Derivatives

6 Months Ended

Jun. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

We have interest rate swaps outstanding which are designated as fair value hedges whereby we receive fixed interest rate payments in exchange for making variable interest rate payments. The differential to be paid or received is accrued and recognized as interest expense. The following table provides a detail of the swaps outstanding and the related hedged items as of June 30, 2014:

	Maturity date	Face value of medium-term notes	Aggregate  notional amount of interest rate swaps	Fixed interest  rate	Weighted-average variable interest rate on hedged debt as of June 30,
Issuance date					2014	2013
		(Dollars in thousands)
February 2011	March 2015	$350,000	$150,000	3.15%	1.28%	1.41%
May 2011	June 2017	$350,000	$150,000	3.50%	1.42%	1.51%
November 2013	November 2018	$300,000	$100,000	2.45%	1.18%	—%
February 2014	June 2019	$350,000	$100,000	2.55%	1.10%	—%
May 2014	September 2019	$400,000	$100,000	2.45%	0.85%	—%

Changes in the fair value of our interest rate swaps are offset by changes in the fair value of the debt instrument. Accordingly, there is no ineffectiveness related to the interest rate swaps. The location and amount of gains (losses) on interest rate swap agreements designated as fair value hedges and related hedged items reported in the Consolidated Condensed Statements of Earnings were as follows:

Fair Value Hedging Relationship	Location of  Gain (Loss) Recognized in Income	Three months ended June 30,					Six months ended June 30,
		2014			2013		2014			2013
		(In thousands)
Derivatives: Interest rate swaps	Interest expense	$	1,667		(3,586	)	$	(316	)	(6,367	)
Hedged items: Fixed-rate debt	Interest expense	(1,667		)	3,586		316			6,367
Total		$	—		—		$	—		—

The derivatives are pay-variable, receive-fixed interest rate swaps based on the LIBOR rate and are designated as fair value hedges. Fair value was based on a model-driven income approach using the LIBOR rate at each interest payment date, which was observable at commonly quoted intervals for the full term of the swaps. Therefore, our interest rate swaps were classified within Level 2 of the fair value hierarchy. The location and fair value amounts of the interest rate swaps reported on the Consolidated Condensed Balance Sheets were as follows:

Balance Sheet Location	June 30, 2014			December 31, 2013
	(In thousands)
Prepaid expenses and other current assets	$	1,834		$	—
Direct financing leases and other assets	6,162			9,333
Other non-current liabilities	(141		)	(1,162		)