Annual report pursuant to Section 13 and 15(d)

DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES

v2.4.0.8
DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES
 12 Months Ended
Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES
DERIVATIVE INSTRUMENTS AND HEDGING STRATEGIES
SEACOR had entered into forward currency exchange contracts on behalf of the Company. These derivative instruments were classified as either assets or liabilities based on their individual fair values. As of December 31, 2013, none of these derivative instruments were outstanding. The Company had designated its forward currency exchange contracts as fair value hedges in respect of capital commitments denominated in Euros. By entering into these forward currency exchange contracts, the Company had fixed a portion of its euro capital commitments in U.S. dollars to protect against currency fluctuations for equipment that was scheduled to be delivered in 2011 through 2013. 
The Company recognized gains (losses) on derivative instruments designated as fair value hedges for the years ended December 31 as follows (in thousands):
 
 
2013
 
2012
 
2011
Foreign currency exchange contracts, effective and ineffective portions
 
$
—

 
$
—

 
$
5,770

Decrease in fair value of hedged items included in property and equipment
  corresponding to the effective portion of derivative gains
 
—

 
—

 
(5,810
)
 
 
$
—

 
$
—

 
$
(40
)

During the year ended December 31, 2011, the Company entered into two interest rate swap agreements maturing in 2014 and 2015 that call for the Company to pay fixed interest rates of 1.67% and 1.83% on an aggregate notional value of $31.8 million and receive a variable interest rate based on the London Interbank Offered Rate (“LIBOR”) on these notional values. The general purpose of these interest rate swap agreements is to provide protection against increases in interest rates, which might lead to higher interest costs for the Company. The fair value of these derivative instruments at December 31, 2013 were liabilities of $0.6 million. The Company recognized gains of $0.4 million and losses of $0.5 million on these derivative instruments for the year ended December 31, 2013 and 2012, respectively.