Derivative Financial Instruments

3 Months Ended

Mar. 31, 2013

Derivative Financial Instruments

Derivative Financial Instruments

Note 6—Derivative Financial Instruments

We use derivative financial instruments to minimize the impact of foreign currency exchange rate changes on earnings and cash flows. In the normal course of business, our operations are exposed to fluctuations in foreign currency exchange rates. In order to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated intercompany transactions and other known foreign currency exposures, we enter into monthly forward contracts. We do not use derivative financial instruments for trading or speculative purposes. Our forward contracts are not expected to subject us to material risks due to exchange rate movements because gains and losses on these contracts are intended to offset exchange gains and losses on the underlying assets and liabilities. We have not designated these economic hedges as accounting hedges pursuant to the accounting guidance. The forward contracts are marked-to-market through earnings. We conduct our derivative transactions with highly rated financial institutions in an effort to mitigate any material counterparty risk. Derivatives consist of (in thousands):

March 31, 2013
Not Designated as Hedges under ASC 815	Component of	Maturity	Notional  Amount		Estimated  Fair Value
Foreign currency exchange forwards	Accrued expenses and other current liabilities	April 2013	$	3,715	$	(21	)
Total Derivative Instruments			$	3,715	$	(21	)

December 31, 2012
Not Designated as Hedges under ASC 815	Component of	Maturity	Notional  Amount		Estimated  Fair Value
Foreign currency exchange forwards	Prepaid expenses and other current assets	January 2013	$	9,590	$	244
Total Derivative Instruments			$	9,590	$	244

	Location of Realized Net (Loss) Gain and	For the three months  ended March 31,
	Changes in the Fair Value of Derivatives	2013		2012
Foreign currency exchange forwards	Other, net	$	228	$	80
Weighted average notional amount of derivatives outstanding		$	2,400	$	2,405