Derivative and Hedging Activities

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

We utilize interest rate swaps, from time to time, to add stability to interest risk and to manage our exposure to interest rate movements. See Note 2 for additional information related to our derivative instruments and hedging policy.

As of December 31, 2013, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges:

Interest Rate Derivative	Number of Instruments	Notional Amount
Interest Rate Swaps	2	$125.0 million

On April 2, 2013, we entered into a forward starting interest rate swap on $125.0 million of our $150.0 million unsecured term loan, fixing the rate beginning June 2, 2016 at a rate of 1.55% per annum plus the credit spread, which was 1.70% per annum as of December 31, 2013, or an all-in rate of 3.25% per annum until the loan matures in January 2018. The credit spread is subject to change, from time to time, from a minimum of 1.25% per annum to a maximum of 2.20% per annum over LIBOR based upon our qualified ratings as defined in the agreement. See Note 12 for additional information related to this forward starting interest rate swap.

On December 19, 2011, we entered into a forward starting interest rate swap effective June 7, 2013. This swap hedges the future cash flows of interest payments on $125.0 million of our unsecured term loan by fixing the rate until June 2016 at a rate of 1.26% per annum plus the credit spread, which was 1.70% per annum at December 31, 2013, or an all-in-rate of 2.96% per annum. The credit spread is subject to change from time to time from a minimum of 1.25% per annum to a maximum of 2.20% per annum over LIBOR based upon our qualified ratings as defined in the agreement. See Note 12 for additional information related to this forward starting interest rate swap.

The following table presents the fair value of our derivative financial instrument as well as the classification on the Consolidated Balance Sheets (see Note 12 for additional information regarding the fair value of this derivative instrument):

Fair Value of Derivative Instruments
	Asset Derivatives
	As of December 31, 2013			As of December 31, 2012
(In thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated
as hedging instruments:
Interest rate swap	Other assets, net	$	1,573	Other assets, net	$	—

Fair Value of Derivative Instruments
	Liability Derivatives
	As of December 31, 2013			As of December 31, 2012
(in thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated
as hedging instruments:
Interest rate swaps	Accounts payable and			Accounts payable and
	other liabilities	$	2,275	other liabilities	$	2,934

The following table presents the effect of our derivative financial instruments on the Consolidated Statements of Operations and Comprehensive Income:

The Effect of Derivative Instruments on the Consolidated Statements of Operations and Comprehensive Income
(In thousands)
	Location of Gain or	Year Ended
Derivatives in Cash Flow Hedging	(Loss) Recognized	December 31,			December 31,			December 31,
Relationships (Interest Rate Swaps)	in Income on Derivative	2013			2012			2011
Amount of gain/(loss) recognized in OCI on derivative		$	1,454		$	(2,529	)	$	(405	)
Amount of loss reclassified from accumulated
OCI into interest expense	Interestexpense	$	(778	)	$	—		$	—
Amount of gain or (loss) recognized in income
on derivative (ineffective portion and amount
excluded from effectiveness testing)	Other expense	$	—		$	—		$	—

The following tables present the effect of offsetting financial assets and liabilities on the Consolidated Balance Sheets:

Offsetting of Derivative Assets and Liabilities
									Gross Amounts Not Offset
									in the Balance Sheets
						Net Amounts of
	Gross Amounts			Gross Amounts		Assets/(Liabilities)					Cash
	of Recognized			Offset in the		Presented in the			Financial		Collateral		Net
(In thousands)	Assets/(Liabilities)			Balance Sheets		Balance Sheets			Instruments		Received		Amount
2013 Offsetting Derivative
Assets	$	1,573		$	—	$	1,573		$	—	$	—	$	1,573
Liabilities	$	(2,275	)	$	—	$	(2,275	)	$	—	$	—	$	(2,275	)
2012 Offsetting Derivative
Assets	$	—		$	—	$	—		$	—	$	—	$	—
Liabilities	$	(2,934	)	$	—	$	(2,934	)	$	—	$	—	$	(2,934	)

As of December 31, 2013, the fair value of the derivative in a net liability position, excluding any adjustment for nonperformance risk, was $2.4 million. As of December 31, 2013, we have not posted any collateral related to this agreement.  If we had breached any of the provisions in the agreement with our derivative counterparty at December 31, 2013, we could have been required to settle our obligations under the agreement at its termination value of $2.4 million, which includes accrued interest of $87,000. The expected amount of other comprehensive income to be reclassified as earnings within the next twelve months is $1.3 million.