Derivative Instruments and Hedging Activities

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company is exposed to certain risks related to its ongoing business operations, including market risks related to fluctuation in currency exchange. The Company uses foreign exchange contracts to manage the risk of certain cross-currency business relationships to minimize the impact of currency exchange fluctuations on the Company’s earnings and cash flows. The Company does not hold or issue derivative financial instruments for trading or speculative purposes. As of June 30, 2013, the foreign exchange contracts designated as hedging instruments did not have a material impact on the Company’s condensed consolidated statement of operations, balance sheet or cash flows. Foreign exchange contracts not designated as hedging instruments which primarily pertain to foreign exchange fluctuation risk of intercompany positions, had a notional value of $271 million and $178 million as of June 30, 2013 and December 31, 2012, respectively. The settlement of derivative contracts for the six months ended June 30, 2013 and 2012 resulted in a net cash inflow of $7.7 million and a net cash outflow of $5.8 million, respectively, and is reported with “Total provided by operating activities” on the Condensed Consolidated Statements of Cash Flows. As of June 30, 2013 and December 31, 2012, the Company's receivable position for the foreign exchange contracts was $1.4 million and $2.6 million, respectively. As of June 30, 2013 and December 31, 2012, the Company's payable position for the foreign exchange contracts was $1.1 million and $0.2 million, respectively.