Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events:

On April 9, 2014, we entered into four interest rate caps with various termination dates and notional amounts with an additional counterparty. We entered into these derivative financial instruments to manage our exposures that arise from payment of future known and uncertain cash amounts related to our borrowings, the value of which are determined by LIBOR interest rates. Incremental borrowing related to the JHP acquisition necessitated additional interest rate caps to maintain a ratio of fixed interest rate debt to variable interest rate debt that is appropriate for our business. The derivatives have a combined notional value of $230,000 thousand, all with an effective date as of September 30, 2014 and with termination dates each September 30th beginning in 2015 and ending in 2018. Consistent with the terms of the Credit Agreement, the interest rate caps have a strike of 1% which matches the LIBOR floor of 1.0% on the debt. The premium is deferred and paid over the life of the instrument. The effective annual interest rate related to these interest rate caps is a fixed weighted average rate of approximately 4.8%. These instruments are designated for accounting purposes as cash flow hedges of interest rate risk related to our Credit Agreement. Future payments under these interest rate caps will be reflected as interest expense on our condensed consolidated statements of operations.