Derivatives

6 Months Ended

Jun. 30, 2017

Summary Of Derivative Instruments [Abstract]

10. Derivatives

Interest Rate Cash Flow Hedges

The Company entered into multiple interest rate swap agreements to hedge the future cash interest payments on portions of its variable rate bank debt. As of June 30, 2017 and December 31, 2016, the Company had interest rate swap agreements to hedge approximately $12.6 million and $15.5 million of its variable rate bank debt, respectively, or 2.25% and 2.70% of total debt, respectively. The amount that the Company expects to reclassify from “Unrealized gain (loss) on hedging transactions, net of taxes” to “Interest expense, net” over the next twelve months is immaterial.

The Company’s interest rate cash flow hedges consist of:

			Fixed			Fair Value Asset (Liability)⁽¹⁾ at
(dollars in thousands)	Notional Amount		Payment Rate		Maturity Date	June 30, 2017			December 31, 2016
Liability Derivatives
Derivatives designated as cash flow hedging instruments:
One-month LIBOR plus 2.50% interest rate swap, effective December 2012	$	560		3.75%	December 2017	$	—		$	(3	)
One-month LIBOR plus 2.00% interest rate swap, effective March 2013		733		2.87%	April 2018		1			—
One-month LIBOR plus 2.00% interest rate swap, effective December 2015		4,196		3.69%	December 2021		(8	)		(24	)
One-month LIBOR interest rate swap, effective December 2015		1,023		1.37%	December 2020		3			—
One-month LIBOR interest rate swap, effective September 2016		3,971		1.17%	September 2021		38			33

Derivatives not designated as cash flow hedging instruments:
One-month LIBOR interest rate swap		1,302	0.75% - 1.68%		September 2017 - April 2020		2			(2	)
One-month LIBOR interest rate swap, effective December 2014⁽²⁾		831		1.34%	November 2019		1			(2	)
Total liability derivatives	$	12,616				$	37		$	2

(1)

The fair values of the interest rate swap asset and liabilities are included in “Other assets” and “Other accrued liabilities,” respectively, in the condensed consolidated balance sheets.

(2)

The interest rate swap agreement was de-designated as a cash flow hedge during the six months ended June 30, 2017.

The following tables summarize the amounts of income (loss) recognized from derivative instruments for the periods indicated and the line items in the accompanying condensed consolidated statements of operations and comprehensive income (loss) where the results are recorded for cash flow hedges:

	Amount of (Loss) Gain Recognized in OCI on Derivatives (Effective Portion)					Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)				Location of Loss Recognized in Income on Derivatives (Ineffective Portion)	Amount of Loss Recognized in Income on Derivatives Income (Ineffective Portion)
	Three Months Ended June 30,						Three Months Ended June 30,					Three Months Ended June 30,
(in thousands)	2017			2016			2017		2016			2017			2016
Interest rate contracts	$	(19	)	$	6	Interest expense, net	$	10	$	140	Interest expense, net	$	(2	)	$	—
Total	$	(19	)	$	6		$	10	$	140		$	(2	)	$	—

	Amount of Loss Recognized in OCI on Derivatives (Effective Portion)						Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion)				Location of Loss Recognized in Income on Derivatives (Ineffective Portion)	Amount of Loss Recognized in Income on Derivatives Income (Ineffective Portion)
	Six Months Ended June 30,							Six Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2017			2016				2017		2016			2017			2016
Interest rate contracts	$	(6	)	$	(74	)	Interest expense, net	$	29	$	223	Interest expense, net	$	(2	)	$	(1	)
Total	$	(6	)	$	(74	)		$	29	$	223		$	(2	)	$	(1	)

The effect of non-designated derivative instruments on the condensed consolidated statements of operations and comprehensive income (loss) for the three and six months ended June 30, 2017 and 2016 was immaterial.

- 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

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+ Details

Alliance HealthCare Services, Inc 10-Q