Derivative instruments

12 Months Ended

Dec. 31, 2012

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative instruments

10. Derivative instruments

The tables below disclose the types of derivative instruments the Company owns, the classifications and fair values of these instruments within the balance sheet, and the amount of gain (loss) recognized in other comprehensive income (loss) (“OCI”) or net income (loss):

(U.S. Dollars, in thousands)	Fair value: favorable (unfavorable)		Balance sheet location
As of December 31, 2012
Cross-currency swap	$	305	Other long-term assets
As of December 31, 2011
Cross-currency swap	$	1,011	Other long-term assets

	For the year ended December 31,
(U.S. Dollars, in thousands)	2012		2011			2010
Interest rate swap gain recognized in net income (loss)	$	—	$	—		$	1,254
Cross-currency swap gain (loss) recorded in other comprehensive income (loss), net of taxes		263		(437	)		(90	)

Cross-currency swap

On September 30, 2010, the Company entered into a cross-currency swap agreement (the “replacement swap agreement”) with JPMorgan Chase Bank and Royal Bank of Scotland PLC (the “counterparties”) to manage its cash flows related to foreign currency exposure for a portion of the Company’s intercompany receivable of a U.S. dollar functional currency subsidiary that is denominated in Euro.

Under the terms of the swap agreement, the Company pays Euros based on a €28.7 million notional value and a fixed rate of 5.00% and receives U.S. dollars based on a notional value of $39 million and a fixed rate of 4.635%. The expiration date is December 30, 2016, the date upon which the underlying intercompany debt, to which the swap agreement applies, matures. The swap agreement is designated as a cash flow hedge and therefore the Company recognized an unrealized gain (loss) on the change in fair value, net of tax, within other comprehensive income.

Interest rate swap

In June 2008, the Company entered into a three-year fully amortizable interest rate swap agreement (the “Swap”) with a notional amount of $150.0 million and an expiration date of June 30, 2011. On June 29, 2010, the Company settled the Swap with the financial institution holder of the derivative instrument, which resulted in a $1.3 million gain in 2010.