Derivative Financial Instruments

6 Months Ended

Jun. 30, 2013

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

7. DERIVATIVE FINANCIAL INSTRUMENTS

We transact business in various foreign countries and are therefore exposed to foreign currency exchange rate risk inherent in revenues, costs, and monetary assets and liabilities denominated in non-functional currencies. We have entered into foreign currency exchange forward contracts and currency swap derivative instruments to selectively protect against volatility in the value of non-functional currency denominated monetary assets and liabilities, and of future cash flows caused by changes in foreign currency exchange rates. We do not designate these derivative instruments as hedging instruments under the accounting standards for derivatives and hedging. Accordingly, these instruments are recorded at fair value as a derivative asset or liability on the balance sheet with their corresponding change in fair value recognized in ‘Foreign currency transaction (gains) losses, net’ in our condensed consolidated statements of income. For purposes of the condensed consolidated statement of cash flows,  we classify the cash flows at settlement from undesignated instruments in the same category as the cash flows from the related hedged items, generally within ‘Cash provided by (used in) operating activities’. See Note 6 – “Fair Value Measurements” for further details regarding the fair values of the corresponding derivative assets and liabilities.

The following table summarizes the notional amounts of the outstanding foreign currency exchange contracts at June 30, 2013 and December 31, 2012. The notional amounts of the derivative financial instruments shown below are denominated in their U.S. dollar equivalents and represent the amount of all contracts of the foreign currency specified. These notional values do not necessarily represent amounts exchanged by the parties and, therefore, are not a direct measure of our exposure to the foreign currency exchange risks.

	June 30,		December 31,
($ thousands)	2013		2012
Foreign currency exchange forward contracts by currency:
Japanese Yen	$	117,250	$	112,500
Pound Sterling		15,945		8,742
Mexican Peso		15,007		11,400
Singapore Dollar		9,000		-
Euro		4,854		5,159
Australian Dollar		4,271		4,178
Russian Ruble		4,036		-
Swedish Krona		1,989		-
New Zealand Dollar		1,756		1,137
South African Rand		1,741		-
Hong Kong Dollar		902		-
Total notional value, net	$	176,751	$	143,116
Latest maturity date	December 2015		December 2015

The following table presents the amounts affecting the consolidated statements of income from derivative instruments for the three and six months endedJune 30, 2013 and 2012:

	Three Months Ended June 30,				Six Months Ended June 30,
($ thousands)	2013		2012		2013		2012		Location of (Gain) Loss Recognized in Income on Derivatives
Derivatives not designated as hedging instruments:
Foreign currency exchange forwards(1)	$	(710)	$	4,287	$	(10,651)	$	2,184	Foreign currency transaction (gains) losses, net

⁽¹⁾For the three and six months ended June 30, 2013, the net gains of $0.7 million and $10.7million, respectively, associated with our foreign currency exchange forwards were offset by net unrealized and realized losses resulting from foreign currency transactions of $1.5 million and $14.1 million, respectively, resulting in net foreign currency transaction losses of  $0.8 million and $3.4 million, respectively.For the three months ended June 30, 2012, the net lossof $4.3 million associated with our foreign currency exchange forwards was offset by net unrealized and realized gains resulting from foreign currency transactions of $5.9 million resulting in a net foreign currency transaction gain of $1.6 million. For the six months ended June 30, 2012, the net loss of $2.2 million associated with our foreign currency exchange forwards and net loss of $0.4 million associated with net unrealized and realized gains resulting from foreign currency transactions resulting in a net foreign currency transaction loss of $2.6 million.