Derivative Instruments and Hedging Activities

12 Months Ended

Dec. 31, 2011

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities [Text Block]

Derivative Instruments and Hedging Activities

Derivative Financial Instruments

The Company uses derivative financial instruments, primarily forward exchange contracts, to manage a majority of the foreign currency exchange exposure associated with net short-term foreign currency denominated assets and liabilities that exist as part of its ongoing business operations that are denominated in a currency other than the functional currency of the subsidiary. The exposures relate primarily to the gain or loss recognized in earnings from the settlement of current foreign denominated assets and liabilities.

The Company does not enter into derivative financial instruments for trading or speculative purposes. The forward exchange contracts generally have maturities of 90 days or less and are not designated as hedging instruments. Forward exchange contracts are marked-to-market at the end of each reporting period, using quoted prices for similar assets or liabilities in active markets (Level 2 inputs), with gains and losses recognized in other income offset by the gains or losses resulting from the settlement of the underlying foreign currency denominated assets and liabilities.

Cash Flow Hedges

In the fourth quarter of 2010, the Company also began a cash flow hedging program under which it hedges a portion of anticipated operating expenses denominated in the Indian rupee. The forward exchange contracts have maturities of twelve months or less and are designated as hedging instruments. Forward exchange contracts are marked-to-market at the end of each reporting period, using quoted prices for similar assets or liabilities in active markets (Level 2 inputs). The effective portion of the derivative's gain or loss is initially reported as a component of accumulated other comprehensive income (loss) and subsequently reclassified into earnings when the hedged exposure affects earnings. The ineffective portion of the gain or loss is reported in earnings immediately.

The forward contract receivables (payables) are included in the consolidated balance sheets under the captions "Prepaid expenses and other current assets" and "Accrued expenses and other liabilities" as applicable. The notional values represent the amount of foreign currencies to be purchased or sold at maturity and does not represent our exposure on these contracts. Net foreign currency exchange gains (losses) are included in the Consolidated Statements of Income under the caption "Interest income and other, net."

Derivative Instruments in the Consolidated Balance Sheets

The gross notional and fair value of derivative financial instruments in the Consolidated Balance Sheets were recorded as follows:

	December 31, 2011						December 31, 2010
	Gross Notional		Prepaid Expenses and Other Current Assets		Accrued Expenses and Other Liabilities		Gross Notional		Prepaid Expenses and Other Current Assets		Accrued Expenses and Other Liabilities
Foreign currency forward contract not designated as hedging instruments	$	64,451	$	—	$	364	$	68,788	$	—	$	424
Foreign currency forward contract designated as hedging instruments	$	42,373	$	—	$	4,046	$	30,701	$	440	$	—

Effects of Derivative Instruments on Income and Other Comprehensive Income

The before-tax effect of derivative instruments not designated as hedging instruments on the Consolidated Statements of Income were as follows:

	Gain (Loss) Recognized in Income on Derivative
		Year Ended December 31,
	Location	2011			2010		2009
Foreign exchange contracts not designated as hedges	Interest income and other, net	$	(1,175	)	$	3,074	$	4,297

The before-tax effect of derivative instruments in cash flow hedging on the Consolidated Statements of Income were as follows:

	Gain (Loss) Recognized in Other Comprehensive Income ("OCI") on Derivative (Effective Portion)					Gain (Loss) Reclassified from Accumulated OCI Into Income (Effective Portion)						Gain (Loss) Recognized in Income Derivative (Ineffective portion and Amount Excluded from Effectiveness Testing)
	Year Ended December 31,						Year Ended December 31,						Year Ended December 31,
	2011			2010		Location	2011			2010		Location	2011		2010
Foreign exchange contracts designated as hedges	$	(5,074	)	$	375	General and administration	$	(882	)	$	—	Interest income and other, net	$	1,380	$	65

There were no foreign exchange contracts designated as hedges for the year ended December 31, 2009.