Derivative Investments and Hedging Activities

12 Months Ended

Dec. 31, 2016

Derivative Investments and Hedging Activities [Abstract]

Derivative Investments and Hedging Activities

10. Derivative Instruments and Hedging Activities

We use derivative instruments to manage risks related to interest (through December 30, 2016), the Cash Convertible Notes, and, prior to the sale of the TPHS business, foreign currencies and the fair value of the Gallup Derivative. We account for derivatives in accordance with ASC Topic 815, which establishes accounting and reporting standards requiring that certain derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. Additionally, changes in the derivative's fair value will be recognized currently in earnings unless specific hedge accounting criteria are met. As permitted under our master netting arrangements, the fair value amounts of our prior interest rate swaps and foreign currency options and/or forward contracts are presented on a net basis by counterparty in the consolidated balance sheets.

Derivative Instruments Designated as Hedging Instruments

Cash Flow Hedges

Derivative instruments that are designated and qualify as cash flow hedges are recorded at estimated fair value in the consolidated balance sheets, with the effective portion of the gains and losses being reported in accumulated other comprehensive income or loss ("accumulated OCI"). Cash flow hedges for all periods presented consist solely of interest rate swap agreements, which effectively modified our exposure to interest rate risk by converting a portion of our floating rate debt to fixed rate obligations, thus reducing the impact of interest rate changes on future interest expense. Under these agreements, we received a variable rate of interest based on LIBOR (as defined in Note 7), and we paid a fixed rate of interest with an interest rate of 1.480% plus a spread (see Note 7). We maintained an interest rate swap agreement that had a termination date of December 30, 2016, and as of December 31, 2016, we maintained no other interest rate swap agreements. Gains and losses on interest rate swap agreements were reclassified to interest expense in the same period during which the hedged transaction affected earnings or the period in which all or a portion of the hedge became ineffective.

The following table shows the effect of our cash flow hedges on the consolidated balance sheets during the years ended December 31, 2016 and 2015:

(In thousands)	For the Year Ended
Derivatives in Cash Flow Hedging Relationships	December 31, 2016		December 31, 2015
Loss related to effective portion of derivatives recognized in accumulated OCI, gross of tax effect	110		253
Loss related to effective portion of derivatives reclassified from accumulated OCI to interest expense, gross of tax effect	(507	)	(354	)

Gains and losses representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. During the years ended December 31, 2016 and 2015, there were no gains or losses on cash flow hedges recognized in our consolidated statements of comprehensive income (loss) resulting from hedge ineffectiveness.

Derivative Instruments Not Designated as Hedging Instruments

Our Cash Conversion Derivative, Cash Convertible Notes Hedges and, prior to July 31, 2016, Gallup Derivative and foreign currency options and/or forward contracts, do not qualify for hedge accounting treatment under U.S. GAAP and are measured at fair value, with gains and losses recognized immediately in the consolidated statements of comprehensive income (loss). Other than the Gallup Derivative described in Note 9, these derivative instruments not designated as hedging instruments did not have a material impact on our consolidated statements of comprehensive income (loss) for the years ended December 31, 2016 and 2015.

The Cash Conversion Derivative is accounted for as a derivative liability and carried at fair value. In order to offset the risk associated with the Cash Conversion Derivative, we entered into Cash Convertible Notes Hedges which are cash-settled and are intended to reduce our exposure to potential cash payments that we would be required to make if holders elect to convert the Cash Convertible Notes at a time when our stock price exceeds the conversion price. The Cash Convertible Notes Hedges are accounted for as a derivative asset and carried at fair value.

Prior to July 31, 2016 and the sale of the TPHS business, the Gallup Derivative was accounted for as a derivative liability and carried at fair value.

The gains and losses resulting from a change in fair values of the Cash Conversion Derivative and the Cash Convertible Notes Hedges are reported in the consolidated statements of comprehensive income (loss). Thesettlement on the Gallup Derivative has been recorded as a part of discontinued operations.

	Year Ended December 31,
(In thousands)	2016				2015				Statements of Comprehensive Income (Loss) Classification
Cash Convertible Notes Hedges:
Net unrealized (loss) gain		$	35,729			$	(35,393	)	Selling, general and administrative expense
Cash Conversion Derivative:
Net unrealized gain (loss)		$	(35,729	)		$	35,393		Selling, general and administrative expense
Gallup Derivative:
Net gain (loss)			4,823				(7,325	)	Loss from discontinued operations

Prior to the sale of the TPHS business, we also entered into foreign currency options and/or forward contracts in order to minimize our earnings exposure to fluctuations in foreign currency exchange rates.  Our foreign currency exchange contracts required current period mark-to-market accounting, with any change in fair value being recorded each period in the consolidated statements of comprehensive income (loss) in selling, general and administrative expenses. We do not execute transactions or hold derivative financial instruments for trading or other purposes.

Financial Instruments

The estimated gross fair values of derivative instruments at December 31, 2016 and December 31, 2015, excluding the impact of netting derivative assets and liabilities when a legally enforceable master netting agreement exists, were as follows:

	December 31, 2016				December 31, 2015
(In thousands)		Cash Convertible Notes Hedges and Cash Conversion Derivative		Foreign     Currency     exchange     contracts			Interest rate swap agreements		Cash Convertible Notes Hedges and Cash Conversion Derivative			Gallup Derivative
Assets:
Derivatives not designated as hedging instruments:
Other current assets		$	—	$		284	$	—	$	—	$	—
Other assets			48,361			—		—		12,632		—
Total assets		$	48,361	$		284	$	—	$	12,632	$	—
Liabilities:
Derivatives not designated as hedging instruments:
Accrued liabilities		$	—	$		48	$	—	$	—	$	3,323
Other long-term liabilities			48,361			—		—		12,632		3,016
Derivatives designated as hedging instruments:
Accrued liabilities			—			—		397		—		—
Total liabilities		$	48,361	$		48	$	397	$	12,632	$	6,339

See also Note 9 for more information on fair value measurements.