Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2011

Notes to Financial Statements [Abstract]

Derivative Instruments and Hedging Activities

11. Derivative Instruments and Hedging Activities

The Company is exposed to certain risks in its ongoing business operations. The primary risk managed by using derivative instruments is interest rate risk. Interest rate swaps and treasury rate locks are the principal derivative instruments used by the Company to manage interest rate risk associated with its long-term borrowings, although other interest rate derivative contracts may also be used from time to time. The Company recognizes all derivative instruments as assets or liabilities at fair value in the Consolidated Balance Sheet.

Interest Rate Contracts

The Company may enter into interest rate swaps to manage its exposure to changes in interest payments on long-term debt attributable to movements in market interest rates, and may enter into treasury rate locks to manage its exposure to changes in future interest payments attributable to changes in treasury rates prior to the issuance of new long-term debt instruments.

Interest Rate Swaps. As of December 31, 2011, the Company had outstanding pay-fixed interest rate swaps with a total notional amount of $455 million applicable to the 2012 Term Loan. These interest rate swaps are accounted for as cash flow hedges, with the effective portion of changes in their fair value recorded in Accumulated other comprehensive loss and reclassified into Interest expense in the same periods during which the related interest payments on long-term debt impact earnings. As of December 31, 2011, approximately $2.5 million of net after-tax losses in Accumulated other comprehensive loss related to these interest rate swaps is expected to be amortized into Interest expense during the next twelve months. Any ineffective portion of the cash flow hedge is reported in current-period earnings.

Treasury Rate Locks. As of December 31, 2011, the Company had no outstanding treasury rate locks. However, certain of its treasury rate locks that settled in prior periods are associated with interest payments on outstanding long-term debt. These treasury rate locks are accounted for as cash flow hedges, with the effective portion of their settled value recorded in Accumulated other comprehensive loss and reclassified into Interest expense in the same periods during which the related interest payments on long-term debt impact earnings. As of December 31, 2011, approximately $166,000 of net after-tax losses in Accumulated other comprehensive loss related to these treasury rate locks will be amortized into Interest expense during the next twelve months.

The Company had no asset derivative instruments at December 31, 2011 and 2010. The following table summarizes the fair value amounts of the Company's liabilityderivative instruments and their location in the Consolidated Balance Sheet at the dates indicated.

		Fair Value (1)
	Balance Sheet	December 31,
	Location	2011		2010
			(In thousands)
Cash Flow Hedges:
Interest rate contracts	Other current liabilities	$	4,148	$	19,694
	Other noncurrent liabilities		-		4,652
		$	4,148	$	24,346

The following table summarizes the location and amount of derivative instrument gains and losses reported in the Company's consolidated financial statements for the periods presented.

			Years Ended December 31,
			2011		2010		2009
			(In thousands)
Cash Flow Hedges: (1)
	Change in fair value - increase in Accumulated other comprehensive loss,
		excluding tax expense effect of $540, $5,237 and $3,051, respectively	$	1,327	$	13,027	$	7,589
	Reclassification of unrealized loss from Accumulated other comprehensive
		loss - increase of Interest expense, excluding tax expense effect
		of $8,757, $8,711 and $7,537, respectively		21,795		21,679		18,760

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• See Note 7 – Comprehensive Income for additional related information.