2.2.0.25falsefalse0206 - Disclosure - Derivative Instruments and Hedging Activitiestruefalsefalse1falsefalseUSDfalsefalse1/1/2011 - 3/31/2011
USD ($)
USD ($) / shares
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<!-- Begin Block Tagged Note 6 - us-gaap:DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock-->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Note 6 — Derivative Instruments and Hedging Activities</b>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We operate internationally and thus are exposed to potential adverse changes in currency
exchange rates. We use derivative instruments (principally forward contracts to exchange foreign
currency) as a means of reducing our exposure to foreign currency rate changes on receivables and
other net monetary assets denominated in foreign currencies. The foreign currency forward
contracts require us to exchange currencies at rates agreed upon at the contract’s inception. In
addition to these foreign exchange contracts, certain of our customer contracts contain provisions
that require our customers to assume the foreign currency exchange risk related to the applicable
transactions. The objective of these contracts is to reduce or eliminate, and efficiently manage,
the economic impact of currency exchange rate movements on our operating results as effectively as
possible. These contracts reduce the exposure to fluctuations in exchange rate movements because
the gains and losses associated with foreign currency balances and transactions are generally
offset with the gains and losses on the related contracts.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     Derivative instruments are recognized as either assets or liabilities and are measured at fair
value. The accounting for changes in the fair value of a derivative instrument depends on the
intended use of the derivative instrument and the resulting designation. We do not designate our
foreign currency exchange contracts as accounting hedges as defined by authoritative guidance for
derivatives and hedging, and, accordingly, we adjust these contracts to fair value through
operations (i.e., included in “Other income (expense), net”). We do not hold or issue financial
instruments for speculative or trading purposes.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     We continually monitor our exposure to fluctuations in foreign currency exchange rates. As we
have expanded internationally, an increasing proportion of our revenues, costs and operating
expenses are denominated in foreign currencies, resulting in an increase in our foreign currency
exchange rate exposure. We enter into multiple forward contracts throughout a given month to
mitigate our changing exposure to foreign currency exchange rate fluctuations principally related
to receivables generated from sales denominated in non-functional currencies and our remeasurements
of international subsidiaries. Our exposure fluctuates as we generate new sales in non-functional
currencies and as existing receivables related to sales in non-functional currencies are collected.
Additionally, our exposure related to remeasurements of our subsidiaries’ financial statements
fluctuates with the underlying activity in those entities. Our foreign currency forward contracts
generally will have terms of one month or less and typically mature on the last day of any given
period. We then immediately enter into new foreign currency forward contracts, if necessary.
</div>
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</div>
<!-- PAGEBREAK -->
<div style="font-family: 'Times New Roman',Times,serif">
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table shows the notional contract values in local currency and U.S. Dollars of
the foreign exchange forward contracts outstanding as of March 31, 2011, grouped by underlying
foreign currency:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>Contracts Outstanding as of March 31, 2011</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>In Local Currency</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>In US Dollars</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Euros (“EUR”) (contracts to buy EUR/sell US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(EUR)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(23,286,833</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(32,890,322</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Indian rupees (“INR”) (contracts to sell INR/buy US$)
</div></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">(INR)</td>
<td> </td>
<td> </td>
<td align="right">238,598,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,310,438</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Canadian dollars (“CAD”) (contracts to sell CAD/buy US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(CAD)</td>
<td> </td>
<td> </td>
<td align="right">2,072,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,150,047</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Singapore dollars (“SGD”) (contracts to buy SGD/sell US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(SGD)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(328,000</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(259,761</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Malaysian ringgits (“MYR”) (contracts to sell MYR/buy US$)
</div></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">(MYR)</td>
<td> </td>
<td> </td>
<td align="right">5,792,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,909,597</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Taiwan dollars (“TWD”) (contracts to sell TWD/buy US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(TWD)</td>
<td> </td>
<td> </td>
<td align="right">50,837,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,735,703</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Brazilian reais (“BRL”) (contracts to sell BRL/buy US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(BRL)</td>
<td> </td>
<td> </td>
<td align="right">10,587,000</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">6,466,133</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(15,578,165</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> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The following table shows the average notional contract values in the underlying currency
and U.S. Dollars of foreign currency exchange forward contracts outstanding during the three months
ended March 31, 2011, grouped by underlying foreign currency:
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="64%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10"><b>Average Contracts Outstanding</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="10" style="border-bottom: 1px solid #000000"><b>during the three months ended March 31, 2011</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>In Local Currency</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>In US Dollars</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Euros (“EUR”) (contracts to buy EUR/sell US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(EUR)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(34,123,582</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(46,293,393</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Indian rupees (“INR”) (contracts to sell INR/buy US$)
</div></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">(INR)</td>
<td> </td>
<td> </td>
<td align="right">246,491,714</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">5,381,695</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">British pound (“GBP”) (contracts to sell GBP/buy US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(GBP)</td>
<td> </td>
<td> </td>
<td align="right">554,341</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">880,845</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Singapore dollars (“SGD”) (contracts to buy SGD/sell US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(SGD)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(142,154</td>
<td nowrap="nowrap">)</td>
<td> </td>
<td nowrap="nowrap" align="left"> </td>
<td align="right">(112,426</td>
<td nowrap="nowrap">)</td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Malaysian ringgits (“MYR”) (contracts to sell MYR/buy US$)
</div></td>
<td> </td>
<td colspan="3" nowrap="nowrap" align="center">(MYR)</td>
<td> </td>
<td> </td>
<td align="right">5,927,231</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,926,369</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Taiwan dollars (“TWD”) (contracts to sell TWD/buy US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(TWD)</td>
<td> </td>
<td> </td>
<td align="right">36,547,418</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">1,239,356</td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Canadian dollars (“CAD”) (contracts to sell CAD/buy US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(CAD)</td>
<td> </td>
<td> </td>
<td align="right">2,419,670</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,440,443</td>
<td> </td>
</tr>
<tr valign="bottom">
<td>
<div style="margin-left:15px; text-indent:-15px">Brazilian reais (“BRL”) (contracts to sell BRL/buy US$)
</div></td>
<td> </td>
<td colspan="3" align="center">(BRL)</td>
<td> </td>
<td> </td>
<td align="right">4,624,286</td>
<td> </td>
<td> </td>
<td> </td>
<td align="right">2,751,184</td>
<td> </td>
</tr>
<tr style="font-size: 1px">
<td>
<div style="margin-left:15px; text-indent:-15px"> 
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 1px solid #000000"> </td>
<td> </td>
</tr>
<tr valign="bottom" style="background: #cceeff">
<td>
<div style="margin-left:15px; text-indent:-15px">Total
</div></td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(31,785,927</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> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" colspan="2" align="right" style="border-top: 3px double #000000"> </td>
<td> </td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As of March 31, 2011, all of our derivative instruments are maintained with Wells Fargo
Bank, and potentially subject us to a concentration of credit risk, which may result in credit
related losses in the event of the bank’s nonperformance. We mitigate this risk by monitoring
Wells Fargo’s credit ratings published by major rating firms (Fitch, Standard & Poor’s, and
Moody’s). In addition, we monitor Wells Fargo’s Credit Default Swap spread on a quarterly basis to
assess the bank’s default risk relative to its peers.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     As discussed above, our foreign currency forward contracts are structured to expire on the
last day of the accounting period, and we immediately enter into new contracts if necessary.
Therefore, our derivative instruments outstanding at period end are outstanding less than one full
day when the reporting period ends and, accordingly, their fair value was not significant as of
March 31, 2011 and December 31, 2010.
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The table below provides a summary of the effect of derivative instruments on the unaudited
condensed consolidated statements of operations for the three months ended March 31, 2011 and 2010
(in thousands):
</div>
<div align="center">
<table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<tr valign="bottom">
<td width="25%"> </td>
<td width="10%"> </td>
<td width="1%"> </td>
<td width="15%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="1%"> </td>
<td width="5%"> </td>
<td width="1%"> </td>
<td width="10%"> </td>
<td width="1%"> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Amount of Gain or (Loss)</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6"><b>Recognized in Results</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000"><b>Derivatives Not Designated</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>Location of Gain or (Loss)</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>of Operations</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 0px solid #000000"><b>as Hedging Instruments</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 0px solid #000000"><b>Recognized in Results</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="6" style="border-bottom: 1px solid #000000"><b>Three months ended</b></td>
<td> </td>
</tr>
<tr style="font-size: 8pt" valign="bottom">
<td nowrap="nowrap" align="center" style="border-bottom: 1px solid #000000"><b>under SFAS No. 133</b></td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>of Operations</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2011</b></td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="center" colspan="2" style="border-bottom: 1px solid #000000"><b>March 31, 2010</b></td>
<td> </td>
</tr>
<!-- End Table Head -->
<!-- Begin Table Body -->
<tr valign="bottom">
<td nowrap="nowrap">
<div style="margin-left:15px; text-indent:-15px">Foreign currency forward contracts
</div></td>
<td> </td>
<td colspan="3" align="center" nowrap="nowrap">Other income (expense), net</td>
<td> </td>
<td align="left">$</td>
<td align="right">1,460</td>
<td> </td>
<td> </td>
<td nowrap="nowrap" align="left">$</td>
<td align="right">(2,416</td>
<td nowrap="nowrap">)</td>
</tr>
<!-- End Table Body -->
</table>
</div>
<div align="left" style="font-size: 10pt; margin-top: 6pt">     The above gains or losses on the derivative instruments include the cost of entering into
the contracts (i.e. forward points), and are generally offset by a corresponding foreign currency
gain or loss on the underlying hedged transaction (e.g., customer accounts receivable). The gain
or loss on both the derivative instrument and the
corresponding hedged transaction are reflected in “Other income (expense), net” in the accompanying
unaudited condensed consolidated statements of operations.
</div>
</div>
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<!-- Begin Block Tagged NotefalsefalsefalsefalsefalseOtherus-types:textBlockItemTypestringThis 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
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