Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2011

Fair Value of Financial Instruments [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

     The fair value of financial instruments has been estimated by the Company using available market information as of June 30, 2011 and December 31, 2010, and valuation methodologies considered appropriate. The estimates presented are not necessarily indicative of amounts the Company could realize in a current market exchange (in thousands):

	June 30, 2011				December 31, 2010
	Carrying		Estimated Fair		Carrying		Estimated Fair
	Amount		Value		Amount		Value
Assets:
Cash and cash equivalents	$	191,432	$	191,432	$	299,169	$	299,169
Available-for-sale securities		33,097		33,097		31,570		31,570
Trading securities		38,709		38,709		35,092		35,092
Liabilities:
Credit Facility		5,974,321		5,806,274		5,999,337		5,882,124
Senior notes		2,784,331		2,846,978		2,784,331		2,923,548
Other debt		43,478		43,478		36,122		36,122

     Cash and cash equivalents. The carrying amount approximates fair value due to the short-term maturity of these instruments (less than three months).

     Available-for-sale securities. Estimated fair value is based on closing price as quoted in public markets.

     Trading securities. Estimated fair value is based on closing price as quoted in public markets.

     Credit Facility. Estimated fair value is based on information from the Company’s bankers regarding relevant pricing for trading activity among the Company’s lending institutions.

     Senior notes. Estimated fair value is based on the average bid and ask price as quoted by the bank who served as underwriter in the sale of these notes.

     Other debt. The carrying amount of all other debt approximates fair value due to the nature of these obligations.

     Interest rate swaps. The fair value of interest rate swap agreements is the amount at which they could be settled, based on estimates calculated by the Company using a discounted cash flow analysis based on observable market inputs and validated by comparison to estimates obtained from the counterparty. The Company incorporates credit valuation adjustments (“CVAs”) to appropriately reflect both its own nonperformance or credit risk and the respective counterparty’s nonperformance or credit risk in the fair value measurements. In adjusting the fair value of its interest rate swap agreements for the effect of nonperformance or credit risk, the Company has considered the impact of any netting features included in the agreements.

     The Company assesses the effectiveness of its hedge instruments on a quarterly basis. For the three and six months ended June 30, 2011 and 2010, the Company completed an assessment of the cash flow hedge instruments and determined the hedges to be highly effective. The Company has also determined that the ineffective portion of the hedges do not have a material effect on the Company’s consolidated financial position, operations or cash flows. The counterparties to the interest rate swap agreements expose the Company to credit risk in the event of nonperformance. However, at June 30, 2011, each swap agreement entered into by the Company was in a net liability position so that the Company would be required to make the net settlement payments to the counterparties; the Company does not anticipate nonperformance by those counterparties. The Company does not hold or issue derivative financial instruments for trading purposes.

     Interest rate swaps consisted of the following at June 30, 2011:

	Notional
	Amount		Fixed Interest			Termination	Fair Value
Swap #	(in 000’s)		Rate			Date	(in 000’s)
1	$	300,000		5.1140	%	August 8, 2011	$	1,533
2		100,000		4.7185	%	August 19, 2011		605
3		100,000		4.7040	%	August 19, 2011		603
4		100,000		4.6250	%	August 19, 2011		592
5		200,000		4.9300	%	August 30, 2011		1,551
6		200,000		3.0920	%	September 18, 2011		1,248
7		100,000		3.0230	%	October 23, 2011		869
8		200,000		4.4815	%	October 26, 2011		2,712
9		200,000		4.0840	%	December 3, 2011		3,279
10		100,000		3.8470	%	January 4, 2012		1,822
11		100,000		3.8510	%	January 4, 2012		1,824
12		100,000		3.8560	%	January 4, 2012		1,826
13		200,000		3.7260	%	January 8, 2012		3,610
14		200,000		3.5065	%	January 16, 2012		3,514
15		250,000		5.0185	%	May 30, 2012		10,654
16		150,000		5.0250	%	May 30, 2012		6,401
17		200,000		4.6845	%	September 11, 2012		10,208
18		100,000		3.3520	%	October 23, 2012		3,798
19		125,000		4.3745	%	November 23, 2012		6,794
20		75,000		4.3800	%	November 23, 2012		4,082
21		150,000		5.0200	%	November 30, 2012		9,618
22		200,000		2.2420	%	February 28, 2013		5,561
23		100,000		5.0230	%	May 30, 2013		8,262
24		300,000		5.2420	%	August 6, 2013		27,964
25		100,000		5.0380	%	August 30, 2013		9,101
26		50,000		3.5860	%	October 23, 2013		3,130
27		50,000		3.5240	%	October 23, 2013		3,063
28		100,000		5.0500	%	November 30, 2013		9,857
29		200,000		2.0700	%	December 19, 2013		5,715
30		100,000		5.2310	%	July 25, 2014		11,994
31		100,000		5.2310	%	July 25, 2014		11,998
32		200,000		5.1600	%	July 25, 2014		23,584
33		75,000		5.0405	%	July 25, 2014		8,571
34		125,000		5.0215	%	July 25, 2014		14,218
35		100,000		2.6210	%	July 25, 2014		4,349
36		100,000		3.1100	%	July 25, 2014		5,788
37		100,000		3.2580	%	July 25, 2014		6,222
38		200,000		2.6930	%	October 26, 2014		7,504	(1)
39		300,000		3.4470	%	August 8, 2016		18,662	(2)
40		200,000		3.4285	%	August 19, 2016		12,096	(3)
41		100,000		3.4010	%	August 19, 2016		6,019	(4)
42		200,000		3.5000	%	August 30, 2016		12,529	(5)
43		100,000		3.0050	%	November 30, 2016		4,196

(1)	This interest rate swap becomes effective October 26, 2011, concurrent with the termination of swap #8.
(2)	This interest rate swap becomes effective August 8, 2011, concurrent with the termination of swap #1.
(3)	This interest rate swap becomes effective August 19, 2011, concurrent with the termination of swaps #2 and #4.
(4)	This interest rate swap becomes effective August 19, 2011, concurrent with the termination of swap #3.
(5)	This interest rate swap becomes effective August 30, 2011, concurrent with the termination of swap #5.

     The Company is exposed to certain risks relating to its ongoing business operations. The risk managed by using derivative instruments is interest rate risk. Interest rate swaps are entered into to manage interest rate fluctuation risk associated with the term loans in the Credit Facility. Companies are required to recognize all derivative instruments as either assets or liabilities at fair value in the condensed consolidated balance sheet. The Company designates its interest rate swaps as cash flow hedges. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (“OCI”) and reclassified into earnings in the same period or periods during which the hedged transactions affect earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

     Assuming no change in June 30, 2011 interest rates, approximately $176.7 million of interest expense resulting from the spread between the fixed and floating rates defined in each interest rate swap agreement will be recognized during the next 12 months. If interest rate swaps do not remain highly effective as a cash flow hedge, the derivatives’ gains or losses resulting from the change in fair value reported through OCI will be reclassified into earnings.

     The following tabular disclosure provides the amount of pre-tax loss recognized in the condensed consolidated balance sheets as a component of OCI during the three and six months ended June 30, 2011 and 2010 (in thousands):

Derivatives in Cash Flow Hedging	Amount of Pre-Tax Loss Recognized in OCI on Derivative (Effective Portion)
Relationships	Three Months Ended June 30,						Six Months Ended June 30,
	2011			2010			2011			2010
Interest rate swaps	$	(67,685	)	$	(107,656	)	$	(63,572	)	$	(178,564	)

     The following tabular disclosure provides the location of the effective portion of the pre-tax loss reclassified from accumulated other comprehensive loss (“AOCL”) into interest expense on the condensed consolidated statements of income during the three and six months ended June 30, 2011 and 2010 (in thousands):

Location of Loss Reclassified from
AOCL into Income (Effective	Amount of Pre-Tax Loss Reclassified from AOCL into Income (Effective Portion)
Portion)	Three Months Ended June 30,				Six Months Ended June 30,
	2011		2010		2011		2010
Interest expense, net	$	53,649	$	55,009	$	106,573	$	108,173

     The fair values of derivative instruments in the condensed consolidated balance sheets as of June 30, 2011 and December 31, 2010 were as follows (in thousands):

Asset Derivatives

Liability Derivatives

June 30, 2011

December 31, 2010

June 30, 2011

December 31, 2010

Balance

Balance

Balance

Balance

Sheet

Fair

Sheet

Fair

Sheet

Fair

Sheet

Fair

Location

Value

Location

Value

Location

Value

Location

Value

Derivatives designated as hedging instruments

Other assets, net

$

—

Other assets, net

$

—

Other long-term liabilities

$

297,526

Other long-term liabilities

$

340,526