Derivatives and Hedging

9 Months Ended

Sep. 30, 2011

Derivatives and Hedging

Note 10 — Derivatives and Hedging

The Company enters into a limited number of derivative contracts to offset the potentially negative economic effects of interest rate and foreign exchange movements. The Company accounts for its outstanding derivative contracts in accordance with FASB ASC Topic 815, which requires all derivatives, to include derivatives designated as accounting hedges, to be recorded on the balance sheet at fair value.

The following tables provide information regarding the Company’s outstanding derivatives contracts (in thousands, except for number of outstanding contracts) as of the dates indicated:

September 30, 2011
Derivative Contract Type	Number of Outstanding Contracts		Notional Amounts		Fair Value Asset (Liability) (4)			Balance Sheet Line Item	Unrealized Loss Recorded in OCI
Interest Rate Swap (1)		1	$	200,000	$	(10,271	)	Other liabilities	$	(6,162	)
Interest Rate Swaps (2)		2		61,500		(662	)	Accrued liabilities		—
Foreign Currency Forwards (3)		15		71,140		(212	)	Accrued liabilities		—
Total		18	$	332,640	$	(11,145	)		$	(6,162	)

December 31, 2010
Derivative Contract Type	Number of Outstanding Contracts		Notional Amounts		Fair Value Asset (Liability) (4)			Balance Sheet Line Item	Unrealized Loss Recorded in OCI (1)
Interest Rate Swap (1)		1	$	200,000	$	(2,101	)	Other liabilities	$	(1,261	)
Interest Rate Swaps (2)		2		147,750		(3,966	)	Other liabilities		—
Foreign Currency Forwards (3)		63		250,220		618		Other current assets		—
Total		66	$	597,970	$	(5,449	)		$	(1,261	)

(1)	The Company entered into this interest rate swap on December 22, 2010. The Company designated and accounts for this swap as a cash flow hedge of the forecasted interest payments on borrowings (see Note 7 — Debt). As a result, changes in fair value of this swap are recognized in OCI, net of tax effect.
(2)	Changes in fair value of these swaps are recognized in earnings. Both swaps mature in January 2012.
(3)	The Company has foreign exchange transaction risk since it typically enters into transactions in the normal course of business that are denominated in foreign currencies that differ from the local functional currencies. The Company enters into short-term foreign currency forward exchange contracts to offset the economic effects of these foreign currency transaction risks. These contracts are accounted for at fair value with realized and unrealized gains and losses recognized in Other income (expense), net since the Company does not designate these contracts as hedges for accounting purposes. All of the outstanding contracts at September 30, 2011 matured by the end of October 2011.
(4)	See Note 11 — Fair Value Disclosures for the determination of the fair value of these instruments.

The Company’s derivative counterparties are all large investment grade financial institutions. The Company did not have any collateral arrangements with its derivative counterparties, and none of the derivative contracts contain credit-risk related contingent features.

The following table provides information regarding derivative gains and losses that have been recognized in the Condensed Consolidated Statements of Operations for the periods indicated (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
Amount recorded in:	2011			2010		2011		2010
Interest expense, net (1)	$	1,022		$	1,799	$	3,100	$	6,117
Other (income) expense, net (2)		(1,976	)		1,497		1,794		(1,413	)
Total (income) expense, net	$	(954	)	$	3,296	$	4,894	$	4,704

(1)	Includes interest expense (income) recognized on the Company’s interest rate swap contracts.
(2)	Includes realized and unrealized gains and losses on foreign currency forward contracts.