Financial Derivative Instruments

6 Months Ended

Jun. 30, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Derivative Instruments

Note 10.  Financial Derivative Instruments

We utilize interest-rate swap agreements that qualify as cash-flow hedges to manage our exposure to interest rate fluctuations on a portion of our variable-interest rate debt. Our interest-rate swaps increase or decrease the amount of cash paid for interest depending on the increase or decrease of interest required on the variable rate debt. We account for derivative instruments on the balance sheet at fair value.

Fair value is the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Three levels of inputs may be used to measure fair value:

�   Level 1 - quoted prices in active markets for identical assets and liabilities.

�   Level 2 - observable inputs other than quoted prices in active markets for identical assets and liabilities.

�   Level 3 - unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions.

The fair value of our interest rate swap agreements were determined based on Level 2 inputs. We currently have an interest-rate swap agreement effectively locking in the LIBOR rate portion of the interest rate on $80,000,000 of variable-interest rate debt until September 2011. The LIBOR rate portion of the swap is a fixed rate of 2.15%. This swap rate is in addition to the applicable margin under our credit agreement, which is currently 1.5%.

As our current interest rate swap agreement will expire in September, we have purchased three additional interest rate swaps which become effective in September 2011. The table below provides details surrounding the newly purchased interest rate swap agreements.

Interest-Rate Swap Agreement Effective Dates	Coverage Amount		Rate
September 2011 - September 2014	$	24,000,000		1.66	%
September 2011 - March 2015	$	24,000,000		1.91	%
September 2011 - September 2015	$	24,000,000		2.14	%

The fair value of our derivative expiring in September 2011 has been recorded as a financial derivative instrument under the short-term liabilities section of our balance sheet. The fair value of our current derivatives at June 30, 2011 and December 31, 2010 is a net liability of $389,000 and $1,079,000, respectively. The fair value of our newly purchased derivatives at June 30, 2011 is recorded as financial derivative instruments under the long-term liabilities section of our balance sheet. The fair value of our newly purchased derivatives at June 30, 2011 is a net liability of $925,000. The cumulative gain or (loss) on the market value of financial derivative instruments is reported as a component of accumulated other comprehensive income (loss) in shareholders' equity, net of tax. If we were to terminate our interest rate swap positions, the cumulative change in fair value at the date of termination would be reclassified from accumulated other comprehensive income (loss), which is classified in shareholder's equity, into earnings in the Consolidated Statements of Operations. The table below illustrates the effect of derivative instruments on consolidated operations for the periods ending June 30, 2011 and 2010, respectively.

(Dollars in thousands)	Gain (Loss) Reported in Accumulated		Location of Gain/Proceeds	Amount of Gain/Proceeds
Derivative Instruments	Other Comprehensive Loss		Reclassified from Accumulated Other	Recognized in Income on Derivative
Cash Flow Hedging Relationships	2011	2010	Comprehensive Income into Income	2011	2010
Interest Rate Contracts	$(141)	$299	Interest Expense	$-	$-