Hedging

The Company maintains a hedging program intended to mitigate the effect of changes in foreign exchange rates for a portion of the Company’s forecasted product revenues denominated in certain foreign currencies. The program includes foreign currency forward contracts that are designated as cash flow hedges under GAAP having contractual durations from one to eighteen months. To date, the existence of operational sites in countries outside the United States has limited the degree to which the Company has sought to hedge its revenues in certain foreign currencies.

The Company formally documents the relationship between foreign currency forward contracts (hedging instruments) and forecasted product revenues (hedged items), as well as the Company's risk management objective and strategy for undertaking various hedging activities, which includes matching all foreign currency forward contracts that are designated as cash flow hedges to forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the foreign currency forward contracts are highly effective in offsetting changes in cash flows of hedged items on a prospective and retrospective basis. If the Company determines that a (i) foreign currency forward contract is not highly effective as a cash flow hedge, (ii) foreign currency forward contract has ceased to be a highly effective hedge or (iii) forecasted transaction is no longer probable of occurring, the Company would discontinue hedge accounting treatment prospectively. The Company measures effectiveness based on the change in fair value of the forward contracts and the fair value of the hypothetical foreign currency forward contracts with terms that match the critical terms of the risk being hedged. As of September 30, 2015, all hedges were determined to be highly effective and the Company has not recorded any ineffectiveness related to the hedging program.

The following table summarizes the notional amount of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges:



	As of September 30, 2015		As of December 31, 2014
Foreign Currency	(in thousands)
Euro	$	106,620	$	20,209
British pound sterling	78,861		13,515
Australian dollar	25,414		—
Total foreign currency forward contracts	$	210,895	$	33,724

The following table summarizes the fair value of the Company's outstanding foreign currency forward contracts designated as cash flow hedges under GAAP included on the Company's condensed consolidated balance sheets:



As of September 30, 2015
Assets			Liabilities
Classification	Fair Value		Classification	Fair Value
(in thousands)
Prepaid and other current assets	$	3,508	Other liabilities, current portion	$	(1,552	)
Other assets	651		Other liabilities, excluding current portion	(24		)
Total assets	$	4,159	Total liabilities	$	(1,576	)



As of December 31, 2014
Assets			Liabilities
Classification	Fair Value		Classification	Fair Value
(in thousands)
Prepaid and other current assets	$	2,011	Other liabilities, current portion	$	—
Total assets	$	2,011	Total liabilities	$	—

The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company's condensed consolidated balance sheets:



	As of September 30, 2015
	Gross Amounts Recognized			Gross Amounts Offset		Gross Amount Presented			Gross Amount Not Offset			Legal Offset
Foreign currency forward contracts	(in thousands)
Total assets	$	4,159		$	—	$	4,159		$	(1,576	)	$	2,583
Total liabilities	$	(1,576	)	$	—	$	(1,576	)	$	1,576		$	—



	As of December 31, 2014
	Gross Amounts Recognized		Gross Amounts Offset		Gross Amount Presented		Gross Amount Not Offset		Legal Offset
Foreign currency forward contracts	(in thousands)
Total assets	$	2,011	$	—	$	2,011	$	—	$	2,011