Quarterly report pursuant to Section 13 or 15(d)

Derivative Financial Instruments

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

We entered into two variable-to-fixed interest rate swap agreements as a strategy to manage the floating rate risk on the Term Loan borrowings under the Credit Agreement. The two agreements fix the interest rate on a notional amount of $73.0 million of borrowings at 3.878% for the period beginning June 27, 2011 and terminating May 14, 2013. The notional amount of the swap agreements will decrease correspondingly with amortization of the Term Loan. We do not apply hedge accounting to the agreements and, accordingly, we report the mark-to-market change in the fair value of the interest rate swaps in earnings. For the three and nine months ended September 30, 2012, we recognized in earnings a nominal gain relating to these agreements compared to a nominal loss for the quarter ended September 30, 2011 and a $0.2 million loss for the nine months ended September 30, 2011.