Note 11 - Interest Rate Swaps

12 Months Ended

Dec. 31, 2019

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

11. INTEREST RATE SWAPS

The Company is party to two interest rate swap agreements, designated as cash flow hedges, to manage the risk of fluctuations in interest expense on its variable rate LIBOR debt. Under the first swap agreement effective March 2019, with respect to a notional amount of $850.0 million, the Company’s monthly payment obligation is determined at a fixed base rate of 2.653%. Under the second swap agreement effective in June 2020, with respect to a notional amount of $350.0 million, the Company’s monthly payment obligation will be determined at a fixed base rate of 2.739%. Both interest rate swap agreements are scheduled to mature in the first quarter of 2029 but may be terminated prior to their scheduled maturities at the election of the Company or the counterparties as provided in the swap agreements. As of December 31, 2019, the Company’s interest rate swap liabilities were recorded at their combined fair value of $89.7 million, with the current and noncurrent portions reflected in accounts payable and accrued expenses and other noncurrent liabilities, respectively, within the consolidated balance sheet.

Changes in the fair values of the interest rate swaps are reported through other comprehensive income until the underlying hedged debt’s interest expense impacts net income, at which point the corresponding change in fair value is reclassified from accumulated other comprehensive income to interest expense. A loss of $89.7 million ($67.5 million net of tax) was recorded through other comprehensive income during 2019 and a loss of $3.1 million was reflected in interest expense. The Company currently expects that $11.0 million of the accumulated other comprehensive loss at December 31, 2019 will be reclassified to interest expense within the next 12 months.

The Company does not hold any derivative instruments for speculative trading purposes.