9.	DERIVATIVE INSTRUMENTS

EM LLC has historically utilized interest rate swap agreements, which are contractual agreements to exchange payments based on underlying interest rates, to manage the floating rate portion of its term debt. Two such interest rate swaps, each with a notional amount of $375.0 million, were entered into in June 2006 and in place through June 30, 2011. In April 2011, the Company entered into three new interest rate swap agreements for an aggregate notional amount of $950.0 million. These swap agreements are effective July 1, 2011. The first swap agreement is for a notional amount of $325.0 million and effectively fixes future interest payments at a rate of 2.935% until the scheduled maturity of the underlying borrowings on June 1, 2013. The other two swap agreements are for notional amounts of $312.5 million each and effectively fix future interest payments at a rate of 6.26% through June 1, 2015.

The fair values of the interest rate swap liabilities were $19.8 million and $33.9 million at June 30, 2011 and 2010, respectively, and were recorded in other long-term liabilities on the accompanying consolidated balance sheets. Additionally, at June 30, 2011, there was a cumulative unrealized loss of $12.5 million, net of tax, related to these interest rate swaps included in accumulated other comprehensive loss on the Company's accompanying consolidated balance sheet. This loss would be immediately recognized in the consolidated statement of operations if these instruments fail to meet certain cash flow hedge requirements.

The change in interest rate swaps, net of tax, recorded in other comprehensive loss during the fiscal years ended June 30 was as follows (in thousands):


	2011			2010			2009
Reclassification into earnings	$	23,802		$	23,795		$	14,422
Periodic revaluation		(14,901	)		(10,881	)		(24,218	)

Net change in interest rate swaps	$	8,901		$	12,914		$	(9,796	)

Over the next twelve months, the Company estimates approximately $9.8 million will be reclassified from accumulated other comprehensive loss to the consolidated statement of operations based on current interest rates and underlying debt obligations at June 30, 2011.

The Company used "level two" inputs to value its interest rate swaps. These inputs are defined as other than quoted prices in active markets that are either directly or indirectly observable. The application of level two inputs includes obtaining quotes from counterparties, which are based on LIBOR forward curves, and assessing non-performance risk based upon published market data.