Derivative Financial Instruments

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

NOTE 6. DERIVATIVE FINANCIAL INSTRUMENTS

We are impacted by changes in foreign currency exchange rates. We manage these risks through the use of derivative financial instruments, primarily forward contracts. During the three months and six months ended June 30, 2011, we entered into a foreign currency exchange forward contract to manage the exchange rate risk associated with intercompany debt denominated in nonfunctional currency. This derivative instrument is not designated as a hedge; however, it does offset the fluctuations of our intercompany debt due to foreign exchange rate changes.

The notional amount of foreign currency exchange contracts was $14.5 million at June 30, 2011. The fair value of these contracts was immaterial at June 30, 2011. During the three months and six months ended June 30, 2011, we recognized $0.1 million of losses on our foreign currency exchange contracts. These losses were offset by corresponding gains on the related intercompany debt and both are included as a component of other income, net, in our Condensed Consolidated Statements of Operations.

We did not enter into foreign currency forward contracts during 2010.