Financial Instruments

6 Months Ended

Jun. 30, 2015

Derivative Instrument Detail [Abstract]

FINANCIAL INSTRUMENTS

The following table presents the estimated fair values of our financial instruments:



	June 30, 2015				December 31, 2014
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	10,614	$	10,614	$	31,012	$	31,012
Revolving line of credit borrowings (Level 1)	$	15,000	$	15,000	$	—	$	—
Derivative asset related to interest rate swaps (Level 2)	$	799	$	799	$	793	$	793
Long-term debt, including fair value adjustments related to fair value hedges (Level 2)	$	629,259	$	655,529	$	629,343	$	657,943
Company owned life insurance asset (COLI) (Level 3)	$	1,454	$	1,454	$	877	$	877

For cash and short-term investments, the carrying amount approximates fair value due to the short-term nature of these financial instruments. The fair value of the interest rate swaps was determined by discounting the expected cash flows of each derivative. The analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate forward curves. For our revolving line of credit borrowings, the carrying amount approximates fair value due to the short-term nature of the borrowings. The fair value of our long-term debt is estimated based upon the quoted market prices for the same or similar debt issues, or estimated based on average market prices for comparable debt when there is no quoted market price. Contract value of our COLI, the amount at which it could be redeemed, is used as a practical expedient to estimate fair value because market prices are not readily available.

BALANCE SHEET AND INCOME EFFECTS OF DERIVATIVES

We have seven interest rate swaps to convert interest payments on fixed rate debt to variable rate 3-month LIBOR plus a spread, with the objective of managing exposure to fluctuations in market interest rates on our debt balances.

The following table presents the gross fair values of derivative instruments on our Condensed Consolidated Balance Sheets:



(Dollars in thousands)	Location	June 30, 2015		December 31, 2014
Derivatives designated as hedging instruments:
Interest rate contracts	Current assets	$	233	$	372
Interest rate contracts	Non-current assets	566		421
Total derivatives designated as hedging instruments		$	799	$	793

The following table details the effect of derivatives on our Consolidated Statements of Income:



		Gain Recognized in Income
	Location	Quarter Ended June 30,				Six Months Ended June 30,
	Location	Quarter Ended June 30,				Six Months Ended June 30,
(Dollars in thousands)		2015		2014		2015		2014
Derivatives designated in fair value hedging relationships:
Realized gain on interest rate contract¹	Interest expense	$	409	$	247	$	788	$	501
Net gain recognized in income from fair value hedges		$	409	$	247	$	788	$	501

¹ Realized gain on hedging instrument consists of net cash settlements and interest accruals on the interest rate swaps during the periods. Net cash settlements are included in the supplemental cash flow information within interest, net of amounts capitalized in the Condensed Consolidated Statements of Cash Flows.

No net unrealized gain or loss associated with the interest rate swaps was recognized in income for any of the periods presented because we recognized no hedge ineffectiveness.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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