Derivative Financial Instruments

12 Months Ended

Dec. 31, 2016

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

(11) Derivative Financial Instruments

From time to time, the Company may enter into interest rate swaps in an attempt to achieve a more balanced debt portfolio between fixed and variable debt.  The Company does not use derivative financial instruments for trading or speculative purposes. 

At December 31, 2016, the Company had three interest rate swaps for notional amounts of $100 million each related to its 7 1/8%senior notes maturing in December 2021.  These transactions were designated as fair value hedges since the swaps hedged against the change in fair value of fixed rate debt resulting from changes in interest rates.  The Company recorded a derivative asset of $8.6 million and $6.9 million within intangible and other long term assets in the consolidated balance sheets at December 31, 2016 and 2015, respectively, relating to these swaps. 

The location and effect of the derivative instrument on the consolidated statements of operations presented on a pre-tax basis is as follows (in thousands):  

		Years ended December 31,
Effect of derivative instrument	Location of (gain) loss  recognized	2016		2015		2014
Interest rate swap	Interest expense, net	$	2,306	$	(1,932)	$	(11,054)
Hedged item - debt	Interest expense, net		(3,980)		(790)		7,208
		$	(1,674)	$	(2,722)	$	(3,846)

During 2016, 2015 and 2014 $1.7 million, $2.7 million and $3.8 million of interest income, respectively, was related to the ineffectiveness associated with these fair value hedges.  Hedge ineffectiveness represents the difference between the changes in fair value of the derivative instruments and the changes in fair value of the fixed rate debt attributable to changes in the benchmark interest rate. 

Subsequent to year-end, during January 2017, the Company sold these interest rate swaps to the counterparties for $0.8 million.