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Derivative Financial Instruments
 9 Months Ended
Sep. 30, 2012
Derivative Financial Instruments  
Derivative Financial Instruments

14.   Derivative Financial Instruments

        From time to time, the Company seeks to offset its exposure to changing interest rates under its debt financing arrangements by entering into interest rate hedging contracts. The Company does not hold or issue derivative financial instruments for speculative purposes.

        In 2010, the Company entered into interest rate swap contracts as summarized in the table below:

 
   Notional
Amount 		  Paying   Receiving   Start Date   Expiration Date

Counterparty A

   $ 25.0     1.67 % 3-Month LIBOR   October 2010   October 2015

Counterparty A

   $ 25.0     1.65 % 3-Month LIBOR   October 2010   October 2015

Counterparty B

   $ 25.0     1.59 % 3-Month LIBOR   October 2010   October 2015

Counterparty B

   $ 25.0     2.14 % 3-Month LIBOR   October 2010   October 2017

        In prior years, the Company entered into treasury rate lock contracts which were settled in 2011 for a net pre-tax loss of $0.7 million. The net loss on these contracts is reflected as a component of Other comprehensive income and will be reclassified to earnings over the life of the 2022 Senior Notes.

        The Company's derivative contracts contain provisions that may require the Company or the counterparties to post collateral based upon the current fair value of the derivative contracts. As of September 30, 2012, the Company had posted collateral of $5.3 million related to its interest rate swap contracts.

        The Company records all derivative instruments on the balance sheet at fair value. As cash flow hedges, the effective portion of the unrealized gain or loss on the derivative instruments is recorded in accumulated other comprehensive income as a separate component of stockholders' equity. Hedge effectiveness is measured by comparing the present value of the cumulative change in the expected future variable cash flows of the hedged contract with the present value of the cumulative change in the expected future variable cash flows of the hedged item. To the extent that the critical terms of the hedged item and the derivative are not identical, hedge ineffectiveness would be reported in earnings as Interest expense. Hedge ineffectiveness was not material in any periods presented.

        The following summarizes the amount of derivative instrument gains and losses (before taxes) reported in the Consolidated Statements of Comprehensive Income:

 
   For the Three
Months Ended
September 30, 		  For the Nine
Months Ended
September 30, 		 
 
   2011   2012   2011   2012  

Cash Flow Hedges

                          

Interest rate swaps

   $ (3.6 ) $ (0.5 ) $ (5.4 ) $ (1.4 )

Treasury rate locks

     (6.7 )   —     (6.2 )   —  
                   

Total

   $ (10.3 ) $ (0.5 ) $ (11.6 ) $ (1.4 )
                   

        The following summarizes the location and fair values of derivative instruments on the Consolidated Balance Sheets:

 
   December 31,
2011 		  September 30,
2012 		 

Cash Flow Hedges

              

Interest rate swaps(1)

   $ (2.9 ) $ (4.3 )
           
(1)
Presented within Other long-term liabilities.