The Company periodically uses derivative instruments to manage risk from changes in market conditions that may affect the Company's financial performance. The Company primarily uses derivative instruments to manage its primary market risks, which are interest rate risk and foreign currency exchange rate risk.

The Company uses interest rate cap agreements for the purpose of managing interest rate exposure on its floating rate debt. For derivatives designated as cash flow hedges, the effective portions of changes in the estimated fair value of the derivative are reported in "Accumulated other comprehensive income (loss)" (or "OCI") on the Company's consolidated balance sheets and are subsequently reclassified into earnings when the hedged item affects earnings. The change in the estimated fair value of the ineffective portion of the hedge, if any, will be recorded as income or expense.

On December 3, 2008, the Company entered into an interest rate cap agreement with a notional amount of $15.0 million to hedge the Company's outstanding floating rate line of credit for a term of 36 months at a fixed rate of 3.25%. On March 27, 2009, the Company entered into an interest rate cap agreement with a notional amount of $15.0 million to hedge the Company's outstanding floating rate line of credit for a term of 36 months at a fixed rate of 3.25%. These interest rate contracts have been determined to be perfectly effective cash flow hedges, pursuant to ASC 815-20-25, Derivatives and Hedging – Recognition at inception and on an ongoing basis.

The Company uses forward currency exchange contracts to minimize the effects of foreign currency risk in the United Kingdom, Australia and Mexico. As of September 30, 2011, the Company designated the intercompany balance related to its Mexico operations as long-term; therefore, future gains and losses related to the translation of this balance will be recognized in "Accumulated other comprehensive income (loss)" in the accompanying consolidated statements of equity. The Company's forward currency exchange contracts are non-designated derivatives. Any gain or loss resulting from these contracts is recorded as income or loss and is included in "Foreign currency transaction gain (loss)" in the Company's consolidated statements of income. The Company does not currently manage its exposure to risk from foreign currency exchange rate fluctuations through the use of forward currency exchange contracts in Canada. As the Company's foreign operations continue to grow, management will continue to evaluate and implement foreign exchange rate risk management strategies.

The fair values of the Company's derivative instruments at September 30, 2011 and 2010 and December 31, 2010 were as follows (in thousands):

The following table presents information on the effect of derivative instruments on the consolidated results of operations and OCI for the three and nine months ended September 30, 2011 and 2010 (in thousands):


	Gains (Losses) Recognized in Income					Gains Recognized in OCI					Gains (Losses) Reclassified From OCI into Income
	Three Months Ended					Three Months Ended					Three Months Ended
	September 30,					September 30,					September 30,
	2011		2010			2011		2010			2011		2010

Derivatives designated as hedges:
Interest rate contracts	$	–	$	–		$	31	$	4		$	–	$	–
Total	$	–	$	–		$	31	$	4		$	–	$	–

Non-designated derivatives:
Forward currency exchange contracts^(a)	$	4,090	$	(432	)	$	–	$	–		$	–	$	–
Total	$	4,090	$	(432	)	$	–	$	–		$	–	$	–

	Gains (Losses) Recognized in Income					Gains (Losses) Recognized in OCI					Gains (Losses) Reclassified From OCI into Income
	Nine Months Ended					Nine Months Ended					Nine Months Ended
	September 30,					September 30,					September 30,
	2011		2010			2011		2010			2011		2010

Derivatives designated as hedges:
Interest rate contracts	$	–	$	–		$	70	$	(114	)	$	–	$	–
Total	$	–	$	–		$	70	$	(114	)	$	–	$	–

Non-designated derivatives:
Forward currency exchange contracts^(a)	$	2,382	$	(706	)	$	–	$	–		$	–	$	–
Total	$	2,382	$	(706	)	$	–	$	–		$	–	$	–

^(a)	The gains (losses) on these derivatives substantially offset the gains (losses) on foreign intercompany balances.