Derivative Financial Instruments

6 Months Ended

Jun. 30, 2012

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

Note 8 – Derivative Financial Instruments

We are exposed to market risk from changes in foreign currency exchange rates, short term interest rates and price fluctuations of certain material commodities such as copper. Foreign currency exchange risks are attributable to sales to foreign customers not denominated in the seller’s functional currency, foreign plant operations, intercompany indebtedness and purchases from foreign suppliers and include exposures to the European Euro, Japanese Yen, Canadian Dollar, Hungarian Forint, Korean Won and Mexican Peso. The Company regularly enters into derivative contracts with the objective of managing its financial and operational exposure arising from this risk by offsetting gains and losses on the underlying exposures with gains and losses on the financial instruments used to hedge them. We do not enter into derivative financial instruments for speculative or trading purposes. Our hedging relationships are formally documented at the inception of the hedge, and hedges must be highly effective in offsetting changes to future cash flows on hedged transactions both at the inception of a hedge and on an ongoing basis to be designated for hedge accounting treatment. We record the ineffective portion of hedging instruments, if any, to other income (expense) in the consolidated condensed statements of operations.

The Company uses a market approach to value derivative instruments, analyzing observable benchmark rates at commonly quoted intervals for the instrument’s full term. Information related to the recurring fair value measurement of derivative instruments, including W.E.T.’s currency related interest rate swap (“CRS”), in our consolidated balance sheet as of June 30, 2012 is as follows:

			Asset Derivatives			Liability Derivatives				Net Asset/ (Liabilities)
	Hedge Designation	Fair Value Hierarchy	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
CRS	Not a hedge	Level 2				Current liabilities	$	(2,594	)
						Non current liabilities		(14,968	)
Total CRS		Level 2					$	(17,562	)	$	(17,562	)
Foreign currency derivatives	Not a hedge	Level 2	Current assets	$	1,493	Current liabilities	$	(965	)	$	528
			Non current assets		6,730					$	6,730
Total Foreign currency derivatives		Level 2		$	8,223		$	(965	)	$	7,258
Interest rate swap derivatives	Cash flow hedge	Level 2				Current liabilities	$	(236	)	$	(236	)

Information relate to the effect of derivative instruments on our consolidated income statements is as follows:

	Location	Three Months Ended June 30, 2012			Six Months Ended June 30, 2012
Foreign currency derivatives	Revaluation of derivatives	$	(1,565	)	$	(478	)
	Foreign currency gain (loss)		(226	)		671
Total foreign currency derivatives		$	(1,791	)	$	193
CRS	Revaluation of derivatives	$	123		$	270
Commodity derivatives	Revaluation of derivatives	$	19		$	145
Interest Rate Swap	Interest Expense	$	(14	)	$	(42	)
	Other Comprehensive Income		3			(30	)

	Location	Three Months Ended June 30, 2011			Six Months Ended June 30, 2011
Foreign currency derivatives	Cost of sales	$	(18	)	$	(15	)
	Revaluation of derivatives	$	1,296		$	1,296
	Foreign currency gain (loss)		353			353
Total foreign currency derivatives		$	1,631		$	1,634
CRS	Revaluation of derivatives	$	(5,311	)	$	(5,311	)
Commodity derivatives	Revaluation of derivatives	$	136		$	136
Series C Convertible Preferred Stock embedded derivatives	Revaluation of derivatives	$	2,610		$	2,610

We did not incur any hedge ineffectiveness during the six months ended June 30, 2012 and 2011. We recorded an expense of $94 from interest payments on interest rate swap agreements designated as hedging instruments within interest expense during the six months ended June 30, 2012.