Derivative Financial Instruments

6 Months Ended

Jun. 30, 2014

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

8. 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 losses, net’ in our condensed consolidated statements of income. For purposes of the condensed consolidated statements 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 7 – Fair Value Measurements for further details regarding the fair values of the corresponding derivative assets and liabilities. As of June 30, 2014, we did not have derivative assets or liabilities on our condensed consolidated balance sheets as all derivative forward contracts described in the table below were entered into on June 30, 2014.

The following table summarizes the notional amounts of the outstanding foreign currency exchange contracts at June 30, 2014 and December 31, 2013. The notional amounts of the derivative financial instruments shown below are denominated in their United States (“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)	2014		2013
Foreign currency exchange forward contracts by currency:
British Pound Sterling	$	22,736	$	15,487
Japanese Yen		19,174		68,707
Singapore Dollar		16,391		28,225
Russian Ruble		15,632		17,588
Euro		12,228		38,577
Mexican Peso		7,974		18,350
Canadian Dollar		4,876		3,428
Australian Dollar		4,669		4,941
South Korean Won		4,210		12,100
Hong Kong Dollar		4,200		1,844
South African Rand		4,032		3,076
New Taiwan Dollar		3,317		3,463
Indian Rupee		2,991		2,150
Swedish Krona		2,559		1,615
New Zealand Dollar		928		943
Norwegian Krone		542		-
Total notional value, net	$	126,459	$	220,494
Latest maturity date	August 2014		December 2015

The following table presents the amounts affecting the condensed consolidated statements of income from derivative instruments for the three and six months endedJune 30, 2014 and 2013:

	Three Months Ended June 30,				Six Months Ended June 30,
($ thousands)	2014		2013		2014		2013		Location of (Gain) Loss Recognized in Income on Derivatives
Foreign currency exchange forwards	$	3,370	$	(710)	$	5,208	$	(10,651)	Foreign currency transaction losses, net

The account 'Foreign currency transaction losses, net' on the condensed consolidated statements of income includes both realized and unrealized gains/losses from underlying foreign currency activity and derivative contracts. These gains and losses are reported on a net basis. For the three and six months ended June 30, 2014, the net losses recognized of $0.2 million and $3.0 million, respectively, recorded on the condensed consolidated statements of income is comprised of net losses noted in the table above of $3.4 million and $5.2 million, respectively, associated with our derivative instruments partially offset by net gains of $3.2 million and $2.2 million, respectively, associated with exposure from day-to-day business transactions in various foreign currencies.For the three and six months ended June 30, 2013, the net losses recognized of $0.8 million and $3.4 million, respectively, recorded on the condensed consolidated statements of income is comprised of net losses $1.5 million and $14.1 million, respectively, associated with exposure from day-to-day business transactions in various foreign currencies partially offset by net gains noted in the table above of $0.7 million and $10.7 million, respectively, associated with our derivative instruments.