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Note 15 - Financial Instruments - Derivatives and Hedging
 6 Months Ended
Jun. 30, 2012
Derivative Instruments and Hedging Activities Disclosure [Text Block]
15. Financial Instruments – Derivatives and Hedging

The Company is exposed to certain risk arising from both economic conditions and its business operations. The Company principally manages its exposures to a wide variety of business and operational risk through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company may use derivatives to manage exposures that arise from changes in interest rates, foreign currency exchange rate fluctuations and market value fluctuations of equity securities. The Company limits these risks by following established risk management policies and procedures including the use of derivatives.

Cash Flow Hedges of Interest Rate Risk -

 The Company, from time to time, hedges the future cash flows of its floating-rate debt instruments to reduce exposure to interest rate risk principally through interest rate swaps and interest rate caps with major financial institutions. The effective portion of the changes in fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.  Any ineffective portion of the change in fair value of the derivatives is recognized directly in earnings.  During the six months ended June 30, 2012 and 2011, the Company had no hedge ineffectiveness.

Amounts reported in accumulated other comprehensive income related to cash flow hedges of interest rate risk will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt.  During the remainder of 2012, the Company estimates that an additional $0.1 million will be reclassified as an increase to interest expense.

As of June 30, 2012, the Company had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk:

Derivatives Designated
As Hedging Instrument
Number of
Instruments
 
Notional
(in millions)
 
Interest Rate Swap
1
 
$
20.7
 

The fair value of this derivative financial instrument classified as a liability was $0.1 million and $0.2 million as of June 30, 2012 and December 31, 2011, respectively, and is included in Other liabilities on the Company’s Condensed Consolidated Balance Sheets.