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Derivative Instruments
 9 Months Ended
Sep. 30, 2013
Derivative Instruments

3.  DERIVATIVE INSTRUMENTS

The Company uses foreign currency forward contracts (“forward contracts”) to manage its exposure to changes in foreign currency denominated accounts receivable, intercompany payables and cash primarily held by the U.S. operating company. The Company has been primarily exposed to the fluctuation in the British pound and Euro relative to the U.S. dollar. More recently, the Company has experienced increased levels of exposure to the Australian dollar and Indian rupee, for which it began to use forward contracts in the third quarter of 2013.

The forward contracts utilized by the Company are not designated as hedging instruments and as a result, the Company records the fair value of these contracts at the end of each reporting period in its consolidated balance sheet as other current assets for unrealized gains and accrued expenses for unrealized losses, with any fluctuations in the value of these contracts recognized in other expense, net, in its consolidated statement of operations. These forward contracts have 90 day terms or less.

As of September 30, 2013 and December 31, 2012, the Company did not have any forward contracts outstanding.

During the third quarter and first nine months of 2013 and 2012, the Company entered into forward contracts with notional values as follows:

 

    Notional Amount  
 

 

    

 

  
    Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
Foreign currency (in thousands)   2013     2012     2013     2012  

Euro

   €      28,500        €     21,700        €     61,000          €        48,900     

British pound

   £      26,000        £     16,000        £     59,500          £        39,000     

Australian dollar

   A$      15,500        A$     —        A$     15,500          A$        —     

Indian rupee

   Rs      460,000        Rs     —        Rs     460,000          Rs        —     

During the third quarter and first nine months of 2013 and 2012, the total change in the fair value of the Company’s forward contracts recorded in other expense, net, was as follows:

 

    Change in Fair Value in USD  
 

 

 

    

 

 

  
    Three Months Ended
September 30,		     Nine Months Ended
September 30,		  
(in thousands)   2013     2012     2013     2012  

Loss included in other expense, net

   $         (1,173)       $         (926)       $         (430)       $         (1,522)