DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

The Company has interest rate risk with respect to interest expense on variable rate debt.  At December 31, 2013, the Company had $258,750 of variable rate debt outstanding.  On March 28, 2013, and November 15, 2013, in compliance with its credit agreement, the Company purchased option and swap derivative contracts to hedge against the potential impact on earnings from an increase in market interest rates associated with the interest payments on its variable rate term credit facility.  The objective of the hedge transactions is to reduce the variability of cash flows due to changes in the designated benchmark interest rate on the term debt.  The purchased options have a strike price of 1.25%, based on 30-day LIBOR with maturity dates each month from April 28, 2013 through December 31, 2014 and payment dates coinciding directly with the term debt. The interest rate swap entered into on March 28, 2013 is effective from December 31, 2014 through December 31, 2015 and effectively swaps a notional amount of $112,500 from the floating LIBOR interest rate with a floor of 1.25% for a 1.63% fixed interest rate.  The interest rate swaps entered into on November 15, 2013 are effective from December 31, 2014 through December 31, 2015 and December 31, 2015 through December 31, 2016, respectively, and effectively swap a notional amount of $80,000 and $100,000, respectively, from the floating LIBOR interest rate with a floor of 1.25% for a 1.565% fixed interest rate and a floor of 1.25% for a 1.99% fixed interest rate, respectively. The derivatives are recognized in the Condensed Consolidated Balance Sheet at fair value, as of December 31, 2013 as follows:

Derivative Assets and Liabilities	Location in Condensed Consolidated Balance Sheet	December 31, 2013
Derivative designated as hedging instrument:
Interest rate purchased options at fair value	Other current assets	$	18
Derivative designated as hedging instrument:
Interest rate swaps at fair value	Other long term liabilities	$	392

The Company has designated and accounts for this swap and purchased options as cash flow hedges of interest rate risk. For a cash flow hedge, the Company reports the gain or loss, net of taxes, from the effective portion of the hedge as a component of Accumulated Other Comprehensive Income (“AOCI”) deferring it and reclassifying it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the Condensed Consolidated Statements of Comprehensive Income as the impact of the hedged transaction.  Amounts reported in AOCI related to these derivatives are reclassified from AOCI to earnings as interest payments are made on the Company’s term credit facility debt in amounts necessary to convert the floating rate interest expense into fixed rate interest expense.  The terms of these derivatives and the variable rate debt coincide making it highly effective so no amounts were excluded from the assessment of hedge effectiveness and any ineffectiveness portion has not been, and is not expected to be, significant.  The Company does not use derivative instruments for trading or speculative purposes.

The following amounts are included in AOCI and earnings for the year ended December 31, 2013:

	Net of Tax
Derivatives in Cash Flow Hedging Relationship	Effective portion of (Gain) Loss Recognized in AOCI on Derivative		Effective Portion of (Gain) Loss Reclassified from AOCI into Earnings(1)
Year ended December 31, 2013
Interest rate derivatives	$	278	$	—

(1) No amounts related to the interest rate derivatives were reclassified from AOCI to interest expense during the period.