Derivative Instruments

9 Months Ended

Sep. 30, 2011

Derivative Instruments [Abstract]

Derivative Instruments

11.    Derivative Instruments

The Company enters into cash flow hedges to reduce the exposure to variability in certain expected future cash flows. The type of cash flow hedges the Company enters into includes foreign currency contracts and interest rate exchange agreements that effectively convert a portion of floating-rate debt to fixed-rate debt and are designed to reduce the impact of interest rate changes on future interest expense.

The effective portion of gains or losses on interest rate exchange agreements is reported in accumulated other comprehensive income (loss) in shareholders' equity and reclassified into net income in the same period or periods in which the hedged transaction affects net income. The remaining gain or loss in excess of the cumulative change in the present value of future cash flows or the hedged item, if any, is recognized into net income during the period of change.

Fair values relating to derivative financial instruments reflect the estimated amounts that the Company would receive or pay to sell or buy the contracts based on quoted market prices of comparable contracts at each balance sheet date.

At September 30, 2011, the Company had two outstanding interest rate exchange agreements. The first interest rate exchange agreement is a forward setting interest rate contract that currently has a notional amount of $350.0 million and an effective date of February 28, 2012. The Company will pay fixed interest and will receive floating rate interest based on LIBOR on the effective date of February 28, 2012. This instrument was entered into in anticipation of the expected issuance of $350.0 million of new debt and was designed to lock in the current market interest rate as of September 29, 2011. The second interest rate exchange agreement, expiring in December 2011, with a current notional amount of $82.0 million, effectively converted $100.0 million of floating-rate debt into fixed-rate debt at an interest rate of 4.00%. The fixed rate consists of the fixed rate on the interest rate exchange agreements and the Company's current margin of 80 basis points on the Term Loan.

Approximately $4.0 million of the gross amount included in accumulated other comprehensive income (loss) in shareholders' equity at September 30, 2011 will be recognized to net income over the next 12 months as the underlying hedged transactions are realized. In addition, after issuance of the new debt, a portion of the forward starting interest rate contracts entered into on July 12, 2011 and September 29, 2011 will be recognized to net income. The amount to be recognized in the next 12 months will be determined based on the settlement date of the forward starting interest rate contract and the issuance of the anticipated new debt.

On May 31, 2011, the Company settled foreign currency exchange contracts with an aggregate notional amount of $0.5 million; the impact of this settlement was immaterial.

The following table sets forth the fair value amounts of derivative instruments held by the Company as of September 30, 2011 and December 31, 2010:

	Fair Value Assets (Liabilities)
	Sept 30, 2011			December 31, 2010			Balance Sheet Caption
	(In thousands)
Interest rate agreements	$	(36,840	)	$	(2,328	)	Accrued expenses
Foreign exchange contracts		—			176		Other current assets

The following table summarizes the gain (loss) recognized and the amounts and location of income (expense) and gain (loss) reclassified into income for interest rate contracts and foreign currency contracts for September 30, 2011 and 2010:

	Gain (Loss) Recognized  in Other Comprehensive Income						Expense and Gain Reclassified into Income
	Three Months Ended September 30,												Income   Statement Caption
	2011			2010			2011			2010
	(In thousands)
Interest rate agreements	$	(36,295	)	$	(16,347	)	$	(1,515	)	$	(2,146	)	Interest expense
Foreign exchange contracts		—			93			—			36		Sales
	Gain (Loss) Recognized  in Other Comprehensive Income						Expense and Gain Reclassified into Income
	Nine Months Ended September 30,												Income   Statement Caption
	2011			2010			2011			2010
	(In thousands)
Interest rate agreements	$	(36,407	)	$	(43,102	)	$	(4,593	)	$	(6,751	)	Interest expense
Foreign exchange contracts		(55	)		95			227			48		Sales