Derivative Financial Instruments (Notes)

9 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

Derivative Financial Instruments

Hedges of Interest Rate Risk

We enter into interest rate swap contracts to manage differences in the amount of our known or expected cash payments related to our debt. Our objective in using interest rate derivatives is to add stability to interest expense and to manage our exposure to interest rate movements. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the derivative agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. If a derivative is deemed to be ineffective, the ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the three and nine months ended March 31, 2014, we did not hold any interest rate derivative instruments that were determined to be ineffective.

Amounts reported in accumulated other comprehensive income (loss) related to interest rate swap contracts will be reclassified to interest expense as interest payments are accrued or made on our variable-rate debt. Assuming these derivative instruments continue to qualify for hedge accounting, as of March 31, 2014, we estimate that $539 will be reclassified from accumulated other comprehensive income (loss) to interest expense during the twelve months ending March 31, 2015. As of March 31, 2014, we had 8 outstanding interest rate swap contracts indexed to one-month LIBOR. These instruments were designated as cash flow hedges of interest rate risk and have varying maturity dates from 2014 - 2017. As the start date of certain contracts has not yet commenced, the notional amount of our outstanding contracts is in excess of the variable-rate debt being hedged as of the balance sheet date.

Interest rate swap contracts outstanding:	Notional Amounts
Contracts accruing interest as of March 31, 2014	$	165,000
Contracts with a future start date (1)	65,000
Total	$	230,000

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(1) These contracts will replace a portion of our current contracts when they expire.

Hedges of Currency Risk

We execute currency forward contracts in order to mitigate our exposure to fluctuations in various currencies against our reporting currency, the U.S. dollar. We use currency derivatives, specifically currency forward contracts, to manage this exposure. During the nine months ended March 31, 2014, we had both currency forward contract activity for which we elected hedge accounting and activity for which we did not elect hedge accounting. In evaluating our currency hedging program and ability to achieve hedge accounting in light of certain changes in our legal entity cash flows, we considered the benefits of hedge accounting relative to the additional economic cost of trade execution and administrative burden. Based on this analysis, we decided to not seek hedge accounting for our currency forward contracts outstanding as of March 31, 2014, but we may elect to apply hedge accounting in future scenarios. As a result, during the three and nine months ended March 31, 2014, we have experienced increased volatility within other income (expense), net in our consolidated statements of operations from unrealized gains and losses on the mark-to-market of outstanding currency forward contracts. We expect this volatility to continue in future periods for contracts for which we do not apply hedge accounting.

The effective portion of changes in the fair value of derivatives designated and qualifying as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period in which the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings as a component of other income (expense), net. As of March 31, 2014, we have no outstanding currency forward contracts that qualify for hedge accounting and, as such, there are no current balances to be reclassified into earnings over the next twelve months.

    As of March 31, 2014, we had the following outstanding currency forward contracts that were not designated for hedge accounting and were used to hedge fluctuations in the U.S. Dollar value of forecasted transactions denominated in Canadian Dollar, Danish Krone, The Euro, Great British Pound, Indian Rupee, New Zealand Dollar, Norwegian Krone, Singapore Dollar, Swedish Krona, and Swiss Franc:

Notional Amount	Effective Date	Maturity Date	Number of Instruments	Index	Hedge Designation
$138,531	July 2013 through March 2014	Various through March 2015	157	Various	Non-designated

Financial Instrument Presentation

The table below presents the fair value of our derivative financial instruments as well as their classification on the balance sheet as of March 31, 2014 and June 30, 2013:

	March 31, 2014
	Asset Derivatives								Liability Derivatives
Derivatives designated as hedging instruments	Balance Sheet Line Item	Gross amounts of recognized assets		Gross amount offset in consolidated balance sheet			Net amount		Balance Sheet Line Item	Gross amounts of recognized liabilities			Gross amount offset in consolidated balance sheet		Net amount
Interest rate swaps	Other non-current assets	$	209	$	(85	)	$	124	Other current liabilities/other liabilities	$	(189	)	$	—	$	(189	)
Total derivatives designated as hedging instruments		$	209	$	(85	)	$	124		$	(189	)	$	—	$	(189	)
Derivatives not designated as hedging instruments
Currency forward contracts	Other current assets	$	558	$	(157	)	$	401	Other current liabilities	$	(3,213	)	$	157	$	(3,056	)
Total derivatives not designated as hedging instruments		$	558	$	(157	)	$	401		$	(3,213	)	$	157	$	(3,056	)

	June 30, 2013
	Asset Derivatives								Liability Derivatives
Derivatives designated as hedging instruments	Balance Sheet Line Item	Gross amounts of recognized assets		Gross amount offset in consolidated balance sheet			Net amount		Balance Sheet Line Item	Gross amounts of recognized liabilities			Gross amount offset in consolidated balance sheet		Net amount
Interest rate swaps	Other non-current assets	$	400	$	(56	)	$	344	Other current liabilities/other liabilities	$	(81	)	$	11	$	(70	)
Currency forward contracts	Other current assets	83		(13		)	70		Other current liabilities	(208		)	5		(203		)
Total derivatives designated as hedging instruments		$	483	$	(69	)	$	414		$	(289	)	$	16	$	(273	)
Derivatives not designated as hedging instruments
Currency forward contracts	Other current assets	$	—	$	—		$	—	Other current liabilities	$	—		$	—	$	—
Total derivatives not designated as hedging instruments		$	—	$	—		$	—		$	—		$	—	$	—

The following table presents the effect of our derivative financial instruments designated as hedging instruments and their classification within comprehensive income for the three and nine months ended March 31, 2014 and 2013:

Derivatives in Hedging Relationships	Amount of Gain (Loss) Recognized in Comprehensive Income on Derivatives (Effective Portion)
	Three Months Ended March 31,						Nine Months Ended March 31,
	2014			2013			2014			2013
Currency contracts that hedge revenue	$	—		$	1,058		$	(107	)	$	407
Currency contracts that hedge cost of revenue	—			(137		)	59			(55		)
Currency contracts that hedge technology and development expense	—			(214		)	70			(4		)
Currency contracts that hedge general and administrative expense	—			(39		)	12			(24		)
Interest Rate Swaps	(132		)	(90		)	(456		)	(367		)
Total loss recognized in comprehensive income during the period	$	(132	)	$	578		$	(422	)	$	(43	)

The following table presents reclassifications out of accumulated other comprehensive income (loss) for the three and nine months ended March 31, 2014 and 2013:

Details about Accumulated Other Comprehensive Income (Loss) Components	Amount Reclassified from Accumulated Other Comprehensive Income (Loss) to Net Income Gain/(Loss)												Affected line item in the Statement of Operations
	Three Months Ended March 31,						Nine Months Ended March 31,
	2014			2013			2014			2013
Currency contracts that hedge revenue	$	—		$	11		$	(120	)	$	8		Revenue
Currency contracts that hedge cost of revenue	—			22			(112		)	11			Cost of revenue
Currency contracts that hedge technology and development expense	—			(30		)	122			(39		)	Technology and development expense
Currency contracts that hedge general and administrative expense	—			(4		)	11			(6		)	General and administrative expense
Interest Rate Swaps	(78		)	(48		)	(232		)	(129		)	Interest expense
Total before income tax	(78		)	(49		)	(331		)	(155		)	Income (loss) before income taxes and loss in equity interests
Income tax benefit	16			10			47			10			Income tax provision
Total	$	(62	)	$	(39	)	$	(284	)	$	(145	)

The following table presents the mark-to-market and settlement effect of our derivative financial instruments for contracts that we did not designate as hedging instruments, as well as those which have been de-designated and no longer qualify as hedging instruments, recorded within the statement of operations:

Derivatives not classified as hedging instruments under ASC 815	Amount of Gain (Loss) Recognized in Income												Location of Gain (Loss) Recognized in Income
	Three Months Ended March 31,						Nine Months Ended March 31,
	2014			2013			2014			2013
Currency forward contracts	$	(1,086	)	$	(164	)	$	(7,526	)	$	(112	)	Other income (expense), net