DERIVATIVES

We provide services globally and our earnings and cash flows are exposed to market risk from changes in foreign currency exchange rates and interest rates. Accordingly, we have instituted interest rate and foreign currency hedging programs that are accounted for in accordance with ASC 815, “Derivatives and Hedging.”

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Our interest rate hedging program is a cash flow hedge program designed to minimize interest rate volatility. We swap the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount, at specified intervals. We also employ an interest rate cap that compensates us if variable interest rates rise above a pre-determined rate. Our interest rate contracts are designated as hedging instruments. Our interest rate swap and cap contracts extend for a period of approximately three and two years, respectively.


•	Our foreign currency hedging program is a cash flow hedge program designed to minimize foreign currency volatility related to the foreign exchange exposure related to intercompany debt obligations. We primarily utilize cross-currency swaps with maturities of no more than 12 months. These contracts are designated as hedging instruments.

We also enter into other economic hedges to mitigate foreign currency exchange risk and interest rate risk related to other intercompany transactions. These contracts are not designated as hedges in accordance with ASC 815.

The following table presents the notional amounts and fair values of our derivatives as of June 30, 2012 and June 30, 2011. All asset and liability amounts are reported in other current assets and other current and non-current liabilities.



	June 30, 2012					June 30, 2011
(in thousands)	Notional Amount		Asset (Liability)			Notional Amount		Asset (Liability)
Derivatives designated as hedging instruments under ASC 815
Interest rate contracts	$	150,000	$	(2,415	)	$	150,000	$	(1,176	)
Cross-currency rate swap contracts	25,106		(2,697		)	31,016		620
Total designated derivatives	$	175,106	$	(5,112	)	$	181,016	$	(556	)
Derivatives not designated as hedging instruments under ASC 815
Cross-currency interest rate swap contracts	$	43,405	$	(4,544	)	$	49,633	$	419
Foreign exchange contracts	100,815		(213		)	107,932		1,126
Total non-designated derivatives	$	144,220	$	(4,757	)	$	157,565	$	1,545
Total derivatives	$	319,326	$	(9,869	)	$	338,581	$	989

We record the effective portion of any change in the fair value of derivatives designated as hedging instruments under ASC 815 to accumulated other comprehensive income (loss) on the balance sheet, net of deferred taxes and any ineffective portion to miscellaneous expense on the income statement. The amounts recognized for the twelve months ended June 30, 2012 and June 30, 2011 in other comprehensive income (loss) are presented below:



	Twelve Months Ended
(in thousands)	June 30, 2012			June 30, 2011
Derivatives designated as hedging instruments under ASC 815
Interest rate contracts, net	$	(964	)	$	2,527
Cross-currency swap, net	(696		)	4,629
Total designated derivative unrealized gain (loss), net	$	(1,660	)	$	7,156

During Fiscal Year 2012, there were no amounts recorded to reflect ineffective portions of any hedges. Also, no amounts were recorded in Fiscal Year 2011. The estimated net amount of the existing losses that are expected to be reclassified into earnings within the next twelve months is $1.1 million.

The change in the fair value of derivatives not designated as hedging instruments under ASC 815 is recorded to miscellaneous expense, net on the income statement. The amounts recognized for the twelve months ended June 30, 2012 and June 30, 2011 are presented below:



	Twelve Months Ended
(in thousands)	June 30, 2012			June 30, 2011
Derivatives not designated as hedging instruments under ASC 815
Cross-currency interest rate swap contracts	$	(4,963	)	$	4,580
Foreign exchange contracts	(1,339		)	2,153
Total non-designated derivative unrealized gain (loss), net	$	(6,302	)	$	6,733