18.

Derivatives:

(a) Interest rate swaps that meet the criteria for hedge accounting:

The Company, according to its long-term strategic plan to maintain stability in its interest rate exposure, has decided to minimize its exposure to floating interest rates by entering into interest rate swap agreements. To this effect, the Company has entered into interest rate swap transactions with varying start and maturity dates, in order to manage its floating rate exposure.

These interest rate swaps are designed to hedge the variability of interest cash flows arising from floating rate debt, attributable to movements in

three

-month or

six

-month USD LIBOR. According to the Company’s Risk Management Accounting Policy, after putting in place the formal documentation required by ASC

815

in order to designate these swaps as hedging instruments as from their inception, these interest rate swaps qualified for hedge accounting. Accordingly, only hedge ineffectiveness amounts arising from the differences in the change in fair value of the hedging instrument and the hedged item are recognized in the Company’s earnings. Assessment and measurement of the effectiveness of these interest rate swaps are performed at each reporting period. For qualifying cash flow hedges, the fair value gain or loss associated with the effective portion of the cash flow hedge is recognized initially in “Other comprehensive income” and recognized to the consolidated statement of income in the periods when the hedged item affects profit or loss. Any ineffective portion of the gain or loss on the hedging instrument is recognized in the consolidated statement of income immediately.

December 31, 2016

and

June 30, 2017,

the Company had interest rate swap agreements with an outstanding notional amount of

$783,403

and

$719,750,

respectively. The fair value of these interest rate swaps outstanding at

December 31, 2016

and

June 30, 2017

amounted to a liability of

$10,459

and a liability of

$5,745,

respectively, and these are included in the accompanying consolidated balance sheets. The maturity of these interest rate swaps range between

June 2018

and

May 2023.

The estimated net amount that is expected to be reclassified within the next

months from Accumulated Other Comprehensive Loss to earnings in respect of the settlements on interest rate swaps amounts to

$8,601.

(b) Interest rate swaps that do

not

meet the criteria for hedge accounting:

As of

December 31, 2016

and

June 30, 2017,

the Company had interest rate swap agreements with an outstanding notional amount of

$199,846

and

$94,799,

respectively, for the purpose of managing risks associated with the variability of changing LIBOR-related interest rates. Such agreements did

not

meet hedge accounting criteria and, therefore, changes in its fair value are reflected in earnings. The fair value of these interest rate swaps at

December 31, 2016

and

June 30, 2017,

was a liability of

$4,855

and a liability of

$1,996,

respectively, and these are included in Fair value of derivatives in the accompanying consolidated balance sheets. The maturity of these interest rate swaps range between

August 2018

and

August 2020.

As of

June 30, 2017,

the Company was engaged in

four

Euro/U.S. dollar forward agreements totaling

$10,000

at an average forward rate of Euro/U.S. dollar

1.098

expiring in monthly intervals up to

October 2017.

As of

December 31, 2016,

the Company was engaged in

three

Euro/U.S. dollar forward agreements totaling

$9,000

at an average forward rate of Euro/U.S. dollar

1.0653

expiring in monthly intervals up to

March 2017.

The total change of forward contracts fair value for the

six

-month period ended

June 30, 2017,

was a gain of

$501

(loss of

$158

for the

six

-month period ended

June 30, 2016)

and is included in Loss on derivative instruments, net in the accompanying consolidated statements of income.

The Effect of Derivative Instruments for the six-month periods ended June 30, 2016 and 2017
Derivatives in ASC 815 Cash Flow Hedging Relationships
	Amount of Gain / (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)						Location of Gain / (Loss) Recognized in Income on Derivative (Ineffective Portion)		Amount of Gain / (Loss) Recognized in Income on Derivative (Ineffective Portion)
	2016			2017					2016		2017
Interest rate swaps	$	(14,550	)	$	(1,364	)		Loss on derivative instruments, net	$	-	$	-
Reclassification to Interest and finance costs		11,489			6,459					-		-
Total	$	(3,061	)	$	5,095				$	-	$	-

Derivatives Not Designated as Hedging Instruments and ineffectiveness of Hedging Instruments under ASC 815
	Location of Gain / (Loss) Recognized in Income on Derivative		Amount of Gain / (Loss) Recognized in Income on Derivative
			2016			2017
Non hedging interest rate swaps		Loss on derivative instruments, net	$	(4,101	)	$	(897	)
Ineffective portion of hedging interest rate swaps		Loss on derivative instruments, net		-			-
Forward contracts		Loss on derivative instruments, net		(158	)		501
Total			$	(4,259	)	$	(396	)

The realized loss on non-hedging interest rate swaps included in “Loss on derivative instruments, net” amounted to

$4,343,

and

$1,625

for the

six

-month periods ended

June 30, 2016

and

2017,

respectively.