Annual report pursuant to Section 13 and 15(d)

Derivative Financial Instruments

v2.4.0.6
Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2011
Derivative Financial Instruments [Abstract]  
Derivative Financial Instruments

NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS

Derivative Contracts Not Designated as Hedged Instruments

There were no derivative contracts not designated as hedged instruments as of December 31, 2011 and 2010.

Derivative Contracts Designated as Hedged Instruments

The Company held the following contracts designated as hedged instruments as of December 31, 2011 and 2010.

  December 31, 2011
  Notional Latest
  Amount Maturity
 
Foreign exchange contracts - Norwegian Kroners 3,633 September-12
Foreign exchange contracts - British Pounds 1,632 February-13
Foreign exchange contracts - Euros 14,937 February-13
Foreign exchange contracts - Swiss Francs 24,225 February-13
Foreign exchange contracts - Canadian Dollars 9,141 March-13
 
  December 31, 2010
  Notional Latest
  Amount Maturity
 
Foreign exchange contracts - Norwegian Kroners 465 January-11
Foreign exchange contracts - British Pounds 415 May-11
Foreign exchange contracts - Canadian Dollars 3,965 June-11
Foreign exchange contracts - Euros 10,072 December-11
Foreign exchange contracts - Swiss Francs 15,835 February-12

 

The Company accounts for these contracts as cash flow hedges and tests effectiveness by determining whether changes in the cash flow of the derivative offset, within a range, changes in the cash flow of the hedged item. For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive income and reclassified to sales in the period the underlying hedge item is recognized in earnings. $(346) and $(43) were reclassified to sales during the years ended December 31, 2011 and 2010, respectively.

As of December 31, 2010, the Company reported an accumulated unrealized loss on hedging activities; net of $(237) in accumulated other comprehensive income. During the year ended December 31, 2011, the Company reported an adjustment to accumulated other comprehensive income of $743, as a result of the change in fair value of these contracts, resulting in an accumulated unrealized gain on hedging activities, net of $506 reported as of December 31, 2011 in accumulated other comprehensive income.

The following table presents the balance sheet classification and fair value of derivative instruments as of December 31, 2011 and 2010:

  Classification   December 31, 2011   December 31, 2010
 
Derivative instruments in asset positions:          
Prepaid and other current
Forward exchange contracts assets $ 842 $ 1,346
 
Derivative instruments in liability positions:          
Accounts payable and
Forward exchange contracts accrued liabilities $ 156 $ 1,387