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Derivative Instruments and Risk Management
 6 Months Ended
Jun. 30, 2013
Derivative Instruments And Hedging Activities Disclosure [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 interest rate, 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:

 

     June 30, 2013      December 31, 2012  

(in millions)

    Carrying
Amount		      Fair
Value		      Carrying
Amount		      Fair
Value		  

Notional quantity—275 tonnes

          $ 0.1       $ 0.1   

Notional quantity—25 tonnes

    $ 0.0       $ 0.0         

 

We enter into various foreign currency forward exchange contracts to minimize currency exchange rate 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 first six months of 2013 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)    $   1.0   
     

 

 

  

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