Derivative Financial Instruments

9 Months Ended

Sep. 30, 2011

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

(17) Derivative Financial Instruments

The Company manages its debt portfolio by targeting an overall desired position of fixed and floating rates and may employ interest rate swaps from time to time to achieve its goal. The Company does not use derivative financial instruments for trading or speculative purposes.

In March 2010, the Company entered into an interest rate swap agreement for a notional amount of $150 million related to its fixed rate debt maturing in 2014. This transaction was designated as a fair value hedge since the swap hedges against the change in fair value of fixed rate debt resulting from changes in interest rates. The Company’s derivative agreement includes a credit risk-related contingent feature whereby the counterparty is allowed to terminate the transaction following the occurrence of a default on certain of the Company’s indebtedness. The Company recorded a derivative asset of $1.3 million and $0.2 million within intangible and other long-term assets in the condensed consolidated balance sheets as of September 30, 2011 and December 31, 2010, respectively (see note 8). The change in fair value of the interest rate swap is included in the adjustments to reconcile net income to net cash provided by operating activities in the condensed consolidated statements of cash flows.

The location and effect of the derivative instrument on the condensed consolidated statements of operations for the three and nine month periods ended September 30, 2011 and 2010, presented on a pre-tax basis, is as follows (in thousands):

	Location of	Amount of (gain) loss recognized
	(gain) loss	Three Months Ended			Three Months Ended
	recognized	September 30, 2011			September 30, 2010
Interest rate swap	Interest expense, net	$	350		$	(1,422	)
Hedged item — debt	Interest expense, net		(788	)		806
		$	(438	)	$	(616	)

	Location of	Amount of (gain) loss recognized
	(gain) loss	Nine Months Ended			Nine Months Ended
	recognized	September 30, 2011			September 30, 2010
Interest rate swap	Interest expense, net	$	230		$	(2,937	)
Hedged item — debt	Interest expense, net		(1,409	)		2,693
		$	(1,179	)	$	(244	)

For the nine months ended September 30, 2011 and 2010, approximately $1.2 million and $0.2 million of interest income, respectively, was related to the ineffectiveness associated with this fair value hedge. Hedge ineffectiveness represents the difference between the changes in fair value of the derivative instruments and the changes in fair value of the fixed rate debt attributable to changes in the benchmark interest rate.