Derivative Instruments And Hedging Activities

6 Months Ended

Jun. 30, 2015

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments And Hedging Activities

7.  Derivative Instruments and Hedging Activities

In July 2013, we entered into twoforward-starting interest rate swap contracts to manage interest rate risk associated with a portion of our $25 million Term Loan floating rate debt (see Note 6).   The interest rate swaps effectively converted 80% of the outstanding balance of our $25.0 million floating rate term loan to a  fixed rate term loan bearing interest at the rate of 3.73%.  The notional amount of the interest rate swaps at June 30, 2015 was $14.3 million.  The termination dates of the swap contracts and the maturity date of the $25 million Term Loan are both June 30, 2020.

In accordance with ASC 815, Derivatives and Hedging,  we have designated both of our interest rate swaps as cash flow hedgesof the interest payments due on our floating rate debt.  To qualify for designation as a cash flow hedge, specific criteria must be met and the appropriate documentation maintained.  Hedging relationships are established pursuant to our risk management policies and are initially and regularly evaluated to determine whether they are expected to be, and have been, highly effective hedges.  For our interest rate swap contracts designated as a cash flow hedge of interest on our floating rate debt, the effective portion of the change in fair value of the derivative is reported in other comprehensive income and reclassified into earnings in the period in which the hedged item affects earnings.  Any amounts excluded from the effectiveness calculation and any ineffective portion of the change in fair value of the derivative are recognized currently in earnings. 

The interest rate swaps are measured at Level 2 fair value on a recurring basis, using standard pricing models and market-based assumptions for all significant inputs, such as LIBOR yield curves.  The fair value of the interest rate swap contracts included within our consolidated balance sheets as of June 30, 2015 and December 31, 2014, are as follows:

Derivative designated as	Balance Sheet	June 30,		December 31,		Balance Sheet	June 30,		December 31,
hedging instrument:	Location	2015		2014		Location	2015		2014
						Other long-term
Interest rate swaps	Other assets	$	-	$	-	liabilities	$	154	$	146

The following tables present the effects of derivative instruments designated as cash flow hedges on our consolidated statements of operations and accumulated other comprehensive income (loss) (“AOCI”):

	Amounts Reclassified from AOCI into income								Affected Line Item in the
	Three Months Ended June 30,				Six Months Ended June 30,				Consolidated Statements
AOCI Component	2015		2014		2015		2014		of Operations
Gain (loss) on cash flow hedges:
Interest rate swaps	$	55	$	68	$	113	$	137	Interest expense
		(23)		(22)		(45)		(50)	Tax expense (benefit)
	$	32	$	46	$	68	$	87	Net of tax

	Amount of gain (loss) recognized in AOCI
	Three Months Ended June 30,				Six Months Ended June 30,
AOCI Component	2015		2014		2015		2014
Gain (loss) on cash flow hedges:
Unrealized gain (loss) -
Interest rate swaps	$	9	$	(112)	$	(121)	$	(187)
Tax effect		(1)		38		48		68
Gain (loss) - net of tax	$	8	$	(74)	$	(73)	$	(119)

We did not realize any ineffectiveness related to our cash flow hedges during the three or six months ended June 30, 2015 and 2014.