Financial Instruments

6 Months Ended

Jun. 30, 2013

Derivative Instrument Detail [Abstract]

FINANCIAL INSTRUMENTS

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



	June 30, 2013				December 31, 2012
(Dollars in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Cash and short-term investments (Level 1)	$	50,451	$	50,451	$	80,062	$	80,062
Net derivative asset related to interest rate swaps (Level 2)	2,012		2,012		2,952		2,952
Long-term debt, including current installments on long-term debt (including fair value adjustments related to fair value hedges) (Level 2)	320,131		354,445		357,576		379,048

FAIR VALUE HEDGES OF INTEREST RATE RISK

As of June 30, 2013, we had six separate interest rate swaps with notional amounts totaling $46.75 million. The swaps convert interest payments with fixed rates to variable rates of 3-month LIBOR plus a spread.

NON-DESIGNATED LUMBER SWAPS

We participated in one commodity swap contract that cash settled in the first quarter of 2012 and two that cash settled in the second quarter of 2012. Changes in the fair value of derivatives not designated in hedging relationships were recorded directly in net income. As of June 30, 2013 there were no outstanding lumber swap contracts.

The following table presents the gross fair values of derivative instruments on our Consolidated Condensed Balance Sheets as of the balance sheet dates:



(Dollars in thousands)	Balance Sheet Location	June 30, 2013		December 31, 2012
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets (non-current)	$	2,012	$	2,952
Total derivatives designated as hedging instruments		$	2,012	$	2,952

The following table details the effect of derivatives on the Consolidated Statements of Income for the quarters and six months ended June 30:



	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Quarter Ended June 30,					Six Months Ended June 30,
		Quarter Ended June 30,					Six Months Ended June 30,
(Dollars in thousands)		2013		2012			2013		2012
Derivatives designated in fair value hedging relationships:
Interest rate contracts
Realized gain on hedging instrument⁽¹⁾	Interest expense	$	241	$	218		$	487	$	433
Net gain recognized in income from fair value hedges		$	241	$	218		$	487	$	433

Derivatives not designated as hedging instruments:
Lumber contracts
Unrealized loss on derivative	Cost of goods sold	$	—	$	(185	)	$	—	$	(480	)
Realized loss on derivative	Cost of goods sold	—		(748		)	—		(396		)
Net loss recognized in income from derivatives not designated as hedging instruments		$	—	$	(933	)	$	—	$	(876	)


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

No net unrealized gain or loss associated with the interest rate swaps was recognized in income for any of the periods presented because we recognized no hedge ineffectiveness.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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