Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

Cash Flow Hedges of Interest Rate Risk

In connection with our Term Loan, we entered into the 2014 Swap (see Note 7 to the Consolidated Financial Statements for information about the Term Loan related to the 2014 Swap) allowing us to trade the variable interest rate for a fixed interest rate on the Term Loan. The 2014 Swap fixes the underlying LIBOR rate on the Term Loan at 1.04% per annum for the first three years and matures on August 1, 2017. Based on the leverage as of September 30, 2016, our spread over LIBOR is 1.35% resulting in an estimated all-in interest rate of 2.39% per annum.

We have designated the 2014 Swap as a cash flow hedge. No gain or loss was recognized in the Consolidated Statements of Income and Comprehensive Income related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedge during the quarters and nine months endedSeptember 30, 2016 and 2015.

Amounts reported in accumulated other comprehensive loss on the Consolidated Balance Sheets related to derivatives are reclassified to interest expense as interest payments are made on our variable-rate debt. During the next ten months, until maturity, we estimate that an additional $0.6 million will be reclassified as an increase to interest expense. This estimate may be subject to change as the underlying LIBOR rate changes.

Derivative Instruments and Hedging Activities

The table below presents the fair value of our derivative financial instrument as well as our classification on our Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015 (amounts in thousands):

Derivatives in Cash Flow Hedging Relationship	Balance Sheet Location	September 30, 2016		December 31, 2015
Interest Rate Swap	Accrued expenses and accounts payable	$	646	$	553

Tabular Disclosure of the Effect of Derivative Instruments on the Income Statement

The tables below present the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income for the quarters endedSeptember 30, 2016 and 2015 (amounts in thousands):

Derivatives in Cash Flow Hedging Relationship	Amount of loss (gain) recognized in OCI on derivative					Location of loss reclassified from accumulated OCI into income	Amount of loss reclassified from accumulated OCI into income
	September 30, 2016			September 30, 2015			September 30, 2016		September 30, 2015
Interest Rate Swap	$	(272	)	$	1,012	Interest Expense	$	279	$	434

The tables below present the effect of our derivative financial instrument on the Consolidated Statements of Income and Comprehensive Income for the nine months endedSeptember 30, 2016 and 2015 (amounts in thousands):

Derivatives in Cash Flow Hedging Relationship	Amount of loss recognized in OCI on derivative				Location of loss reclassified from accumulated OCI into income	Amount of loss reclassified from accumulated OCI into income
	September 30, 2016		September 30, 2015			September 30, 2016		September 30, 2015
Interest Rate Swap	$	986	$	2,535	Interest Expense	$	893	$	1,304

We determined that no adjustment was necessary for non-performance risk on our derivative obligation. As of September 30, 2016, we have not posted any collateral related to this agreement.