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Interest Rate Swap Agreements
 9 Months Ended
Sep. 30, 2012
Interest Rate Swap Agreements [Abstract]  
Interest Rate Swap Agreements
11. Interest Rate Swap Agreements

The Company is currently a party to four interest rate swap agreements that qualify for cash flow hedge accounting. No premium or discount was incurred upon the Company entering into any of its interest rate swap agreements because the pay rates and receive rates on the interest rate swap agreements represented prevailing rates for each counterparty at the time each of the interest rate swap agreements was consummated. The fair values of the interest rate swaps are recorded on the Company’s consolidated balance sheet as an asset or liability with the effective portion of the interest rate swaps’ gains or losses reported as a component of accumulated other comprehensive loss and the ineffective portion reported in earnings. The changes in fair values are reclassified from accumulated other comprehensive loss into earnings in the same period that the hedged items affect earnings. For the nine months ended September 30, 2012 and 2011, the Company reclassified approximately $11,184 and $12,047, respectively, from accumulated other comprehensive loss into earnings.

The valuation technique used to determine fair value is the income approach and under this approach, the Company uses projected future interest rates as provided by counterparties to the interest rate swap agreements and the fixed rates that the Company is obligated to pay under these agreements. Therefore, the Company’s measurements use significant unobservable inputs, which fall in Level 3 of the U.S. GAAP hierarchy as defined by FASB ASC Topic 820-10-35. There were no changes in valuation techniques during the period and no transfers in or out of Level 3. See Note 14 for a summary of unrealized gains or losses recorded in accumulated other comprehensive loss and earnings.

 

Below is a summary of the Company’s current interest rate swap agreements designated as hedge agreements as of September 30, 2012:

 

                                                             

Amount

Designated

as a Hedge

     Nominal
Amount		     Effective Date   Pay Rate     Receive Rate     Expiration Date   Current
Liability
(1) 		    Long-Term
Liability (2)		     Estimated
Total Fair
Value at
September 30,
2012		  
$ 63,983 (3 )    $ 75,000     November 2008     3.6300 %      1-Month LIBOR     November 2012   $ 320     $ —       $ 320  
$ 175,000     $ 175,000     December 2010     1.3975 %      1-Month LIBOR     September 2015     1,968       3,483       5,451  
$ 175,000     $ 175,000     December 2010     1.4000 %      1-Month LIBOR     September 2015     1,991       3,534       5,525  
$ 100,000     $ 100,000     November 2011     1.7150 %      1-Month LIBOR     April 2016     1,570       3,056       4,626  

 

 

    

 

 

                            

 

 

    

 

 

    

 

 

  
$ 513,983     $ 525,000                             $ 5,849     $ 10,073     $ 15,922  

 

 

    

 

 

                            

 

 

    

 

 

    

 

 

  

 

(1)

Included in accounts payable and accrued expenses on the condensed consolidated balance sheet as of September 30, 2012.

(2) 

Included in other long-term liabilities on the condensed consolidated balance sheet as of September 30, 2012.

(3) 

An additional $11,017 of this original $75,000 swap is no longer designated as a hedge as a result of the prepayment of the unextended portion of the Company’s term loan debt.

The Company amortized approximately $2,470 and $3,248 to interest expense during the nine months ended September 30, 2012 and 2011, respectively, related to a previously terminated interest rate swap agreement. The accumulated other comprehensive loss related to the terminated interest rate swap agreement became fully amortized during the nine months ended September 30, 2012. See Note 14 for additional information about the Company’s fair value measurements related to its interest rate swap agreements.