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DERIVATIVES
 6 Months Ended
Jun. 30, 2011
DERIVATIVES [Abstract]  
DERIVATIVES

(6)       DERIVATIVES

Cash Flow Hedges

The Company enters into foreign exchange and interest rate derivatives. Foreign exchange derivatives entered into consist of forward and option contracts to reduce the Company's exposure to currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Interest rate derivatives consist of interest rate swaps to reduce the Company's exposure to rate fluctuations associated with its variable rate debt. Upon proper qualification, these contracts are designated as cash flow hedges. It is the Company's policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets consider, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company's creditworthiness. As of June 30, 2011, the Company has not experienced, nor does it anticipate any issues related to derivative counterparty defaults. The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the three and six months ended June 30, 2011 and 2010 (amounts in thousands and net of tax):

 Three Months Ended June 30, Six Months Ended June 30,
 2011 2010 2011 2010
            
Aggregate unrealized net gain (loss) at beginning of period$ 5,634 $ 7,430 $ 7,091 $ 4,468
Add: Net gain/(loss) from change in fair value of cash flow hedges  (3,189)   (2,366)   (2,431)   1,523
Less: Net (gain)/loss reclassified to earnings from effective hedges  (1,934)   (1,633)   (4,149)   (2,560)
Aggregate unrealized net gain (loss) at end of period$ 511 $ 3,431 $ 511 $ 3,431
            

The Company's foreign exchange cash flow hedging instruments as of June 30, 2011 and December 31, 2010 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts unless noted otherwise.

As of June 30, 2011 Local Currency Notional Amount U.S. Dollar Notional Amount % Maturing in the Next 12 Months Contracts Maturing Through
Canadian Dollar  12,600 $ 12,009   100.0% June 2012
Philippine Peso  11,414,000   259,429 (1)  62.1% December 2014
Mexican Peso  511,000   40,200   69.9% December 2012
Mexican Peso Collars  140,298   12,000 (3)  50.0% December 2012
British Pound Sterling  5,660   9,019 (2)  73.7% December 2012
    $ 332,657      

As of December 31, 2010 Local Currency Notional Amount U.S. Dollar Notional Amount      
Canadian Dollar  10,200 $ 8,493      
Philippine Peso  7,731,000   169,364 (1)     
Mexican Peso  311,500   22,383      
British Pound Sterling  4,647   7,231 (2)     
    $ 207,471      
            

(1)       Includes contracts to purchase Philippine pesos in exchange for Australian dollars and New Zealand dollars which are translated into equivalent U.S. dollars on June 30, 2011 and December 31, 2010.

(2)       Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on June 30, 2011 and December 31, 2010.

(3)       The Mexican Peso Collars include call options with a floor total of MXN 140,298 and put options with a cap total of MXN 157,038.

The Company's interest rate swap arrangements as of June 30, 2011 and December 31, 2010 were as follows:

  Notional Amount Variable Rate Received Fixed Rate Paid Contract Commencement Date Contract Maturity Date
As of June 30, 2011 $25 million 1 - month LIBOR   2.55% April 2012 April 2016
   15 million 1 - month LIBOR   3.14% May 2012 May 2017
  $40 million          
              
As of December 31, 2010 $- -  -  - -
              

Fair Value Hedges

The Company enters into foreign exchange forward contracts to hedge against foreign currency exchange gains and losses on certain receivables and payables of the Company's foreign operations. Changes in the fair value of derivative instruments designated as fair value hedges, as well as the offsetting gain or loss on the hedged asset or liability, are recognized in earnings in Other income (expense), net. As of June 30, 2011 and December 31, 2010, the total notional amount of the Company's forward contracts used as fair value hedges were $60.8 million and $93.3 million, respectively.

Embedded Derivatives

In addition to hedging activities, the Company's foreign subsidiary in Argentina is party to U.S. dollar denominated lease contracts that the Company has determined contain embedded derivatives. As such, the Company bifurcates the embedded derivative features of the lease contracts and values these features as foreign currency derivatives.

Derivative Valuation and Settlements

The fair value of the Company's derivatives as of June 30, 2011 and December 31, 2010 were as follows (amounts in thousands):

  June 30, 2011
  Designated as Hedging Instruments Not Designated as Hedging Instruments
Derivative contracts:Foreign Exchange Interest Rate Foreign Exchange Leases
Derivative classification:Cash Flow Cash Flow Fair Value Embedded Derivative
             
Fair value and location of derivative in the           
 Consolidated Balance Sheet:           
Prepaids and other current assets$ 6,102 $ - $ 107 $ -
Other long-term assets  1,068   -   -   -
Other current liabilities  (3,221)   -   (76)   (17)
Other long-term liabilities  (1,982)   (545)   -   -
 Total fair value of derivatives, net$ 1,967 $ (545) $ 31 $ (17)
             
  December 31, 2010
  Designated as Hedging Instruments Not Designated as Hedging Instruments
Derivative contracts:Foreign Exchange Interest Rate Foreign Exchange Leases
Derivative classification:Cash Flow Cash Flow Fair Value Embedded Derivative
             
Fair value and location of derivative in           
 the Consolidated Balance Sheet:           
Prepaids and other current assets$ 10,602 $ - $ 783 $ -
Other long-term assets  2,081   -   -   -
Other current liabilities  (677)   -   (58)   (105)
Other long-term liabilities  (104)   -   -   (34)
 Total fair value of derivatives, net$ 11,902 $ - $ 725 $ (139)
             

The effect of derivative instruments on the Consolidated Statements of Operations for the three months ended June 30, 2011 and 2010 were as follows (amounts in thousands):

  Three Months Ended June 30,
  2011 2010
  Designated as Hedging Instruments Designated as Hedging Instruments
Derivative contracts:Foreign Exchange Interest Rate Foreign Exchange Interest Rate
Derivative classification:Cash Flow Cash Flow Cash Flow Cash Flow
           
Amount of gain or (loss) recognized in other comprehensive         
 income - effective portion, net of tax$ (2,673)$ (516) $ (2,366)$ -
           
Amount and location of net gain or (loss) reclassified from         
 accumulated OCI to income - effective portion:         
Revenue$ 3,224$ - $ 2,677$ -
           
Amount and location of net gain or (loss) reclassified from         
 accumulated OCI to income - ineffective portion and         
 amount excluded from effectiveness testing:         
Other income (expense), net$ -$ - $ -$ -
           

  Three Months Ended June 30,
  2011 2010
  Not Designated as Hedging Instruments Not Designated as Hedging Instruments
Derivative contracts:Foreign ExchangeLeases Foreign ExchangeLeases
Derivative classification:Option and Forward ContractsFair ValueEmbedded Derivative Option and Forward ContractsFair ValueEmbedded Derivative
               
Amount and location of net gain or (loss) recognized             
 in the Consolidated Statement of Operations:             
Costs of services$ -$ -$ 78 $ -$ -$ (31)
Other income (expense), net$ -$ (207)$ - $ (46)$ (1,117)$ -
               

The effect of derivative instruments on the Consolidated Statements of Operations for the six months ended June 30, 2011 and 2010 were as follows (amounts in thousands):

  Six Months Ended June 30,
  2011 2010
  Designated as Hedging Instruments Designated as Hedging Instruments
Derivative contracts:Foreign Exchange Interest Rate Foreign Exchange Interest Rate
Derivative classification:Cash Flow Cash Flow Cash Flow Cash Flow
           
Amount of gain or (loss) recognized in other comprehensive         
 income - effective portion, net of tax$ (2,103)$ (327) $ 1,523$ -
           
Amount and location of net gain or (loss) reclassified from         
 accumulated OCI to income - effective portion:         
Revenue$ 6,915$ - $ 4,197$ -
           
Amount and location of net gain or (loss) reclassified from         
 accumulated OCI to income - ineffective portion and         
 amount excluded from effectiveness testing:         
Other income (expense), net$ -$ - $ -$ -
           

  Six Months Ended June 30,
  2011 2010
  Not Designated as Hedging Instruments Not Designated as Hedging Instruments
Derivative contracts:Foreign ExchangeLeases Foreign ExchangeLeases
Derivative classification:Option and Forward ContractsFair ValueEmbedded Derivative Option and Forward ContractsFair ValueEmbedded Derivative
               
Amount and location of net gain or (loss) recognized             
 in the Consolidated Statement of Operations:             
Costs of services$ -$ -$ 122 $ -$ -$ 76
Other income (expense), net$ -$ 503$ - $ (42)$ (46)$ -