DERIVATIVE INSTRUMENTS |
9 Months Ended |
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Sep. 30, 2011 | |
| DERIVATIVE INSTRUMENTS [Abstract] | |
| DERIVATIVE INSTRUMENTS |
NOTE 4-DERIVATIVE INSTRUMENTS
The Company primarily uses forward currency contracts in addition to options to reduce its exposure to foreign currency risk associated with short-term artist fee commitments. The Company also enters into forward currency contracts to minimize the risks and/or costs associated with changes in foreign currency rates on forecasted operating income. At September 30, 2011 and December 31, 2010, the Company had forward currency contracts outstanding with notional amounts of $40.8 million and $85.7 million, respectively. These forward currency contracts have not been designated as hedging instruments. Any change in fair value is reported in earnings during the period of the change. The Company's foreign currency derivative activity, including the related fair values, are not material to any period presented.
Additionally, the Company has entered into certain interest rate swaps and cap agreements to limit its exposure to variable interest rates, related to portions of the Company's outstanding debt, some of which have been designated as cash flow hedges. At September 30, 2011 and December 31, 2010, the Company had interest rate swaps and cap agreements outstanding with notional amounts of $137.2 million and $141.4 million, respectively. In May 2010, in conjunction with the refinancing of certain of its debt arrangements, the Company settled three interest rate swap agreements, one of which was designated as a cash flow hedge, that were associated with the term loans under the Company's December 2005 senior secured credit facility. The Company recognized expense of $4.5 million for the settlement of the interest rate swap agreements as a component of loss on extinguishment of debt. Excluding the debt extinguishment settlements, the Company's interest rate swaps and caps activity, including the related fair values, are not material to any period presented.
The Company's 2.875% convertible senior notes issued in July 2007 include certain provisions which are bifurcated from the notes and accounted for as derivative instruments. At the date of issuance and as of September 30, 2011 and December 31, 2010, the fair value of these provisions was considered to be de minimis.
The Company does not enter into derivative instruments for speculation or trading purposes and does not anticipate any significant recognition of derivative activity through the income statement in the future related to the instruments currently held. See Note 5-Fair Value Measurements for further discussion and disclosure of the fair values for the Company's derivative instruments.
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