Financial Instruments

9 Months Ended

Sep. 30, 2011

Derivative Instrument Detail [Abstract]

Fair Value Disclosures [Text Block]

Financial Instruments

The following table presents the estimated fair values of our financial instruments as of the balance sheet dates:

	September 30, 2011				December 31, 2010
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount			Fair Value
Cash, restricted cash and short-term investments (Level 1)	$	80,907	$	80,907	$	91,183		$	91,183
Net derivative asset (liability) related to interest rate swaps (Level 2)	2,415		2,415		(216		)	(216		)
Derivative asset (liability) related to lumber hedge (Level 2)	1,747		1,747		(2,876		)	(2,876		)
Long-term debt, including current installments on long-term debt (including fair value adjustments related to fair value hedges) (Level 2)	366,337		367,356		368,496			369,351

FAIR VALUE HEDGES OF INTEREST RATE RISK

As of September 30, 2011, we had eight separate interest rate swap agreements with notional amounts totaling $63.25 million, associated with our $22.5 million debentures and $40.75 million of our medium-term notes. The swaps convert interest payments with fixed rates between 6.95% and 8.89% to variable rates of three-month LIBOR plus spreads between 4.738% and 7.805%. The interest rate swaps terminate at various dates between January 2012 and February 2018.

As of September 30, 2011, we had a derivative asset within non-current other assets of $2.4 million, resulting in a cumulative net increase to the carrying amount of our debt of $2.4 million recorded on our Consolidated Condensed Balance Sheets.

For the quarter ended September 30, 2011 and 2010, we recognized a total of $1.9 million and $1.7 million, respectively, of net gains recorded in interest expense due to changes in fair value of the derivatives, which was offset by a cumulative net decrease to the carrying amount of debt of $1.9 million and $1.7 million, respectively. For the nine months ended September 30, 2011 and 2010 we recognized a total of $2.6 million and $1.5 million, respectively, of net gains recorded in interest expense due to changes in fair value of the derivatives, which was offset by a cumulative net decrease to the carrying amount of debt of $2.6 million and $1.5 million, respectively. Consequently, no net unrealized gain or loss was recognized in income for the quarter or nine months ended September 30, 2011. For the quarter ended September 30, 2011 and 2010, we recognized a net gain, resulting in a reduction in interest expense, of $0.3 million and $0.2 million, respectively, which includes realized net gains and losses from net cash settlements and interest accruals on the derivatives. For the nine months ended September 30, 2011 and 2010, we recognized a net gain, resulting in a reduction in interest expense, of $0.8 million and $0.2 million, respectively, which includes realized net gains and losses from net cash settlements and interest accruals on the derivatives. We recognized no hedge ineffectiveness during the quarter or nine months ended September 30, 2011 and 2010.

NON-DESIGNATED LUMBER HEDGE

In September 2011, we entered into a commodity swap contract for 31,200 mbf of southern yellow pine with an effective date of November 1, 2011 and a termination date of February 29, 2012. Under the contract, 7,800 mbf cash settles each month. On October 13, 2010, we entered into a commodity swap contract for 33,000 mbf (thousand board feet) of eastern spruce/pine with an effective date of April 1, 2011 and a termination date of September 30, 2011. Under the contract, 5,500 mbf cash settled each month. During the quarter ended September 30, 2011, the three monthly cash settlements resulted in a cash receipt of $0.3 million. Realized gains of $0.3 million and $0.6 million were recognized in the quarter and nine months ended September 30, 2011, respectively, as a reduction of cost of goods sold. In February 2011, the remaining 7,150 mbf of southern yellow pine from our commodity swap contract entered into on October 18, 2010 cash settled, resulting in a cash payment of $0.2 million. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in net earnings. As such, unrealized gains of $1.7 million and $4.4 million were recognized in the quarter and nine months ended September 30, 2011, respectively.

The following table presents the fair values of derivative instruments as of the balance sheet dates:

(Dollars in thousands)	Balance Sheet Location	September 30, 2011		December 31, 2010
Fair Value of Derivative Assets:
Derivatives designated as hedging instruments:
Interest rate contracts	Other non-current assets	$	2,415	$	62
Total derivatives designated as hedging instruments		$	2,415	$	62
Derivatives not designated as hedging instruments:
Lumber contracts	Receivables, net	$	1,747	$	—
Total derivatives not designated as hedging instruments		$	1,747	$	—
Fair Value of Derivative Liabilities:
Derivatives designated as hedging instruments:
Interest rate contracts	Other long-term obligations	$	—	$	278
Total derivatives designated as hedging instruments		$	—	$	278
Derivatives not designated as hedging instruments:
Lumber contracts	Accrued liabilities	$	—	$	2,876
Total derivatives not designated as hedging instruments		$	—	$	2,876

The following table details the effect of derivatives on the Consolidated Condensed Statements of Operations and Comprehensive Income for the quarters and nine months ended September 30, 2011 and 2010:

	Location of Gain  Recognized in Income	Gain Recognized in Income
		Quarter Ended				Nine Months Ended
		September 30,				September 30,
(Dollars in thousands)		2011		2010		2011		2010
Derivatives designated in fair value hedging relationships:
Interest rate contracts
Realized gain on hedging instrument(1)	Interest expense	$	255	$	226	$	791	$	226
Net gain recognized in income from fair value hedges		$	255	$	226	$	791	$	226
Derivatives not designated as hedging instruments:
Lumber contracts
Unrealized gain on derivative	Cost of goods sold	$	1,650	$	—	$	4,401	$	—
Realized gain on derivative	Cost of goods sold	304		—		553		—
Net gain recognized in income from derivatives not designated as hedging instruments		$	1,954	$	—	$	4,954	$	—

(1) Realized gain on hedging instrument consists of net cash settlements and interest accruals on the interest rate swaps during the periods.