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Financial Instruments | 12 Months Ended
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Dec. 31, 2011
Financial Instruments [Abstract] |
FINANCIAL INSTRUMENTS | 15. FINANCIAL INSTRUMENTS Fuel Hedges We have entered into multiple swap agreements designated as cash flow hedges to mitigate some of our exposure related to changes in diesel fuel prices. The swaps qualified for, and were designated as, effective hedges of changes in the prices of forecasted diesel fuel purchases (fuel hedges). The following fuel hedges were outstanding during 2011 and 2010:
Inception Date |  | Commencement Date |  | Termination Date |  | Notional Amount (in Gallons per Month) |  | Contract Price per Gallon |
November 5, 2007 |  | January 5, 2009 |  | December 30, 2013 |  | 60,000 |  | $ | 3.28 |
March 17, 2008 |  | January 5, 2009 |  | December 31, 2012 |  | 50,000 |  |  | 3.72 |
March 17, 2008 |  | January 5, 2009 |  | December 31, 2012 |  | 50,000 |  |  | 3.74 |
September 22, 2008 |  | January 1, 2009 |  | December 31, 2011 |  | 150,000 |  |  | 4.16 -4.17 |
July 10, 2009 |  | January 1, 2011 |  | December 31, 2011 |  | 100,000 |  |  | 3.05 |
July 10, 2009 |  | January 1, 2012 |  | December 31, 2012 |  | 100,000 |  |  | 3.20 |
August 8, 2011 |  | July 1, 2012 |  | December 31, 2012 |  | 500,000 |  |  | 3.84 |
August 8, 2011 |  | January 1, 2013 |  | December 31, 2013 |  | 500,000 |  |  | 3.83 |
August 8, 2011 |  | January 1, 2014 |  | December 31, 2014 |  | 500,000 |  |  | 3.82 |
August 8, 2011 |  | July 2, 2012 |  | December 31, 2012 |  | 500,000 |  |  | 3.84 |
August 8, 2011 |  | January 7, 2013 |  | December 30, 2013 |  | 500,000 |  |  | 3.82 |
August 9, 2011 |  | July 1, 2012 |  | December 31, 2012 |  | 250,000 |  |  | 3.80 |
August 9, 2011 |  | January 1, 2013 |  | December 31, 2013 |  | 250,000 |  |  | 3.83 |
August 9, 2011 |  | January 1, 2014 |  | December 31, 2014 |  | 250,000 |  |  | 3.82 |
August 9, 2011 |  | January 6, 2014 |  | December 29, 2014 |  | 500,000 |  |  | 3.83 |
September 30, 2011 |  | January 6, 2014 |  | December 29, 2014 |  | 250,000 |  |  | 3.69 |
September 30, 2011 |  | January 7, 2013 |  | December 30, 2013 |  | 250,000 |  |  | 3.70 |
October 3, 2011 |  | January 5, 2015 |  | December 28, 2015 |  | 250,000 |  |  | 3.68 |
If the national U.S. on-highway average price for a gallon of diesel fuel (average price) as published by the Department of Energy exceeds the contract price per gallon, we receive the difference between the average price and the contract price (multiplied by the notional gallons) from the counter-party. If the national U.S. on-highway average price for a gallon of diesel fuel is less than the contract price per gallon, we pay the difference to the counter-party. The fair values of our fuel hedges are determined using standard option valuation models with assumptions about commodity prices being based on those observed in underlying markets (Level 2 in the fair value hierarchy). The aggregated fair values of our outstanding fuel hedges at December 31, 2011 and 2010 were current assets of $1.6 million, and current liabilities of $4.7 million and $1.9 million, respectively, and have been recorded in other current assets and other accrued liabilities in our consolidated balance sheets, respectively. The following table summarizes the impact of our fuel hedges on our results of operations and comprehensive income for the years ended December 31, 2011, 2010 and 2009:
Derivatives in Cash Flow Hedging Relationships |  | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) |  |  | Statement of Income Classification |  | Amount of Realized Gain or (Loss) |  |  | Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |  | Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |
| 2011 |  |  | 2010 |  |  | 2009 |  |  |  | 2011 |  |  | 2010 |  |  | 2009 |  |  |  | 2011 |  |  | 2010 |  |  | 2009 |
Fuel hedges |  | $ | (1.7 | ) |  | $ | 0.8 |  |  | $ | 6.1 |  |  | Cost of operations |  | $ | 0.9 |  |  | $ | (2.0 | ) |  | $ | (7.3 | ) |  | Other income, net |  | $ | - |  |  | $ | - |  |  | $ | 0.2 |
The effective portions of the changes in fair values as of December 31, 2011 and 2010, net of tax, of $1.8 million and $0.2 million, respectively, have been recorded in stockholders’ equity as components of accumulated other comprehensive income. Recycling Commodity Hedges Our revenue from sale of recycling commodities is primarily from sales of old corrugated cardboard (OCC) and old newspaper (ONP). We use derivative instruments such as swaps and costless collars designated as cash flow hedges to manage our exposure to changes in prices of these commodities. We have entered into multiple agreements related to the forecasted OCC and ONP sales. The agreements qualified for, and were designated as, effective hedges of changes in the prices of certain forecasted recycling commodity sales (recycling commodity hedges). The following commodity swaps were outstanding during 2011 and 2010:
Inception Date |  | Commencement Date |  | Termination Date |  | Transaction Hedged |  | Notional Amount (in Short Tons per Month) |  |  | Contract Price Per Short Ton |
December 8, 2009 |  | January 1, 2010 |  | December 31, 2011 |  | ONP |  |  | 2,000 |  |  | $ | 76.00 |
December 10, 2009 |  | January 1, 2010 |  | December 31, 2011 |  | OCC |  |  | 2,000 |  |  |  | 82.00 |
December 11, 2009 |  | January 1, 2010 |  | December 31, 2011 |  | OCC |  |  | 2,000 |  |  |  | 82.00 |
January 5, 2010 |  | January 1, 2010 |  | December 31, 2011 |  | ONP |  |  | 2,000 |  |  |  | 84.00 |
January 6, 2010 |  | January 1, 2010 |  | December 31, 2011 |  | OCC |  |  | 1,000 |  |  |  | 90.00 |
January 27, 2010 |  | February 1, 2010 |  | January 31, 2012 |  | OCC |  |  | 1,000 |  |  |  | 90.00 |
September 23, 2010 |  | January 1, 2011 |  | December 31, 2011 |  | ONP |  |  | 1,000 |  |  |  | 95.00 |
September 28, 2010 |  | January 1, 2011 |  | December 31, 2011 |  | ONP |  |  | 1,000 |  |  |  | 95.00 |
October 11, 2010 |  | January 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 1,500 |  |  |  | 115.00 |
If the price per short ton of the hedging instrument (average price) as reported on the Official Board Market is less than the contract price per short ton, we receive the difference between the average price and the contract price (multiplied by the notional short tons) from the counter-party. If the price of the commodity exceeds the contract price per short ton, we pay the difference to the counter-party. The fair values of our commodity swaps are determined using standard option valuation models with assumptions about commodity prices being based on those observed in underlying markets (Level 2 in the fair value hierarchy). We entered into costless collar agreements on forecasted sales of up to 25,000 short tons of OCC and ONP a month. The agreements involve combining a purchased put option giving us the right to sell up to 25,000 short tons of OCC and ONP monthly at an established floor strike price with a written call option obligating us to deliver up to 25,000 short tons of OCC and ONP monthly at an established cap strike price. The puts and calls have the same settlement dates, are net settled in cash on such dates and have the same terms to expiration. The contemporaneous combination of options resulted in no net premium for us and represent costless collars. Under the agreements, no payments will be made or received by us, as long as the settlement price is between the floor price and cap price. However, if the settlement price is above the cap, we will be required to pay the counterparty an amount equal to the excess of the settlement price over the cap times the monthly volumes hedged. Also, if the settlement price is below the floor, the counterparty will be required to pay us the deficit of the settlement price below the floor times the monthly volumes hedged. The objective of these agreements is to reduce the variability of the cash flows of the forecasted sales of OCC and ONP between two designated strike prices. The following costless collar hedges were outstanding at December 31, 2011 and 2010:
Inception Date |  | Commencement Date |  | Termination Date |  | Transaction Hedged |  | Notional Amount (in Short Tons per Month) |  |  | Floor Strike Price Per Short Ton |  |  | Cap Strike Price Per Short Ton |
December 8, 2010 |  | January 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,000 |  |  | $ | 80.00 |  |  | $ | 180.00 |
December 8, 2010 |  | January 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,000 |  |  |  | 86.00 |  |  |  | 210.00 |
December 8, 2010 |  | January 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,000 |  |  |  | 81.00 |  |  |  | 190.00 |
December 8, 2010 |  | January 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,000 |  |  |  | 85.00 |  |  |  | 195.00 |
December 8, 2010 |  | January 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,000 |  |  |  | 87.00 |  |  |  | 195.00 |
January 19, 2011 |  | February 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,500 |  |  |  | 90.00 |  |  |  | 155.00 |
January 19, 2011 |  | February 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,500 |  |  |  | 90.00 |  |  |  | 155.00 |
April 15, 2011 |  | July 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,000 |  |  |  | 90.00 |  |  |  | 155.00 |
April 15, 2011 |  | July 1, 2011 |  | December 31, 2012 |  | OCC |  |  | 2,000 |  |  |  | 90.00 |  |  |  | 155.00 |
April 26, 2011 |  | July 1, 2011 |  | December 31, 2012 |  | ONP |  |  | 1,000 |  |  |  | 90.00 |  |  |  | 165.00 |
April 26, 2011 |  | July 1, 2011 |  | December 31, 2012 |  | ONP |  |  | 1,000 |  |  |  | 90.00 |  |  |  | 165.00 |
August 1, 2011 |  | January 1, 2012 |  | December 31, 2012 |  | ONP |  |  | 2,000 |  |  |  | 85.00 |  |  |  | 135.00 |
August 1, 2011 |  | January 1, 2012 |  | December 31, 2012 |  | ONP |  |  | 2,000 |  |  |  | 85.00 |  |  |  | 135.00 |
The costless collar hedges are recorded on the balance sheet at fair value. The fair values of the costless collars are determined using standard option valuation models with assumptions about commodity prices based upon forward commodity price curves in underlying markets (Level 2 in the fair value hierarchy). The aggregated fair values of the outstanding recycling commodity hedges at December 31, 2011 and 2010 were current assets of $1.4 million and $1.9 million, respectively, and current liabilities of $0.7 million and $6.5 million, respectively, and have been recorded in other current assets and other accrued liabilities in our consolidated balance sheets, respectively. The following table summarizes the impact of our recycling commodity hedges on our results of operations and comprehensive income for the years ended December 31, 2011, 2010 and 2009:
Derivatives in Cash Flow Hedging Relationships |  | Amount of Gain or (Loss) Recognized in OCI on Derivatives (Effective Portion) |  |  | Statement of Income Classification |  | Amount of Realized Gain or (Loss) |  |  | Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |  | Amount of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing) |
| 2011 |  |  | 2010 |  |  | 2009 |  |  |  | 2011 |  |  | 2010 |  |  | 2009 |  |  |  | 2011 |  |  | 2010 |  |  | 2009 |
Recycling commodity hedges |  | $ | 3.0 |  |  | $ | (3.2 | ) |  | $ | (4.7 | ) |  | Revenue |  | $ | (7.8 | ) |  | $ | (3.2 | ) |  | $ | 5.1 |  |  | Other income, net |  | $ | - |  |  | $ | (0.1 | ) |  | $ | (0.1 | )
The effective portions of the changes in fair values of our recycling commodity hedges as of December 31, 2011 and 2010, net of tax, of $0.4 million and $(2.6) million have been recorded in stockholders’ equity as a component of accumulated other comprehensive income. Fair Value Measurements In measuring fair values of assets and liabilities, we used quoted prices in active markets where available (Level 1), as well as valuation techniques that maximize the use of observable inputs (Level 2) and minimize the use of unobservable inputs (Level 3). Also, we use market data or assumptions that we believe market participants would use in pricing an asset or liability, including assumptions about risk when appropriate. As of December 31, 2011 and 2010, our assets and liabilities that are measured at fair value on a recurring basis include the following:
|  |  |  |  | Fair Value Measurements Using |
|  | Total as of December 31, 2011 |  |  | Quoted Prices in Active Markets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market mutual funds |  | $ | 100.8 |  |  | $ | 100.8 |  |  | $ | - |  |  | $ | - |
Bonds |  |  | 34.6 |  |  |  | - |  |  |  | 34.6 |  |  |  | - |
Fuel hedges - other current assets |  |  | 1.6 |  |  |  | - |  |  |  | 1.6 |  |  |  | - |
Commodity hedges - other accrued assets |  |  | 1.4 |  |  |  | - |  |  |  | 1.4 |  |  |  | - |
Total assets |  | $ | 138.4 |  |  | $ | 100.8 |  |  | $ | 37.6 |  |  | $ | - |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fuel hedges - other accrued liabilities |  | $ | 4.7 |  |  | $ | - |  |  | $ | 4.7 |  |  | $ | - |
Commodity hedges - other accrued liabilities |  |  | 0.7 |  |  |  | - |  |  |  | 0.7 |  |  |  | - |
Total liabilities |  | $ | 5.4 |  |  | $ | - |  |  | $ | 5.4 |  |  | $ | - |
|  |  |  |  | Fair Value Measurements Using |
|  | Total as of December 31, 2010 |  |  | Quoted Prices in Active Markets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market mutual funds |  | $ | 135.7 |  |  | $ | 135.7 |  |  | $ | - |  |  | $ | - |
Bonds |  |  | 27.2 |  |  |  | - |  |  |  | 27.2 |  |  |  | - |
Fuel hedges - other current assets |  |  | 1.6 |  |  |  | - |  |  |  | 1.6 |  |  |  | - |
Commodity hedges - other accrued assets |  |  | 1.9 |  |  |  | - |  |  |  | 1.9 |  |  |  | - |
Interest rate swaps - other non-trade receivables |  |  | 5.2 |  |  |  | - |  |  |  | 5.2 |  |  |  | - |
Total assets |  | $ | 171.6 |  |  | $ | 135.7 |  |  | $ | 35.9 |  |  | $ | - |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fuel hedges - other accrued liabilities |  | $ | 1.9 |  |  | $ | - |  |  | $ | 1.9 |  |  | $ | - |
Commodity hedges - other accrued liabilities |  |  | 6.5 |  |  |  | - |  |  |  | 6.5 |  |  |  | - |
Total liabilities |  | $ | 8.4 |  |  | $ | - |  |  | $ | 8.4 |  |  | $ | - |
Approximately $27.2 million of restricted marketable securities previously presented as assets measured at fair value on a recurring basis using quoted prices in active markets (Level 1) at December 31, 2010 have been reclassified to be presented as assets measured at fair value on a recurring basis using significant other observable inputs (Level 2). The securities consist of US federal, state and foreign government debt securities and corporate debt securities. Additionally, approximately $18.5 million of cash equivalents were previously presented as assets measured at fair value on a recurring basis using quoted prices in active markets (Level 1), but which did not need to be disclosed, as these amounts are not measured at fair value.

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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