Foreign Currency Exchange Contracts and Hedging

6 Months Ended

Jun. 30, 2013

Foreign Currency Exchange Contracts and Hedging

Foreign Currency Exchange Contracts and Hedging

(6) Foreign Currency Exchange Contracts and Hedging

The Company had foreign currency forward contracts designated as cash-flow hedges with notional amounts totaling approximately $63,000 as of June 30, 2013, held by two counterparties.  At December 31, 2012, the Company had non-designated derivative contracts with notional amounts totaling approximately $19,000, which were comprised of offsetting contracts with the same counterparty and expired in March 2013.  At June 30, 2013, the outstanding contracts were expected to mature over the next six months.

The nonperformance risk of the Company and the counterparties did not have a material impact on the fair value of the derivatives.  During the three and six months ended June 30, 2013, the ineffective portion relating to these hedges was immaterial and the hedges remained effective as of June 30, 2013.  The effective portion of the gain or loss on the derivative is reported in other comprehensive (loss) income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.  As of June 30, 2013, the total amount in accumulated other comprehensive loss (see note 3) was expected to be reclassified into income within the next nine months.

The following table summarizes the effect of foreign exchange contracts designated as cash flow hedging relationships on the condensed consolidated financial statements:

	Amount of Gain (Loss)			Location of Gain (Loss)	Reclassified from
For the Six	Recognized in OCI			Reclassified from	AOCI into		Location of Amount	Gain (Loss) from
Months Ended	on Derivative			AOCI into Income	Income (Effective		Excluded from	Amount Excluded from
June 30,	(Effective Portion)			(Effective Portion)	Portion)		Effectiveness Testing	Effectiveness Testing
2013	$	2,154		Net Sales	$	—	SG&A	$	(5	)
2012	$	(111	)	Net Sales	$	382	SG&A	$	10

All of the Company’s derivatives were designated as hedging instruments as of June 30, 2013.