Derivative Financial Instruments

6 Months Ended

Mar. 31, 2013

Derivative Financial Instruments

3. Derivative Financial Instruments

Periodically the Company enters into foreign currency hedge arrangements. At March 31, 2013, the Company’s Canadian subsidiary had $34.4 million of Canadian 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 second quarter ended March 31, 2013, the Company entered into a $20.0 million foreign currency forward contract to hedge a portion of the Canadian subsidiary’s Canadian dollar denominated debt. This contract reduces the impact on cash flows from movements in the Canadian dollar/U.S. dollar currency exchange rate. At March 31, 2013, 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	March 31, 2013		September 30, 2012
Foreign Currency Exchange Contracts	Accrued Expenses		252		215
		$	252	$	215

The following table summarizes the impact of the Company’s derivatives on the consolidated statements of operations for the three and six month periods ended March 31, 2013 and 2012 (in thousands):

	Location of (Loss)	Three Months Ended						Six Months Ended
Derivative	Gain on Derivative	March 31						March 31
Instrument	Instrument	2013			2012			2013		2012
Foreign Currency
Forward Contracts	Other Income (Expense)		(58	)		(148	)		155		(148	)
		$	(58	)	$	(148	)	$	155	$	(148	)

Amounts in the above table include realized and unrealized derivative gains and losses.