Fair Value Measurements and Derivative Instruments (Tables)
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6 Months Ended |
Jun. 30, 2014
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Fair Value Disclosures [Abstract] |
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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 June 30, 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) | $ | 185,262 |
| | $ | 185,262 |
| | $ | 185,262 |
| | $ | — |
| | $ | — |
| | $ | 204,687 |
| | $ | 204,687 |
| | $ | 204,687 |
| | $ | — |
| | $ | — |
| Total Assets | $ | 185,262 |
| | $ | 185,262 |
| | $ | 185,262 |
| | $ | — |
| | $ | — |
| | $ | 204,687 |
| | $ | 204,687 |
| | $ | 204,687 |
| | $ | — |
| | $ | — |
| Liabilities: | | | | | | | | | | | | | | | | | | | | Long-term debt (including current portion of long-term debt)(5) | $ | 7,538,280 |
| | $ | 7,909,833 |
| | $ | 1,902,445 |
| | $ | 6,007,388 |
| | $ | — |
| | $ | 8,020,061 |
| | $ | 8,431,220 |
| | $ | 2,888,255 |
| | $ | 5,542,965 |
| | $ | — |
| Total Liabilities | $ | 7,538,280 |
| | $ | 7,909,833 |
| | $ | 1,902,445 |
| | $ | 6,007,388 |
| | $ | — |
| | $ | 8,020,061 |
| | $ | 8,431,220 |
| | $ | 2,888,255 |
| | $ | 5,542,965 |
| | $ | — |
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(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 June 30, 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 June 30, 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) | $ | 80,112 |
| | $ | — |
| | $ | 80,112 |
| | $ | — |
| | $ | 188,576 |
| | $ | — |
| | $ | 188,576 |
| | $ | — |
| Investments(5) | 5,973 |
| | 5,973 |
| | — |
| | — |
| | 6,044 |
| | 6,044 |
| | — |
| | — |
| Total Assets | $ | 86,085 |
| | $ | 5,973 |
| | $ | 80,112 |
| | $ | — |
| | $ | 194,620 |
| | $ | 6,044 |
| | $ | 188,576 |
| | $ | — |
| Liabilities: | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Derivative financial instruments(6) | $ | 74,431 |
| | $ | — |
| | $ | 74,431 |
| | $ | — |
| | $ | 100,260 |
| | $ | — |
| | $ | 100,260 |
| | $ | — |
| Total Liabilities | $ | 74,431 |
| | $ | — |
| | $ | 74,431 |
| | $ | — |
| | $ | 100,260 |
| | $ | — |
| | $ | 100,260 |
| | $ | — |
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(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 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 June 30, 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 June 30, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements: | | | | | | | | Fuel Swap Agreements | | June 30, 2014 | | December 31, 2013 | | (metric tons) | 2014 | 731,000 |
| | 762,000 |
| 2015 | 720,000 |
| | 665,000 |
| 2016 | 526,000 |
| | 372,000 |
| 2017 | 229,000 |
| | 74,000 |
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| | | | | | | | Fuel Swap Agreements | | As of June 30, 2014 | | As of December 31, 2013 | | (% hedged) | Projected fuel purchases for year: | |
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| 2014 | 55 | % | | 57 | % | 2015 | 51 | % | | 45 | % | 2016 | 35 | % | | 25 | % | 2017 | 15 | % | | 5 | % |
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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 June 30, 2014 | | As of December 31, 2013 | | Balance Sheet Location | | As of June 30, 2014 | | As of December 31, 2013 | | | Fair Value | | Fair Value | | | Fair Value | | Fair Value | In thousands | | | | | | | | | | | | Derivatives designated as hedging instruments under ASC 815-20(1) | | | | | | | | | | | | Interest rate swaps | Other assets | | $ | 1,640 |
| | $ | 56,571 |
| | Other long-term liabilities | | $ | 51,387 |
| | $ | 66,920 |
| Foreign currency forward contracts | Derivative financial instruments | | 30,214 |
| | 61,596 |
| | Accrued expenses and other liabilities | | — |
| | — |
| Foreign currency forward contracts | Other assets | | 9,582 |
| | 13,783 |
| | Other long-term liabilities | | 2,636 |
| | — |
| Foreign currency collar options | Derivative financial instruments | | 13,439 |
| | — |
| | Other long-term liabilities | | — |
| | — |
| Foreign currency collar options | Other assets | | — |
| | 22,172 |
| | Other long-term liabilities | | — |
| | — |
| Fuel swaps | Derivative financial instruments | | 10,738 |
| | 10,902 |
| | Accrued expenses and other liabilities | | 3,029 |
| | 1,657 |
| Fuel swaps | Other assets | | 12,585 |
| | 8,205 |
| | Other long-term liabilities | | 5,167 |
| | 9,052 |
| Total derivatives designated as hedging instruments under 815-20 | | | $ | 78,198 |
| | $ | 173,229 |
| | | | $ | 62,219 |
| | $ | 77,629 |
| Derivatives not designated as hedging instruments under ASC 815-20 | | | | | | | | | | | | Foreign currency forward contracts | Derivative financial instruments | | $ | 1,914 |
| | $ | 15,347 |
| | Accrued expenses and other liabilities | | $ | 12,212 |
| | $ | 22,631 |
| Total derivatives not designated as hedging instruments under 815-20 | | | 1,914 |
| | 15,347 |
| | | | 12,212 |
| | 22,631 |
| Total derivatives | | | $ | 80,112 |
| | $ | 188,576 |
| | | | $ | 74,431 |
| | $ | 100,260 |
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(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 June 30, 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 | | 171,035 |
| | 273,354 |
| | | | | $ | 171,035 |
| | $ | 750,796 |
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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 (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion) | | Location of Gain (Loss) 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 June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | | | Quarter Ended June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | In thousands | |
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| Foreign Currency Debt | $ | 256 |
| | $ | (7,978 | ) | | $ | 4,630 |
| | $ | 4,754 |
| | Other income (expense) | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
| | $ | 256 |
| | $ | (7,978 | ) | | $ | 4,630 |
| | $ | 4,754 |
| | | | $ | — |
| | $ | — |
| | $ | — |
| | $ | — |
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Derivative Instruments |
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Offsetting Liabilities |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | | | As of June 30, 2014 | | As of December 31, 2013 | | | Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | | Gross Amount of Eligible Offsetting Recognized Derivative Assets | | Cash Collateral Pledged | | Net Amount of Derivative Liabilities | | Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet | | Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | | Cash Collateral Pledged | | Net Amount of Derivative Liabilities | In thousands of dollars | | | | | | | | | | | | | | | | | Derivatives subject to master netting agreements | | $ | (74,431 | ) | | $ | 42,808 |
| | — |
| | $ | (31,623 | ) | | $ | (100,260 | ) | | $ | 91,627 |
| | — |
| | $ | (8,633 | ) | Total | | $ | (74,431 | ) | | $ | 42,808 |
| | — |
| | $ | (31,623 | ) | | $ | (100,260 | ) | | $ | 91,627 |
| | — |
| | $ | (8,633 | ) |
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Offsetting Assets |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements | | | As of June 30, 2014 | | As of December 31, 2013 | | | Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | | Gross Amount of Eligible Offsetting Recognized Derivative Liabilities | | Cash Collateral Received | | Net Amount of Derivative Assets | | Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet | | Gross Amount of Eligible Offsetting Recognized Derivative Assets | | Cash Collateral Received | | Net Amount of Derivative Assets | In thousands of dollars | | | | | | | | | | | | | | | | | Derivatives subject to master netting agreements | | $ | 80,112 |
| | $ | (42,808 | ) | | — |
| | $ | 37,304 |
| | $ | 188,576 |
| | $ | (91,627 | ) | | — |
| | $ | 96,949 |
| Total | | $ | 80,112 |
| | $ | (42,808 | ) | | — |
| | $ | 37,304 |
| | $ | 188,576 |
| | $ | (91,627 | ) | | — |
| | $ | 96,949 |
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Not Designated as Hedging Instrument
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Derivative Instruments |
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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 June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | In thousands | | |
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| | |
| Foreign currency forward contracts | Other income (expense) | $ | 8,889 |
| | $ | (18,669 | ) | | $ | 10,770 |
| | $ | (27,280 | ) | Fuel swaps | Other income (expense) | 285 |
| | (61 | ) | | (937 | ) | | 48 |
| Fuel call options | Other income (expense) | — |
| | (121 | ) | | — |
| | 37 |
| | | $ | 9,174 |
| | $ | (18,851 | ) | | $ | 9,833 |
| | $ | (27,195 | ) |
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Fair Value Hedging
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Derivative Instruments |
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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 June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | | Quarter Ended June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | In thousands | | | | | | | | | | | | | | | | | | | Interest rate swaps | | Interest expense, net of interest capitalized | | $ | 3,067 |
| | $ | 2,498 |
| | $ | 6,136 |
| | $ | 3,277 |
| | $ | 3,925 |
| | $ | 9,323 |
| | $ | 9,467 |
| | $ | 18,599 |
| Interest rate swaps | | Other income (expense) | | 14,931 |
| | (57,675 | ) | | 27,441 |
| | (59,244 | ) | | (11,621 | ) | | 54,761 |
| | (23,056 | ) | | 56,173 |
| | | | | $ | 17,998 |
| | $ | (55,177 | ) | | $ | 33,577 |
| | $ | (55,967 | ) | | $ | (7,696 | ) | | $ | 64,084 |
| | $ | (13,589 | ) | | $ | 74,772 |
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Cash flow hedge
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Derivative Instruments |
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Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Derivatives under ASC 815-20 Cash Flow Hedging Relationships | Amount of (Loss) Gain Recognized in Accumulated Other Comprehensive (Loss) Income on Derivative (Effective Portion) | | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive (Loss) Gain into Income (Effective Portion) | | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive (Loss) Income into Income (Effective Portion) | Quarter Ended June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | | | Quarter Ended June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | In thousands | |
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| Cross currency swaps | — |
| | — |
| | — |
| | — |
| | Interest expense, net of interest capitalized | | — |
| | (880 | ) | | (261 | ) | | (1,751 | ) | Interest rate swaps | (32,221 | ) | | 80,800 |
| | (66,745 | ) | | 93,488 |
| | Other income (expense) | | — |
| | — |
| | — |
| | — |
| Foreign currency forward contracts | (10,437 | ) | | 6,087 |
| | (9,243 | ) | | (8,995 | ) | | Depreciation and amortization expenses | | (450 | ) | | (450 | ) | | (899 | ) | | (899 | ) | Foreign currency forward contracts | — |
| | — |
| | — |
| | — |
| | Other income (expense) | | (238 | ) | | (239 | ) | | (3,814 | ) | | (477 | ) | Foreign currency forward contracts | — |
| | — |
| | — |
| | — |
| | Interest expense, net of interest capitalized | | — |
| | (5 | ) | | (57 | ) | | (5 | ) | Foreign currency collar options | (6,127 | ) | | 3,714 |
| | (8,734 | ) | | (11,247 | ) | | Depreciation and amortization expenses | | — |
| | — |
| | — |
| | — |
| Fuel swaps | 28,344 |
| | (65,225 | ) | | 6,928 |
| | (55,200 | ) | | Fuel | | 884 |
| | 9,408 |
| | 790 |
| | 26,236 |
| | $ | (20,441 | ) | | $ | 25,376 |
| | $ | (77,794 | ) | | $ | 18,046 |
| | | | $ | 196 |
| | $ | 7,834 |
| | $ | (4,241 | ) | | $ | 23,104 |
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| | | | | | | | | | | | | | | | | | | | Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | | Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) | Derivatives under ASC 815- 20 Cash Flow Hedging Relationships | | Quarter Ended June 30, 2014 | | Quarter Ended June 30, 2013 | | Six Months Ended June 30, 2014 | | Six Months Ended June 30, 2013 | In thousands | | | |
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| | |
| Interest rate swaps | Other income (expense) | | (76 | ) | | 373 |
| | (95 | ) | | 427 |
| Foreign currency forward contracts | Other income (expense) | | (7 | ) | | (5 | ) | | (27 | ) | | (10 | ) | Fuel swaps | Other income (expense) | | 2,094 |
| | (3,649 | ) | | 462 |
| | (4,369 | ) | | | | $ | 2,011 |
| | $ | (3,281 | ) | | $ | 340 |
| | $ | (3,952 | ) |
|