Derivative Financial Instruments

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

The Company has typically used pay-fixed/receive-variable interest rate swaps to reduce the Company’s aggregate exposure to interest rate risk. the Company does not enter into derivative agreements for speculative purposes.

Swift Interest Rate Swaps

In April 2011, as contemplated by the then existing credit facility, the Company entered into two forward-starting interest rate swap agreements with a notional amount of $350.0 million. These interest rate swaps were effective in January 2013 and have a maturity date of July 2015. On April 27, 2011 (“designation date”), the Company designated and qualified these interest rate swaps as cash flow hedges. Subsequent to the designation date, the effective portion of the changes in estimated fair value of the designated swaps was recorded in AOCI, and thereafter reclassified to derivative interest expense in the periods that the interest on the hedged debt affected earnings. The Company began accruing for hedged interest in January 2013. Refer to Note 22 for amounts and the Company's methodology related to fair value of interest rate swaps.

On March 7, 2013, the Company entered into the 2013 Agreement, as discussed in Note 12. Due to the incorporation of a new interest rate floor provision in the 2013 Agreement, the Company concluded, as of February 28, 2013, that the outstanding interest rate swaps were no longer highly effective in achieving offsetting changes in cash flows related to the hedged interest payments. As a result, the Company de-designated the hedges as of February 28, 2013 (“de-designation date”), at which time the effective portion of the change in fair value of interest rate swaps (previously recorded in AOCI) was, and will continue to be, amortized as derivative interest expense over the period of the originally designated hedged interest payments through July 2015. Following the de-designation date, changes in fair value of the interest rate swaps are immediately recognized as derivative interest expense in the consolidated income statements.

Central Interest Rate Swap

In connection with the note payable to a bank due March 2016, Central entered into an interest rate swap agreement to manage its interest rate exposure. The interest rate swap agreement was designated as a cash flow hedge. The interest rate swap agreement reduced the effect of changes in interest rates on the floating rate associated with this note. The agreement effectively changed Central's interest rate exposure on this note to a fixed rate of 8.9%. In conjunction with the Central Acquisition on August 6, 2013, the Company paid $0.3 million to terminate Central's interest rate swap agreements.

Effects on Income and AOCI

Activities related to AOCI net of tax, are presented in the consolidated statement of stockholders' equity, and primarily pertain to derivative financial instruments. The tax effects are presented in the statements of comprehensive income. Activities related to foreign currency transactions were immaterial.

The following table presents pre-tax gains (losses) from changes in fair value, included in AOCI and earnings (in thousands):

	2014		2013		2012
Losses recognized in AOCI from cash flow hedges (effective portion)	$	—	$	145	$	2,786
Loss reclassified from AOCI into income from cash flow hedges (effective portion)	$	6,218	$	3,143	$	5,101
Loss recognized in income from de-designated derivative contracts	277		709		—
Derivative interest expense	$	6,495	$	3,852	$	5,101

As of December 31, 2014, $4.0 million of deferred losses on derivatives in AOCI are expected to be reclassified to earnings within the next 12 months.

Losses on cash flow hedging, reclassified out of AOCI were as follows (in thousands):

		Year Ended December 31,
	Reclassified to:	2014			2013			2012
Interest rate swaps	Derivative interest expense	$	6,218		$	3,143		$	5,101
Income tax (benefit) expense	Income tax expense	(2,220		)	(1,226		)	1,989
	Net income	$	3,998		$	1,917		$	7,090