Derivatives and Hedging

The fair value of all our interest rate swap contracts was reported as follows (in thousands):



	Assets			Liabilities
	Balance Sheet Location	Amount		Balance Sheet Location	Amount
Designated Hedges:
December 31, 2017	Other Assets, net	$	2,035	Other Liabilities, net	$	—
December 31, 2016	Other Assets, net	126		Other Liabilities, net	—

The gross presentation, the effects of offsetting for derivatives with a right to offset under master netting agreements and the net presentation of our interest rate swap contracts is as follows (in thousands):



							Gross Amounts Not Offset in Balance Sheet
	Gross Amounts Recognized		Gross Amounts Offset in Balance Sheet		Net Amounts Presented in Balance Sheet		Financial Instruments		Cash Collateral Received		Net Amount
December 31, 2017
Assets	$	2,035	$	—	$	2,035	$	—	$	—	$	2,035
December 31, 2016
Assets	126		—		126		—		—		126

Cash Flow Hedges

As of December 31, 2017 and 2016, we had three interest rate swap contracts, maturing through March 2020, with an aggregate notional amount of $200 million that were designated as cash flow hedges and fix the LIBOR component of the interest rates at 1.5%. We have determined that these contracts are highly effective in offsetting future variable interest cash flows.

During 2016, we entered into and settled a forward-starting interest rate swap contract with an aggregate notional amount of $200 million hedging future fixed-rate debt issuances, which fixed the 10-year swap rates at 1.5% per annum. Upon settlement of this contract in August 2016, we paid $2.1 million resulting in a loss of $2.0 million in accumulated other comprehensive loss.

As of December 31, 2017 and 2016, the net gain balance in accumulated other comprehensive loss relating to active and previously terminated cash flow interest rate swap contracts was $7.4 million and $6.4 million, respectively. Within the next 12 months, approximately $1.4 million in accumulated other comprehensive loss is expected to be reclassified as a reduction to interest expense related to our interest rate contracts.

A summary of cash flow interest rate swap contract hedging activity is as follows (in thousands):



Derivatives in Cash Flow Hedging Relationships	Amount of (Gain) Loss Recognized in Other Comprehensive Income on Derivative (Effective Portion)			Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)			Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Year Ended December 31, 2017	$	(1,063	)	Interest expense, net	$	42		Interest expense, net	$	—
Year Ended December 31, 2016	3,192			Interest expense, net	(1,435		)	Interest expense, net	(96		)
Year Ended December 31, 2015	(1,946		)	Interest expense, net	(2,798		)	Interest expense, net	—

Fair Value Hedges:

Associated with the refinancing of a secured note, on June 24, 2016, we terminated two interest rate swap contracts that were designated as fair value hedges and had an aggregate notional amount of $62.9 million. Upon settlement, we received $2.2 million, which was recognized as part of the gain on extinguishment of debt related to the hedged debt.

A summary of fair value interest rate swap contract hedging activity is as follows (in thousands):



	Gain (Loss) on Contracts			Gain (Loss) on Borrowings		Net Settlements and Accruals on Contracts ^{(1) (3)}		Amount of Gain (Loss) Recognized in Income ^{(2) (3)}
Year Ended December 31, 2016
Interest expense, net	$	(418	)	$	418	$	3,140	$	3,140
Year Ended December 31, 2015
Interest expense, net	(1,228		)	1,228		2,030		2,030

_______________


(1)	Amounts in this caption include gain (loss) recognized in income on derivatives and net cash settlements.


(2)	No ineffectiveness was recognized during the respective periods.


(3)	Included in each caption for the year ended December 31, 2016 is $2.2 million received upon the termination of two interest rate swap contracts.