Derivative Financial Instruments

6 Months Ended

Mar. 31, 2014

Derivative Financial Instruments

2. Derivative Financial Instruments

At March 31, 2014, the Company’s Canadian subsidiary had $40.1 million of Canadian dollar denominated intercompany accounts payable owed to the Company’s U.S. subsidiaries. In order to mitigate its exposure to movements in foreign currency rates between the U.S. dollar and Canadian dollar, the Company routinely enters into foreign currency forward contracts to hedge a portion of its exposure to changes in the value of the Canadian dollar. At March 31, 2014, the Company was a party to a $32.0 million foreign currency forward contract. This contract reduces the impact on cash flows from movements in the Canadian dollar/U.S. dollar currency exchange rate. At March 31, 2014, the Company had accrued unrealized foreign exchange losses of $0.3 million under this contract.

The following table summarizes the gross fair value of all derivative instruments, which are not designated as hedging instruments and their location in the consolidated balance sheets (in thousands):

Derivative Instrument	Location	March 31, 2014		September 30, 2013
Foreign Currency Exchange Contracts	Accrued Expenses	$	254	$	351

The following table summarizes the impact of the Company’s derivatives on the consolidated statements of operations for the three and six month periods ended March 31, 2014 and 2013 (in thousands):

	Location of (Loss)Gain on DerivativeInstrument	Three Months Ended March 31				Six Months Ended March 31
Derivative Instrument		2014		2013		2014		2013
Foreign Currency Exchange Contracts	Other Income (Expense)	$	1,255	$         (58	)		$      2,117		$       155