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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
 6 Months Ended
Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of fair value of the Company's derivative financial instruments
The following table summarizes certain terms of the Company's derivative contracts:
 
 
 
 
 
 
 
 
Fixed
 
 
 
 
 
Fair Value Asset (Liability)
 
 
 
 
 
 
Notional
 
Interest
 
Effective
 
Maturity
 
June 30,
 
December 31,
(In thousands)
 
 
 
Balance Sheet Location
 
Amount
 
Rate (a)
 
Date
 
Date
 
2019
 
2018
Derivative instruments not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate cap
 
(b)
 
Prepaid expenses and other assets, net
 
$
75,000

 
5.00
%
 
9/1/2017
 
8/31/2019
 
$
—

 
$
—

Interest rate cap
 
(b) (c)
 
Prepaid expenses and other assets, net
 
230,000

 
2.50
%
 
12/22/2016
 
12/23/2019
 
—

 
333

Derivative instruments designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate collar
 
(d) (e)
 
Prepaid expenses and other assets, net
 
51,592

 
1.50% - 2.50%

 
7/1/2018
 
5/1/2019
 
—

 
13

Interest rate collar
 
(d)
 
Accounts payable and accrued expenses
 
193,967

 
2.00% - 3.00%

 
5/1/2019
 
5/1/2020
 
(276
)
 
(37
)
Interest rate collar
 
(d)
 
Accounts payable and accrued expenses
 
354,217

 
2.25% - 3.25%

 
5/1/2020
 
5/1/2021
 
(2,275
)
 
(730
)
Interest rate collar
 
(d)
 
Accounts payable and accrued expenses
 
381,404

 
2.75% - 3.50%

 
5/1/2021
 
4/30/2022
 
(4,415
)
 
(1,969
)
Interest rate swap
 
(f)
 
Accounts payable and accrued expenses
 
615,000

 
2.96
%
 
9/21/2018
 
9/18/2023
 
(32,206
)
 
(13,781
)
Interest rate swap
 
(g)
 
Accounts payable and accrued expenses
 
1,810

 
4.89
%
 
11/1/2019
 
1/1/2032
 
(1,676
)
 
—

Total fair value derivative assets
 
 
 
 
 
 
 
 
 
 
 
$
—

 
$
346

Total fair value derivative liabilities
 
 
 
 
 
 
 
 
 
$
(40,848
)
 
$
(16,517
)
 
(a)
These rates represent the strike rate on HHC's interest swaps, caps and collars.
(b)
There was no interest income included in the Condensed Consolidated Statements of Operations for the three months ended June 30, 2019 related to these contracts. Interest income of $0.2 million is included in the Condensed Consolidated Statements of Operations for the six months ended June 30, 2019 and the year ended December 31, 2018 related to these contracts.
(c)
The Company settled this Interest rate cap on February 1, 2019.
(d)
On May 17, 2018 and May 18, 2018, the Company entered into these interest rate collars which are designated as cash flow hedges.
(e)
On May 1, 2019, the $51.6 million interest rate collar matured as scheduled.
(f)
Concurrent with the funding of the $615.0 million term loan on September 21, 2018, the Company entered into this interest rate swap which is designated as a cash flow hedge.
(g)
Concurrent with the closing of the $35.5 million construction loan for 8770 New Trails on June 27, 2019, the Company entered into this interest rate swap which is designated as a cash flow hedge.

Summary of effect of the Company's derivative financial instruments on the Condensed Consolidated Statements of Operations
The tables below present the effect of the Company's derivative financial instruments on the Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2019 and 2018 (in thousands):
 
 
Amount of (Loss) Gain Recognized
 
Amount of (Loss) Gain Recognized
 
 
in AOCI on Derivative
 
in AOCI on Derivative
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Derivatives in Cash Flow Hedging Relationships
 
2019
 
2018
 
2019
 
2018
Interest rate derivatives
   
$
(13,016
)
 
$
6,005

 
$
(18,832
)
 
$
14,266

 
 
 
Amount of Gain Reclassified
 
Amount of Gain Reclassified
 
 
from AOCI into Operations
 
from AOCI into Operations
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Location of Gain Reclassified from AOCI into Operations
 
2019
 
2018
 
2019
 
2018
Interest expense
   
$
92

 
$
652

 
$
220

 
$
868


 
 
Total Interest Expense Presented
 
Total Interest Expense Presented
 
 
in the Results of Operations in which the
 
in the Results of Operations in which the
 
 
Effects of Cash Flow Hedges are Recorded
 
Effects of Cash Flow Hedges are Recorded
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Interest Expense Presented in Results of Operations
 
2019
 
2018
 
2019
 
2018
Interest expense
 
$
24,203

 
$
18,903

 
$
47,529

 
$
35,512