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Derivative Instruments | 6 Months Ended
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Jun. 30, 2020
Derivative Instrument Detail [Abstract] |
Derivative Instruments | NOTE 9. 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 changes in the fair value of an asset or liability to a particular risk are considered fair value hedges. 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. At June 30, 2020, we have six interest rate swaps associated with $397.5 million of term loan debt. These swaps are cash flow hedges that convert variable rates ranging from three-month and one-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 offsetting cash flows attributable to the hedged interest rate risk through the term of the hedges. In March 2020, we entered into $653.5 million of forward starting interest rate swaps. These forward starting interest rate swaps effectively hedge the variability in future benchmark interest payments attributable to changes in interest rates on future debt refinancing by locking in fixed rates on our anticipated future refinancing of $653.5 million of term loan debt maturing December 2020 through January 2029. The fixed interest rate components for these forward swaps range from 0.85% to 1.17%. The variable rate component on these forward interest rate swaps is one-month LIBOR. Accordingly, the forward rate swaps were designated as cash flow hedges. In addition, these cash flow hedges require settlement on the stated maturity date for each respective term loan currently outstanding. The following table presents the gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets:
|  |  |  | Asset Derivatives |  |  |  |  | Liability Derivatives |
(in thousands) |  | Location |  | June 30, 2020 |  |  | December 31, 2019 |  |  | Location |  | June 30, 2020 |  |  | December 31, 2019 |
Derivatives designated in cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | Other assets, current1 |  | $ | — |  |  | $ | — |  |  | Accounts payable and accrued liabilities1 |  | $ | 1,768 |  |  | $ | — |
Interest rate contracts |  | Other assets, non-current |  |  | — |  |  |  | 1,601 |  |  | Other long-term obligations |  |  | 61,207 |  |  |  | 22,398 |
|  |  |  | $ | — |  |  | $ | 1,601 |  |  |  |  | $ | 62,975 |  |  | $ | 22,398 |
1 | Derivative instruments that mature within one year, as a whole, are classified as current.
The following table details the effect of derivatives on our Condensed Consolidated Statements of Operations:
|  |  |  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(in thousands) |  | Location |  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Derivatives designated in cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss recognized in other comprehensive loss, net of tax |  |  |  | $ | (3,669 | ) |  | $ | (10,598 | ) |  | $ | (43,032 | ) |  | $ | (19,192 | )
Loss reclassified from accumulated other comprehensive loss1 |  | Interest expense |  | $ | (1,822 | ) |  | $ | (181 | ) |  | $ | (2,660 | ) |  | $ | (262 | )
Interest expense, net |  |  |  | $ | 8,339 |  |  | $ | 7,882 |  |  | $ | 12,037 |  |  | $ | 13,346 |
1Realized loss on hedging instruments consist of net cash settlements and interest accruals on interest rate swaps during the periods. At June 30, 2020, approximately $9.1 million of net losses are expected to be reclassified into earnings over the next 12 months. However, this expected amount to be reclassified into earnings is subject to volatility as the ultimate amount recognized in earnings is based on the market LIBOR rate at the time of cash settlement.

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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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