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Derivative Instruments And Hedging Activities | 6 Months Ended
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Jun. 30, 2012
Derivative Instruments and Hedges, Assets [Abstract] |
Derivative Instruments And Hedging Activities | 9. Derivative Financial Instruments and Hedging Activities Risk Management Objective of Using Derivatives. We are exposed to certain risks arising from both our business operations and economic conditions. We principally manage our exposures to a wide variety of business and operational risks through management of our core business activities. We manage economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of our debt funding and the use of derivative financial instruments. Specifically, we may enter into derivative financial instruments to manage exposures arising from business activities resulting in differences in the amount, timing, and duration of our known or expected cash payments principally related to our borrowings. Cash Flow Hedges of Interest Rate Risk. Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish these objectives, we primarily use interest rate swaps and caps as part of our interest rate risk management strategy. Interest rate swaps involve the receipt of variable rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps involve the receipt of variable rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an upfront premium. Designated Hedges. The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income or loss and is subsequently reclassified into earnings in the period the hedged forecasted transaction affects earnings. During the six months ended June 30, 2011, such derivatives were used to hedge the variable cash flows associated with existing variable rate debt. The ineffective portion of the change in fair value of the derivatives, if any, is recognized directly in earnings. No portion of designated hedges was ineffective during the three and six months ended June 30, 2011. We did not have any designated hedges during the six months ended June 30, 2012. Non-designated Hedges. Derivatives are not entered into for speculative purposes and are used to manage our exposure to interest rate movements and other identified risks. Our non-designated hedges are either specifically non-designated by management or do not meet strict hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings in interest and other income. As of June 30, 2012, we had the following outstanding interest rate derivatives which were not designated as hedges of interest rate risk:
Interest Rate Derivative |  | Number of Instruments |  | Notional Amount
Interest Rate Cap |  | 1 |  |  | $ | 175.0 | million
Interest Rate Swap |  | 1 |  |  | $ | 500.0 | million
The table below presents the fair value of our derivative financial instruments as well as their classification in the condensed consolidated balance sheets at June 30, 2012 and December 31, 2011 (in millions): Fair Values of Derivative Instruments
| Asset Derivatives |  | Liability Derivatives
| June 30, 2012 |  | December 31, 2011 |  | June 30, 2012 |  | December 31, 2011
| Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value
Derivatives not designated as hedging instruments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest Rate Swap |  |  |  |  |  |  |  |  | Other Liabilities |  | $ | 5.9 |  |  | Other Liabilities |  | $ | 16.6 |
Interest Rate Cap | Other Assets |  | $ | — |  |  | Other Assets |  | $ | 0.1 |  |  |  |  |  |  |  |  |
The tables below present the effect of our derivative financial instruments in the condensed consolidated statements of income (loss) and comprehensive income for the three and six months ended June 30, 2012 and 2011 (in millions): Effect of Derivative Instruments
Three Months Ended
June 30,
|  | Unrealized (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivative (Effective Portion) |  | Location of Loss Reclassified from Accumulated OCI into Income(Effective Portion) |  | Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) |  | Location of Loss Recognized in Statements of Income (Loss) (Discontinuation, Ineffective Portion and Amount Excluded from Effectiveness Testing) |  | Amount of Loss Recognized in Statements of Income (Loss) (Discontinuation, Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivatives in Cash Flow Hedging Relationships |  | 2012 |  | 2011 |  |  |  | 2012 |  | 2011 |  |  |  | 2012 |  | 2011
Interest Rate Swaps (1) |  | $ | — |  |  | $ | (2.2 | ) |  | Interest expense |  | $ | — |  |  | $ | 4.0 |  |  | Loss on discontinuation of hedging relationship |  | $ | — |  |  | $ | 29.8 |
Derivatives not designated as hedging instruments |  | Location of Gain/(Loss) Recognized in Statements of Income (Loss) |  | Amount of (Loss) Recognized in Statements of Income (Loss)
|  | 2012 |  | 2011
Interest Rate Cap |  | Other income/(loss) |  | $ | — |  |  | $ | — |
Interest Rate Swap |  | Other income/(loss) |  | $ | (0.1 | ) |  | $ | — |
Six Months Ended
June 30,
|  | Unrealized (Loss) Recognized in Other Comprehensive Income (“OCI”) on Derivative (Effective Portion) |  | Location of Loss Reclassified from Accumulated OCI into Income(Effective Portion) |  | Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) |  | Location of Loss Recognized in Statements of Income (Loss) (Ineffective Portion and Amount Excluded from Effectiveness Testing) |  | Amount of Loss Recognized in Statements of Income (Loss) (Ineffective Portion and Amount Excluded from Effectiveness Testing)
Derivatives in Cash Flow Hedging Relationships |  | 2012 |  | 2011 |  |  |  | 2012 |  | 2011 |  |  |  | 2012 |  | 2011
Interest Rate Swaps (1) |  | $ | — |  |  | $ | (2.7 | ) |  | Interest expense |  | $ | — |  |  | $ | 9.8 |  |  | Loss on discontinuation of hedging relationship |  | $ | — |  |  | $ | 29.8 |
Derivatives not designated as hedging instruments |  | Location of Gain/(Loss) Recognized in Statements of Income (Loss) |  | Amount of (Loss) Recognized in Statements of Income (Loss)
|  | 2012 |  | 2011
Interest Rate Cap |  | Other income/(loss) |  | $ | (0.1 | ) |  | $ | — |
Interest Rate Swap |  | Other income/(loss) |  | $ | (0.7 | ) |  | $ | — |
(1) | The results include the interest rate swap gain (loss) prior to discontinuation in May 2011.
Credit-risk-related Contingent Features. Derivative financial investments expose us to credit risk in the event of non-performance by the counterparties under the terms of the interest rate hedge agreements. We believe we minimize our credit risk on these transactions by transacting with major creditworthy financial institutions. As part of our on-going control procedures, we monitor the credit ratings of counterparties and our exposure to any single entity, which we believe minimizes credit risk concentration. Our agreements with each of our derivative counterparties contain provisions which provide the counterparty the right to declare a default on our derivative obligations if we are in default on any of our indebtedness, subject to certain thresholds. For all instances, these provisions include a default even if there is no acceleration of the indebtedness. Our agreements with each of our derivative counterparties also provide if we consolidate with, merge with or into, or transfer all or substantially all our assets to another entity and the creditworthiness of the resulting, surviving, or transferee entity is materially weaker than ours, the counterparty has the right to terminate the derivative obligations. At June 30, 2012, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk (the “termination value”), related to these agreements was approximately $7.5 million. As of June 30, 2012, we had not posted any collateral related to these agreements. If we were in breach of any of these provisions at June 30, 2012, or terminated these agreements, we would have been required to settle our obligations at their aggregate termination value of approximately $7.5 million.

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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 Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 12: 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. 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