DERIVATIVE FINANCIAL INSTRUMENTS

Our net income and cash flows are subject to fluctuations resulting from changes in interest rates on our variable rate debt obligations and from changes in foreign currency exchange rates, particularly with respect to the U.S. dollar and the Canadian dollar. In limited circumstances, we may also hold long positions in the commodities we handle on behalf of our customers, which exposes us to commodity price risk. We use derivative financial instruments, including futures, forwards, swaps, options and other financial instruments with similar characteristics, to manage the risks associated with market fluctuations in interest rates, foreign currency exchange rates and commodity prices, as well as to reduce volatility in our cash flows. We have not historically designated, nor do we expect to designate, our derivative financial instruments as hedges of the underlying risk exposure. All of our derivative financial instruments are employed in connection with an underlying asset, liability and/or forecasted transaction and are not entered into for speculative purposes.

Interest Rate Derivatives

We use interest rate derivative financial instruments to partially mitigate our exposure to interest rate fluctuations on our variable rate debt. Under our Credit Agreement, one-month LIBOR is used as the index rate for the interest we are charged on amounts borrowed under our Revolving Credit Facility. Effective November 2017, we entered into a five-year interest rate collar contract with a $100 million notional amount. The collar establishes a range where we will pay the counterparty if the one-month Overnight Index Swap, or OIS, rate falls below the established floor rate of 1.7%, and the counterparty will pay us if the one-month OIS rate exceeds the established ceiling rate of 2.5%. The collar settles monthly through the termination date in October 2022. No payments or receipts are exchanged on the interest rate collar contracts unless interest rates rise above or fall below the pre-determined ceiling or floor rates. Prior to February 2019, our interest rate collar contract discussed above was based on one-month LIBOR, which is being phased out by financial institutions in the United States.

Derivative Positions

We record all of our derivative financial instruments at their fair values in the line items specified below within our consolidated balance sheets, the amounts of which were as follows at the dates indicated:



	June 30, 2019			December 31, 2018
	(in thousands)
Other current assets	$	—		$	260
Other non-current assets	—			335
Other current liabilities	(135		)	—
Other non-current liabilities	(1,017		)	—
	$	(1,152	)	$	595

We have not designated our derivative financial instruments as hedges of our interest rate or foreign currency exposures. As a result, changes in the fair value of these derivatives are recorded as “Loss (gain) associated with derivative instruments” in our consolidated statements of income. The gains or losses associated with changes in the fair value of our derivative contracts do not affect our cash flows until the underlying contract is settled by making or receiving a payment to or from the counterparty. In connection with our derivative activities, we recognized the following amounts during the periods presented:



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019		2018
	(in thousands)
Loss (gain) associated with derivative instruments	$	1,074	$	(386	)	$	1,746	$	(1,410	)

We determine the fair value of our derivative financial instruments using third party pricing information that is derived from observable market inputs, which we classify as level 2 with respect to the fair value hierarchy.

The following table presents summarized information about the fair values of our outstanding interest rate contracts for the periods indicated:



					At June 30, 2019			At December 31, 2018
	Notional		Interest Rate Parameters		Fair Value			Fair Value
					(in thousands)
Collar Agreements Maturing in 2022
Ceiling	$	100,000,000	2.5	%	$	202		$	1,238
Floor	$	100,000,000	1.7	%	(1,354		)	(643		)
Total					$	(1,152	)	$	595

We record the fair market value of our derivative financial instruments in our consolidated balance sheets as current and non-current assets or liabilities on a net basis by counterparty. The terms of the International Swaps and Derivatives Association, or ISDA, Master Agreement governs our financial contracts and include master netting agreements that allow the parties to our derivative contracts to elect net settlement in respect of all transactions under the agreements. The effect of the rights of offset are presented in the tables below as of the dates indicated.



	June 30, 2019
	Current assets			Non-current assets			Current liabilities			Non-current liabilities			Total
	(in thousands)
Fair value of derivatives — gross presentation	$	7		$	195		$	(142	)	$	(1,212	)	$	(1,152	)
Effects of netting arrangements	(7		)	(195		)	7			195			—
Fair value of derivatives — net presentation	$	—		$	—		$	(135	)	$	(1,017	)	$	(1,152	)



	December 31, 2018
	Current assets		Non-current assets			Current liabilities		Non-current liabilities			Total
	(in thousands)
Fair value of derivatives — gross presentation	$	260	$	978		$	—	$	(643	)	$	595
Effects of netting arrangements	—		(643		)	—		643			—
Fair value of derivatives — net presentation	$	260	$	335		$	—	$	—		$	595