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Derivative Financial Instruments | 12 Months Ended
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Dec. 31, 2020
Derivative Financial Instruments [Abstract] |
Derivative Financial Instruments |
14. | Derivative Financial Instruments
Risk Management Objective of Using Derivatives The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash receipts and its known or expected cash payments principally related to the Company’s borrowings. Cash Flow Hedges of Interest Rate Risk The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without exchange of the underlying notional amount. During 2020, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in Accumulated Other Comprehensive Income and subsequently reclassified into interest expense/income in the same period(s) during which the hedged transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense/income as interest payments are made/received on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $105 thousand will be reclassified as an increase to interest expense. As of December 31, 2020, the Company had four outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk with a total notional amount of $200 million. Fair Values of Derivative Instruments on the Balance Sheet The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the Balance Sheet:
|  |  | Fair Values of Derivative Instruments |
Derivatives in Cash flow | Balance Sheet |  | December 31, |
Hedging Relationships: | Location |  | 2020 |  |  | 2019 |
Interest Rate Swap - Asset | Other Assets |  | $ | 1,145 |  |  | $ | — |
Interest Rate Swap - Liability | Accrued Expenses |  | $ | 105 |  |  | $ | — |
Effect of Cash Flow Hedge Accounting on Accumulated Other Comprehensive Income The tables below present the effect of cash flow hedge accounting on Accumulated Other Comprehensive Income.
|  | Amount of Gain (Loss) Recognized in OCI on Derivative |
Derivatives in Cash Flow |  | Year Ended December 31, |
Hedging Instruments: |  | 2020 |  |  | 2019 |  |  | 2018 |
Interest Rate Swaps |  | $ | 1,041 |  |  | $ | — |  |  | $ | — |
Foreign currency forward contracts related to intercompany license fee and product sales hedges |  | $ | — |  |  | $ | — |  |  | $ | (160 | )
|  |  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income |
Derivatives designated as | Income Statement |  | Year Ended December 31, |
Hedging Instruments: | Location |  | 2020 |  |  | 2019 |  |  | 2018 |
Interest Rate Swaps | Other Income |  | $ | (25 | ) |  | $ | — |  |  | $ | — |
Foreign currency forward contracts related to intercompany license fees and product sales hedges | Revenue |  | $ | — |  |  | $ | — |  |  | $ | 18 |

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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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