Note 9 — Financial instruments

The Company uses derivative instruments for risk management purposes. Forward rate contracts are used to manage foreign currency transaction exposure. These derivative instruments are designated as cash flow hedges and are recorded on the balance sheet at fair market value. The effective portion of the gains or losses on derivatives are reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects 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. Approximately $7.3 million of the amount in accumulated other comprehensive income at December 31, 2011 would be reclassified as expense to the statement of income during 2012 should foreign currency exchange rates and interest rates remain at December 31, 2011 levels. See Note 10, "Fair Value Measurement" for additional information.

The location and fair values of derivative instruments designated as hedging instruments in the consolidated balance sheet are as follows:


	December 31, 2011 Fair Value		December 31, 2010 Fair Value
	(Dollars in thousands)
Asset derivatives:
Foreign exchange contracts:
Other assets — current	$	204	$	880

Total asset derivatives	$	204	$	880

Liability derivatives:
Interest rate swap:
Derivative liabilities — current	$	—	$	15,004
Other liabilities — noncurrent		—		9,566
Foreign exchange contracts:
Derivative liabilities — current		633		630

Total liability derivatives	$	633	$	25,200

The location and amount of the gains and losses for derivatives in cash flow hedging relationships that were reported in other comprehensive income ("OCI"), accumulated other comprehensive income ("AOCI") and the consolidated statement of income for the years ended December 31, 2011, 2010 and 2009 are as follows:


	After Tax Gain/(Loss) Recognized in OCI
	2011			2010			2009
	(Dollars in thousands)
Interest rate swap	$	8,330		$	2,248		$	10,484
Foreign exchange contracts		(325	)		(167	)		5,504

Total	$	8,005		$	2,081		$	15,988


	Pre-Tax (Gain)/Loss Reclassified from AOCI into Income
	2011			2010			2009
	(Dollars in thousands)
Interest rate swap:
Interest expense	$	15,769		$	17,331		$	19,585
Foreign exchange contracts:
Net revenues		—			(540	)		36
Cost of goods sold		(22	)		(3,516	)		3,067
Selling, general and administrative expenses		—			—			(356	)
Income from discontinued operations		(536	)		105			19

Total	$	15,211		$	13,380		$	22,351

For the year ended December 31, 2011, there was no ineffectiveness related to the Company's derivatives.

In 2011, the Company terminated its interest rate swap. At December 31, 2011, the Company had $7.0 million, net of tax, recorded in accumulated other comprehensive income ("AOCI") associated with this interest rate swap, which will be amortized as interest expense over the remaining life of the original term of the hedging designation that expires in September of 2012. See Note 8, "Borrowings" for additional information on the termination of the interest rate swap.

The following table provides information regarding financial instruments activity included as part of accumulated other comprehensive income, net of tax:


	2011			2010
	(Dollars in thousands)
Balance at beginning of year	$	(15,262	)	$	(17,343	)
Additions and revaluations		(1,491	)		(5,714	)
Loss reclassified from AOCI into income		9,604			7,762
Tax rate adjustment		(108	)		33

Balance at end of period	$	(7,257	)	$	(15,262	)

After-tax loss (gain) reclassified from AOCI into income with respect to the Company's terminated interest rate swap and forward rate contracts hedge results contributed approximately $10.0 and $(0.4) million, respectively, to the increase (decrease) in other comprehensive income for 2011 and approximately $10.8 and $(3.0) million, respectively, to the increase (decrease) in other comprehensive income for 2010.