Derivatives

12 Months Ended

Dec. 31, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVES

DERIVATIVES

From time to time, we enter into interest rate swap and cap agreements to manage our fixed and variable interest rate exposure and to better match the repricing of debt instruments to that of our portfolio of assets. We assess the risk that changes in interest rates will have either on the fair value of debt obligations or on the amount of future interest payments by monitoring changes in interest rate exposures and by evaluating hedging opportunities. We regularly monitor interest rate risk attributable to both our outstanding or forecasted debt obligations as well as our offsetting hedge positions. This risk management process involves the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.

As of December 31, 2012, we have interest rate swaps outstanding which are designated as fair value hedges whereby we receive fixed interest rate payments in exchange for making variable interest rate payments. The differential to be paid or received is accrued and recognized as interest expense. The following table provides a detail of the swaps outstanding and the related hedged items as of December 31, 2012:

		Face value of medium-term notes	Aggregate notional amount of interest rate swaps		Weighted-average variable interest rate on hedged debt as of December 31,
Issuance date	Maturity date			Fixed interest rate	2012	2011
		(Dollars in thousands)
May 2011	June 2017	$350,000	$150,000	3.50%	1.62%	1.84%
February 2011	March 2015	$350,000	$150,000	3.15%	1.66%	1.43%
February 2008	March 2013	$250,000	$250,000	6.00%	2.84%	2.61%

Changes in the fair value of our interest rate swaps are offset by changes in the fair value of the debt instrument. Accordingly, there is no ineffectiveness related to the interest rate swaps. The location and amount of gains (losses) on derivative instruments and related hedged items reported in the Consolidated Statements of Earnings were as follows:

	Location of Gain (Loss) Recognized in Income	December 31,
Fair Value Hedging Relationship		2012			2011		2010
		(In thousands)
Derivative: Interest rate swap	Interest expense	$	(5,118	)	6,414		3,328
Hedged item: Fixed-rate debt	Interest expense	5,118			(6,414	)	(3,328	)
Total		$	—		—		—