Derivatives

6 Months Ended

Sep. 30, 2011

Derivatives [Abstract]

DERIVATIVES

NOTE J — DERIVATIVES

The Company is exposed to financial market risks arising from changes in interest rates and foreign exchange rates. Changes in interest rates could affect the Company’s monetary assets and liabilities, and foreign exchange rate changes could affect the Company’s foreign currency denominated monetary assets and liabilities and forecasted transactions. The Company enters into derivative contracts with the intent of mitigating a portion of these risks.

Interest rate swaps: The Company has interest rate swaps with a total notional value of $500 million, that swap a total of $500 million of its 6.125% Senior Notes due December 2014 into floating interest rate debt through December 1, 2014. These swaps are designated as fair value hedges.

At September 30, 2011, the fair value of these derivatives was an asset of approximately $30 million, of which approximately $11 million is included in “Other current assets” and approximately $19 million is included in “Other noncurrent assets, net” in the Company’s Condensed Consolidated Balance Sheets.

At March 31, 2011, the fair value of these derivatives was an asset of approximately $15 million, of which approximately $11 million is included in “Other current assets” and approximately $4 million is included in “Other noncurrent assets, net” in the Company’s Condensed Consolidated Balance Sheets.

During fiscal year 2009, the Company entered into interest rate swaps with a total notional value of $250 million to hedge a portion of its variable interest rate payments on its revolving credit facility. The amount of loss reclassified from “Accumulated other comprehensive income” into “Interest expense, net” in the Company’s Condensed Consolidated Statements of Operations was approximately $1 million and $3 million for the three and six months ended September 30, 2010, respectively. These derivatives were designated as cash flow hedges and matured in October 2010.

Foreign currency contracts: The Company enters into foreign currency option and forward contracts to manage foreign currency risks. The Company has not designated its foreign exchange derivatives as hedges. Accordingly, changes in fair value from these contracts are recorded as “Other (gains) expenses, net” in the Company’s Condensed Consolidated Statements of Operations. At September 30, 2011, foreign currency contracts outstanding consisted of purchase and sales contracts with a total notional value of approximately $574 million and durations of less than six months. The net fair value of these contracts at September 30, 2011 was approximately $10 million, of which approximately $22 million is included in “Other current assets” and approximately $12 million is included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheet. The net fair value of these contracts at March 31, 2011 was approximately $6 million, of which approximately $7 million is included in “Other current assets” and approximately $1 million is included in “Accrued expenses and other current liabilities” in the Company’s Condensed Consolidated Balance Sheet.

A summary of the effect of the interest rate and foreign exchange derivatives on the Company’s Condensed Consolidated Statements of Operations is as follows:

	Amount of Net (Gain)/Loss Recognized in the
	Condensed Consolidated Statements of Operations
	(in millions)
	Three Months Ended			Three Months Ended
Location of Amounts Recognized	September 30, 2011			September 30, 2010
Interest expense, net — interest rate swaps designated as cash flow hedges	$	—		$	1
Interest expense, net — interest rate swaps designated as fair value hedges	$	(3	)	$	(3	)
Other (gains) expenses, net — foreign currency contracts	$	(6	)	$	21

	Amount of Net (Gain)/Loss Recognized in the
	Condensed Consolidated Statements of Operations
	(in millions)
	Six Months Ended			Six Months Ended
Location of Amounts Recognized	September 30, 2011			September 30, 2010
Interest expense, net — interest rate swaps designated as cash flows hedges	$	—		$	3
Interest expense, net — interest rate swaps designated as fair value hedges	$	(6	)	$	(6	)
Other (gains) expenses, net — foreign currency contracts	$	1		$	8

The Company is subject to collateral security arrangements with most of its major counterparties. These arrangements require the Company to hold or post collateral when the derivative fair values exceed contractually established thresholds. The aggregate fair values of all derivative instruments under these collateralized arrangements were in a net asset position at September 30, 2011 and March 31, 2011. The Company posted no collateral at September 30, 2011 or March 31, 2011. Under these agreements, if the Company’s credit ratings had been downgraded one rating level, the Company would still not have been required to post collateral.