Fair Value and Derivative Financial Instruments —

The Company holds certain assets and liabilities that are required to be measured at fair value on a recurring basis. These include the Company's derivative instruments related to foreign currency forward contracts, as well as foreign exchange swaps. The Company uses derivative financial instruments to manage risk and not for trading or other speculative purposes.

Fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is the Company's policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements. The fair values of the Company's derivatives are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized these contracts as Level 2 in the fair value hierarchy.

The following table presents the Company's financial assets and liabilities that were accounted for at fair value on a recurring basis:



	Balance Sheet Classification	March 31, 2012		December 31, 2011
Assets:
Foreign exchange swaps (not designated as hedging instruments)	Other current assets	$	—	$	494
Liabilities:
Forward contracts (designated as hedging instruments)	Other accrued liabilities	$	1,541	$	3,809
Foreign exchange swaps (not designated as hedging instruments)	Other accrued liabilities	81		—
Forward contracts (designated as hedging instruments)	Other liabilities	—		129
		$	1,622	$	3,938

The Company enters into forward contracts to hedge the value of the U.S. dollar or euro cash flow at locations that do not have the U.S. dollar or euro as their functional currency but conduct certain transactions in U.S. dollars or euros. The objective of all outstanding forward contracts is to hedge forecasted transactions in U.S. dollars or euros through the cash settlement date. The Company enters into forward contracts with maturity dates of up to eighteen months after the contract date. All forward contracts are designated as and qualify for hedge accounting treatment.

The Company had foreign currency forward contracts outstanding in notional amounts as follows:

Changes in the fair value of forward contracts designated as hedging instruments are recognized as a component of net income or accumulated other comprehensive income depending on whether the transaction related to the hedged risk has occurred and whether the contract qualifies as highly effective. Changes in fair values of derivatives that are accounted for as cash flow hedges are recorded in accumulated other comprehensive income. The amount of loss, net of tax, recorded as a component of accumulated other comprehensive income related to forward contracts was $990 and $2,721 at March 31, 2012 and December 31, 2011, respectively. At March 31, 2012 the Company expects to reclassify $990 of loss, net of tax, on forward contracts from accumulated other comprehensive income to net income during the next twelve months due to the actual fulfillment of forecasted transactions.

The following table summarizes the amount of gain (loss) reclassified from accumulated other comprehensive income into net income for the three months ended March 31, 2012 and 2011:



	Three Months Ended March 31,
Statement of Operations Classification	2012			2011
Net Sales	$	(507	)	$	(158	)
Other, net	167			211
	$	(340	)	$	53

Any portion of the hedge that is deemed ineffective due to the absolute value of the cumulative change in the derivative being greater than the cumulative change in the hedged item is recorded immediately in other, net on the consolidated statements of operations. There was no significant hedge ineffectiveness in the three months ended March 31, 2012 or 2011.

The Company uses foreign exchange swaps to hedge intercompany financing activities between group companies with different functional currencies. The Company does not designate these foreign exchange swaps as hedging instruments. Accordingly, the gain or loss associated with changes in the fair value of these contracts is immediately recorded in other, net on the consolidated statements of operations.

The following table summarizes the amount of loss related to foreign exchange swaps recognized in the statements of operations for the three months ended March 31, 2012 and 2011:



	Three Months Ended March 31,
Statement of Operations Classification	2012			2011
Other, net	$	(581	)	$	(313	)

March 31, 2012

December 31, 2011

U.S. dollar