Fair Value Measurements and Derivative Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Estimated Fair Value of Financial Instruments that are not Measured at Fair Value on Recurring Basis

The estimated fair value of our financial instruments that are not measured at fair value on a recurring basis, categorized based upon the fair value hierarchy, are as follows (in thousands):



	Fair Value Measurements at March 31, 2014 Using										Fair Value Measurements at December 31, 2013 Using
Description	Total Carrying Amount		Total Fair Value		Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾		Total Carrying Amount		Total Fair Value		Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾
Assets:
Cash and cash equivalents⁽⁴⁾	$	216,508	$	216,508	$	216,508	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Total Assets	$	216,508	$	216,508	$	216,508	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Liabilities:
Long-term debt (including current portion of long-term debt)⁽⁵⁾	$	7,942,449	$	8,319,299	$	1,893,376	$	6,425,923	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—
Total Liabilities	$	7,942,449	$	8,319,299	$	1,893,376	$	6,425,923	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—

(1) Inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Valuation of these items does not entail a significant amount of judgment.

(2) Inputs other than quoted prices included within Level 1 that are observable for the liability, either directly or indirectly. For unsecured revolving credit facilities and unsecured term loans, fair value is determined utilizing the income valuation approach. This valuation model takes into account the contract terms of our debt such as the debt maturity and the interest rate on the debt. The valuation model also takes into account the creditworthiness of the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of March 31, 2014 and December 31, 2013.

(4) Consists of cash and marketable securities with original maturities of less than 90 days.

(5) Consists of unsecured revolving credit facilities, unsecured senior notes, senior debentures and unsecured term loans. Does not include our capital lease obligations.

Company's Financial Instruments Recorded at Fair Value on Recurring Basis

The following table presents information about the Company’s financial instruments recorded at fair value on a recurring basis (in thousands):



	Fair Value Measurements at March 31, 2014 Using								Fair Value Measurements at December 31, 2013 Using
Description	Total		Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾		Total		Level 1⁽¹⁾		Level 2⁽²⁾		Level 3⁽³⁾
Assets:
Derivative financial instruments⁽⁴⁾	$	119,704	$	—	$	119,704	$	—	$	188,576	$	—	$	188,576	$	—
Investments⁽⁵⁾	6,136		6,136		—		—		6,044		6,044		—		—
Total Assets	$	125,840	$	6,136	$	119,704	$	—	$	194,620	$	6,044	$	188,576	$	—
Liabilities:
Derivative financial instruments⁽⁶⁾	$	107,340	$	—	$	107,340	$	—	$	100,260	$	—	$	100,260	$	—
Total Liabilities	$	107,340	$	—	$	107,340	$	—	$	100,260	$	—	$	100,260	$	—

(2) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. For foreign currency forward contracts, interest rate swaps, cross currency swaps and fuel swaps, fair value is derived using valuation models that utilize the income valuation approach. These valuation models take into account the contract terms, such as maturity, as well as other inputs, such as foreign exchange rates and curves, fuel types, fuel curves and interest rate yield curves. Fair value for foreign currency collar options is determined by using standard option pricing models with inputs based on the options’ contract terms, such as exercise price and maturity, and readily available public market data, such as foreign exchange curves, foreign exchange volatility levels and discount rates. All derivative instrument fair values take into account the creditworthiness of the counterparty and the Company.

(3) Inputs that are unobservable. The Company did not use any Level 3 inputs as of March 31, 2014 and December 31, 2013.

(4) Consists of foreign currency forward contracts, foreign currency collar options, interest rate swaps and fuel swaps. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

(5) Consists of exchange-traded equity securities and mutual funds.

(6) Consists of interest rate swaps, fuel swaps and foreign currency forward contracts. Please refer to the “Fair Value of Derivative Instruments” table for breakdown by instrument type.

Outstanding Fuel Swap Agreements

As of March 31, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements:



	Fuel Swap Agreements
	March 31, 2014	December 31, 2013
	(metric tons)
2014	731,000	762,000
2015	720,000	665,000
2016	447,000	373,000
2017	152,000	74,000



	Fuel Swap Agreements
	As of March 31, 2014		As of December 31, 2013
	(% hedged)
Projected fuel purchases for year:
2014	54	%	57	%
2015	51	%	45	%
2016	30	%	25	%
2017	10	%	5	%

Fair Value And Line item Caption of Derivative Instruments

The fair value and line item caption of derivative instruments recorded within our consolidated balance sheets were as follows:



	Fair Value of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of March 31, 2014		As of December 31, 2013		Balance Sheet Location	As of March 31, 2014		As of December 31, 2013
	Balance Sheet Location	Fair Value		Fair Value		Balance Sheet Location	Fair Value		Fair Value
In thousands
Derivatives designated as hedging instruments under ASC 815-20⁽¹⁾
Interest rate swaps	Other assets	$	26,971	$	56,571	Other long-term liabilities	$	59,353	$	66,920
Foreign currency forward contracts	Derivative financial instruments	36,758		61,596		Accrued expenses and other liabilities	—		—
Foreign currency forward contracts	Other assets	14,036		13,783		Other long-term liabilities	4,086		—
Foreign currency collar options	Other assets	19,565		22,172		Other long-term liabilities	—		—
Fuel swaps	Derivative financial instruments	3,982		10,902		Accrued expenses and other liabilities	7,349		1,657
Fuel swaps	Other assets	2,808		8,205		Other long-term liabilities	13,897		9,052
Total derivatives designated as hedging instruments under 815-20		$	104,120	$	173,229		$	84,685	$	77,629
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	15,345	$	15,347	Accrued expenses and other liabilities	$	22,647	$	22,631
Fuel swaps	Derivative financial instruments	239		—		Accrued expenses and other liabilities	—		—
Fuel swaps	Other assets	—		—		Other long-term liabilities	8		—
Total derivatives not designated as hedging instruments under 815-20		15,584		15,347			22,655		22,631
Total derivatives		$	119,704	$	188,576		$	107,340	$	100,260

(1) Accounting Standard Codification 815-20 “Derivatives and Hedging”.

Carrying Value and Line Item Caption of Non-derivative Instruments designated as hedging instruments

The carrying value and line item caption of non-derivative instruments designated as hedging instruments recorded within our consolidated balance sheets were as follows:



		Carrying Value
Non-derivative instrument designated as hedging instrument under ASC 815-20	Balance Sheet Location	As of March 31, 2014		As of December 31, 2013
In thousands
Foreign currency debt	Current portion of long-term debt	$	—	$	477,442
Foreign currency debt	Long-term debt	112,090		273,354
		$	112,090	$	750,796

Effect of Non-derivative Instruments Qualifying and Designated as net investment Hedging Instruments on Consolidated Financial Statements

The effect of non-derivative instruments qualifying and designated as net investment hedging instruments on the consolidated financial statements was as follows:



Non-derivative instruments under ASC 815- 20 Net Investment Hedging Relationships	Amount of Gain Recognized in Other Comprehensive (Loss) Income (Effective Portion)				Location of Gain in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Gain (Loss) Recognized in Income (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Quarter Ended March 31, 2014		Quarter Ended March 31, 2013			Quarter Ended March 31, 2014		Quarter Ended March 31, 2013
In thousands
Foreign Currency Debt	$	4,374	$	12,732	Other expense	$	—	$	—
	$	4,374	$	12,732		$	—	$	—

Not Designated as Hedging Instrument

Derivative Instruments

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivatives not designated as hedging instruments on the consolidated financial statements was as follows:



		Amount of Gain (Loss) Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of Gain (Loss) Recognized in Income on Derivatives	Quarter Ended March 31, 2014			Quarter Ended March 31, 2013
In thousands
Foreign currency forward contracts	Other expense	$	1,881		$	(8,611	)
Fuel swaps	Other expense	(1,222		)	109
Fuel call options	Other expense	—			158
		$	659		$	(8,344	)

Fair Value Hedging

Derivative Instruments

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivative instruments qualifying and designated as hedging instruments and the related hedged items in fair value hedges on the consolidated statements of comprehensive income (loss) was as follows:



Derivatives and related Hedged Items under ASC 815-20 Fair Value Hedging Relationships	Location of Gain (Loss) Recognized in Income on Derivative and Hedged Item	Amount of Gain (Loss) Recognized in Income on Derivative					Amount of (Loss) Gain Recognized in Income on Hedged Item
		Quarter Ended March 31, 2014		Quarter Ended March 31, 2013			Quarter Ended March 31, 2014			Quarter Ended March 31, 2013
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	3,069	$	779		$	5,542		$	9,276
Interest rate swaps	Other expense	12,510		(1,569		)	(11,435		)	1,412
		$	15,579	$	(790	)	$	(5,893	)	$	10,688

Cash flow hedge

Derivative Instruments

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance

The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows:



Derivatives under ASC 815-20 Cash Flow Hedging Relationships	Amount of Loss Recognized in Accumulated Other Comprehensive Loss on Derivative (Effective Portion)						Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)	Amount of (Loss) Gain Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)						Location of Loss Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)	Amount of Loss Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)
	Quarter Ended March 31, 2014			Quarter Ended March 31, 2013				Quarter Ended March 31, 2014			Quarter Ended March 31, 2013				Quarter Ended March 31, 2014			Quarter Ended March 31, 2013
In thousands
Cross currency swaps	—			—			Interest expense, net of interest capitalized	(261		)	(871		)	Other expense	—			—
Interest rate swaps	(34,525		)	12,688			Other expense	—			—			Other expense	(19		)	54
Foreign currency forward contracts	1,195			(15,082		)	Depreciation and amortization expenses	(449		)	(449		)	Other expense	(20		)	(5		)
Foreign currency forward contracts	—			—			Other expense	(3,576		)	(238		)	Other expense	—			—
Foreign currency forward contracts	—			—			Interest expense, net of interest capitalized	(57		)	—			Other expense	—			—
Foreign currency collar options	(2,607		)	(14,961		)	Depreciation and amortization expenses	—			—			Other expense	—			—
Fuel swaps	(21,415		)	10,025			Fuel	(94		)	16,828			Other expense	(1,632		)	(720		)
	$	(57,352	)	$	(7,330	)		$	(4,437	)	$	15,270			$	(1,671	)	$	(671	)