2.2.0.7 false Derivative Financial Instruments 11301 - Disclosure - Derivative Financial Instruments true false false false 1 false false 5 Derivative Financial Instruments 3 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false terselabel false 1 false false false false 0 0 <div> <div style="font-family: 'Times New Roman',Times,serif;"> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 13. Derivative Financial Instruments</b> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The Company, based on market conditions, enters into forward contracts to manage foreign exchange risk. The Company enters into forward contracts to hedge forecasted transactions based in certain foreign currencies, including the Euro, Canadian Dollar and Yen. These forward contracts have been designated and qualify as cash flow hedges, and their change in fair value is recorded as a component of other comprehensive income and reclassified into earnings in the same period or periods in which the forecasted transaction occurs. To qualify as a hedge, the Company needs to formally document, designate and assess the effectiveness of the transactions that receive hedge accounting. The notional dollar amounts of the outstanding Euro and Yen forward contracts at June 30, 2010 are $10 million and $3 million, respectively, with average exchange rates of 1.4 and 90.4, respectively, with terms of less than one year. The Company reviews the effectiveness of its hedging instruments on a quarterly basis and records any ineffectiveness into earnings. The Company discontinues hedge accounting for any hedge that is no longer evaluated to be highly effective. From time to time, the Company may choose to de-designate portions of hedges when changes in estimates of forecasted transactions occur. Each of these hedges was highly effective in offsetting fluctuations in foreign currencies. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The Company also enters into forward contracts to manage foreign exchange risk on intercompany loans that are not deemed permanently invested. These forward contracts are not designated as hedges, and their change in fair value is recorded in the Company's consolidated statements of income during each reporting period. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The Company enters into interest rate swap agreements to manage interest expense. The Company's objective is to manage the impact of interest rates on the results of operations, cash flows and the market value of the Company's debt. At June 30, 2010, the Company has six interest rate swap agreements with an aggregate notional amount of $500 million under which the Company pays floating rates and receives fixed rates of interest ("Fair Value Swaps"). The Fair Value Swaps hedge the change in fair value of certain fixed rate debt related to fluctuations in interest rates and mature in 2012, 2013 and 2014. The Fair Value Swaps modify the Company's interest rate exposure by effectively converting debt with a fixed rate to a floating rate. These interest rate swaps have been designated and qualify as fair value hedges and have met the requirements to assume zero ineffectiveness. </div> <p style="font-size: 10pt;" align="center"> </p></div> <hr noshade="noshade" /> <p> </p> <p> </p> <p> </p> <div style="font-family: 'Times New Roman',Times,serif;"> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As a result of the adoption of ASU No. 2009-17 (see Note 2) the Company was required to consolidate a balance guarantee interest rate swap derivative that was executed by the QSPE in connection with the Company's June 2009 securitization transaction. The purpose of the swap is to mitigate the variability in cash flows associated with the underlying variable interest rate debt. In connection with the adoption of ASU No. 2009-17, at January 1, 2010, the fair value of the derivative was recorded as a reduction to beginning retained earnings and a liability on the Company's consolidated balance sheet. This interest rate swap is designated as a cash flow hedge. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The counterparties to the Company's derivative financial instruments are major financial institutions. The Company evaluates the bond ratings of the financial institutions and believes that credit risk is at an acceptable level. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The following tables summarize the fair value of our derivative instruments, the effect of derivative instruments on our consolidated statements of comprehensive income, the amounts reclassified from other comprehensive income and the effect on the consolidated statements of income during the quarter. </div> <div style="margin-top: 18pt; font-size: 10pt;" align="center"><b>Fair Value of Derivative Instruments</b><br />(in millions) </div> <div align="center"> <table style="font-size: 10pt; text-align: left;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"><td width="48%"> </td> <td width="3%"> </td> <td width="17%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="17%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="4"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="4"><b>December 31,</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="4"><b>2010</b></td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="4"><b>2009</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Balance Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Balance Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center"><b>Location</b></td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>Value</b></td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center"><b>Location</b></td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>Value</b></td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"><b>Derivatives designated as hedging instruments</b></div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"><i>Asset Derivatives</i></div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td valign="top"> <div style="margin-left: 30px; text-indent: -15px;">Forward contracts</div></td> <td> </td> <td valign="top" nowrap="nowrap" align="left">Prepaid and other current assets</td> <td> </td> <td align="left">$</td> <td align="right">1</td> <td> </td> <td> </td> <td valign="top" nowrap="nowrap" align="left">Prepaid and other current assets</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Interest rate swaps</div></td> <td> </td> <td valign="top" align="left">Other assets</td> <td> </td> <td> </td> <td align="right">17</td> <td> </td> <td> </td> <td valign="top" align="left">Other assets</td> <td> </td> <td> </td> <td align="right">7</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 45px; text-indent: -15px;">Total assets</div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">18</td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">7</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"><i>Liability Derivatives</i></div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Interest rate swaps</div></td> <td> </td> <td valign="top" align="left">Other liabilities</td> <td> </td> <td align="left">$</td> <td align="right">4</td> <td> </td> <td> </td> <td valign="top" align="left">Other liabilities</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 45px; text-indent: -15px;">Total liabilities</div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">4</td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr></table></div> <div align="center"> <table style="font-size: 10pt; text-align: left;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"><td width="48%"> </td> <td width="3%"> </td> <td width="17%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="17%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="4"><b>June 30,</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="4"><b>December 31,</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="4"><b>2010</b></td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="4"><b>2009</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Balance Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Balance Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="2"><b>Fair</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center"><b>Location</b></td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>Value</b></td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center"><b>Location</b></td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>Value</b></td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"><b>Derivatives not designated as hedging instruments</b></div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"><i>Asset Derivatives</i></div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td valign="top"> <div style="margin-left: 30px; text-indent: -15px;">Forward contracts</div></td> <td> </td> <td valign="top" nowrap="nowrap" align="left">Prepaid and other current assets</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td valign="top" nowrap="nowrap" align="left">Prepaid and other current assets</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 45px; text-indent: -15px;">Total assets</div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"><i>Liability Derivatives</i></div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Forward contracts</div></td> <td> </td> <td valign="top" align="left">Accrued expenses</td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td valign="top" align="left">Accrued expenses</td> <td> </td> <td align="left">$</td> <td align="right">7</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 45px; text-indent: -15px;">Total liabilities</div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td align="left">$</td> <td align="right">7</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr></table></div> <p style="font-size: 10pt;" align="center"> </p></div> <hr noshade="noshade" /> <p> </p> <p> </p> <h5 align="left"> </h5> <p> </p> <div style="font-family: 'Times New Roman',Times,serif;"> <div style="margin-top: 18pt; font-size: 10pt;" align="center"><b>Consolidated Statements of Income and Comprehensive Income<br />for the Three and Six Months Ended June 30, 2010 and 2009</b><br />(in millions) </div> <div align="center"> <table style="font-size: 10pt; text-align: left;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"><td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at March 31, 2010</div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(1</td> <td nowrap="nowrap">)</td></tr> <tr valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Mark-to-market loss (gain) on forward exchange contracts</div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Reclassification of gain from OCI to management fees, franchise fees, and other income</div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at June 30, 2010</div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at December 31, 2009</div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Mark-to-market loss (gain) on forward exchange contracts</div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Reclassification of gain from OCI to management fees, franchise fees, and other income</div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at June 30, 2010</div></td> <td> </td> <td align="left">$</td> <td align="right">—</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at March 31, 2009</div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(7</td> <td nowrap="nowrap">)</td></tr> <tr valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Mark-to-market loss (gain) on forward exchange contracts</div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Reclassification of gain from OCI to management fees, franchise fees, and other income</div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at June 30, 2009</div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(4</td> <td nowrap="nowrap">)</td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td> </td> <td> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at December 31, 2008</div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(6</td> <td nowrap="nowrap">)</td></tr> <tr valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Mark-to-market loss (gain) on forward exchange contracts</div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Reclassification of gain from OCI to management fees, franchise fees, and other income</div></td> <td> </td> <td> </td> <td align="right">3</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Balance at June 30, 2009</div></td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(4</td> <td nowrap="nowrap">)</td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr></table></div> <p style="font-size: 10pt;" align="center"> </p></div> <hr noshade="noshade" /> <p> </p> <p> </p> <p> </p> <div style="font-family: 'Times New Roman',Times,serif;"> <div align="center"> <table style="font-size: 10pt; text-align: left;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"><td width="50%"> </td> <td width="5%"> </td> <td width="28%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="2%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="1%"> </td> <td width="1%"> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="center"><b>Derivatives Not</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Location of Gain</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td nowrap="nowrap" align="center"><b>Designated as Hedging</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>or (Loss) Recognized</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>or (Loss) Recognized</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center"><b>Instruments</b><b> </b></td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center"><b>in Income on Derivative</b></td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="6"><b>in Income on Derivative</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Three Months Ended</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="6"><b>June 30,</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>2010</b></td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>2009</b></td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Foreign forward exchange contracts</div></td> <td> </td> <td valign="top" align="left">Interest expense, net</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(17</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">3</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Total (loss) gain included in income</div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(17</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left">$</td> <td align="right">3</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr><td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="6"><b>Six Months Ended</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="6"><b>June 30,</b></td> <td> </td></tr> <tr style="font-size: 8pt;" valign="bottom"><td> </td> <td> </td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>2010</b></td> <td> </td> <td> </td> <td style="border-bottom: #000000 1px solid;" nowrap="nowrap" align="center" colspan="2"><b>2009</b></td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Foreign forward exchange contracts</div></td> <td> </td> <td valign="top" align="left">Interest expense, net</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(35</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(7</td> <td nowrap="nowrap">)</td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Total loss included in income</div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(35</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="left">$</td> <td align="right">(7</td> <td nowrap="nowrap">)</td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td valign="top" align="left"> </td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td> <td> </td></tr></table></div></div> </div> Note 13. Derivative Financial Instruments      The Company, based on market conditions, enters into forward contracts to manage false false false us-types:textBlockItemType textblock This element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 45 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 false 1 1 false UnKnown UnKnown UnKnown false true