Financial Derivative Instruments

12 Months Ended

Dec. 31, 2011

Financial Derivative Instruments [Abstract]

Financial Derivative Instruments

Note 13.   Financial Derivative Instruments

We utilize interest-rate swap agreements 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 have effectively changed our exposure to varying cash flows on the variable-rate portion of our debt into fixed-rate cash flows. We do not enter into derivative instruments for any purpose other than to manage interest rate exposure. That is, we do not engage in interest rate speculation using derivative instruments.

We account for derivatives in accordance with FASB ASC Topic 815, "Derivatives and Hedging." ASC 815 requires that all derivative instruments be recorded on the balance sheet as either an asset or a liability measured at its fair value, and that changes in the derivatives' fair value be recognized in earnings unless specific hedge accounting criteria are met. Our financial derivative instruments are not designated as hedges as of the end of and during the periods presented.

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. Thus the fair value of our interest rate swap agreements represents the estimated receipts or payments that would be made to terminate the agreements. 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. Listed below are the interest rate swap agreements which lock in our interest rates on existing variable interest rate debt.

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 derivatives at December 31, 2011 is recorded as financial derivative instruments under the long-term liabilities section of our balance sheet. As our former interest-rate swap agreement expired in September 2011, the fair value of our derivatives at December 31, 2010 was recorded as financial derivative instruments under the short-term liabilities section of our balance sheet as of December 31, 2010.

The fair value of our derivatives at December 31, 2011 and December 31, 2010 is a net liability of $2,469,000 and $1,079,000, respectively. The change in the market value of financial derivative instruments during a period is recognized in earnings for that period. The table below illustrates the effect of derivative instruments on consolidated operations for the years ended December 31, 2011, 2010 and 2009.

(Dollars in thousands)		Increase/(Decrease)
Derivatives Instruments in	Location of Financial Impact of	in Interest Expense
Hedging Relationships	Derivatives into Income	2011		2010			2009
Interest Rate Contracts	Interest Expense	$	1,390	$	(830	)	$	(1,378	)