Pitney Bowes 2014 Annual Report Download - page 73

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PITNEY BOWES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Tabular dollars in thousands, except per share amounts)
63
The following represents the results of our non-designated derivative instruments for the years ended December 31, 2014 and 2013:
Year Ended December 31,
Derivative Gain (Loss)
Recognized in Earnings
Derivatives Instrument Location of Derivative Gain (Loss) 2014 2013
Foreign exchange contracts Selling, general and administrative expense $(4,701)$ (16,574)
Interest Rate Swaps
We had no interest rate swap agreements outstanding at December 31, 2014 or 2013. During 2013, we had interest rate swaps related to
our fixed-rate debt outstanding. These interest rate swaps were designated as fair value hedges and changes in the fair value of both the
derivative and item being hedged were recognized in earnings. No amount of ineffectiveness was recorded in earnings during 2013.
Activity for interest rate swaps outstanding during 2013 was as follows:
Year Ended December 31, 2013
Derivative Instrument Location of Gain (Loss)
Derivative Gain
Recognized in
Earnings
Hedged Item
Expense
Recognized in
Earnings
Interest rate swaps Interest expense $ 3,798 $ (11,883)
Credit-Risk-Related Contingent Features
Certain derivative instruments contain credit-risk-related contingent features that would require us to post collateral based on a combination
of our long-term senior unsecured debt ratings and the net fair value of our derivatives. At December 31, 2014, the maximum amount of
collateral that we would have been required to post had the credit-risk-related contingent features been triggered was $2 million.
Fair Value of Financial Instruments
Our financial instruments include cash and cash equivalents, investment securities, accounts receivable, loan receivables, derivative
instruments, accounts payable and debt. The carrying value for cash and cash equivalents, accounts receivable, loans receivable, and
accounts payable approximate fair value because of the short maturity of these instruments.
The fair value of our debt is estimated based on recently executed transactions and market price quotations. The inputs used to determine
the fair value of our debt were classified as Level 2 in the fair value hierarchy. The carrying value and estimated fair value of our debt at
December 31, 2014 and 2013 was as follows:
December 31,
2014 2013
Carrying value $ 3,252,006 $ 3,346,295
Fair value $ 3,440,383 $ 3,539,022