Annual report pursuant to Section 13 and 15(d)

Derivative Financial Instruments

v3.6.0.2
Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments
Derivative Financial Instruments

The following table summarizes the terms and fair values of our derivative financial instruments, as well as their classifications within the consolidated balance sheets as of December 31, 2016 and 2015 (notional amounts and fair values in thousands):
 
 
 
 
 
 
 
 
 
 
Fair Value
Effective Date
 
Maturity Date
 
Notional Amount
 
Bank Pay Rate
 
Company Fixed Pay Rate
 
2016
 
2015
Assets (Liabilities)(1):
 
 
 
 
 
 
 
 
 
 
 
 
November 14, 2013
 
August 14, 2018
 
$
50,000

 
1 month LIBOR
 
1.3075
%
 
$
(119
)
 
$
(212
)
November 14, 2013
 
August 14, 2018
 
50,000

 
1 month LIBOR
 
1.2970
%
 
(110
)
 
(198
)
November 14, 2013
 
August 14, 2018
 
50,000

 
1 month LIBOR
 
1.3025
%
 
(115
)
 
(206
)
April 13, 2016
 
January 1, 2021
 
50,000

 
1 month LIBOR
 
1.0390
%
 
1,227

 
—

April 13, 2016
 
January 1, 2021
 
50,000

 
1 month LIBOR
 
1.0395
%
 
1,226

 
—

April 13, 2016
 
January 1, 2021
 
50,000

 
1 month LIBOR
 
1.0400
%
 
1,222

 
—

April 13, 2016
 
January 1, 2021
 
25,000

 
1 month LIBOR
 
0.9915
%
 
662

 
—

Total
 
 
 
$
325,000

 
 
 
 
 
$
3,993

 
$
(616
)
(1)
Net asset balances are recorded in prepaids and other assets on the consolidated balance sheets and net liabilities are recorded in other liabilities on the consolidated balance sheets.

In April 2016, we entered into four separate interest rate swap agreements, effective April 13, 2016 that fix the base LIBOR rate at an average of 1.03% on notional amounts totaling $175.0 million through January 1, 2021.

The derivative financial instruments are comprised of interest rate swaps, which are designated and qualify as cash flow hedges, each with a separate counterparty. We do not use derivatives for trading or speculative purposes and currently do not have any derivatives that are not designated as hedges.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive 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 derivative, if significant, is recognized directly in earnings. For the year ended December 31, 2016, the ineffective portion was not significant.

The following table represents the effect of the derivative financial instruments on the accompanying consolidated financial statements for the years ended December 31, 2016, 2015 and 2014, respectively (in thousands):
 
 
 
 
 
 
 
 
2016
 
2015
 
2014
Interest Rate Swaps (Effective Portion):
 
 
 
 
 
 
Amount of gain (loss) recognized in OCI on derivative
 
$
4,609

 
$
(711
)
 
$
(2,028
)