Annual report pursuant to Section 13 and 15(d)

Derivative and Other Comprehensive Income

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Derivative and Other Comprehensive Income
12 Months Ended
Dec. 31, 2017
Derivative and Other Comprehensive Income  
Derivative and Other Comprehensive Income
Derivative and Other Comprehensive Income
From time to time, the Company enters into derivative instruments for risk management purposes only, including a derivative designated as a cash flow hedge under guidance for derivative instruments and hedging activities. The Company uses interest rate-related derivative instruments to manage the exposure to fluctuations in interest rates. By using these instruments, the Company exposes itself, from time to time, to both credit and market risk. Credit risk is the failure of either party to the contract to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, creating credit risk for the Company. The Company minimizes credit risk by entering into transactions with high-quality counterparties whose credit ratings are evaluated on a quarterly basis. Market risk, as it relates to the Company’s interest-rate derivative, is the adverse effect on the value of a financial instrument resulting from changes in interest rates. The Company minimizes market risk by establishing and monitoring parameters that limit the types and degree of market risk that the Company accepts.
The Company had no active derivative financial instruments at December 31, 2017 or December 25, 2016. The Company had one interest rate swap that was highly effective during 2015 until it matured on June 30, 2015. The loss on the interest rate swap designated as a cash flow hedge recognized in other comprehensive loss and reclassifications from Accumulated other comprehensive loss to earnings during 2015 were immaterial.