Fair Value Measurements and Derivative Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

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, 2015		As of December 31, 2014		Balance Sheet Location	As of June 30, 2015		As of December 31, 2014
	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	$	7,266	$	—	Other long-term liabilities	$	62,402	$	65,768
Foreign currency forward contracts	Derivative financial instruments	107,900		—		Derivative financial instruments	291,503		17,619
Foreign currency forward contracts	Other assets	—		63,981		Other long-term liabilities	8,545		164,627
Foreign currency collar options	Derivative financial instruments	—		—		Derivative financial instruments	—		21,855
Fuel swaps	Derivative financial instruments	1,018		—		Derivative financial instruments	162,512		227,512
Fuel swaps	Other assets	1,862		—		Other long-term liabilities	174,513		270,254
Total derivatives designated as hedging instruments under 815-20		118,046		63,981			699,475		767,635
Derivatives not designated as hedging instruments under ASC 815-20
Fuel swaps	Derivative financial instruments	—		—		Derivative financial instruments	14,599		—
Fuel swaps	Other Assets	—		—		Other long-term liabilities	12,536		—
Total derivatives not designated as hedging instruments under 815-20		—		—			27,135		—
Total derivatives		$	118,046	$	63,981		$	726,610	$	767,635

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

Non Derivative 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, 2015		As of December 31, 2014
(In thousands)
Foreign currency debt	Long-term debt	$	158,119	$	168,718
		$	158,119	$	168,718

Schedule of Price Risk Derivatives

As of June 30, 2015 and December 31, 2014, we had the following outstanding fuel swap agreements:



	Fuel Swap Agreements
	As of June 30, 2015	As of December 31, 2014
	(metric tons)
2015	361,000	806,000
2016	805,000	802,000
2017	598,000	525,000
2018	300,000	226,000



	Fuel Swap Agreements
	As of June 30, 2015		As of December 31, 2014
	(% hedged)
Projected fuel purchases:
2015	53	%	58	%
2016	55	%	55	%
2017	40	%	35	%
2018	20	%	15	%

Fair Value Measurements, Nonrecurring

Fair Value Measurements

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



	Fair Value Measurements at June 30, 2015 Using										Fair Value Measurements at December 31, 2014 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⁾	$	159,360	$	159,360	$	159,360	$	—	$	—	$	189,241	$	189,241	$	189,241	$	—	$	—
Total Assets	$	159,360	$	159,360	$	159,360	$	—	$	—	$	189,241	$	189,241	$	189,241	$	—	$	—
Liabilities:
Long-term debt (including current portion of long-term debt)⁽⁵⁾	$	8,727,026	$	9,078,893	$	1,839,643	$	7,239,250	$	—	$	8,391,301	$	8,761,414	$	1,859,361	$	6,902,053	$	—
Total Liabilities	$	8,727,026	$	9,078,893	$	1,839,643	$	7,239,250	$	—	$	8,391,301	$	8,761,414	$	1,859,361	$	6,902,053	$	—

(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, 2015 and December 31, 2014.

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

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

Non Derivative Instruments Qualifying and Designated as Hedging Instruments in Net Investment Hedges

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



	Amount of Gain (Loss) Recognized in Other Comprehensive Income (Loss) (Effective Portion)
Non-derivative instruments under ASC 815-20 Net Investment Hedging Relationships	Quarter Ended June 30, 2015			Quarter Ended June 30, 2014		Six Months Ended June 30, 2015		Six Months Ended June 30, 2014
(In thousands)
Foreign Currency Debt	$	(2,746	)	$	256	$	9,391	$	4,630
	$	(2,746	)	$	256	$	9,391	$	4,630

Schedule of Fair Value, Assets and Liabilities Measured 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 June 30, 2015 Using								Fair Value Measurements at December 31, 2014 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⁾	$	118,046	$	—	$	118,046	$	—	$	63,981	$	—	$	63,981	$	—
Investments⁽⁵⁾	$	4,312	4,312		—		—		$	5,531	5,531		—		—
Total Assets	$	122,358	$	4,312	$	118,046	$	—	$	69,512	$	5,531	$	63,981	$	—
Liabilities:
Derivative financial instruments⁽⁶⁾	$	726,610	$	—	$	726,610	$	—	$	767,635	$	—	$	767,635	$	—
Total Liabilities	$	726,610	$	—	$	726,610	$	—	$	767,635	$	—	$	767,635	$	—

(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, 2015 and December 31, 2014.

(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 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.

Offsetting Assets



	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2015									As of December 31, 2014
	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	$	118,046	$	(116,059	)	$	—	$	1,987	$	63,981	$	(63,981	)	$	—	$	—
Total	$	118,046	$	(116,059	)	$	—	$	1,987	$	63,981	$	(63,981	)	$	—	$	—

Offsetting Liabilities



	Gross Amounts not Offset in the Consolidated Balance Sheet that are Subject to Master Netting Agreements
	As of June 30, 2015										As of December 31, 2014
	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	$	(726,610	)	$	116,059	$	—	$	(610,551	)	$	(767,635	)	$	63,981	$	—	$	(703,654	)
Total	$	(726,610	)	$	116,059	$	—	$	(610,551	)	$	(767,635	)	$	63,981	$	—	$	(703,654	)

Not Designated as Hedging Instrument

Derivative Instruments

Derivative Instruments, Gain (Loss)

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, 2015		Quarter Ended June 30, 2014		Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
(In thousands)
Foreign currency forward contracts	Other income (expense)	$	11,181	$	8,889	$	(16,902	)	$	10,770
Fuel swaps	Other income (expense)	16		285		(113		)	(937		)
		$	11,197	$	9,174	$	(17,015	)	$	9,833

Fair Value Hedging

Derivative Instruments

Derivative Instruments, Gain (Loss)

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 June 30, 2015			Quarter Ended June 30, 2014		Six Months Ended June 30, 2015			Six Months Ended June 30, 2014		Quarter Ended June 30, 2015		Quarter Ended June 30, 2014			Six Months Ended June 30, 2015		Six Months Ended June 30, 2014
(In thousands)
Interest rate swaps	Interest expense, net of interest capitalized	$	2,872		$	3,067	$	5,848		$	6,136	$	3,925	$	3,925		$	7,807	$	9,467
Interest rate swaps	Other income (expense)	(15,713		)	14,931		(561		)	27,441		14,348		(11,621		)	2,007		(23,056		)
		$	(12,841	)	$	17,998	$	5,287		$	33,577	$	18,273	$	(7,696	)	$	9,814	$	(13,589	)

Cash flow hedge

Derivative Instruments

Derivative Instruments, Gain (Loss)



Derivatives under ASC 815- 20 Cash Flow Hedging Relationships	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)
		Quarter Ended June 30, 2015			Quarter Ended June 30, 2014			Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
(In thousands)
Interest rate swaps	Other income (expense)	183			(76		)	221			(95		)
Foreign currency forward contracts	Other income (expense)	—			(7		)	—			(27		)
Fuel swaps	Other income (expense)	(600		)	2,094			(418		)	462
		$	(417	)	$	2,011		$	(197	)	$	340



Derivatives under ASC 815-20 Cash Flow Hedging Relationships	Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Income (Loss) on Derivative (Effective Portion)											Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (Effective Portion)
	Quarter Ended June 30, 2015		Quarter Ended June 30, 2014			Six Months Ended June 30, 2015			Six Months Ended June 30, 2014				Quarter Ended June 30, 2015			Quarter Ended June 30, 2014			Six Months Ended June 30, 2015			Six Months Ended June 30, 2014
(In thousands)
Cross currency swaps	$	—	$	—		$	—		$	—		Interest expense, net of interest capitalized	$	—		$	—		$	—		$	(261	)
Interest rate swaps	29,666		(35,301		)	(6,149		)	(72,951		)	Interest expense, net of interest capitalized	(9,962		)	(3,078		)	(16,748		)	(6,206		)
Foreign currency forward contracts	42,229		(10,437		)	(130,593		)	(9,243		)	Depreciation and amortization expenses	(685		)	(450		)	(1,402		)	(899		)
Foreign currency forward contracts	—		—			—			—			Other income (expense)	(239		)	(238		)	(477		)	(3,814		)
Foreign currency forward contracts	—		—			—			—			Interest expense, net of interest capitalized	—			—			—			(57		)
Foreign currency collar options	240		(6,127		)	(64,593		)	(8,734		)	Depreciation and amortization expenses	(435		)	—			(435		)	—
Fuel swaps	66,603		28,344			17,689			6,928			Fuel	(52,416		)	884			(106,108		)	790
	$	138,738	$	(23,521	)	$	(183,646	)	$	(84,000	)		$	(63,737	)	$	(2,882	)	$	(125,170	)	$	(10,447	)