DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 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 is primarily exposed to fluctuations in the British pound, Euro, Australian dollar and Indian rupee relative to the U.S. dollar.

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.

The Company is in the process of reassessing its hedging strategy and has not entered into any forward contracts since February 2014. As of September 30, 2014 and December 31, 2013, the Company did not have any forward contracts outstanding.

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)	2014		2013		2014		2013
Euro	€	—	€	28,500	€	21,900	€	61,000
British pound	£	—	£	26,000	£	26,500	£	59,500
Australian dollar	A$	—	A$	15,500	A$	12,900	A$	15,500
Indian rupee	Rs	—	Rs	460,000	Rs	204,000	Rs	460,000

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 September 30,				Nine Months Ended September 30,
(in thousands)	2014		2013		2014		2013
(Loss) included in other income (expense), net	$	—	$	(1,173)	$	(532)	$	(430)