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DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
 3 Months Ended
Mar. 31, 2016
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES  
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

6.DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

 

The Company is exposed to foreign currency exchange rate risks related primarily to its foreign business operations. During the three-months ended March 31, 2016 and the year ended December 31, 2015, the Company entered into forward currency exchange contracts with financial institutions to create an economic hedge to specifically manage a portion of the foreign exchange risk exposure associated with certain consolidated subsidiaries’ non-functional currency denominated assets and liabilities. All foreign currency exchange contracts of the Company that were outstanding as of March 31, 2016 have terms of one month or less. The Company does not enter into forward currency exchange contracts for speculation or trading purposes.

 

The Company has not designated its foreign currency exchange contracts as hedge transactions under ASC 815. Therefore, gains and losses on the Company’s foreign currency exchange contracts are recognized in interest income and other (expense), net, in the condensed consolidated statements of income, and are largely offset by the changes in the fair value of the underlying economically hedged item.

 

The notional amount and fair value of all outstanding foreign currency derivative instruments in the condensed consolidated balance sheets consist of the following at:

 

March 31, 2016

Derivatives not designated as
hedging instruments under
FASB ASC 815-20

 

Notional
Amount

 

Fair
Value

 

Balance Sheet Location

Assets:

 

 

 

 

 

 

Foreign currency exchange contracts:

 

 

 

 

 

 

Receive EUR/pay USD

 

  $
21,945

 

  $
157

 

Accounts receivable, net

Receive SGD/pay USD

 
9,606

 
38

 

Accounts receivable, net

Receive RUB/pay USD

 
1,374

 
24

 

Accounts receivable, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Foreign currency exchange contracts:

 

 

 

 

 

 

Receive USD/pay GBP

 

  $
17,380

 

  $
(12)

 

Accrued liabilities

Receive USD/pay AUD

 
17,588

 
(104)

 

Accrued liabilities

Receive USD/pay CAD

 
3,823

 
(28)

 

Accrued liabilities

Receive USD/pay MXN

 
6,798

 
(24)

 

Accrued liabilities

Receive USD/pay ZAR

 
11,655

 
(335)

 

Accrued liabilities

Receive USD/pay HUF

 
1,085

 
(6)

 

Accrued liabilities

Receive USD/pay SEK

 
1,612

 
(15)

 

Accrued liabilities

Receive USD/pay BRL

 
2,722

 
(38)

 

Accrued liabilities

Receive USD/pay CLP

 
2,650

 
(46)

 

Accrued liabilities

Receive USD/pay COP

 
1,379

 
(28)

 

Accrued liabilities

 

December 31, 2015

Derivatives not designated as
hedging instruments under
FASB ASC 815-20

 

Notional
Amount

 

Fair
Value

 

Balance Sheet Location

Assets:

 

 

 

 

 

 

Foreign currency exchange contracts:

 

 

 

 

 

 

Receive USD/pay GBP

 

  $
18,146

 

  $
168

 

Accounts receivable, net

Receive USD/pay ZAR

 
17,411

 
144

 

Accounts receivable, net

Receive USD/pay RUB

 
2,173

 
9

 

Accounts receivable, net

Receive USD/pay BRL

 
2,478

 
49

 

Accounts receivable, net

Receive USD/pay COP

 
1,351

 
1

 

Accounts receivable, net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Foreign currency exchange contracts:

 

 

 

 

 

 

Receive EUR/pay USD

 

  $
39,578

 

  $
(429)

 

Accrued liabilities

Receive USD/pay AUD

 
14,040

 
(82)

 

Accrued liabilities

Receive USD/pay CAD

 
2,804

 
(15)

 

Accrued liabilities

Receive USD/pay JPY

 
2,495

 
(2)

 

Accrued liabilities

Receive USD/pay MXN

 
8,122

 
(15)

 

Accrued liabilities

Receive SGD/pay USD

 
3,837

 
(30)

 

Accrued liabilities

Receive USD/pay NZD

 
1,978

 
(3)

 

Accrued liabilities

Receive USD/pay CLP

 
3,519

 
(12)

 

Accrued liabilities

 

 

The net gains (losses) on derivative instruments in the condensed consolidated statements of income were as follows:

 

 

 

 

 

Amount of gain (loss)
recognized in income on
derivatives

 

 

 

 

Three-months ended

Derivatives not designated as
hedging instruments under
FASB ASC 815-20

 

Location of gain
recognized in income on
derivatives

 

March 31,
2016

 

March 31,
2015

Foreign currency exchange contracts

 

Interest and other income, net

 

  $
317

 

  $
(1,856)