The Company’s outstanding foreign currency forward exchange contracts used to hedge anticipated net income are marked to market with unrealized gains and losses recognized as incurred in results of operations. The purpose of the Company’s foreign exchange exposure management policy and practices is to attempt to minimize the impact of exchange rate fluctuations on the value of the foreign currency denominated assets and liabilities being hedged. Substantially all forward foreign exchange contracts entered into by the Company have maturities of 360 days or less. There are no significant unrealized gains or losses on these contracts at December 31, 1999 and 1998. At December 31, 1999 and 1998, the Company had approximately $87.0 million and $93.9 million of foreign currency forward exchange contracts outstanding, respectively.

The table below summarizes by currency the contractual amounts of the Company’s foreign currency forward exchange contracts at December 31, 1999 and December 31, 1998. The information is provided in U.S. dollar equivalents and presents the notional amount (contract amount), the unrealized gain (loss) and fair value. Fair value represents the difference in value of the contracts at the spot rate at December 31, 1999 and the forward rate, plus the unamortized premium or discount. All contracts mature within twelve months.

Forward Contracts

While the contract amounts provide one measure of the volume of these transactions, they do not represent the amount of the Company’s exposure to credit risk. The amount of the Company’s credit risk exposure (arising from the possible inabilities of counterparties to meet the terms of their contracts) is generally limited to the amounts, if any, by which the counterparties’ obligations exceed the obligations of the Company as these contracts can be settled on a net basis at the option of the Company. The Company controls credit risk through credit approvals, limits and monitoring procedures.

As of December 31, 1999 and 1998, other than foreign currency forward exchange contracts discussed immediately above, the Company does not currently invest in or hold any other derivative financial instruments.