Derivative Financial Instruments

3 Months Ended

Mar. 31, 2012

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Our foreign currency risk management strategy is principally designed to mitigate the future potential financial impact of changes in the value of transactions and balances denominated in foreign currency resulting from changes in foreign currency exchange rates. We enter into derivative transactions, specifically foreign currency forward contracts with maturities of up to three months, to manage our exposure to fluctuations in foreign exchange rates that arise primarily from our foreign currency-denominated receivables and payables.

Generally, we do not designate foreign currency forward contracts as hedges for accounting purposes, and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into forward contracts only as an economic hedge, any gain or loss on the underlying foreign-denominated balance would be offset by the loss or gain on the forward contract. Gains and losses on forward contracts and foreign denominated receivables and payables are included in other income (expense), net.

As of March 31, 2012 and September 30, 2011, we had outstanding forward contracts with notional amounts equivalent to the following:

Currency Hedged	March 31, 2012		September 30, 2011
	(in thousands)
Canadian Dollar / U.S. Dollar	$	64,274	$	92,748
Euro / U.S. Dollar	38,888		65,773
Canadian Dollar / Euro	4,781		—
Chinese Renminbi / U.S. Dollar	5,480		19,973
Japanese Yen / U.S. Dollar	22,150		13,676
Swiss Franc / U.S. Dollar	9,167		9,419
British Pound / Euro	5,706		3,993
All other	10,365		7,350
Total	$	160,811	$	212,932

The accompanying consolidated balance sheets as of March 31, 2012 and September 30, 2011 include a net asset of $0.2 million and $5.5 million, respectively, in other current assets related to the fair value of our forward contracts.

Net gains and losses on foreign currency exposures, including realized and unrealized gains and losses on forward contracts, included in foreign currency net losses, were net losses of $2.4 million and $4.6 million for the three and six months ended March 31, 2012, respectively, and $1.1 million and $3.3 million for the three and six months ended April 2, 2011, respectively. Excluding the underlying foreign currency exposure being hedged, net realized and unrealized gains and losses on forward contracts included in foreign currency net losses, were net losses of $1.7 million and $2.4 million for the three and six months ended March 31, 2012, respectively, and net losses of $6.5 million and $5.2 million for the three and six months ended April 2, 2011, respectively.