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NOTE 11 - DERIVATIVE INSTRUMENTS
 12 Months Ended
Dec. 31, 2011
Derivative Instruments and Hedging Activities Disclosure [Text Block]
NOTE 11 – DERIVATIVE INSTRUMENTS

We are exposed to certain risks relating to our ongoing business operations.  The primary risk managed by us using derivative instruments is interest rate risk.  We have in the past entered into interest rate swap agreements to manage interest rate risk exposure.  The interest rate swap agreements utilized by us effectively modified our exposure to interest rate risk by converting our floating-rate debt to a fixed rate basis during the period of the interest rate swap, thus reducing the impact of interest-rate changes on future interest expense.

At inception, we designated our interest rate swaps as cash flow hedges of floating-rate borrowings.  In accordance with ASC Topic 815, derivatives that have been designated and qualify as cash flow hedging instruments are reported at fair value. The gain or loss on the effective portion of the hedge (i.e., change in fair value) is initially reported as a component of accumulated other comprehensive loss in the consolidated statement of equity deficit. The remaining gain or loss, if any, is recognized currently in earnings. Unrealized gain or loss on the change in fair value of interest rate swaps that do not qualify as hedges are recognized in earnings.

As a result of our refinancing and the New Credit Agreement and the issuance of the senior notes completed on April 6, 2010, our interest rate swaps do not match the terms of our current bank debt and so accordingly, we have determined that they are no longer designated as cash flow hedges.  Accordingly, all changes in their fair value after April 6, 2010 are, and will continue to be recognized in earnings.

The related Accumulated Other Comprehensive Loss (AOCL) of $3.1 million associated with the negative fair values of these interest rate swaps on April 6, 2010, the date of our refinancing, is being amortized on a straight-line basis to interest expense through November 15, 2012, the maturity date of these cash flow hedges.  From April 6, 2010 to December 31, 2011, approximately $2.2 million of AOCL was amortized to interest expense bringing the remaining balance of AOCL to $918,000 at December 31, 2011.  As of April 6, 2010, the fair value of the interest rate swaps was a negative $10.4 million.

At December 31, 2011 the negative fair value of these interest rate swaps was $5.1 million and was classified as current liabilities in our condensed consolidated balance sheet.  For the year ended December 31, 2011, we recognized approximately $5.4 million in other income related to the change in fair value of these interest rate swaps.

A tabular presentation of the fair value of derivative instruments as of December 31, 2011 and 2010 is as follows (amounts in thousands):

   
 
Balance Sheet Location
 
Fair Value – Asset (Liability) Derivatives
 
Derivatives
         
           
Interest rate contracts
 
Other current liabilities
    $(5,064)  

A tabular presentation of the fair value of derivative instruments as of December 31, 2010 is as follows (amounts in thousands):

   
 
Balance Sheet Location
 
Fair Value – Asset (Liability) Derivatives
 
Derivatives
         
           
Interest rate contracts
 
Other non-current liabilities
    $(10,505)  

A tabular presentation of the effect of derivative instruments on our statement of operations is as follows (amounts in thousands):

For the Year Ended December 31, 2011

Ineffective Interest Rate Swap
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
 
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Interest rate contracts
None
 
$5,441
Other income/ (expense)
*  ($1,225)
Interest income/(expense)

For the Year Ended December 31, 2010

Ineffective Interest Rate Swap
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
 
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Interest rate contracts
($1,472)
 
($132)
Other income/ (expense)
*   ($917)
Interest income/(expense)

For the Year Ended December 31, 2009

Ineffective Interest Rate Swap
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
 
Amount of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion)
Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Interest rate contracts
($1,311)
 
$823
Other income/ (expense)
*   ($6,119)
Interest income/(expense)

  *    Amortization of OCI associated with the cash flow hedges through April 6, 2010 (see discussion above).