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Derivative Instruments And Hedging Activities
3 Months Ended
Sep. 30, 2011
Derivative Instruments And Hedging Activities [Abstract] 
Derivative Instruments And Hedging Activities

NOTE 15—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Foreign Currency Forward Contracts

In July 2010, we entered into a hedging program with a Canadian chartered bank to limit the potential foreign exchange fluctuations incurred on future cash flows related to a portion of the payroll expenses that are expected to be paid by our Canadian subsidiary. We operate internationally and are therefore exposed to foreign currency exchange rate fluctuations in the normal course of our business, in particular to changes in the Canadian Dollar ("CAD") on account of large costs that get incurred from our centralized Canadian operations, and are denominated in CAD. As part of our risk management strategy, we use derivative instruments to hedge portions of our payroll exposure. We do not use these forward contracts for trading or speculative purposes. These forward contracts typically mature between one and twelve months.

We have designated these transactions as cash flow hedges of forecasted transactions under ASC Topic 815 "Derivatives and Hedging" (ASC Topic 815). As the critical terms of the hedging instrument, and of the entire hedged forecasted transaction, are the same, in accordance with ASC Topic 815 we have been able to conclude that changes in fair value or cash flows attributable to the risk being hedged are expected to completely offset at inception and on an ongoing basis. Accordingly, quarterly unrealized gains or losses on the effective portion of these forward contracts have been included within other comprehensive income. The fair value of the contracts, as of September 30, 2011, is recorded within "Accounts payable and accrued liabilities".

As of September 30, 2011, the notional amount of forward contracts we held to sell U.S. dollars in exchange for Canadian dollars was $99.6 million (June 30, 2011—$16.8 million).

Fair Value of Derivative Instruments and Effect of Derivative Instruments on Financial Performance

The effect of these derivative instruments on our consolidated financial statements as of, and for the three months ended September 30, 2011, were as follows (amounts presented do not include any income tax effects).

Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheets (see note 14)

 

Asset Derivatives

   

Balance Sheet Location

    Fair  Value
Asset
(Liability)		  

Foreign currency forward contracts designated as cash flow hedges

    Accounts payable and accrued liabilities    $ (5,398 ) 
     

 

 

  

Effects of Derivative Instruments on Income and Other Comprehensive Income (OCI)

 

Derivative in Cash Flow
Hedging Relationship

   Amount of Gain or (Loss)
Recognized in OCI on
Derivative (Effective
Portion)		     Location of
Gain or (Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion)		     Amount of Gain or
(Loss) Reclassified from
Accumulated OCI into
Income (Effective
Portion)		     Location of
Gain or
(Loss)
Recognized
in Income  on
Derivative
(Ineffective
Portion and
Amount
Excluded
from
Effectiveness
Testing)		    

Amount of Gain or
(Loss) Recognized in
Income on Derivative
(Ineffective Portion
and Amount Excluded
from Effectiveness
Testing)

     Three months
ended
September 30,
2011		           Three months
ended
September 30,
2011		          

Three months

ended

September 30,

2011

Foreign currency forward contracts

   $ (5,655 )     
 		 Operating
expenses		   
  		   $ 1,545        N/A      $ N/A