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Derivative Instruments And Risk Management
 3 Months Ended
Mar. 31, 2012
Derivative Instruments And Risk Management [Abstract]  
Derivative Instruments And Risk Management

NOTE 11—DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

The Company has limited involvement with derivative instruments and does not trade them. The Company does use derivatives to manage certain foreign currency exchange rate and raw material cost exposures.

The Company has hedged the cost of certain raw materials with commodity swaps which are summarized as follows:

 

     March 31, 2012      December 31, 2011  

(in millions)

    Carrying
Amount		      Fair
Value		      Carrying
Amount		      Fair
Value		  

Notional quantity—2,075 tonnes

          $ 0.2       $ 0.2   

Notional quantity—700 tonnes

    $ 0.1       $ 0.1         

The impact on the income statement for the first three months of 2012 is summarized below:

 

(in millions)

    Gain/(Loss)
Recognized in
OCI on
Derivative		     

Location of Gain/(Loss)

Reclassified from

Accumulated OCI into

Income

    Amount of Gain/(Loss)
Reclassified from
Accumulated OCI  into
Income		  

Commodity contracts

    $ 0.1       Cost of goods sold    $ 0.3   

Taxation

      0.0       Income taxes      (0.1 ) 
  

 

 

        

 

 

  
   $ 0.1          $ 0.2   
  

 

 

        

 

 

  

We enter into various foreign currency forward exchange contracts to minimize currency exposure from expected future cash flows. The contracts have maturity dates of up to four years at the date of inception. These foreign currency forward exchange contracts have not been designated as hedging instruments, and their impact on the income statement for the three months ended March 31, 2012 is summarized below:

 

(in millions)

   

Location of Gain/(Loss)
Recognized in Income

    Amount of Gain/(Loss)
Recognized in Income		  

Foreign currency forward exchange contracts

    Other income/(expense)    $   (0.1)   
     

 

 

  

The Company sells a range of Fuel Specialties, Active Chemicals and Octane Additives to major oil refineries and chemical companies throughout the world. Credit limits, ongoing credit evaluation and account monitoring procedures are used to minimize bad debt risk. Collateral is not generally required.