Fair Value Measurements and Derivative Instruments (Tables)

9 Months Ended

Sep. 30, 2014

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

Fair Value Measurements

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 September 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⁾	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Total Assets	$	183,181	$	183,181	$	183,181	$	—	$	—	$	204,687	$	204,687	$	204,687	$	—	$	—
Liabilities:
Long-term debt (including current portion of long-term debt)⁽⁵⁾	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	8,020,061	$	8,431,220	$	2,888,255	$	5,542,965	$	—
Total Liabilities	$	6,931,171	$	7,241,824	$	1,844,607	$	5,397,217	$	—	$	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 September 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

Assets and liabilities that are recorded at fair value have been categorized based upon the fair value hierarchy. 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 September 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⁾	$	57,937	$	—	$	57,937	$	—	$	188,576	$	—	$	188,576	$	—
Investments⁽⁵⁾	$	5,678	5,678		—		—		$	6,044	6,044		—		—
Total Assets	$	63,615	$	5,678	$	57,937	$	—	$	194,620	$	6,044	$	188,576	$	—
Liabilities:
Derivative financial instruments⁽⁶⁾	$	275,036	$	—	$	275,036	$	—	$	100,260	$	—	$	100,260	$	—
Total Liabilities	$	275,036	$	—	$	275,036	$	—	$	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 September 30, 2014 and December 31, 2013.

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

Outstanding Fuel Swap Agreements

As of September 30, 2014 and December 31, 2013, we had the following outstanding fuel swap agreements:



	Fuel Swap Agreements
	September 30, 2014	December 31, 2013
	(metric tons)
2014	731,000	762,000
2015	778,000	665,000
2016	600,000	372,000
2017	306,000	74,000



	Fuel Swap Agreements
	As of September 30, 2014		As of December 31, 2013
	(% hedged)
Projected fuel purchases for year:
2014	54	%	57	%
2015	56	%	45	%
2016	41	%	25	%
2017	20	%	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 September 30, 2014		As of December 31, 2013		Balance Sheet Location	As of September 30, 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	$	2,384	$	56,571	Other long-term liabilities	$	50,688	$	66,920
Foreign currency forward contracts	Derivative financial instruments	2,882		61,596		Accrued expenses and other liabilities	29,304		—
Foreign currency forward contracts	Other assets	40,682		13,783		Other long-term liabilities	99,437		—
Foreign currency collar options	Derivative financial instruments	—		—		Accrued expenses and other liabilities	8,465		—
Foreign currency collar options	Other assets	—		22,172		Accrued expenses and other liabilities	—		—
Fuel swaps	Derivative financial instruments	—		10,902		Accrued expenses and other liabilities	37,768		1,657
Fuel swaps	Other assets	18		8,205		Other long-term liabilities	27,016		9,052
Total derivatives designated as hedging instruments under ASC 815-20		$	45,966	$	173,229		$	252,678	$	77,629
Derivatives not designated as hedging instruments under ASC 815-20
Foreign currency forward contracts	Derivative financial instruments	$	11,971	$	15,347	Accrued expenses and other liabilities	$	22,358	$	22,631
Total derivatives not designated as hedging instruments under ASC 815-20		11,971		15,347			22,358		22,631
Total derivatives		$	57,937	$	188,576		$	275,036	$	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 September 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	169,819		273,354
		$	169,819	$	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 (Loss) Recognized in Other Comprehensive (Loss) Income (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 September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014		Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013
In thousands
Foreign Currency Debt	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)	Other income (expense)	$	—	$	—	$	—	$	—
	$	13,408	$	(26,347	)	$	18,038	$	(21,593	)		$	—	$	—	$	—	$	—

Derivative Instruments

Offsetting Liabilities



	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 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	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)
Total	$	(275,036	)	$	57,937	$	—	$	(217,099	)	$	(100,260	)	$	91,627	$	—	$	(8,633	)

Offsetting Assets



	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of September 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	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949
Total	$	57,937	$	(57,937	)	$	—	$	—	$	188,576	$	(91,627	)	$	—	$	96,949

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 (Loss) Gain Recognized in Income on Derivatives
Derivatives Not Designated as Hedging Instruments under ASC 815-20	Location of (Loss) Gain Recognized in Income on Derivatives	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Foreign currency forward contracts	Other income (expense)	$	(35,175	)	$	16,789		$	(24,405	)	$	(10,491	)
Fuel swaps	Other income (expense)	(220		)	220			(1,157		)	268
Fuel call options	Other income (expense)	—			(38		)	—			(1		)
		$	(35,395	)	$	16,971		$	(25,562	)	$	(10,224	)

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 Gain (Loss) Recognized in Income on Hedged Item
		Quarter Ended September 30, 2014			Quarter Ended September 30, 2013		Nine Months Ended September 30, 2014		Nine Months Ended September 30, 2013			Quarter Ended September 30, 2014		Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Interest expense, net of interest capitalized	$	3,063		$	3,022	$	9,199	$	6,299		$	3,968	$	9,503		$	13,435		$	28,102
Interest rate swaps	Other income (expense)	(3,010		)	958		24,431		(58,286		)	3,934		(620		)	(19,122		)	55,553
		$	53		$	3,980	$	33,630	$	(51,987	)	$	7,902	$	8,883		$	(5,687	)	$	83,655

Cash flow hedge

Derivative Instruments

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



Derivatives under ASC 815-20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive (Loss) Income on Derivative (Effective Portion)												Location of (Loss) Gain Reclassified from Accumulated Other Comprehensive (Loss) Gain into Income (Effective Portion)	Amount of (Loss) Gain reclassified from Accumulated Other Comprehensive (Loss) Income into Income (Effective Portion)
	Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013				Quarter Ended September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Cross currency swaps	$	—		$	—		$	—		$	—		Interest expense, net of interest capitalized	$	—		$	(890	)	$	(261	)	$	(2,641	)
Interest rate swaps	4,437			(5,816		)	(62,309		)	87,672			Other income (expense)	—			—			—			—
Foreign currency forward contracts	(163,387		)	47,338			(172,629		)	38,343			Depreciation and amortization expenses	(450		)	(449		)	(1,348		)	(1,348		)
Foreign currency forward contracts	—			—			—			—			Other income (expense)	(238		)	19,089			(4,052		)	18,612
Foreign currency forward contracts	—			—			—			—			Interest expense, net of interest capitalized	—			(217		)	(57		)	(222		)
Foreign currency collar options	(21,904		)	16,801			(30,638		)	5,554			Depreciation and amortization expenses	—			—			—			—
Fuel swaps	(71,456		)	32,785			(64,527		)	(22,415		)	Fuel	(1,996		)	12,002			(1,206		)	38,238
	$	(252,310	)	$	91,108		$	(330,103	)	$	109,154			$	(2,684	)	$	29,535		$	(6,924	)	$	52,639



	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 September 30, 2014			Quarter Ended September 30, 2013			Nine Months Ended September 30, 2014			Nine Months Ended September 30, 2013
In thousands
Interest rate swaps	Other income (expense)	$	17		$	(7	)	$	(78	)	$	420
Foreign currency forward contracts	Other income (expense)	15			15			(12		)	5
Fuel swaps	Other income (expense)	(8,069		)	(953		)	(7,607		)	(5,322		)
		$	(8,037	)	$	(945	)	$	(7,697	)	$	(4,897	)