Forward Currency Contracts

9 Months Ended

Sep. 30, 2012

Foreign Currency [Abstract]

Forward Currency Contracts

Forward Currency Contracts

The assets and liabilities of the Company's international subsidiaries are translated at the applicable exchange rate as of the balance sheet date, and revenues and expenses are translated at an average rate over the period. Resulting currency translation adjustments are recorded as a component of accumulated other comprehensive income (loss), a separate component of stockholders’ equity. Gains and losses on inter-company and other non-functional currency transactions are recorded in other (expense) income, net. For the three and nine months ended September 30, 2012, the Company recorded net foreign currency losses of $0.3 million and net foreign currency gains of $0.2 million, respectively, in the consolidated statement of operations. For the three and nine months ended September 30, 2011, the Company recorded net foreign currency losses of $0.2 million and $1.3 million, respectively, in the consolidated statement of operations.

Since 2011, the Company has entered into short-term foreign currency forward contracts to offset foreign exchange gains and losses generated by the re-measurement of certain assets and liabilities recorded in non-functional currencies. Changes in the fair value of these derivatives, as well as re-measurement gains and losses, are recognized in current earnings in other (expense) income, net. As of September 30, 2012 and 2011, the fair value of the forward currency contracts and the underlying net loss for the three and nine months ended September 30, 2012 and 2011 were deemed to be immaterial.

The Company's foreign currency forward contracts include credit risk to the extent that the counterparties may be unable to meet the terms of the agreements. The Company seeks to minimize counterparty credit (or repayment) risk by entering into transactions only with major financial institutions of investment grade credit rating.