DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2011

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

11. DERIVATIVE FINANCIAL INSTRUMENTS

Interest Rate Swap

        The Company occasionally uses derivative financial instruments to reduce its exposure to adverse fluctuations in interest rates.

        On May 21, 2008, the Company entered into four interest rate swap agreements for purposes of managing its risk in interest rate fluctuations. These agreements each hedged a notional amount of $150.0 million of the Company's borrowings under the revolving credit facility. Two of the agreements were effective June 9, 2009 and expired on June 9, 2010. On these two agreements, the Company paid a fixed rate of 3.51% and received a variable rate of interest equal to three-month London Interbank Offered Rate (LIBOR), as determined on the last day of each quarterly settlement period. The other two agreements were effective on June 9, 2010 and expired on June 9, 2011. The Company paid a fixed rate of 4.10% on these two agreements and received a variable rate of interest equal to three-month LIBOR as determined on the last day of each quarterly settlement period.

        The Company elected to apply hedge accounting to these swap agreements. Changes in the fair value of the effective portion of the interest rate swap agreements was recorded as a component of accumulated other comprehensive income (loss) in the equity section of the balance sheet. The net amount received or paid upon quarterly settlements was recorded as an adjustment to interest expense, with a corresponding adjustment in accumulated other comprehensive income (loss).

        The effect of derivatives in cash flow hedging relationships on the consolidated statement of income for the twelve months ended December 31, 2011, 2010 and 2009 was as follows (in thousands):

Derivatives in Cash Flow Hedge Relationship	Before-Tax Loss Recognized in OCI on Derivatives (Effective Portion)			Locations of Loss Reclassified from AOCI into Income (Effective Portion)	Before-Tax Loss Reclassified from AOCI into Income (Effective Portion)			Locations of Loss Recognized in Income on Derivatives (Ineffective Portion)	Before-Tax Loss Recognized in Income on Derivatives (Ineffective Portion)
December 31, 2011
Interest rate swap contracts	$	(41	)	Interest Expense	$	(4,237	)	Other Income (Expense), net	$	—
Total	$	(41	)		$	(4,237	)		$	—
December 31, 2010
Interest rate swap contracts	$	(2,868	)	Interest Expense	$	(10,284	)	Other Income (Expense), net	$	(1,177	)
Total	$	(2,868	)		$	(10,284	)		$	(1,177	)
December 31, 2009
Interest rate swap contracts	$	(5,176	)	Interest Expense	$	(5,226	)	Other Income (Expense), net	$	—
Total	$	(5,176	)		$	(5,226	)		$	—

        The Company had no outstanding interest rate swap contracts as of December 31, 2011. The fair value of the Company's derivative instruments included in current liabilities was $5.1 million (of which $0.9 million is not designated as a hedging instrument) as of December 31, 2010.

        The Company will continue to review its exposure to interest rate fluctuations and evaluate whether it should manage such exposure through derivative transactions. See Note 20 of the consolidated financial statements for additional information regarding the fair value of the interest rate swaps.

Foreign Currency Contracts

        During 2011, the Company entered into multiple foreign currency contracts. The net settlement of these contracts was a $1.2 million gain that was recorded in other income (expense), net. As of December 31, 2011 the Company had no outstanding foreign currency contracts. During 2010 and 2009, the Company did not enter into any foreign currency contracts.

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	2011
Foreign currency contracts	Other income (expense), net	$	1,153
Total		$	1,153