Quarterly report pursuant to Section 13 or 15(d)

Interest Rate Derivatives

v3.10.0.1
Interest Rate Derivatives
6 Months Ended
Jun. 30, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Interest Rate Derivatives
Interest Rate Derivatives
 
The following table sets forth the key terms and fair values of our interest rate swap derivatives, each of which was designated as a cash flow hedge of interest rate risk (dollars in thousands):
 
 
 



 

 

Fair Value at
Notional Amount
 
Fixed Rate

Floating Rate Index

Effective Date

Expiration Date

June 30,
2018

December 31,
2017
$
100,000


1.7300%

One-Month LIBOR

9/1/2015

8/1/2019

$
745


$
252

13,026

(1)
1.3900%
 
One-Month LIBOR
 
10/13/2015
 
10/1/2020
 
343

 
213

100,000

 
1.9013%
 
One-Month LIBOR
 
9/1/2016
 
12/1/2022
 
3,481

 
1,046

100,000

 
1.9050%
 
One-Month LIBOR
 
9/1/2016
 
12/1/2022
 
3,494

 
1,051

50,000

 
1.9079%
 
One-Month LIBOR
 
9/1/2016
 
12/1/2022
 
1,729

 
511

 

 
 

 

 

 

$
9,792


$
3,073


(1)     The notional amount of this instrument is scheduled to amortize to $12.1 million.
 
The table below sets forth the fair value of our interest rate derivatives as well as their classification on our consolidated balance sheets (in thousands):
 
 
 
 
Fair Value at
Derivatives
 
Balance Sheet Location
 
June 30,
2018
 
December 31, 2017
Interest rate swaps designated as cash flow hedges
 
Prepaid expenses and other assets, net
 
$
9,792

 
$
3,073


 
The table below presents the effect of our interest rate derivatives on our consolidated statements of operations and comprehensive income (in thousands):
 
 
Amount of Gain (Loss) Recognized in AOCI on Derivatives
 
Amount of Gain (Loss) Reclassified from AOCI into Interest Expense on Statement of Operations
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
Derivatives in Hedging Relationships
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
 
2018
 
2017
Interest rate derivatives
 
$
1,912

 
$
(1,800
)
 
$
6,588

 
$
(1,576
)
 
$
47

 
$
(941
)
 
$
(198
)
 
$
(2,125
)


Over the next 12 months, we estimate that approximately $1.9 million of gains will be reclassified from AOCI as a decrease to interest expense.

We have agreements with each of our interest rate derivative counterparties that contain provisions under which, if we default or are capable of being declared in default on defined levels of our indebtedness, we could also be declared in default on our derivative obligations. Failure to comply with the loan covenant provisions could result in our being declared in default on any derivative instrument obligations covered by the agreements. We are not in default with any of these provisions. As of June 30, 2018, we did not have any derivatives in liability positions. As of June 30, 2018, we had not posted any collateral related to these agreements.