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Financial Instruments
 9 Months Ended
Sep. 30, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS
As more fully described below, the Company enters into certain interest rate swap agreements in order to manage its exposure to changes in interest rates. The amount of the Company’s fixed obligation interest payments may change based upon the expiration dates of its interest rate swap agreements and the level and composition of its debt. The Company also enters into certain foreign currency forward contracts to limit the Company’s exposure to currency fluctuations on the respective hedged items. The Company does not use derivative financial instruments for trading purposes. For additional disclosures on the fair value of financial instruments, also see Note 4 to the interim consolidated financial statements.
Cash Flow Hedges
The Company has an interest rate swap agreement, designated as a cash flow hedge. The agreement changes the floating rate LIBOR-based interest payments associated with $100 million in borrowings under the Company’s credit agreement to a fixed obligation of 3.24% beginning October 2010 ("Interest rate swaps - October 2010").
In June 2013, the Company entered into a forward starting interest rate swap agreement, designated as a cash flow hedge. The agreement which will change the floating rate LIBOR-based interest payments associated with $50 million in forecasted borrowings under the Company's credit agreement to a fixed obligation of 2.52% beginning in October 2015 ("Interest rate swaps - October 2015").
In July 2012, the Company began entering into foreign currency forward contracts, designated as cash flow hedges, to hedge certain forecasted intercompany sales denominated in euro with its Swiss-based businesses. The notional amount of foreign currency forward contracts outstanding at September 30, 2014 and December 31, 2013 was $83.6 million and $78.2 million, respectively.
Through September 30, 2014 no hedge ineffectiveness has occurred in relation to these cash flow hedges.
The fair value of the cash flow hedges as of September 30, 2014 and December 31, 2013 are recorded gross in the consolidated balance sheet as follows:
 
 
 
 
Fair Value at
 
 
Balance Sheet Location
 
September 30, 2014
 
December 31, 2013
Derivative designated as cash flow hedging instruments:
 
 
 
 
 
 
Interest rate swaps - October 2010
 
Non-current (liabilities)/assets
 
$
(3,218
)
 
$
(5,312
)
Interest rate swaps - October 2015
 
Non-current (liabilities)/assets
 
(314
)
 
1,269

 
 
 
 
 
 
 
Foreign currency forward contracts:
 
Other current assets
 
607

 
268

 
 
Accrued and other liabilities
 
—

 
(103
)
The effects of the derivative instruments designated as cash flow hedges on the consolidated statements of operations for the three months ended September 30, 2014 and 2013 are as follows:
 
 
Before Tax
 
After Tax
 
 
2014
 
2013
 
2014
 
2013
Recognized in other comprehensive income (loss):
 
 
 
 
 
 
 
 
Interest rate swaps - October 2010
 
$
—

 
$
(281
)
 
$
—

 
$
(173
)
Interest rate swaps - October 2015
 
—

 
(198
)
 
—

 
(122
)
Foreign currency forward contracts
 
493

 
(229
)
 
392

 
(182
)
 
 
Location of Derivative Gain (Loss) in Earnings
 
Before Tax
 
After Tax
 
 
 
2014
 
2013
 
2014
 
2013
Effective portion of gain (loss) reclassified into earnings:
 
 
 
 
 
 
 
 
 
 
Interest rate swaps - October 2010
 
Interest expense
 
$
(787
)
 
$
(777
)
 
$
(484
)
 
$
(478
)
Foreign currency forward contracts
 
Cost of sales
 
247

 
(486
)
 
197

 
(386
)
The effects of the derivative instruments designated as cash flow hedges on the consolidated statements of operations for the nine months ended September 30, 2014 and 2013 are as follows:
 
 
Before Tax
 
After Tax
 
 
2014
 
2013
 
2014
 
2013
Recognized in other comprehensive income (loss):
 
 
 
 
 
 
 
 
Interest rate swaps - October 2010
 
$
(239
)
 
$
(123
)
 
$
(147
)
 
$
(76
)
Interest rate swaps - October 2015
 
(1,582
)
 
717

 
(973
)
 
441

Foreign currency forward contracts
 
887

 
(1,579
)
 
705

 
(1,255
)
 
 
Location of Derivative Gain (Loss) in Earnings
 
Before Tax
 
After Tax
 
 
 
2014
 
2013
 
2014
 
2013
Effective portion of gain (loss) reclassified into earnings:
 
 
 
 
 
 
 
 
 
 
Interest rate swaps - October 2010
 
Interest expense
 
$
(2,333
)
 
$
(2,299
)
 
$
(1,435
)
 
$
(1,414
)
Foreign currency forward contracts
 
Cost of sales
 
453

 
(1,517
)
 
360

 
(1,206
)

A derivative loss of $3.0 million, $1.9 million after tax, based upon interest rates and a derivative gain of $0.6 million, $0.5 million after tax, based upon foreign currency rates at September 30, 2014, are expected to be reclassified from other comprehensive income (loss) to earnings in the next twelve months.
Other Derivatives
The Company enters into foreign currency forward contracts in order to economically hedge short-term intercompany balances largely denominated in Swiss franc and other major European currencies with its foreign businesses. In accordance with U.S. GAAP, these contracts are considered “derivatives not designated as hedging instruments.” Gains or losses on these instruments are reported in current earnings. At September 30, 2014 and December 31, 2013, these contracts had a notional value of $210.4 million and $180.3 million, respectively.

The fair value of the foreign currency forward contracts as of September 30, 2014 and December 31, 2013 are as follows:
 
 
Fair Value at
 
 
September 30, 2014
 
December 31, 2013
Balance sheet location:
 
 
 
 
Other current assets
 
$
690

 
$
719

Other current liabilities
 
(1,006
)
 
(355
)

The effects of the foreign currency forward contracts on the consolidated statements of operations for the three and nine months ended September 30, 2014 and 2013 are as follows:
 
 
2014
 
2013
Gain (loss) recognized in other charges (income), net
 
 
 
 
Three months ended
 
$
(2,048
)
 
$
1,418

Nine months ended
 
(2,983
)
 
727