Derivative Instruments

3 Months Ended

Mar. 31, 2012

Derivative Instruments and Hedges, Assets [Abstract]

Derivative Instruments

Derivative Instruments

Foreign Currency Exchange Rate Risk

The functional currency for our Finnish operating subsidiary is the U.S. dollar since a majority of its purchases and sales are denominated in U.S. dollars. Accordingly, foreign currency exchange gains and losses related to transactions of this subsidiary denominated in other currencies (principally the Euro) are included in earnings. While a majority of the subsidiary’s raw material purchases are in U.S. dollars, it has some Euro-denominated operating expenses. From time to time, we enter into foreign currency forward contracts to mitigate a portion of the earnings volatility in those Euro-denominated cash flows due to changes in the Euro/U.S. dollar exchange rate. We had Euro forward contracts with notional values that totaled 67.5 million Euros at March 31, 2012 with maturities ranging up to 9 months. As of March 31, 2012, AOCI(L) included a cumulative loss related to these contracts of $0.9 million, all of which is expected to be reclassified to earnings within the next twelve months. We had no Euro forward contracts at March 31, 2011. We designated these derivatives as cash flow hedges of the subsidiary's forecasted Euro-denominated expenses. There was no hedge ineffectiveness in the three months ended March 31, 2012 for these hedges. At March 31, 2012, we had a liability of $1.1 million recorded on the Unaudited Condensed Consolidated balance sheet in other current liabilities related to these Euro forward contracts.

Interest Rate Risk

We use interest rate swap agreements to partially reduce risks related to floating rate financing agreements that are subject to changes in the market rate of interest. Terms of the interest rate swap agreements require us to pay a fixed interest rate and receive a variable interest rate. The Company’s interest rate swap agreements and its variable rate financings are based upon the three-month LIBOR. We had interest rate swaps with notional values that totaled $199.0 million and $60.0 million at March 31, 2012 and 2011, respectively. The outstanding contracts as of March 31, 2012 had maturities ranging up to 9 months. As of March 31, 2012, AOCI(L) included a cumulative loss of $0.3 million related to these contracts, all of which is expected to be reclassified to earnings within the next twelve months. There was no hedge ineffectiveness in the three months ended March 31, 2012 or 2011 for these hedges. At March 31, 2012 and 2011, we had a liability of $0.3 million and $0.3 million, respectively, recorded on the Unaudited Condensed Consolidated balance sheet in other current liabilities related to these interest rate swaps.