| Derivative Instruments and Hedging Activities |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
At December 31, 2018 and 2017, the following table presents information about the fair value amounts of the Company’s derivative instruments:
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Derivatives as of December 31, |
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2018 |
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2017 |
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Balance Sheet Location |
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Fair Value |
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Balance Sheet Location |
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Fair Value |
Derivatives Designated as Hedging Instruments: |
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Interest rate swap contracts |
Other assets |
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$ |
703 |
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Other assets |
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$ |
233 |
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Interest rate swap contracts |
Other liabilities |
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$ |
3,187 |
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Other liabilities |
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$ |
3,529 |
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Derivatives Not Designated as Hedging Instruments: |
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Interest rate swap contracts |
Other assets |
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$ |
30 |
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Other assets |
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$ |
— |
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Commodity swap contracts |
Other assets |
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$ |
33 |
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Other assets |
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$ |
— |
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Commodity swap contracts |
Other liabilities |
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$ |
70 |
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Other liabilities |
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$ |
— |
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Interest make-whole provisions |
Other liabilities |
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$ |
1,808 |
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Other liabilities |
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$ |
— |
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All but four of the Company’s freestanding derivatives were designated as hedging instruments as of December 31, 2018 and all but one of the Company’s derivatives were designated as hedging instruments as of December 31, 2017.
The following tables present information about the effects of the Company’s derivative instruments on the consolidated statements of income (loss) and consolidated statements of comprehensive income (loss):
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Location of (Gain) Loss Recognized in Net Income |
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Amount of (Gain) Loss Recognized in Net Income for the Year Ended December 31, |
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2018 |
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2017 |
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2016 |
Derivatives Designated as Hedging Instruments: |
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Interest rate swap contracts |
Other expenses, net |
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$ |
(196 |
) |
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$ |
(271 |
) |
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$ |
(279 |
) |
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Derivatives Not Designated as Hedging Instruments:
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Interest rate swap contracts |
Other expenses, net |
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$ |
(308 |
) |
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$ |
— |
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$ |
— |
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Commodity swap contracts |
Other expenses, net |
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$ |
36 |
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$ |
— |
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$ |
— |
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Interest make-whole provisions |
Other expenses, net |
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$ |
337 |
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$ |
— |
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$ |
— |
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Year Ended |
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December 31, 2018 |
Derivatives Designated as Hedging Instruments: |
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Accumulated loss in AOCI at the beginning of the period |
$ |
(1,745 |
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Cumulative impact from the adoption of ASU No. 2017-12 |
(486 |
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Unrealized gain recognized in AOCI |
603 |
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Gain reclassified from AOCI to other expenses, net |
(196 |
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Accumulated loss in AOCI at the end of the period |
$ |
(1,824 |
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In March 2010, the Company entered into a fourteen-year interest rate swap contract under which the Company agreed to pay an amount equal to a specified fixed rate of interest times a notional amount, and to in turn receive an amount equal to a specified variable rate of interest times the same notional principal amount. The swap covered an initial notional amount of approximately $27,900 variable rate note at a fixed interest rate of 3.74% and expired in December 2024. This swap was designated as a hedge in March 2013. During the second quarter of 2014, this swap was de-designated and re-designated as a hedge as a result of a partial pay down of the associated hedged debt principal. As a result $566 was reclassified from accumulated other comprehensive loss and recorded as a reduction to other expenses, net in the Company’s consolidated statements of income (loss) during the second quarter of 2014. During the second quarter 2018, this swap was de-designated as a hedge as a result of the expected pay down of the associated hedged debt principal. As a result, $34 was reclassified from accumulated other comprehensive loss and recorded to other expenses, net in the Company’s consolidated statements of income (loss) during the second quarter 2018. In the third quarter of 2018, the expected pay down of the hedged debt principal occurred and the balance of the related hedge was written off. This resulted in a decrease of other liabilities of $252 in the Company’s consolidated balance sheets and a corresponding decrease in other expenses, net in the Company’s consolidated statements of income (loss).
The followings tables present a listing of all the Company’s active derivative instruments as of December 31, 2018:
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Active Interest Rate Swap |
Effective Date |
Expiration Date |
Initial Notional Amount ($) |
Status |
11-Year, 5.77% Fixed
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October 2018 |
October 2029 |
$ |
9,200 |
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Designated |
15-Year, 3.19% Fixed |
June 2018 |
June 2033 |
10,000 |
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Designated |
3-Year, 2.46% Fixed |
March 2018 |
December 2020 |
17,100 |
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Not Designated |
10-Year, 4.74% Fixed |
June 2017 |
December 2027 |
14,100 |
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Designated |
15-Year, 3.26% Fixed |
February 2023 |
December 2038 |
14,084 |
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Designated |
7-Year, 2.19% Fixed |
February 2016 |
February 2023 |
20,746 |
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Designated |
8-Year, 3.70% Fixed |
March 2020 |
June 2028 |
14,643 |
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Designated |
8-Year, 3.70% Fixed |
March 2020 |
June 2028 |
10,734 |
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Designated |
8-Year, 1.71% Fixed |
October 2012 |
March 2020 |
9,665 |
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Designated |
8-Year, 1.71% Fixed |
October 2012 |
March 2020 |
7,085 |
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Designated |
15-Year, 5.30% Fixed |
February 2006 |
February 2021 |
3,256 |
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Designated |
15.5-Year, 5.40% Fixed |
September 2008 |
March 2024 |
13,081 |
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Designated |
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Active Commodity Swap |
Effective Date |
Expiration Date |
Initial Notional Amount (Volume) |
Commodity Measurement |
Status |
1-Year, $2.84 MMBtu Fixed |
May 2018 |
April 2019 |
323,390 |
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MMBtus |
Not Designated |
1-Year, $2.68 MMBtu Fixed |
May 2019 |
April 2020 |
437,004 |
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MMBtus |
Not Designated |
1-Year, $2.70 MMBtu Fixed |
May 2020 |
April 2021 |
435,810 |
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MMBtus |
Not Designated |
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Other Derivatives |
Classification |
Effective Date |
Expiration Date |
Fair Value ($) |
Interest make-whole provisions |
Liability |
June/August 2018 |
December 2038 |
$ |
1,808 |
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