4. DERIVATIVE INSTRUMENTS

The Company has historically used foreign currency forward contracts (“forward contracts”) to hedge its exposure to fluctuations in foreign currency exchange rates associated with its foreign currency denominated cash, accounts receivable, and intercompany receivables and payables held primarily by the U.S. parent company and its United Kingdom (“U.K.”) subsidiary.

The Company is primarily exposed to foreign currency exchange rate fluctuations in the Euro relative to the U.S. dollar for the U.S. parent and in the U.S. dollar, the Euro, and the Australian dollar relative to the British pound for the Company’s U.K. subsidiary. The forward contracts are not designated as hedging instruments. As a result, the Company records the fair value of these contracts at the end of each reporting period in the accompanying unaudited condensed consolidated balance sheets 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 the accompanying unaudited condensed consolidated statements of operations. The cash flows related to these forward contracts are classified as operating activities in the accompanying unaudited condensed consolidated statements of cash flows. The Company does not enter into any forward contracts for trading or speculative purposes.

In May 2017, the Company discontinued its forward contracts program, however, it will continue to periodically evaluate its foreign exchange exposures and may re-initiate this program if it is deemed necessary. At December 31, 2016, the total notional value of the Company’s outstanding forward contracts was $128.4 million.

The fair value of the Company’s outstanding forward contracts was as follows:


	December 31, 2016
(in thousands)	Recorded In:	Fair Value
Asset Derivatives
Foreign currency forward contracts	Other current assets	$	628
Liability Derivatives
Foreign currency forward contracts	Accrued expenses	$	883

As of June 30, 2017, the Company did not have any forward contracts outstanding.

The Company had forward contracts outstanding with total notional values as of June 30, 2016 as follows:


(in thousands)
Euro	€	24,735
British pound	£	7,885
Australian dollar	A$	25,830
Indian rupee	Rs	353,500
United States dollar	$	93,460

The income statement impact of the Company’s outstanding forward contracts and foreign currency transactions was as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2017			2016			2017			2016
Gain (loss) from the change in the fair value of forward contracts included in other income (expense), net	$	565		$	(1,421	)	$	286		$	(3,718	)
Foreign currency transaction (loss) gain from the remeasurement of foreign currency assets and liabilities	$	(917	)	$	306		$	(241	)	$	1,682

	$	(352	)	$	(1,115	)	$	45		$	(2,036	)