Derivative Financial Instruments

12 Months Ended

Sep. 30, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

3. Derivative Financial Instruments

At September 30, 2016 and September 30, 2015, the Company’s Canadian subsidiary had CAN$27.1 million and CAN$28.1 million, respectively, of Canadian dollar denominated intercompany accounts payable owed to one of 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.  Approximately CAN$2.9 million of these Canadian dollar denominated intercompany accounts payable are considered by management to be of a short-term nature whereby the appreciation or devaluation of the Canadian dollar against the U.S. dollar will result in a gain or loss, respectively, to the consolidated statements of operations.  The Company considers approximately CAN$24.2 million Canadian dollar denominated intercompany accounts payable to be of a long-term nature and whereby settlement is not planned or anticipated in the foreseeable future; therefore, any resulting foreign exchange gains and losses are reported in the consolidated balance sheets as a component of other comprehensive income in accordance with ASC 830 “Foreign Currency Matters”.  In September 2016, the Company entered into a CAN$3.0 million 90-day hedge contract with a United States bank to hedge its short-term Canadian dollar foreign exchange rate exposure.  This contract reduces the impact on cash flows from movements in the Canadian dollar/U.S. dollar currency exchange rate, but has not been designated as a hedge for accounting purposes.  At September 30, 2016, the fair value of this contract was an asset of $5,000.

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	September 30, 2016		September 30, 2015
Foreign Currency Forward Contracts	Prepaid Expenses and Other Current Assets	$	5	$	—
Foreign Currency Forward Contracts	Accrued Expenses and Other Current Liabilities		—		18
		$	5	$	18

The following table summarizes the impact of the Company’s derivatives on the consolidated statements of operations for the fiscal years ended September 30, 2016, 2015 and 2014 (in thousands):

	Location of Gain (Loss) on	FOR THE YEAR ENDED SEPTEMBER 30,
Derivative Instrument	Derivative Instrument	2016		2015		2014
Foreign Currency Forward Contracts	Other Income (Expense)	$	50	$	2,698	$	2,439
		$	50	$	2,698	$	2,439

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