2.2.0.25falsefalse0206 - Disclosure - Derivative Financial Instrumentstruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 3/31/2011
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<!-- Begin Block Tagged Note 6 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>(6) DERIVATIVE FINANCIAL INSTRUMENTS</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Derivative instruments are accounted for at fair value. The accounting for changes in the fair
value of a derivative depends on the intended use and designation of the derivative instrument. For
a derivative instrument designated as a fair value hedge, the gain or loss on the derivative is
recognized in earnings in the period of change in fair value together with the offsetting gain or
loss on the hedged item. For a derivative instrument designated as a cash flow hedge, the effective
portion of the derivative’s gain or loss is initially reported as a component of
Other Comprehensive Income (“OCI”) and is subsequently recognized in earnings when the
hedged
exposure affects earnings. The ineffective portion of the gain or loss is recognized in earnings.
Gains and losses from changes in fair values of derivatives that are not designated as hedges for
accounting purposes are recognized in earnings.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Using derivative instruments means assuming counterparty credit risk. Counterparty credit risk
relates to the loss we could incur if a counterparty were to default on a derivative contract. We
deal with investment grade counterparties and monitor the overall credit risk and exposure to
individual counterparties. We do not anticipate nonperformance by any counterparties. The amount of
counterparty credit exposure is the unrealized gains, if any, on such derivative contracts. We do
not require, nor do we post, collateral or security on such contracts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Hedging Strategy</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We are exposed to certain risks relating to our ongoing business operations. As a result, we
enter into derivative transactions to manage certain of these exposures that arise in the normal
course of business. The primary risks managed by using derivative instruments are foreign currency
exchange rate and interest rate risks. Fluctuations in these rates and prices can affect our
operating results and financial condition. We manage the exposure to these market risks through
operating and financing activities and through the use of derivative financial instruments. We do
not enter into derivative financial instruments for trading or speculative purposes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We periodically enter into forward foreign currency contracts which are designated as fair
value hedges and are highly effective, as the terms of the forward contracts are the same as the
purchase commitments under the related contract. Any gains or losses resulting from changes in fair
value are recognized in income with an offsetting adjustment to income for changes in the fair
value of the hedged item such that there is no net impact in the consolidated statements of
operations. As of March 31, 2011, we had no open forward foreign currency contracts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We entered into an interest rate swap with the objective of reducing our exposure to interest
rate risk for $100.0 million of our $200.0 million Facility Agreement variable-rate debt. At March
31, 2011, our interest rate derivative instruments have an outstanding notional amount of $100.0
million and have been designated as cash flow hedges. The terms of these swaps, including reset
dates and floating rate indices, match those of our underlying variable-rate debt and no
ineffectiveness has been recorded.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt"><i>Early Hedge Settlement</i>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     During December 2009, we cash settled certain interest rate swap contracts prior to their
scheduled settlement dates. As a result of these transactions, we paid $6.4 million in cash, which
represented the fair value of these contracts at the date of settlement. Unrecognized losses of
$1.4 million are recorded as of March 31, 2011 in accumulated OCI related to these interest rate
swap contracts. This balance will be amortized into interest expense through December 31, 2012
based on forecasted payments as of the settlement date.
</div>
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</div>
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<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table quantifies the fair values, on a gross basis, of all our derivative
contracts and identifies the balance sheet location as of March 31, 2011 and December 31, 2010
(dollars in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="20%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>Asset Derivatives</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="14" style="border-bottom: 1px solid #000000"><b>Liability Derivatives</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31, 2010</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">March 31, 2011</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000">December 31, 2010</td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Balance</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Derivatives designed as</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Sheet</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Sheet</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Sheet</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Sheet</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2"> </td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>hedging instruments</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Value</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Location</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2">Fair Value</td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr style="font-size: 1px">
<td> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td colspan="7" align="left" style="border-top: 1px solid #000000"> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate swaps
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td colspan="3" align="center" nowrap="nowrap">Cash flow hedges</td>
<td> </td>
<td colspan="3" align="center"> 5,946</td>
<td> </td>
<td colspan="3" align="center" nowrap="nowrap">Cash flow hedges</td>
<td> </td>
<td colspan="3" align="center"> 6,807</td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">—</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">5,946</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td align="left">$</td>
<td align="right">6,807</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following tables quantify the amount of gain or loss recognized during the quarters
ended March 31, and identify the consolidated statement of operations location:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="40%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
<td width="5%"> </td>
<td width="3%"> </td>
<td width="1%"> </td>
<td width="3%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Location of Gain or (Loss)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Amount of Gain or (Loss)</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Amount of Gain or (Loss)</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Reclassified from</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Reclassified from</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left"><b>Derivatives in cash flow</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Recognized in OCI on</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3"><b>Accumulated OCI into</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7"><b>Accumulated OCI into</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="left" style="border-bottom: 1px solid #000000"><b>hedging relationships</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Derivative</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000"><b>Income</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #000000"><b>Income</b></td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2010</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2011</td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #000000">2010</td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">(in thousands)</td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="7">(in thousands)</td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Interest rate swaps
</div></td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(98</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(1,650</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">Interest expense</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(752</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="right">$</td>
<td align="right">(660</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
</div>
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-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 45
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44
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