Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

The Company has a lease agreement with an independent lessor, that is considered to be a VIE.  The agreement provides $28,720 of financing for five of the Company’s distribution facilities and carries a five-year term expiring July 2013.  The financing structure used with this lease qualifies as a silo of a VIE.  The Company, as lessee, retains the power to direct the operational activities that most significantly impact the economic performance of the VIE and has an obligation to absorb losses and the right to receive benefits from the sale of the real property held by the VIE lessor.  Therefore, the Company is the primary beneficiary of this VIE, and accordingly, consolidates the silo in its financial statements.

In December 2011, the Company notified the independent lessor of its intent to prepay and terminate the lease arrangement due in July 2013. The Company expects to liquidate the $27,715 balance owed on the lease arrangement during the first quarter of 2012. As a result, the Company reclassified the $27,715 lease arrangement from long-term debt to current portion of long-term debt as of December 31, 2011.

As of December 31, 2011, the consolidated silo included in the Company’s consolidated financial statements had a net property balance of $15,118, current portion long-term debt of $27,715, and a noncontrolling interest of $1,005.  At December 31, 2010, the consolidated silo included in the Company’s consolidated financial statements had a net property balance of $15,775, long-term debt of $27,715, and a noncontrolling interest of $1,005.

Under the terms of the lease agreement, the amount guaranteed by the Company as the residual fair value of the property subject to the lease arrangement was $28,720 at December 31, 2011 and 2010, respectively.

Rental expense was $20,275, $25,684, and $27,185 in 2011, 2010, and 2009, respectively.  Future minimum rental payments required under operating leases that have either initial or remaining noncancelable lease terms in excess of one year as of December 31, 2011 are as follows:

For the Years Ending December 31,	Minimum Rental Payments
2012	$	18,035
2013	13,933
2014	11,494
2015	8,352
2016	6,809
After 2016	14,422

The Company entered into a swap agreement to manage interest rates on amounts due under the $27,715 lease arrangement discussed above in September 2000.  In December 2011, the Company settled the interest rate swap. The amount of loss recorded in interest expense was $3,257.

The Company and its subsidiaries are subject to various claims, disputes, administrative, and legal matters incidental to the Company’s past and current business activities.  As a result, contingencies arise resulting from an existing condition, situation, or set of circumstances involving an uncertainty as to the realization of a possible loss.

The Company accounts for loss contingencies in accordance with US GAAP.  Estimated loss contingencies are accrued only if the loss is probable and the amount of the loss can be reasonably estimated.  With respect to a particular loss contingency, it may be probable that a loss has occurred but the estimate of the loss is a wide range.  If the Company deems some amount within the range to be a better estimate than any other amount within the range, that amount shall be accrued.  However, if no amount within the range is a better estimate than any other amount, the minimum amount of the range is accrued.  While the Company believes that none of these claims, disputes, administrative, and legal matters will have a material adverse effect on its financial position, these matters are uncertain and the Company cannot at this time determine whether the financial impact, if any, of these matters will be material to its results of operations in the period in which such matters are resolved or a better estimate becomes available.