DERIVATIVES

9 Months Ended

Sep. 30, 2011

DERIVATIVES [Abstract]

DERIVATIVES

(6)       DERIVATIVES

Cash Flow Hedges

The Company enters into foreign exchange and interest rate derivatives. Foreign exchange derivatives entered into consist of forward and option contracts to reduce the Company's exposure to currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Interest rate derivatives consist of interest rate swaps to reduce the Company's exposure to rate fluctuations associated with its variable rate debt. Upon proper qualification, these contracts are designated as cash flow hedges. It is the Company's policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets consider, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company's creditworthiness. As of September 30, 2011, the Company has not experienced, nor does it anticipate any issues related to derivative counterparty defaults. The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for thethree and nine months ended September 30, 2011 and 2010 (amounts in thousands and net of tax):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2011		2010		2011		2010
Aggregate unrealized net gain (loss) at beginning of period	$	511	$	3,431	$	7,091	$	4,468
Add: Net gain/(loss) from change in fair value of cash flow hedges		(2,504)		4,814		(4,935)		6,337
Less: Net (gain)/loss reclassified to earnings from effective hedges		(1,330)		(1,520)		(5,479)		(4,080)
Aggregate unrealized net gain (loss) at end of period	$	(3,323)	$	6,725	$	(3,323)	$	6,725

The Company's foreign exchange cash flow hedging instruments as of September 30, 2011 and December 31, 2010 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts unless noted otherwise.

As of September 30, 2011	Local Currency Notional Amount	U.S. Dollar Notional Amount			% Maturing in the Next 12 Months			Contracts Maturing Through
Canadian Dollar	25,300	$	24,705			72.3	%	August 2013
Costa Rican Colons	2,750,000		5,340			100.0	%	August 2012
Philippine Peso	12,571,000		282,201	(1)		54.8	%	December 2014
Mexican Peso	771,000		60,814			62.6	%	April 2014
Mexican Peso Collars	140,298		12,000	(3)		75.0	%	December 2012
British Pound Sterling	9,267		14,673	(2)		54.8	%	June 2014
		$	399,733

As of December 31, 2010	Local Currency Notional Amount	U.S. Dollar Notional Amount
Canadian Dollar	10,200	$	8,493
Philippine Peso	7,731,000		169,364	(1)
Mexican Peso	311,500		22,383
British Pound Sterling	4,647		7,231	(2)
		$	207,471

(1)Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on September 30, 2011.

(2)Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on September 30, 2011.

(3)The Mexican Peso Collars include call options with a floor total of MXN 140,298 and put options with a cap total of MXN 157,038.

The Company's interest rate swap arrangements as of September 30, 2011were as follows:

	Notional Amount		Variable Rate Received	Fixed Rate Paid			Contract Commencement Date	Contract Maturity Date
As of September 30, 2011	$	25 million	1 - month LIBOR		2.55	%	April 2012	April 2016
		15 million	1 - month LIBOR		3.14	%	May 2012	May 2017
	$	40 million

The Company did not have any interest rate swap arrangements as of December 31, 2010.

Fair Value Hedges

The Company enters into foreign exchange forward contracts to hedge against foreign currency exchange gains and losses on certain receivables and payables of the Company's foreign operations. Changes in the fair value of derivative instruments designated as fair value hedges, as well as the offsetting gain or loss on the hedged asset or liability, are recognized in earnings in Other income (expense), net. As of September 30, 2011 and December 31, 2010, the total notional amount of the Company's forward contracts used as fair value hedges were $51.1 million and $93.3 million, respectively.

Embedded Derivatives

In addition to hedging activities, the Company's foreign subsidiary in Argentina is party to U.S. dollar denominated lease contracts that the Company has determined contain embedded derivatives. As such, the Company bifurcates the embedded derivative features of the lease contracts and values these features as foreign currency derivatives.

Derivative Valuation and Settlements

The fair value of the Company's derivatives as of September 30, 2011 and December 31, 2010 were as follows (amounts in thousands):

		September 30, 2011
		Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:		Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in the
	Consolidated Balance Sheet:
Prepaids and other current assets		$	4,342	$	-	$	-	$	-
Other long-term assets			2,117		-		-		-
Other current liabilities			(7,062)		-		(171)		(7)
Other long-term liabilities			(3,129)		(1,950)		-		-
	Total fair value of derivatives, net	$	(3,732)	$	(1,950)	$	(171)	$	(7)
		December 31, 2010
		Designated as Hedging Instruments				Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange		Interest Rate		Foreign Exchange		Leases
Derivative classification:		Cash Flow		Cash Flow		Fair Value		Embedded Derivative
Fair value and location of derivative in
	the Consolidated Balance Sheet:
Prepaids and other current assets		$	10,602	$	-	$	783	$	-
Other long-term assets			2,081		-		-		-
Other current liabilities			(677)		-		(58)		(105)
Other long-term liabilities			(104)		-		-		(34)
	Total fair value of derivatives, net	$	11,902	$	-	$	725	$	(139)

The effect of derivative instruments on the Consolidated Statements of Operations for the three months ended September 30, 2011 and 2010 were as follows (amounts in thousands):

		Three Months Ended September 30,
		2011				2010
		Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange			Interest Rate	Foreign Exchange			Interest Rate
Derivative classification:		Cash Flow			Cash Flow	Cash Flow			Cash Flow
Amount of gain or (loss) recognized in other comprehensive
	income - effective portion, net of tax	$	(1,662)	$	(843)	$	4,814	$	-
Amount and location of net gain or (loss) reclassified from
	accumulated OCI to income - effective portion:
Revenue		$	2,216	$	-	$	2,491	$	-
Amount and location of net gain or (loss) reclassified from
	accumulated OCI to income - ineffective portion and
	amount excluded from effectiveness testing:
Other income (expense), net		$	-	$	-	$	-	$	-

		Three Months Ended September 30,
		2011						2010
		Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:		Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized
	in the Consolidated Statement of Operations:
Costs of services		$	-	$	-	$	10	$	-	$	-	$	96
Other income (expense), net		$	-	$	(1,189)	$	-	$	-	$	3,256	$	-

The effect of derivative instruments on the Consolidated Statements of Operations for the nine months ended September 30, 2011 and 2010 were as follows (amounts in thousands):

		Nine Months Ended September 30,
		2011				2010
		Designated as Hedging Instruments				Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange			Interest Rate	Foreign Exchange			Interest Rate
Derivative classification:		Cash Flow			Cash Flow	Cash Flow			Cash Flow
Amount of gain or (loss) recognized in other comprehensive
	income - effective portion, net of tax	$	(3,765)	$	(1,170)	$	6,337	$	-
Amount and location of net gain or (loss) reclassified from
	accumulated OCI to income - effective portion:
Revenue		$	9,131	$	-	$	6,688	$	-
Amount and location of net gain or (loss) reclassified from
	accumulated OCI to income - ineffective portion and
	amount excluded from effectiveness testing:
Other income (expense), net		$	-	$	-	$	-	$	-

		Nine Months Ended September 30,
		2011						2010
		Not Designated as Hedging Instruments						Not Designated as Hedging Instruments
Derivative contracts:		Foreign Exchange				Leases		Foreign Exchange				Leases
Derivative classification:		Option and Forward Contracts		Fair Value		Embedded Derivative		Option and Forward Contracts		Fair Value		Embedded Derivative
Amount and location of net gain or (loss) recognized
	in the Consolidated Statement of Operations:
Costs of services		$	-	$	-	$	132	$	-	$	-	$	172
Other income (expense), net		$	-	$	(686)	$	-	$	(42)	$	3,222	$	-