments
 3 Months Ended
Mar. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments
Derivative Financial Instruments

We utilize interest rate swap agreements for risk management purposes to reduce the impact of changes in interest rates on our variable rate debt.  On the date we enter into an interest rate swap, the derivative is designated as a hedge against the variability of cash flows that are to be paid in connection with a recognized liability.  Subsequent changes in the fair value of a derivative designated as a cash flow hedge that is determined to be highly effective are recorded in other comprehensive income (“OCI”) until earnings are affected by the variability of cash flows of the hedged transaction.  The differential between fixed and variable rates to be paid or received is accrued, as interest rates change, and recognized currently as interest expense in the condensed consolidated statements of operations.  We assess effectiveness of our cash flow hedges both at inception and on an ongoing basis.  Our cash flow hedges become ineffective if critical terms of the hedging instrument and the debt do not perfectly match such as notional amounts, settlement dates, reset dates and calculation period.

At March 31, 2015, we had seven interest rate swap agreements with an aggregate notional amount of $210.0 million that were designated as cash flow hedges.  The agreements provided for swapping one-month LIBOR to fixed interest rates ranging from 1.2% to 2.2% on $210.0 million of unsecured term loans and have expirations ranging from April 2016 to May 2020.

The following table summarizes the notional values and fair values of our derivative financial instruments as of March 31, 2015:
 
 
Hedge
 
Notional
 
Fixed
 
Fair
 
Expiration
Underlying Debt
 
Type
 
Value
 
Rate
 
Value
 
Date
 
 
 
 
(In thousands)
 
 
 
(In thousands)
 
 
Derivative Liabilities
 
 
 
 
 
 
 
 
 
 
Unsecured term loan facility
 
Cash Flow
 
$
75,000

 
1.2175
%
 
$
(693
)
 
04/2016
Unsecured term loan facility
 
Cash Flow
 
30,000

 
2.0480
%
 
(1,007
)
 
10/2018
Unsecured term loan facility
 
Cash Flow
 
25,000

 
1.8500
%
 
(669
)
 
10/2018
Unsecured term loan facility
 
Cash Flow
 
5,000

 
1.8400
%
 
(132
)
 
10/2018
Unsecured term loan facility
 
Cash Flow
 
15,000

 
2.1500
%
 
(572
)
 
05/2020
Unsecured term loan facility
 
Cash Flow
 
10,000

 
2.1500
%
 
(382
)
 
05/2020
Unsecured term loan facility
 
Cash Flow
 
50,000

 
1.4600
%
 
(179
)
 
05/2020
 
 
 
 
$
210,000

 
 

 
$
(3,634
)
 
 
 
 
 
 
 
 
 
 
 
 
 

 
The effect of derivative financial instruments on our condensed consolidated statements of operations for the three months ended March 31, 2015 and 2014 is summarized as follows:
 
 
Amount of Gain (Loss)
Recognized in OCI on Derivative
(Effective Portion)
 
Location of
Loss
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
 
Amount of Loss
Reclassified from
Accumulated OCI into
Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationship
 
Three Months Ended March 31,
 
 
Three Months Ended March 31,
 
2015
 
2014
 
 
2015
 
2014
 
 
(In thousands)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts - assets
 
$
(537
)
 
$
(561
)
 
Interest Expense
 
$
(288
)
 
$
(286
)
Interest rate contracts - liabilities
 
(928
)
 
(138
)
 
Interest Expense
 
(468
)
 
(467
)
Total
 
$
(1,465
)
 
$
(699
)
 
Total
 
$
(756
)
 
$
(753
)