9. DERIVATIVE INSTRUMENTS

6 Months Ended

Jun. 30, 2011

Derivative Instruments and Hedging Activities Disclosure [Text Block]

9. DERIVATIVE INSTRUMENTS

We have used derivative instruments from time to time to manage risks related to interest rates. During the three and nine months ended September 30, 2011, we did not have any derivative instruments. During the three and nine months ended September 30, 2010, our derivative instruments were limited to interest rate swaps. We are exposed to one-month LIBOR interest rate risk on our credit facility. In August 2007, we entered into two $100.0 million pay fixed, receive floating interest rate swaps to hedge the variability in our cash flows associated with changes in one-month LIBOR interest rates. One of these interest rate swaps expired in August 2009 and the other expired in August 2010, so there is no associated asset or liability on our condensed consolidated balance sheet as of September 30, 2011.

Cash-Flow Hedges

For a derivative instrument designated as a cash-flow hedge, the effective portion of the derivative’s gain (loss) is initially reported as a component of other comprehensive income and is subsequently recognized in earnings in the same period or periods during which the hedged exposure is recognized in earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in current earnings. Monthly settlements with the counterparties are recognized in the same line item, “Interest expense,” as the interest costs associated with our credit facility. Accordingly, cash settlements are included in operating cash flows and were $3.0 million for the nine months ended September 30, 2010. Concurrent with the refinancing of our credit facility on May 10, 2010, we dedesignated the cash flow hedge associated with our remaining interest rate swap, which expired in August 2010. Consequently, we did not have any such cash settlements during the nine months ended September 30, 2011.

During the three and nine months ended September 30, 2010, we recognized the following gains and interest expense related to interest rate swaps (in thousands):

	Three Months Ended September 30, 2010			Nine Months Ended September 30, 2010
Effective portion:
Gain recognized in other comprehensive income, net of  tax effect of $0.1 million and $0.5 million in 2010	$	211		$	1,009
Ineffective portion:
Unrealized gain on change in fair value of interest rate          swaps recognized in other expense	$	254		$	1,228
Interest expense related to monthly cash settlements:
Interest expense	$	(575	)	$	(2,828	)

For further disclosure on our policy for accounting for derivatives and hedges, see Note 5.