Derivative Financial Instruments

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

The following table summarizes the terms and fair values of the Company's derivative financial instruments, as well as their classification on the Consolidated Balance Sheets, at December 31, 2013 and 2012 (dollars in thousands):

										Fair Value
	Effective Date	Maturity Date	Early Termination Date (1)		Notional Amount	Bank Pays Variable Rate of	Regency Pays Fixed Rate of			2013		2012
Assets:
	4/15/2014	4/15/2024	10/15/2014	$	75,000	3 Month LIBOR	2.087%		$	7,476		1,022
	4/15/2014	4/15/2024	10/15/2014		50,000	3 Month LIBOR	2.088%			4,978		672
	4/15/2014	4/15/2024	10/15/2014		60,000	3 Month LIBOR	2.864	%		1,821		—
	4/15/2014	4/15/2024	10/15/2014		35,000	3 Month LIBOR	2.873	%		1,036		—
	8/1/2015	8/1/2025	2/1/2016		75,000	3 Month LIBOR	2.479%			8,516		1,131
	8/1/2015	8/1/2025	2/1/2016		50,000	3 Month LIBOR	2.479%			5,670		729
	8/1/2015	8/1/2025	2/1/2016		50,000	3 Month LIBOR	2.479%			5,658		753
	10/16/2013	10/16/2020	N/A		28,100	1 Month LIBOR	2.196	%		82		—
Other assets									$	35,237		4,307
Liabilities:
	10/1/2011	9/1/2014	N/A	$	9,000	1 Month LIBOR	0.760%		$	(34	)	(76	)
Accounts payable and other liabilities									$	(34	)	(76	)

⁽¹⁾ Represents the date specified in the agreement for either optional or mandatory early termination which will result in cash settlement.

These derivative financial instruments are all interest rate swaps, which are designated and qualify as cash flow hedges. The Company does not use derivatives for trading or speculative purposes and currently does not have any derivatives that are not designated as hedges. The Company has master netting agreements, however the Company does not have multiple derivatives subject to a single master netting agreement with the same counterparties. Therefore none are offset in the accompanying Consolidated Balance Sheet.

The Company has $150.0 million of unsecured long-term debt that matures in 2014 and $350.0 million of unsecured long-term debt that matures in 2015. In order to mitigate the risk of interest rates rising before new unsecured borrowings are obtained, the Company entered into seven forward-starting interest rate swaps for the same ten year periods expected for the future borrowings. These swaps total $395.0 million of notional value, as shown above. The Company will settle these swaps upon the early termination date, which is expected to coincide with the date new unsecured borrowings are obtained, and will begin amortizing the gain or loss realized from the swap settlement over the ten year period expected for the new borrowings; resulting in a modified effective interest rate on those borrowings.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income (loss) and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings within interest expense.

The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements for the years ended December 31, 2013, 2012, and 2011 (in thousands):

Derivatives in FASB ASC Topic 815 Cash Flow Hedging Relationships:	Amount of Gain (Loss) Recognized in Other Comprehensive Loss on Derivative (Effective Portion)				Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)							Location of Gain or (Loss) Recognized in Income on  Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	2013		2012	2011		2013			2012		2011			2013		2012	2011
Interest rate swaps	$	30,952	4,245	18	Interest expense	$	(9,433	)	(9,491	)	(9,467	)	Other expenses	$	—	—	(54	)

As of December 31, 2013, the Company expects $12.9 million of deferred losses (gains) on derivative instruments accumulated in other comprehensive income to be reclassified into earnings during the next 12 months, of which $9.0 million is related to previously settled swaps.