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Derivative Instruments | 12 Months Ended
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Dec. 31, 2019
Derivative Instrument Detail [Abstract] |
Derivative Instruments | NOTE 15. DERIVATIVE INSTRUMENTS From time to time, we enter into derivative financial instruments to manage certain cash flow and fair value risks. Derivatives designated and qualifying as a hedge of the exposure to variability in the cash flows of a specific asset or liability that is attributable to a particular risk, such as interest rate risk, are considered cash flow hedges. As of December 31, 2019, we have six interest rate swaps associated with $397.5 million of term loan debt. These cash flow hedges convert variable rates ranging from one-month and three-month LIBOR plus 1.85% to 2.15%, to fixed rates ranging from 3.17% to 4.82%. Our cash flow hedges are expected to be highly effective in achieving the offsetting of cash flows attributable to the hedged interest rate risk through the term of the hedge. At December 31, 2019, the amount of net losses expected to be reclassified into earnings in the next 12 months is approximately $3.7 million. In January 2019, we entered into a $150.0 million interest rate swap associated with the new term loan that refinanced our Senior Notes. This cash flow hedge converted a variable rate of one-month LIBOR plus 1.85% to a fixed rate of 4.56%. In September 2019, we entered into a $40.0 million interest rate swap, with the objective to lock in the index component rate on an expected new term loan in December 2019. In December 2019, we refinanced an existing $40.0 million term loan that matured with a new term loan maturing December 2029. Upon completing the refinance of the term loan, the interest rate swap was re-designated under new terms consistent with the new term loan. This cash flow hedge converts a variable rate of one-month LIBOR plus 1.85% to a fixed rate of 3.17%. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset or liability to a particular risk, such as interest rate risk, are considered fair value hedges. Fair value interest rate swaps with notional amounts totaling $14.3 million matured during the first quarter of 2018. A $50.0 million notional fair value swap associated with the Senior Notes was terminated in December 2017 at a cost of $0.4 million. The termination cost was recorded as a reduction to the carrying value of our long-term debt. The remaining unamortized balance was expensed in 2019 upon redemption of the Senior Notes. As of December 31, 2019, we do not hold any derivatives designated or qualifying as fair value hedges. Derivatives not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, commodity price movements or other identified risks, but do not meet the strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly into income. In April 2017, we entered into a lumber price swap to fix the price on a total of 36 million board feet (MMBF) of southern yellow pine. The lumber price swap expired on December 31, 2017, resulting in a realized gain of $1.1 million for the year then ended. The fair values of our cash flow derivative instruments on our Consolidated Balance Sheets as of December 31 are as follows:
|  |  |  | Asset Derivatives |  |  |  |  | Liability Derivatives |
(in thousands) |  | Location |  | 2019 |  |  | 2018 |  |  | Location |  | 2019 |  |  | 2018 |
Derivatives designated in cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | Other assets, non-current |  | $ | 1,601 |  |  | $ | 1,510 |  |  | Other long-term obligations |  | $ | 22,398 |  |  | $ | 2,888 |
The following table details the effect of derivatives on our Consolidated Statements of Income:
|  |  |  | Year Ended December 31, |
(in thousands) |  | Location |  | 2019 |  |  | 2018 |  |  | 2017 |
Derivatives designated in fair value hedging relationships: |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
Realized gain (loss) on interest rate contracts1 |  | Interest expense |  | $ | — |  |  | $ | (191 | ) |  | $ | 413 |
Loss on hedged debt basis adjustment included in debt extinguishment |  |  |  |  | (165 | ) |  |  | — |  |  |  | — |
|  |  |  | $ | (165 | ) |  | $ | (191 | ) |  | $ | 413 |
Derivatives designated in cash flow hedging relationships: |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss recognized in other comprehensive income, net of tax |  |  |  | $ | (19,824 | ) |  | $ | (3,062 | ) |  | $ | (145 | )
Loss reclassified from accumulated other comprehensive loss1 |  | Interest expense |  | $ | (1,384 | ) |  | $ | (647 | ) |  | $ | (149 | )
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |
Lumber price contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |
Realized gain on lumber price swap |  | Gain on lumber price swap |  | $ | — |  |  | $ | — |  |  | $ | 1,088 |
Interest expense, net |  |  |  | $ | 30,361 |  |  | $ | 35,227 |  |  | $ | 27,049 |
1 | Realized gains and losses on interest rate contracts consist of net cash received or paid and interest accruals on the interest rate swaps during the periods. Net cash received or paid is included in the supplemental cash flow information within interest, net of amounts capitalized in the Consolidated Statements of Cash Flows.

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- References No definition available. + Details
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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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