Derivatives And Hedging Activities

12 Months Ended

Dec. 31, 2011

Derivatives And Hedging Activities [Abstract]

7.	Derivatives and Hedging Activities

Interest Rate Swap

We entered into an interest rate swap agreement in April 2007 to effectively convert a portion of our variable rate debt to fixed rate debt. The notional amount of the swap was $150.0 million and it matured on December 31, 2011.

Our counterparty syndicated 40% of the April 2007 swap agreement by entering into risk participation agreements with a subsidiary of Lehman Brothers Holding, Inc. ("Lehman Brothers") and another financial institution. On September 15, 2008, Lehman Brothers filed for Chapter 11 bankruptcy, which triggered termination of its risk participation agreement with our counterparty. As agreed with our counterparty, the swap was amended to increase the fixed rate by four basis points to 4.95% to compensate the counterparty for assuming the additional credit risk. We de-designated the cash flow hedging relationship under the original terms of the swap and re-designated the amended swap in a new cash flow hedging relationship. The deferred loss associated with the de-designated hedge was amortized over the life of the debt.

We entered into an additional interest rate swap agreement in June 2009 to effectively convert an additional portion of our variable rate debt to fixed rate debt. The notional amount of the swap was $300.0 million and it matured on June 30, 2011.

Foreign Currency Forward Contracts

We use foreign currency forward contracts to hedge forecasted United Kingdom pound sterling inventory purchases. We reduced production rates and related purchase volumes as a result of depressed demand in the business and general aviation market, including purchases of previously forecasted United Kingdom pound sterling inventory. As a result, we discontinued cash flow hedge accounting for foreign currency forward contracts when the underlying inventory purchase transactions were no longer probable.

We had no foreign currency forward contracts outstanding at December 31, 2011. The notional amount outstanding at December 31, 2010, based on contract rates, was $0.3 million, which matured in January 2011. We entered into additional foreign currency forward contracts in June 2011 with notional values totaling $59.5 million and maturity dates extending through December 2011. We elected to not designate these forward contracts as cash flow hedges. As of December 31, 2011, we had no net unrealized losses on contracts designated and effective as cash flow hedges recorded in Accumulated other comprehensive loss to be reclassified into earnings.

Notional Amounts and Fair Values

The following table summarizes the effects derivative instruments had on our Consolidated Statements of Financial Position:


	Notional amounts				Other accrued expenses
*(In millions)*	December 31, 2011		December 31, 2010		December 31, 2011		December 31, 2010
Derivatives designated as hedging instruments:

Interest rate contracts, current	$	—	$	450.0	$	—	$	8.3


Derivatives not designated as hedging instruments:
Interest rate contracts, current		—		—		—		0.3
Foreign currency forward contracts, current		—		0.3		—		—

Total derivatives not designated as hedging instruments		—		0.3		—		0.3


Total derivatives	$	—	$	450.3	$	—	$	8.6

Derivatives not in Cash Flow Hedging Relationships

The following table summarizes the losses recorded in income from derivative instruments that were not designated in cash flow hedging relationships:


	Year Ended December 31,
*(In millions)*	2011			2010			2009
Interest rate contracts (a)	$	(0.3	)	$	(2.7	)	$	(5.6	)
Foreign currency forward contracts (b)		(0.3	)		(5.3	)		(26.5	)

Total	$	(0.6	)	$	(8.0	)	$	(32.1	)

(a)	Amounts are included in Interest expense related to the de-designation of the original hedging relationship

(b)	Amounts are included in Cost of sales

We have no unrealized losses related to the de-designation of the original hedging relationship to be reclassified from Accumulated other comprehensive loss into Interest expense over the next twelve months as the underlying transactions have matured and the hedged items are reflected fully in earnings.

Derivatives in Cash Flow Hedging Relationships

The following table summarizes the gains (losses) recorded in Accumulated other comprehensive loss from the effective portion of derivative instruments designated in cash flow hedging relationships:


	Year Ended December 31,
*(In millions)*	2011		2010			2009
Interest rate contracts (a)	$	—	$	(2.8	)	$	9.5
Foreign currency forward contracts		—		(4.5	)		26.8

Total	$	—	$	(7.3	)	$	36.3

(a)	In 2011, we had losses of $7.0 million recorded in Accumulated other comprehensive loss which were reclassified into interest expense as a result of the interest rate swaps maturing.

The following table summarizes the losses reclassified from Accumulated other comprehensive loss into income for the effective portion of derivative instruments designated in cash flow hedging relationships:


	Year Ended December 31,
*(In millions)*	2011			2010			2009
Foreign currency forward contracts (a)	$	(5.5	)	$	(19.4	)	$	29.7

(a)	Amounts are included in Cost of sales

We have no unrealized losses on foreign currency forward contracts designated and effective as cash flow hedges to be reclassified from Accumulated other comprehensive loss into Cost of sales over the next twelve months as the underlying transactions have matured and the hedged items are reflected fully in earnings.

The following table summarizes the gains recorded in income from the ineffective portion and amount excluded from effectiveness testing of derivative instruments designated in cash flow hedging relationships:


	Year Ended December 31,
*(In millions)*	2011		2010		2009
Interest rate contracts (a)	$	2.1	$	15.0	$	—

(a)	Amounts are included in Interest expense

- 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 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. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 10

-Section 50

-Paragraph 1B

-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5580258-113959

Reference 3: 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 4: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 10

-Section 50

-Paragraph 4A

-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5618551-113959

Reference 5: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 10

-Section 50

-Paragraph 4B

-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624163-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 10

-Section 50

-Paragraph 4J

-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5708773-113959

Reference 7: 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=6935481&loc=d3e41638-113959

Reference 8: 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=6935481&loc=SL5624171-113959

Reference 9: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 10

-Section 50

-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41620-113959

Reference 10: 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=6935481&loc=d3e41641-113959

Reference 11: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 30

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80748-113994

Reference 12: 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 13: 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=6887037&loc=d3e80784-113994

Reference 14: 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=6935481&loc=SL5579240-113959

Reference 15: 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=6935481&loc=d3e41635-113959

Reference 16: 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=6935481&loc=SL5624181-113959

Reference 17: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 10

-Section 50

-Paragraph 4H

-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624258-113959

Reference 18: 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=6935481&loc=SL5579245-113959

Reference 19: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 25

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986

Reference 20: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 133

-Paragraph 45

-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 21: 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=6935481&loc=SL5708775-113959

Reference 22: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 815

-SubTopic 10

-Section 50

-Paragraph 4D

-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624177-113959

+ Details

HAWKER BEECHCRAFT ACQUISITION CO LLC 10-K