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Interest Rate Hedge Swaps (Tables)
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9 Months Ended |
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Sep. 30, 2014
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Derivative assets and liabilities at fair value |
The table below presents the Company's assets and liabilities measured at fair value on a recurring basis as well as their classification on the Consolidated Balance Sheets as of September 30, 2014 and December 31, 2013, aggregated by the level in the fair value hierarchy within which those measurements fall. Hedges that are valued as receivable by the Company are considered Asset Derivatives and those that are valued as payable by the Company are considered Liability Derivatives.
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Derivative Financial Instruments Measured At Fair Value on a Recurring Basis |
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Balance Sheet
Classification
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Fair Value Hierarchy |
Balance Sheet Line Item |
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Level 1 |
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Level 2 |
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Level 3 |
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September 30, 2014 |
Hedged derivative asset |
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Assets |
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$ |
— |
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$ |
577,584 |
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$ |
— |
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December 31, 2013 |
Hedged derivative asset |
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Assets |
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$ |
— |
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$ |
680,968 |
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$ |
— |
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Level 1 – quoted prices in active markets for identical investments |
Level 2 – other significant observable inputs (including quoted prices for similar investments, market corroborated inputs, etc.) |
Level 3 – significant unobservable inputs (including the Company’s own assumptions in determining the fair value of investments) |
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| Outstanding derivative and financial instruments |
As of September 30, 2014, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
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Outstanding Derivatives Designated as Cash Flow Hedges of Interest Rate Risk |
Interest Rate Derivative |
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Number of Instruments |
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Notional Amount Outstanding |
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Floating Rate Received |
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Fixed Rate Paid |
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Effective Date |
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Termination Date |
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Interest Rate Swap |
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2 |
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$52,500,000 |
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February 5, 2013 |
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December 5, 2017 |
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1-month US Dollar LIBOR |
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0.865% |
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| Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance |
The tables below present the effect of the Company's derivative financial instruments on the Income Statement for the three and nine months ended September 30, 2014 and September 30, 2013.
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Effect of Derivative Financial Instruments on Income Statement |
Derivatives in Cash Flow Hedging Relationships |
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Amount of Gain (Loss) Recognized in AOCI
on Derivative
(Effective Portion)
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Location of
Gain (Loss) Reclassified from AOCI into Net Income (Effective Portion)
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Amount of Gain (Loss) Reclassified from AOCI on Derivatives (Effective Portion) Recognized in Net Income * |
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Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |
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Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion, Amounts Excluded from Effectiveness Testing) |
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For the three months ended: |
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September 30, 2014 |
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September 30, 2013 |
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September 30, 2014 |
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September 30, 2013 |
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September 30, 2014 |
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September 30, 2013 |
Interest Rate Products |
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$ |
187,642 |
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$ |
(397,214 |
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Interest Expense |
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$ |
(77,135 |
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$ |
(72,757 |
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Interest Expense |
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$ |
148 |
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$ |
(1,062 |
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For the nine months ended: |
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September 30, 2014 |
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September 30, 2013 |
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September 30, 2014 |
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September 30, 2013 |
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September 30, 2014 |
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September 30, 2013 |
Interest Rate Products |
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$ |
(385,232 |
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$ |
669,674 |
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Interest Expense |
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$ |
(228,716 |
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$ |
(142,750 |
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Interest Expense |
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$ |
(434 |
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$ |
6,098 |
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Derivatives Not Designated as Hedging Instruments |
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Location of
Gain (Loss) Recognized in Income on Derivative
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Amount of Gain (Loss) Recognized in Income on Derivative * |
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For the Three Months Ended |
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For the Nine Months Ended |
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September 30, 2014 |
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September 30, 2013 |
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September 30, 2014 |
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September
30, 2013
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Interest rate contracts |
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Interest Expense |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
(75,200 |
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* The gain or (loss) recognized in income on derivatives includes changes in fair value of the derivatives as
well as the periodic cash settlements and interest accruals for derivatives not designated as hedging
instruments
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| Derivative Financial Instruments, Liabilities, Fair Value Disclosure |
The table below presents a gross presentation, the effects of offsetting, and a net presentation of the Company's derivatives as of September 30, 2014 and December 31, 2013. The net amounts of derivative assets or liabilities can be reconciled to the tabular disclosure of fair value. The tabular disclosure of fair value provides the location that derivative assets and liabilities are presented on the Balance Sheet.
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Offsetting Derivatives |
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Gross Amounts of Recognized Assets |
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Gross Amounts Offset in the Statement of Financial Position |
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Net Amounts of Assets presented in the Statement of Financial Position |
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Gross Amounts Not
Offset in the Statement
of Financial Position
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Financial Instruments |
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Cash Collateral Received |
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Net Amount |
Offsetting Derivative Assets as of September 30, 2014 |
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$ |
577,584 |
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$ |
— |
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$ |
577,584 |
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$ |
— |
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$ |
— |
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$ |
577,584 |
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Offsetting Derivative Liabilities as of September 30, 2014 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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Offsetting Derivative Assets as of December 31, 2013 |
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$ |
680,968 |
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$ |
— |
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$ |
680,968 |
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$ |
— |
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$ |
— |
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$ |
680,968 |
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Offsetting Derivative Liabilities as of December 31, 2013 |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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$ |
— |
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