Derivative Financial Instruments

12 Months Ended

Dec. 31, 2014

Summary of Derivative Instruments [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

Certain of the Company’s foreign subsidiaries have entered into interest rate swap agreements, which have been designated as cash flow hedges, to manage exposure to variability in interest rates on debt.

South Africa

One of the Company’s South African subsidiaries has fifteen interest rate swap agreements outstanding, which mature on the earlier of termination of the underlying debt or March 31, 2020. The interest rate swap agreements provide that the Company pay a fixed interest rate ranging from 6.09% to 7.83% and receive variable interest at the three-month JIBAR over the term of the interest rate swap agreements. The notional value is reduced in accordance with the repayment schedule under the South African Facility.

Colombia

In connection with entering into the Colombian Credit Facility in October 2014, one of the Company’s Colombian subsidiaries entered into an interest rate swap agreement with an aggregate notional value of 100.0 billion COP (approximately $41.8 million) with certain of the lenders under the Colombian Credit Facility. The interest rate swap agreement matures on the earlier of termination of the underlying debt or April 24, 2021 and provides that the Company pay a fixed interest rate of 5.74% and receive variable interest at the three-month IBR over the term of the interest rate swap agreement. The notional value is reduced in accordance with the repayment schedule under the Colombian Credit Facility.

In October 2014, the Company settled its previously existing interest rate swap related to the Colombian Long-Term Credit Facility and recognized a 3.0 billion COP (approximately $1.4 million) loss included in Loss on retirement of long-term obligations in the consolidated statements of operations.

The notional amount and fair value of the interest rate swap agreements are as follows (in thousands):

	December 31, 2014				December 31, 2013
	Local		USD		Local		USD
South Africa (ZAR)
Notional	440,614		38,080		469,354		44,732
Fair Value	1,016		88		939		90
Colombia (COP)
Notional	100,000,000		41,798		101,250,000		52,547
Fair Value	(1,548,688	)	(647	)	(3,000,236	)	(1,557	)
Costa Rica (USD) (1)
Notional	—		—		N/A		42,000
Fair Value	—		—		N/A		(628	)

__________

(1) One of the Company’s Costa Rican subsidiaries had three interest rate swap agreements, which were terminated upon repayment of the Costa Rica Loan in February 2014.

As of December 31, 2014 and 2013, the South African interest rate swap agreements are in an asset position and are included in Notes receivable and other non-current assets on the consolidated balance sheets. The Colombian interest rate swap agreement is in a liability position and is included in Other non-current liabilities on the consolidated balance sheets.

In addition to the interest rate swap agreements, the Company is amortizing the settlement cost of a treasury rate lock as additional interest expense over the term of the 7.00% senior unsecured notes due 2017.

During the years ended December 31, 2014, 2013 and 2012, the interest rate swap agreements and treasury rate lock had the following impact on the Company’s consolidated financial statements (in thousands):

Year Ended December 31,	Gain(Loss) Recognized in OCI - Effective Portion	Gain(Loss) Reclassified from AOCI into Income - Effective Portion	Location of Gain(Loss) Reclassified from AOCI into Income- Effective Portion (1)	Gain(Loss) Recognized in Income - Ineffective Portion	Location of Gain(Loss) Recognized in Income - Ineffective Portion
2014	$(2,082)	$(3,606)	Interest expense/Loss on retirement of long-term obligations	N/A	N/A
2013	$1,481	$(2,809)	Interest expense	N/A	N/A
2012	$(6,220)	$(1,340)	Interest expense	N/A	N/A

__________

(1) During the year ended December 31, 2014, amount includes $1.0 million reclassified from AOCI into Loss on retirement of long-term obligations in connection with the settlement of the interest rate swap related to the Colombian Long-Term Credit Facility.

As of December 31, 2014, $0.7 million of the amount related to derivatives designated as cash flow hedges and recorded in AOCI is expected to be reclassified into earnings in the next twelve months.

The Company also recognized a gain on the settlement of interest rate swap agreements entered into in connection with the 2007 Securitization.  The settlement was recognized as a reduction in interest expense over a five-year period for which the interest rate swaps were designated as hedges.  During the year ended December 31, 2012, the Company recorded $0.2 million as a reduction in interest expense. The remaining portion of the gain was fully amortized during the year ended December 31, 2012.

For additional information on the Company’s interest rate swap agreements, see notes 12 and 13.