Derivative Financial Instruments

9 Months Ended

Jun. 30, 2014

Derivative Financial Instruments

3.    Derivative Financial Instruments

At June 30, 2014, the Company’s Canadian subsidiary had $34.8 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 June 30, 2014, the Company was a party to a $30.0 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 June 30, 2014, the Company had accrued unrealized foreign exchange losses of $0.5 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	June 30, 2014		September 30, 2013
Foreign Currency Exchange Contracts	Accrued Expenses	$	491	$	351

The following table summarizes the impact of the Company’s derivatives on the consolidated statements of operations for the three and nine month periods ended June 30, 2014 and 2013 (in thousands):

Derivative Instrument	Location of (Loss) Gain on Derivative Instrument	Three Months Ended June 30					Nine Months Ended June 30
		2014			2013		2014		2013
Foreign Currency Exchange Contracts	Other Income (Expense)	$	(1,003	)	$	657	$	1,114	$	812

Amounts in the above table include realized and unrealized derivative gains and losses.