Derivative Financial Instruments

3 Months Ended

Dec. 31, 2012

Derivative Financial Instruments

3. Derivative Financial Instruments

Periodically the Company enters into foreign currency hedge arrangements. At December 31, 2012, the Company’s Canadian subsidiary had $34.4 million of U.S. dollar denominated intercompany accounts payable owed to the Company’s U.S. subsidiaries. In order to mitigate its exposure to movements in foreign currency rates between the U.S. dollar and Canadian dollar, during its first quarter ended December 31, 2012, the Company entered into an $18.0 million foreign currency forward contract to hedge a portion of the Canadian subsidiary’s U.S. dollar denominated debt. This contract reduces the impact on cash flows from movements in the Canadian dollar/U.S. dollar currency exchange rate. At December 31, 2012, the Company had accrued unrealized foreign exchange losses of $0.2 million under this contract.

The following table summarizes the gross fair value of all derivative instruments, which are not designated as hedging instruments and their location in the consolidated balance sheets (in thousands):

Derivative Instrument	Location		December 31, 2012		September 30, 2012
Foreign Currency Exchange Contracts		Accrued Expenses		150		215
			$	150	$	215

The following table summarizes the impact of the Company’s derivatives on the consolidated statements of operations for the three month periods ended December 31, 2012 and 2011 (in thousands ):

	Location of (Loss) Gain on Derivative	Three Months Ended
Derivative Instrument	Instrument	December 31, 2012		December 31, 2011
Foreign Currency Exchange Contracts	Other Income (Expense)		213		—
		$	213	$	—