1.0.0.3 false Financial Instruments false 1 $ false false USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Financial Instruments [Abstract] 0 us-gaap_DerivativeInstrumentsAndHedgesAbstract us-gaap true na duration string No definition available. false false false false false true false false false 1 false false 0 0 false false No definition available. false 3 FINANCIAL INSTRUMENTS 1 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false 1 false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>NOTE 11. FINANCIAL INSTRUMENTS</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt"><b>Fair Value of Financial Instruments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     Our financial instruments include cash and short-term investments, noncurrent investments in auction rate securities, accounts receivable, accounts payable, debt, foreign currency forward contracts, foreign currency option contracts and interest rate swaps. Except as described below, the estimated fair value of such financial instruments at December 31, 2009 and 2008 approximates their carrying value as reflected in our consolidated balance sheets. The fair value of our debt, foreign currency forward contracts and interest rate swaps has been estimated based on quoted year end market prices. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The estimated fair value of total debt at December 31, 2009 and 2008 was $2,126 million and $2,471 million, respectively, which differs from the carrying amounts of $1,800 million and $2,333 million, respectively, included in our consolidated balance sheets. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Foreign Currency Forward Contracts</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We conduct our business in over 90 countries around the world, and we are exposed to market risks resulting from fluctuations in foreign currency exchange rates. A number of our significant foreign subsidiaries have designated the local currency as their functional currency. We transact in various foreign currencies and have established a program that primarily utilizes foreign currency forward contracts to reduce the risks associated with the effects of certain foreign currency exposures. Under this program, our strategy is to have gains or losses on the foreign currency forward contracts mitigate the foreign currency transaction gains or losses to the extent practical. These foreign currency exposures typically arise from changes in the value of assets and liabilities which are denominated in currencies other than the functional currency. Our foreign currency forward contracts generally settle within 90 days. We do not use these forward contracts for trading or speculative purposes. We designate these forward contracts as fair value hedging instruments pursuant to ASC 815<i>, Derivatives and Hedging</i>. Accordingly, we record the fair value of these contracts as of the end of our reporting period to our consolidated balance sheet with changes in fair value recorded in our consolidated statement of operations along with the change in fair value of the hedged item. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     At December 31, 2009 and 2008, we had outstanding foreign currency forward contracts with notional amounts aggregating $153 million and $125 million, respectively, to hedge exposure to currency fluctuations in various foreign currencies. These contracts are designated and qualify as fair value hedging instruments. The fair value was determined using a model with Level 2 inputs including quoted market prices for contracts with similar terms and maturity dates. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Interest Rate Swaps</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We are subject to interest rate risk on our debt and investment of cash and cash equivalents arising in the normal course of our business, as we do not engage in speculative trading strategies. We maintain an interest rate management strategy, which primarily uses a mix of fixed and variable rate debt that is intended to mitigate the exposure to changes in interest rates in the aggregate for our investment portfolio. In addition, we are currently using interest rate swaps to manage the economic effect of fixed rate obligations associated with our senior notes so that the interest payable on the senior notes effectively becomes linked to variable rates. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     In June 2009, we entered into two interest rate swap agreements (“the Swap Agreements”) for a notional amount of $250 million each in order to hedge changes in the fair market value of our $500 million 6.5% senior notes maturing on November 15, 2013. Under the Swap Agreements, we receive interest at a fixed rate of 6.5% and pay interest at a floating rate of one-month Libor plus a spread of 3.67% on one swap and three-month Libor plus a spread of 3.54% on the second swap both through November 15, 2013. The counterparties are primarily the lenders in our credit facilities. The Swap Agreements are designated and each qualifies as a fair value hedging instrument. The swap to three-month Libor is deemed to be 100 percent effective resulting in no gain or loss recorded in the consolidated statement of operations. The effectiveness of the swap to one-month Libor, which is highly effective, is calculated as of each period end and any ineffective portion is recognized in the consolidated statement of operations. The fair value of the Swap Agreements was determined using a model with Level 2 inputs including quoted market prices for contracts with similar terms and maturity dates. </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Fair Value of Derivative Instruments</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     The fair value of derivative instruments included in our consolidated balance sheet was as follows as of December 31, 2009: </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="100%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="20%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="13%"> </td> <td width="2%"> </td> <td width="13%"> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative</b></td> <td> </td> <td nowrap="nowrap" align="left" colspan="3" ><b>Balance Sheet Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fair Value</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td colspan="3" align="left" nowrap="nowrap">Other accrued liabilities</td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest Rate Swaps </div></td> <td> </td> <td colspan="3" align="left" nowrap="nowrap">Other assets</td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> </tr> <tr style="font-size: 10pt"> <td> </td> </tr> <tr style="font-size: 10pt"> <td colspan="9">     The effects of derivative instruments in our consolidated statement of operations were as follows for the year ended December 31, 2009 (amounts exclude any income tax effects):</td> </tr> <tr style="font-size: 10pt"> <td> </td> </tr> <tr style="font-size: 8pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative</b></td> <td> </td> <td nowrap="nowrap" align="left" colspan="3"><b>Statement of Operations Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Amount of Gain Recognized in Income</b></td> </tr>   <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Foreign Currency Forward Contracts </div></td> <td> </td> <td colspan="3" align="left" nowrap="nowrap">Marketing, general and administrative</td> <td> </td> <td align="right">$</td> <td align="right">11</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Interest Rate Swaps </div></td> <td> </td> <td colspan="3" align="left" nowrap="nowrap">Interest Expense</td> <td> </td> <td> </td> <td align="right">6</td> <td> </td> </tr>  </table> </div> <div align="left" style="font-size: 10pt; margin-top: 12pt"><b>Concentration of Credit Risk</b> </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We sell our products and services to numerous companies in the oil and natural gas industry. Although this concentration could affect our overall exposure to credit risk, we believe that our risk is minimized since the majority of our business is conducted with major companies within the industry. We perform periodic credit evaluations of our customers’ financial condition and generally do not require collateral for our accounts receivable. In some cases, we will require payment in advance or security in the form of a letter of credit or bank guarantee. </div> <div align="left" style="font-size: 10pt; margin-top: 6pt">     We maintain cash deposits with financial institutions that may exceed federally insured limits. We monitor the credit ratings and our concentration of risk with these financial institutions on a continuing basis to safeguard our cash deposits. </div> </div>  <!-- Begin Block Tagged Note false false No definition available. No authoritative reference available. false false 1 2 false UnKnown UnKnown UnKnown false true