Derivative Instruments And Hedging Activities

6 Months Ended

Jun. 30, 2011

Derivative Instruments And Hedging Activities

Derivative Instruments And Hedging Activities

13. Derivative Instruments and Hedging Activities

In March 2009, the Company adopted the provisions under ASC Topic 815, "Derivatives and Hedging" ("ASC 815") as it relates to disclosures about derivative instruments and hedging activities. The provisions under ASC 815 are intended to improve transparency in financial reporting by requiring enhanced disclosures of an entity's derivative instruments and hedging activities and their effects on the entity's financial position, financial performance, and cash flows.

The Company is exposed to certain risks related to its ongoing business operations, including market risks related to fluctuation in currency exchange. The Company uses foreign exchange contracts to manage the risk of certain cross-currency business relationships to minimize the impact of currency exchange fluctuations on the Company's earnings and cash flows. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. As of June 30, 2011, the foreign exchange contracts designated as hedging instruments did not have a material impact on the Company's statements of operations, balance sheets or statements of cash flows. Foreign exchange contracts not designated as hedging instruments which primarily pertain to foreign exchange fluctuation risk of intercompany positions had a notional value of $208 million and $184 million as of June 30, 2011 and December 31, 2010, respectively. The settlement of derivative contracts for the six months ended June 30, 2011 and 2010, resulted in a net cash inflow of $5.5 million and a net cash outflow of $6.8 million, respectively, and is reported with "Total provided by operating activities" on the Condensed Consolidated Statements of Cash Flows.