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Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value of Derivative Instrument Designated as Cash Flow Hedges



The fair values of derivative instruments designated as cash flow hedges as of September 30, 2017, were as follows: 


Derivatives Designated as Cash		Asset Derivatives				Liability Derivatives
Flow Hedges		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate swaps		Prepaid expenses and other current assets(a)	$	2,748		Accrued liabilities(a)	$	(1,857)
		Other assets, net		11,721		Other long-term liabilities		(1,616)

Fuel hedges		Prepaid expenses and other current assets(b)		1,317		Accrued liabilities(b)		(729)
		Other assets, net		241
Total derivatives designated as cash flow hedges			$	16,027			$	(4,202)

____________________

(a) Represents the estimated amount of the existing unrealized gains and losses, respectively, on interest rate swaps as of September 30, 2017 (based on the interest rate yield curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.  The actual amounts reclassified into earnings are dependent on future movements in interest rates. 

(b) Represents the estimated amount of the existing unrealized gains and losses, respectively, on fuel hedges as of September 30, 2017 (based on the forward DOE diesel fuel index curve at that date), included in AOCIL expected to be reclassified into pre-tax earnings within the next 12 months.  The actual amounts reclassified into earnings are dependent on future movements in diesel fuel prices.



The fair values of derivative instruments designated as cash flow hedges as of December 31, 2016, were as follows: 


Derivatives Designated as Cash		Asset Derivatives				Liability Derivatives
Flow Hedges		Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Interest rate swaps		Prepaid expenses and other current assets	$	127		Accrued liabilities	$	(3,260)
		Other assets, net		13,822		Other long-term liabilities		(2,350)

Fuel hedges		Prepaid expenses and other current assets		1,343		Accrued liabilities		(3,258)
		Other assets, net		1,651
Total derivatives designated as cash flow hedges			$	16,943			$	(8,868)




Impact of Cash Flow Hedges on Results of Operations, Comprehensive Income and Accumulated Other Comprehensive Loss

The following table summarizes the impact of the Company’s cash flow hedges on the results of operations, comprehensive income (loss) and AOCIL for the three and nine months ended September 30, 2017 and 2016: 


Derivatives Designated as Cash Flow Hedges		Amount of Gain or (Loss) Recognized as AOCIL on Derivatives, Net of Tax (Effective Portion)(a)						Statement of Net Income Classification		Amount of (Gain) or Loss Reclassified from AOCIL into Earnings, Net of Tax (Effective Portion) (b),(c)
		Three Months Ended September 30,								Three Months Ended September 30,
		2017			2016					2017			2016
Interest rate swaps		$	(361)		$	2,598		Interest expense		$	376		$	1,234
Fuel hedges			1,680			630		Cost of operations			487			830
Total		$	1,319		$	3,228				$	863		$	2,064




Derivatives Designated as Cash Flow Hedges		Amount of Gain or (Loss) Recognized as AOCIL on Derivatives, Net of Tax (Effective Portion)(a)						Statement of Net Income Classification		Amount of (Gain) or Loss Reclassified from AOCIL into Earnings, Net of Tax (Effective Portion) (b),(c)
		Nine Months Ended September 30,								Nine Months Ended September 30,
		2017			2016					2017			2016
Interest rate swaps		$	224		$	(3,896)		Interest expense		$	1,729		$	3,338
Fuel hedges			(1,030)			841		Cost of operations			1,704			2,855
Total		$	(806)		$	(3,055)				$	3,433		$	6,193

___________________

(a) In accordance with the derivatives and hedging guidance, the effective portions of the changes in fair values of interest rate swaps and fuel hedges have been recorded in equity as a component of AOCIL.  As the critical terms of the interest rate swaps match the underlying debt being hedged, no ineffectiveness is recognized on these swaps and, therefore, all unrealized changes in fair value are recorded in AOCIL.  Because changes in the actual price of diesel fuel and changes in the DOE index price do not offset exactly each reporting period, the Company assesses whether the fuel hedges are highly effective using the cumulative dollar offset approach. 

(b) Amounts reclassified from AOCIL into earnings related to realized gains and losses on interest rate swaps are recognized when interest payments or receipts occur related to the swap contracts, which correspond to when interest payments are made on the Company’s hedged debt. 

(c) Amounts reclassified from AOCIL into earnings related to realized gains and losses on the fuel hedges are recognized when settlement payments or receipts occur related to the hedge contracts, which correspond to when the underlying fuel is consumed. 

Interest Rate Swap [Member]

Company's Derivative Instruments

At September 30, 2017, the Company’s derivative instruments included 14 interest rate swap agreements as follows: 


 Date Entered		Notional Amount			Fixed Interest Rate Paid*			Variable Interest Rate Received		Effective Date		Expiration Date
April 2014		$	100,000		1.800%			1-month LIBOR		July 2014		July 2019
May 2014		$	50,000		2.344%			1-month LIBOR		October 2015		October 2020
May 2014		$	25,000		2.326%			1-month LIBOR		October 2015		October 2020
May 2014		$	50,000		2.350%			1-month LIBOR		October 2015		October 2020
May 2014		$	50,000		2.350%			1-month LIBOR		October 2015		October 2020
April 2016		$	100,000		1.000%			1-month LIBOR		February 2017		February 2020
June 2016		$	75,000		0.850%			1-month LIBOR		February 2017		February 2020
June 2016		$	150,000		0.950%			1-month LIBOR		January 2018		January 2021
June 2016		$	150,000		0.950%			1-month LIBOR		January 2018		January 2021
July 2016		$	50,000		0.900%			1-month LIBOR		January 2018		January 2021
July 2016		$	50,000		0.890%			1-month LIBOR		January 2018		January 2021
August 2017		$	100,000		1.900%			1-month LIBOR		July 2019		July 2022
August 2017		$	200,000		2.200%			1-month LIBOR		October 2020		October 2025
August 2017		$	150,000		1.950%			1-month LIBOR		February 2020		February 2023

____________________

*  Plus applicable margin.

Fuel [Member] | Commodity Contract [Member]

Company's Derivative Instruments

At September 30, 2017, the Company’s derivative instruments included four fuel hedge agreements as follows:   


Date Entered		Notional Amount (in gallons per month)		Diesel Rate Paid Fixed (per gallon)		Diesel Rate Received Variable		Effective Date		Expiration Date
May 2015		300,000		$3.2800		DOE Diesel Fuel Index*		January 2016		December 2017
May 2015		200,000		$3.2750		DOE Diesel Fuel Index*		January 2016		December 2017
July 2016		500,000		$2.4988		DOE Diesel Fuel Index*		January 2017		December 2017
July 2016		1,000,000		$2.6345		DOE Diesel Fuel Index*		January 2018		December 2018

____________________

*  If the national U.S. on-highway average price for a gallon of diesel fuel (“average price”), as published by the U.S. Department of Energy (“DOE”), exceeds the contract price per gallon, the Company receives the difference between the average price and the contract price (multiplied by the notional number of gallons) from the counterparty.  If the average price is less than the contract price per gallon, the Company pays the difference to the counterparty. 



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Tabular disclosure of the effective portion of gains and losses on derivative instruments (and nonderivative instruments) designated and qualifying in cash flow hedges recorded in accumulated other comprehensive income (loss) during the term of the hedging relationship and reclassified into earnings during the current period.

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