Derivative Instruments

9 Months Ended

Sep. 30, 2012

Derivative Instruments [Abstract]

Derivative Instruments

7.   Derivative Instruments

The Company utilizes forward foreign currency exchange contracts to manage market risks associated with the fluctuations in foreign currency exchange rates.  It is the Company's policy to use such derivative financial instruments to protect against market risk arising in the normal course of business in order to reduce the impact of these exposures.  The Company minimizes credit exposure by limiting counterparties to nationally recognized financial institutions.

As of September 30, 2012, the Company had foreign exchange contracts outstanding of approximately 1.0 million Pounds Sterling, 13.3 million Euro, and 70.8 million Japanese Yen at fixed rates.  The contracts expire on various dates through May 2016.  At December 31, 2011, the Company had contracts outstanding of approximately 3.1 million Pounds Sterling, 12.0 million Euro, and 383.5 million Japanese Yen at fixed rates.  The Company has not designated any of the foreign exchange contracts outstanding as hedges and has recorded the estimated fair value of the contracts in the consolidated balance sheets as follows:

	September 30,			December 31,
(in thousands)	2012			2011
Asset derivatives
Prepaid expenses and other current assets	$	481		$	393
Other assets		26			90
		507			483
Liability derivatives
Other current liabilities		(203	)		(258	)
Other liabilities		(167	)		(56	)
		(370	)		(314	)
Net fair value	$	137		$	169

The changes in the fair value of the foreign exchange contracts are included in net gain (loss) on derivative instruments in the consolidated statements of operations.

The foreign currency denominated contract receivables, billings in excess of revenue earned and subcontractor accruals that are related to the outstanding foreign exchange contracts are remeasured at the end of each period into the functional currency using the current exchange rate at the end of the period.  The gain or loss resulting from such remeasurement is also included in net gain (loss) on derivative instruments in the consolidated statements of operations.

For the three and nine months ended September 30, 2012 and 2011, the Company recognized a net gain (loss) on its derivative instruments as outlined below:

	Three Months ended						Nine Months ended
	September 30,						September 30,
(in thousands)	2012			2011			2012			2011
Foreign exchange contracts- change in fair value	$	(134	)	$	(143	)	$	(42	)	$	(298	)
Remeasurement of related contract receivables, billings in excess of revenue earned, and subcontractor accruals		154			14			78			347
Gain (loss) on derivative instruments, net	$	20		$	(129	)	$	36		$	49