Derivative Instruments And Hedging Activities

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments And Hedging Activities

Note 21 — Derivative Instruments and Hedging Activities

In June 2015, we entered into interest rate swap contracts to fix the interest rate on $187.5 million of the Nordea Q5000 Loan (Note 8). These swap contracts, which are settled monthly, began in June 2015 and extend through April 2020. Our interest rate swap contracts qualify for cash flow hedge accounting treatment. Changes in the fair value of interest rate swaps are reported in accumulated OCI (net of tax). These changes are subsequently reclassified into earnings when the anticipated interest is recognized as interest expense.

In February 2013, we entered into foreign currency exchange contracts to hedge our foreign currency exposure associated with the Grand Canyon II and Grand Canyon III charter payments denominated in the Norwegian kroner through July 2019 and February 2020, respectively. Unrealized losses associated with our foreign currency exchange contracts that qualify for hedge accounting treatment are included in accumulated OCI (net of tax). These changes are subsequently reclassified into earnings when the forecasted vessel charter payments are made and recorded as cost of sales. Changes in unrealized losses associated with the foreign currency exchange contracts that are not designated as cash flow hedges are reflected in “Other income (expense), net” in the accompanying consolidated statements of operations.

The following table presents the balance sheet location and fair value of our derivative instruments that were designated as hedging instruments (in thousands): 

	December 31,
	2019			2018
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Asset Derivative Instruments:
Interest rate swaps	Other current assets	$	44	Other current assets	$	863
Interest rate swaps	Other assets, net	—		Other assets, net	201
		$	44		$	1,064
Liability Derivative Instruments:
Foreign exchange contracts	Accrued liabilities	$	401	Accrued liabilities	$	5,857
Foreign exchange contracts	Other non-current liabilities	—		Other non-current liabilities	354
		$	401		$	6,211

The following table presents the balance sheet location and fair value of our derivative instruments that were not designated as hedging instruments (in thousands): 

	December 31,
	2019			2018
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Liability Derivative Instruments:
Foreign exchange contracts	Accrued liabilities	$	601	Accrued liabilities	$	3,454
Foreign exchange contracts	Other non-current liabilities	—		Other non-current liabilities	530
		$	601		$	3,984

The following tables present the impact that derivative instruments designated as hedging instruments had on our accumulated OCI (net of tax) and our consolidated statements of operations (in thousands). We estimate that as of December 31, 2019, $0.3 million of net losses in accumulated OCI associated with our derivative instruments is expected to be reclassified into earnings within the next 12 months.

	Unrealized Gain (Loss) Recognized in OCI
	Year Ended December 31,
	2019			2018			2017
Foreign exchange contracts	$	(315	)	$	(1,453	)	$	2,672
Interest rate swaps	(365		)	606			651
	$	(680	)	$	(847	)	$	3,323

	Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings	Gain (Loss) Reclassified from Accumulated OCI into Earnings
		Year Ended December 31,
		2019			2018			2017
Foreign exchange contracts	Cost of sales	$	(6,125	)	$	(7,709	)	$	(12,300	)
Interest rate swaps	Net interest expense	655			508			(615		)
		$	(5,470	)	$	(7,201	)	$	(12,915	)

The following table presents the impact that derivative instruments not designated as hedging instruments had on our consolidated statements of operations (in thousands): 

	Location of Gain (Loss) Recognized in Earnings	Gain (Loss) Recognized in Earnings
		Year Ended December 31,
		2019			2018			2017
Foreign exchange contracts	Other income (expense), net	$	(378	)	$	(901	)	$	818
		$	(378	)	$	(901	)	$	818