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DERIVATIVES | 12 Months Ended
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Dec. 31, 2011
DERIVATIVES [Abstract] |
DERIVATIVES | (9) 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 foreign 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 interest 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 December 31, 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 A ccumulated other comprehensive income (loss) for the years ended December 31, 2011, 2010 and 2009 (amounts in thousands and net of tax):
|  | Year Ended December 31,
|  | 2011 |  | 2010 |  | 2009
Aggregate unrealized net gain/(loss) at beginning of year |  | $ | 7,090 |  | $ | 4,467 |  | $ | (21,180)
Add: Net gain/(loss) from change in fair value of cash flow hedges |  |  | (7,362) |  |  | 8,513 |  |  | 14,427
Less: Net (gain)/loss reclassified to earnings from effective hedges |  |  | (5,580) |  |  | (5,890) |  |  | 11,220
Aggregate unrealized net gain/(loss) at end of year |  | $ | (5,852) |  | $ | 7,090 |  | $ | 4,467
The Company's foreign exchange cash flow hedging instruments as of December 31, 2011 and 2010 are summarized as follows (amounts in thousands). All hedging instruments are forward contracts unless noted otherwise.
As of December 31, 2011 |  | Local Currency Notional Amount |  | U.S. Dollar Notional Amount |  |  | % Maturing in 2012 |  | Contracts Maturing Through
Canadian Dollar |  | 25,750 |  | $ | 25,137 |  |  | 69.9% |  | March 2014
Costa Rican Colon |  | 2,000,000 |  |  | 3,874 |  |  | 100.0% |  | August 2012
Philippine Peso |  | 13,304,000 |  |  | 301,361 | (1) |  | 56.3% |  | December 2014
Mexican Peso (Forwards) |  | 1,081,000 |  |  | 80,735 |  |  | 47.7% |  | November 2014
Mexican Peso (Collars) |  | 140,298 |  |  | 12,000 | (3) |  | 100.0% |  | December 2012
British Pound Sterling |  | 8,808 |  |  | 13,822 | (2) |  | 60.1% |  | June 2014
|  |  |  | $ | 436,929 |  |  |  |  |
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 New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on December 31, 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 December 31, 2011 and December 31, 2010. (3) The Mexican p eso c ollars 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 December 31, 2011 were as follows:
|  | Notional Amount |  | Variable Rate Received |  | Fixed Rate Paid |  | Contract Commencement Date |  | Contract Maturity Date
As of December 31, 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 |  |  |  |  |  |  |  |  |  |
The Company did not have any interest rate swap arrangements as of December 31, 2010. Hedge of Net Investment In 2008, the Company entered into a foreign exchange forward contract to hedge its net investment in a foreign operation which was settled in May 2009. Changes in fair value of the Company's net investment hedge are recorded in the cumulative translation adjustment in Accumulated o ther c omprehensive i ncome (l oss) i n the accompanying Consolidated Balance Sheets offsetting the change in the cumulative translation adjustment attributable to the hedged portion of the Company's net investment in the foreign operation. Gains and losses from the settlements of the Company's net investment hedge remain in Accumulated o ther c omprehensive i ncome (l oss) until partial or complete liquidation of the applicable net investment. A loss of $1.2 million from the settlements of net investment hedges was recorded within Accumulated o ther c omprehensive i ncome (l oss) at December 31, 2011. 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 December 31, 2011, the total notional amount of the Company's forward contracts used as fair value hedges was $49.8 million. Embedded Derivatives In addition to hedging activities, th e Company's foreign subsidiary in Argentina was part y to U.S. dollar denominated lease contract s which the Company determined contain ed embedded derivative s. As such, the Company bifurcate d the embedded derivative s feature s of the lease contract s and value d these features as foreign currency derivatives. In 2011, the Company amended its leases reducing the fair value to zero as of December 31, 2011. Derivative Valuation and Settlements The Company's derivatives as of December 31, 2011 and 2010 were as follows (amounts in thousands):
|  |  | December 31, 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 |  | $ | 2,325 | $ | - |  | $ | 12 | $ | -
Other long-term assets |  |  | 1,119 |  | - |  |  | - |  | -
Other current liabilities |  |  | (7,828) |  | - |  |  | (341) |  | -
Other long-term liabilities |  |  | (2,786) |  | (2,263) |  |  | - |  | -
| Total fair value of derivatives, net |  | $ | (7,170) | $ | (2,263) |  | $ | (329) | $ | -
|  |  | 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 and Comprehensive Income for the year ended December 31, 2011 and 2010 were as follows (amounts in thousands):
|  |  | Year Ended December 31,
|  |  | 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: |  | $ | (6,003) |  | $ | (1,358) |  | $ | 8,513 |  | $ | -
Amount and location of net gain or (loss) reclassified |  |  |  |  |  |  |  |  |  |  |  |
| from accumulated OCI to income - effective portion: |  |  |  |  |  |  |  |  |  |  |  |
Revenue |  | $ | 9,297 |  | $ | - |  | $ | 9,817 |  | $ | -
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 |  | $ | - |  | $ | - |  | $ | - |  | $ | -
|  |  | Year Ended December 31,
|  |  | 2011 |  | 2010
|  |  | Not designated as hedging instruments |  | Not designated as hedging instruments
Derivative contracts: |  | Foreign Exchange |  | Leases |  |  | Foreign Exchange |  |  | Leases
Derivative classification: |  | Option and Forward Contracts |  | Fair Value |  | Embedded Derivative |  | Option and Forward Contracts |  | Fair Value |  | Embedded Derivative
Amount and location of net gain or |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (loss) recognized in the Consolidated |  |  |  |  |  |  |  |  |  |  |  |  |
| Statement of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of services |  | $ | - |  | $ | - |  | $ | 139 |  | $ | - |  | $ | - |  | $ | 230
Other income (expense), net |  |  | - |  |  | (1,178) |  |  | - |  |  | (42) |  |  | 3,693 |  |  | -

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5580258-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5618551-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624163-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5708773-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41638-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624171-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41620-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41641-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6887037&loc=d3e80784-113994 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5579240-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6935481&loc=d3e41635-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624258-113959 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5579245-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 20: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 45 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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