| Fair Value Measurements and Derivative Instruments | Fair Value Measurements and Derivative Instruments 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. Other Financial Instruments The carrying amounts of accounts receivable, accounts payable, accrued interest and accrued expenses approximate fair value at June 30, 2015 and December 31, 2014 . 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 $ — (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, 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. The reported fair values are based on a variety of factors and assumptions. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of June 30, 2015 or December 31, 2014 , or that will be realized in the future, and do not include expenses that could be incurred in an actual sale or settlement. We have master International Swaps and Derivatives Association (“ISDA”) agreements in place with our derivative instrument counterparties. These ISDA agreements provide for final close out netting with our counterparties for all positions in the case of default or termination of the ISDA agreement. We have determined that our ISDA agreements provide us with rights of setoff on the fair value of derivative instruments in a gain position and those in a loss position with the same counterparty. We have elected not to offset such derivative instrument fair values in our consolidated balance sheets. As of June 30, 2015 and December 31, 2014 , no cash collateral was received or pledged under our ISDA agreements. See Credit Related Contingent Features for further discussion on contingent collateral requirements for our derivative instruments. The following table presents information about the Company’s offsetting of financial assets under master netting agreements with derivative counterparties: 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 Cash Collateral Net Amount of Gross Amount of Derivative Assets Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of (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 ) $ — $ — The following table presents information about the Company’s offsetting of financial liabilities under master netting agreements with derivative counterparties: 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 Cash Collateral Net Amount of Gross Amount of Derivative Liabilities Presented in the Consolidated Balance Sheet Gross Amount of Eligible Offsetting Cash Collateral Net Amount of (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 ) Concentrations of Credit Risk We monitor our credit risk associated with financial and other institutions with which we conduct significant business and, to minimize these risks, we select counterparties with credit risks acceptable to us and we seek to limit our exposure to an individual counterparty. Credit risk, including but not limited to counterparty nonperformance under derivative instruments, our credit facilities and new ship progress payment guarantees, is not considered significant, as we primarily conduct business with large, well-established financial institutions, insurance companies and export credit agencies many of which we have long-term relationships with and which have credit risks acceptable to us or where the credit risk is spread out among a large number of counterparties. As of June 30, 2015 , our exposure under our derivative instruments was approximately $1.6 million . As of December 31, 2014 , we did not have any exposure under our derivative instruments. We do not anticipate nonperformance by any of our significant counterparties. In addition, we have established guidelines we follow regarding credit ratings and instrument maturities to maintain safety and liquidity. We do not normally require collateral or other security to support credit relationships; however, in certain circumstances this option is available to us. Derivative Instruments We are exposed to market risk attributable to changes in interest rates, foreign currency exchange rates and fuel prices. We manage these risks through a combination of our normal operating and financing activities and through the use of derivative financial instruments pursuant to our hedging practices and policies. The financial impact of these hedging instruments is primarily offset by corresponding changes in the underlying exposures being hedged. We achieve this by closely matching the notional amount, term and conditions of the derivative instrument with the underlying risk being hedged. Although certain of our derivative financial instruments do not qualify or are not accounted for under hedge accounting, we do not hold or issue derivative financial instruments for trading or other speculative purposes. We monitor our derivative positions using techniques including market valuations and sensitivity analyses. We enter into various forward, swap and option contracts to manage our interest rate exposure and to limit our exposure to fluctuations in foreign currency exchange rates and fuel prices. These instruments are recorded on the balance sheet at their fair value and the vast majority are designated as hedges. We also have non-derivative financial instruments designated as hedges of our net investment in our foreign operations and investments. At inception of the hedge relationship, a derivative instrument that hedges the exposure to changes in the fair value of a firm commitment or a recognized asset or liability is designated as a fair value hedge. A derivative instrument that hedges a forecasted transaction or the variability of cash flows related to a recognized asset or liability is designated as a cash flow hedge. Changes in the fair value of derivatives that are designated as fair value hedges are offset against changes in the fair value of the underlying hedged assets, liabilities or firm commitments. Gains and losses on derivatives that are designated as cash flow hedges are recorded as a component of Accumulated other comprehensive loss until the underlying hedged transactions are recognized in earnings. The foreign currency transaction gain or loss of our non-derivative financial instruments and the changes in the fair value of derivatives designated as hedges of our net investment in foreign operations and investments are recognized as a component of Accumulated other comprehensive loss along with the associated foreign currency translation adjustment of the foreign operation. On an ongoing basis, we assess whether derivatives used in hedging transactions are “highly effective” in offsetting changes in the fair value or cash flow of hedged items. We use the long-haul method to assess hedge effectiveness using regression analysis for each hedge relationship under our interest rate, foreign currency and fuel hedging programs. We apply the same methodology on a consistent basis for assessing hedge effectiveness to all hedges within each hedging program (i.e. interest rate, foreign currency and fuel). We perform regression analyses over an observation period of up to three years, utilizing market data relevant to the hedge horizon of each hedge relationship. High effectiveness is achieved when a statistically valid relationship reflects a high degree of offset and correlation between the changes in the fair values of the derivative instrument and the hedged item. The determination of ineffectiveness is based on the amount of dollar offset between the change in fair value of the derivative instrument and the change in fair value of the hedged item at the end of the reporting period. If it is determined that a derivative is not highly effective as a hedge or hedge accounting is discontinued, any change in fair value of the derivative since the last date at which it was determined to be effective is recognized in earnings. In addition, the ineffective portion of our highly effective hedges is immediately recognized in earnings and reported in Other income (expense) in our consolidated statements of comprehensive income (loss). Cash flows from derivative instruments that are designated as fair value or cash flow hedges are classified in the same category as the cash flows from the underlying hedged items. In the event that hedge accounting is discontinued, cash flows subsequent to the date of discontinuance are classified within investing activities. Cash flows from derivative instruments not designated as hedging instruments are classified as investing activities. We consider the classification of the underlying hedged item’s cash flows in determining the classification for the designated derivative instrument’s cash flows. We classify derivative instrument cash flows from hedges of benchmark interest rate or hedges of fuel expense as operating activities due to the nature of the hedged item. Likewise, we classify derivative instrument cash flows from hedges of foreign currency risk on our newbuild ship payments as investing activities and derivative instrument cash flows from hedges of foreign currency risk on debt payments as financing activities. Interest Rate Risk Our exposure to market risk for changes in interest rates relates to our long-term debt obligations including future interest payments. At June 30, 2015 , approximately 35.0% of our long-term debt was effectively fixed as compared to 28.5% as of December 31, 2014 . We use interest rate swap agreements to modify our exposure to interest rate movements and to manage our interest expense. Market risk associated with our long-term fixed rate debt is the potential increase in fair value resulting from a decrease in interest rates. We use interest rate swap agreements that effectively convert a portion of our fixed-rate debt to a floating-rate basis to manage this risk. At June 30, 2015 and December 31, 2014 , we maintained interest rate swap agreements on the $420.0 million fixed rate portion of our Oasis of the Seas unsecured amortizing term loan and on the $650.0 million unsecured senior notes due 2022. The interest rate swap agreements on Oasis of the Seas debt effectively changed the interest rate on the balance of the unsecured term loan, which was $227.5 million as of June 30, 2015 , from a fixed rate of 5.41% to a LIBOR-based floating rate equal to LIBOR plus 3.87% , currently approximately 4.28% . The interest rate swap agreements on the $650.0 million unsecured senior notes effectively changed the interest rate of the unsecured senior notes from a fixed rate of 5.25% to a LIBOR-based floating rate equal to LIBOR plus 3.63% , currently approximately 3.91% . These interest rate swap agreements are accounted for as fair value hedges. Market risk associated with our long-term floating rate debt is the potential increase in interest expense from an increase in interest rates. We use interest rate swap agreements that effectively convert a portion of our floating-rate debt to a fixed-rate basis to manage this risk. In May 2015, we entered into forward-starting interest rate swap agreements that hedge the anticipated unsecured amortizing term loan that will finance our purchase of Harmony of the Seas . Forward-starting interest rate swaps hedging the Harmony of the Seas loan will effectively convert the interest rate for €693.4 million , or approximately $772.5 million based on the exchange rate at June 30, 2015 , of the anticipated loan balance from EURIBOR plus 1.15% to a fixed rate of 2.26% (inclusive of margin) beginning in May 2016. These interest rate swap agreements are accounted for as cash flow hedges. In addition, at June 30, 2015 and December 31, 2014 , we maintained interest rate swap agreements on our Celebrity Reflection term loan. Our interest rate swap agreements effectively converted the interest rate on a portion of the Celebrity Reflection unsecured amortizing term loan balance of approximately $518.1 million from LIBOR plus 0.40% to a fixed rate (including applicable margin) of 2.85% through the term of the loan. Additionally, at June 30, 2015 and December 31, 2014 , we maintained interest rate swap agreements on our Quantum of the Seas term loan. Our interest rate swap agreements effectively converted the interest rate on a portion of the Quantum of the Seas unsecured amortizing term loan balance of approximately $704.4 million from LIBOR plus 1.30% to a fixed rate of 3.74% (inclusive of margin) through the term of the loan. Furthermore, at June 30, 2015 , we maintained interest rate swap agreements on our Anthem of the Seas term loan. Our interest rate swap agreements effectively converted the interest rate on a portion of the Anthem of the Seas unsecured amortizing term loan balance of approximately $725.0 million from LIBOR plus 1.30% to a fixed rate of 3.86% (inclusive of margin) through the term of the loan. These interest rate swap agreements are accounted for as cash flow hedges. The notional amount of interest rate swap agreements related to outstanding debt and on our current unfunded financing arrangements as of June 30, 2015 and December 31, 2014 was $3.6 billion and $2.9 billion , respectively. Foreign Currency Exchange Rate Risk Derivative Instruments Our primary exposure to foreign currency exchange rate risk relates to our ship construction contracts denominated in Euros, our foreign currency denominated debt and our international business operations. We enter into foreign currency forward contracts, collar options and cross currency swap agreements to manage portions of the exposure to movements in foreign currency exchange rates. As of June 30, 2015 , the aggregate cost of our ships on order, not including the "Project Edge" ships and the TUI Cruises' ships on order, was approximately $5.0 billion , of which we had deposited $385.8 million as of such date. Approximately 42.9% and 28.8% of the aggregate cost of the ships under construction was exposed to fluctuations in the Euro exchange rate at June 30, 2015 and December 31, 2014 , respectively. The majority of our foreign currency forward contracts, collar options and cross currency swap agreements are accounted for as cash flow, fair value or net investment hedges depending on the designation of the related hedge. On a regular basis, we enter into foreign currency forward contracts and, from time to time, we utilize cross-currency swap agreements to minimize the volatility resulting from the remeasurement of net monetary assets and liabilities denominated in a currency other than our functional currency or the functional currencies of our foreign subsidiaries. During the second quarter of 2015 , we maintained an average of approximately $480.4 million of these foreign currency forward contracts. These instruments are not designated as hedging instruments. Changes in the fair value of the foreign currency forward contracts resulted in a gain (loss), of approximately $11.2 million and $9.0 million , respectively, during the quarters ended June 30, 2015 and June 30, 2014 , respectively, and approximately $(16.9) million and $10.8 million , during the six months ended June 30, 2015 and June 30, 2014 , respectively, that were recognized in earnings within Other income (expense) in our consolidated statements of comprehensive income (loss). We consider our investments in our foreign operations to be denominated in relatively stable currencies and of a long-term nature. As of June 30, 2015 , we maintained foreign currency forward contracts of €415.6 million , or approximately $463.0 million based on the exchange rate at June 30, 2015 , and designated them as hedges of a portion of our net investments in Pullmantur and TUI Cruises. These forward currency contracts mature in April 2016. The notional amount of outstanding foreign exchange contracts including our forward contracts and collar options as of June 30, 2015 and December 31, 2014 was $2.5 billion and $3.0 billion , respectively. Non-Derivative Instruments We also address the exposure of our investments in foreign operations by denominating a portion of our debt in our subsidiaries’ and investments’ functional currencies and designating it as a hedge of these subsidiaries and investments. We had designated debt as a hedge of our net investments in Pullmantur and TUI Cruises of approximately €141.9 million and €139.4 million , or approximately $158.1 million and $168.7 million , as of June 30, 2015 and December 31, 2014 , respectively. Fuel Price Risk Our exposure to market risk for changes in fuel prices relates primarily to the consumption of fuel on our ships. We use fuel swap agreements to mitigate the financial impact of fluctuations in fuel prices. Our fuel swap agreements are accounted for as cash flow hedges. At June 30, 2015 , we have hedged the variability in future cash flows for certain forecasted fuel transactions occurring through 2018. 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 % At June 30, 2015 and December 31, 2014 , $176.4 million and $223.1 million , respectively, of estimated unrealized net loss associated with our cash flow hedges pertaining to fuel swap agreements were expected to be reclassified to earnings from Accumulated other comprehensive loss within the next twelve months. Reclassification is expected to occur as the result of fuel consumption associated with our hedged forecasted fuel purchases. 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 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 $ 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.” 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 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 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) Amount of Gain (Loss) 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 ) The effect of derivative instruments qualifying and designated as cash flow hedging instruments on the consolidated financial statements was as follows: Derivatives Amount of Gain (Loss) Recognized in (Effective Portion) Location of Amount of Gain (Loss) Reclassified from 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 ) Derivatives Location of Gain (Loss) 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 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 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 There was no amount recognized in income (ineffective portion and amount excluded from effectiveness testing) for the quarters and six month periods ended June 30, 2015 and June 30, 2014 , respectively. 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 Location of 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 Credit Related Contingent Features Our current interest rate derivative instruments may require us to post collateral if our Standard & Poor’s and Moody’s credit ratings remain below specified levels. Specifically, if on the fifth anniversary of entering into a derivative transaction or on any succeeding fifth-year anniversary our credit ratings for our senior unsecured debt were to be rated below BBB- by Standard & Poor’s and Baa3 by Moody’s, then each counterparty to such derivative transaction with whom we are in a net liability position that exceeds the applicable minimum call amount may demand that we post collateral in an amount equal to the net liability position. The amount of collateral required to be posted following such event will change each time our net liability position increases or decreases by more than the applicable minimum call amount. If our credit rating for our senior unsecured debt is subsequently equal to or above BBB- by Standard & Poor’s or Baa3 by Moody’s, then any collateral posted at such time will be released to us and we will no longer be required to post collateral unless we meet the collateral trigger requirement at the next fifth-year anniversary. Currently, our senior unsecured debt credit rating is BB with a positive outlook by Standard & Poor’s and Ba1 with a stable outlook by Moody’s. We currently have six interest rate derivative hedges that have a term of at least five years. The aggregate fair values of all derivative instruments with such credit-related contingent features in net liability positions as of June 30, 2015 and December 31, 2014 were $62.4 million and $65.8 million , respectively, which do not include the impact of any such derivatives in net asset positions. The earliest that any of the six interest rate derivative hedges will reach their fifth anniversary is November 2016. Therefore, as of June 30, 2015 , we were not required to post collateral for any of our derivative transactions. |
