Derivative Financial Instruments

9 Months Ended

Sep. 30, 2011

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

Note 7 — Derivative Financial Instruments

In the normal course of business, we use foreign exchange forward contracts to manage foreign currency exchange rate risk. The estimated fair value of the foreign exchange forward contracts considers the following items: discount rate, timing and amount of cash flow and counterparty credit risk. Derivatives may give rise to credit risks from the possible non-performance by counterparties. Credit risk is generally limited to the fair value of those contracts that are favorable to us. We have limited our credit risk by entering into derivative transactions only with highly-rated global financial institutions, limiting the amount of credit exposure with any one financial institution and conducting ongoing evaluation of the creditworthiness of the financial institutions with which we do business.

The following table provides information on the location and fair values of derivative financial instruments in our unaudited condensed consolidated statements of financial position:

		September 30, 2011				December 31, 2010
Designation of Derivatives	Location on Statement of Financial Position	Assets		Liabilities		Assets		Liabilities
Cash Flow Hedges – Designated as hedging instruments
Foreign exchange forward contracts	Other current assets	$	345	$	—	$	30,983	$	—
	Other noncurrent assets		1,046		—		8,144		—
	Accrued expenses and other current liabilities		—		35,272		—		187
	Other noncurrent liabilities		—		36,177		—		6,601
	Total		1,391		71,449		39,127		6,788
Other Derivatives – Not designated as hedging instruments
Foreign exchange forward contracts	Other current assets		14,039		—		—		—
Foreign exchange forward contracts	Accrued expenses and other current liabilities		—		—		—		7,317
	Total		14,039		—		—		7,317
Total		$	15,430	$	71,449	$	39,127	$	14,105

Cash Flow Hedges

We have entered into a series of foreign exchange forward contracts that are designated as cash flow hedges of certain salary payments in India. These contracts are intended to partially offset the impact of movement of exchange rates on future operating costs and are scheduled to mature each month during 2011, 2012, 2013, 2014, and 2015. Under these contracts, we purchase Indian rupees and sell U.S. dollars. The changes in fair value of these contracts are initially reported in the caption "accumulated other comprehensive income (loss)" on our accompanying unaudited condensed consolidated statements of financial position and are subsequently reclassified to earnings in the same period the hedge contract matures. The notional value of our outstanding contracts by year of maturity and the net unrealized (loss) gain included in accumulated other comprehensive income (loss) for such contracts were as follows:

	September 30, 2011			December 31, 2010
2011	$	225,000		$	780,000
2012		990,000			780,000
2013		960,000			600,000
2014		600,000			—
2015		240,000			—
Total notional value of contracts outstanding	$	3,015,000		$	2,160,000
Net unrealized (loss) gain included in accumulated other comprehensive income (loss), net of taxes	$	(55,474	)	$	30,723

Upon settlement or maturity of the cash flow hedge contracts, we record the related gain or loss, based on our designation at the commencement of the contract, to salary expense reported within cost of revenues and selling, general and administrative expenses. The following table provides information on the location and amounts of pre-tax gains (losses) on our cash flow hedges for the three months ended September 30:

	Increase (decrease) in Derivative Gains (Losses) Recognized in Accumulated Other Comprehensive Income (Loss) (effective portion)					Location of Net Derivative Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)	Net Gain (Loss) Reclassified from Accumulated Other Comprehensive  Income (Loss) into Income (effective portion)
	2011			2010			2011		2010
Cash Flow Hedges – Designated as hedging instruments
Foreign exchange forward contracts	$	(130,402	)	$	39,995	Cost of revenues	$	5,756	$	6,858
						Selling, general and administrative expenses		1,222		1,506
Total	$	(130,402	)	$	39,995		$	6,978	$	8,364

The following table provides information on the location and amounts of pre-tax gains (losses) on our cash flow hedges for the nine months ended September 30:

	Increase (decrease) in Derivative Gains (Losses) Recognized in Accumulated Other Comprehensive Income (Loss) (effective portion)					Location of Net Derivative Gains (Losses) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income (effective portion)	Net Gain (Loss) Reclassified from Accumulated Other Comprehensive  Income (Loss) into Income (effective portion)
	2011			2010			2011		2010
Cash Flow Hedges – Designated as hedging instruments
Foreign exchange forward contracts	$	(69,300	)	$	29,337	Cost of revenues	$	27,282	$	22,990
						Selling, general and administrative expenses		5,815		4,269
Total	$	(69,300	)	$	29,337		$	33,097	$	27,259

Other Derivatives

We also use foreign exchange forward contracts, which have not been designated as hedges, to hedge our foreign currency exposure to Indian rupee denominated net monetary assets. We entered into a series of foreign exchange forward contracts to purchase U.S. dollars and sell Indian rupees. Realized gains or losses and changes in the estimated fair value of these derivative financial instruments are recorded in Other, net in our unaudited condensed consolidated statements of operations.

Additional information related to our outstanding contracts is as follows:

	September 30, 2011		December 31, 2010
Notional value of contracts outstanding	$	218,739	$	234,021

The following table provides information on the location and amounts of realized and unrealized pre-tax gains (losses) on our other derivative financial instruments for the three and nine months ended September 30, 2011 and 2010.

	Location of Net Gains / (Losses) on Derivative  Instruments		Amount of Net Gains (Losses) on Derivative Instruments
			Three Months Ended September 30,					Nine Months Ended September 30,
			2011		2010			2011		2010
Other Derivatives – Not designated as hedging instruments
Foreign exchange forward contracts		Other, net	$	16,437	$	(14,645	)	$	6,922	$	(16,420	)
Total			$	16,437	$	(14,645	)	$	6,922	$	(16,420	)

The related cash flow impacts of all of our derivative activities are reflected as cash flows from operating activities.