DERIVATIVE INSTRUMENTS

6 Months Ended

Jun. 30, 2014

DERIVATIVE INSTRUMENTS

4.    DERIVATIVE INSTRUMENTS

The Company has historically used 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.

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 income (expense), net, in its consolidated statement of operations. These forward contracts have terms of 90 days or less.

As of June 30, 2014 and December 31, 2013, the Company did not have any forward contracts outstanding.

During the second quarter of 2014, the Company did not enter into any forward contracts. The Company is in the process of reassessing its hedging strategy.

During the first six months of 2014 and 2013, the Company entered into forward contracts with notional values as follows:

	Notional Amount
	Three Months Ended June 30,				Six Months Ended June 30,
Foreign currency (in thousands)	2014		2013		2014		2013
Euro	€	—	€	16,500	€	21,900	€	32,500
British pound	£	—	£	14,500	£	26,500	£	33,500
Australian dollar	A$	—	A$	—	A$	12,900	A$	—
Indian rupee	Rs	—	Rs	—	Rs	204,000	Rs	—

During the first six months of 2014 and 2013, the total change in the fair value of the Company’s forward contracts recorded in other income (expense), net, was as follows:

	Change in Fair Value in USD
	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2014		2013		2014		2013
(Loss) gain included in other income (expense), net	$	—	$	(95)	$	(532)	$	743