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DERIVATIVES | 12 Months Ended
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Dec. 31, 2014
DERIVATIVES [ABSTRACT] |
DERIVATIVES | (9) DERIVATIVES Cash Flow Hedges The Company enters into foreign exchange and interest rate related derivatives. Foreign exchange derivatives entered into consist of forward and option contracts to reduce the Company's exposure to foreign currency exchange rate fluctuations that are associated with forecasted revenue earned in foreign locations. Interest rate derivatives consist of interest rate swaps to reduce the Company's exposure to interest rate fluctuations associated with its variable rate debt. Upon proper qualification, these contracts are designated as cash flow hedges. It is the Company's policy to only enter into derivative contracts with investment grade counterparty financial institutions, and correspondingly, the fair value of derivative assets consider, among other factors, the creditworthiness of these counterparties. Conversely, the fair value of derivative liabilities reflects the Company's creditworthiness. As of December 31, 2014, the Company had not experienced, nor did it anticipate, any issues related to derivative counterparty defaults. The following table summarizes the aggregate unrealized net gain or loss in Accumulated other comprehensive income (loss) for the years ended December 31, 2014, 2013 and 2012 (in thousands and net of tax):
|  | Year Ended December 31,
|  | 2014 |  | 2013 |  | 2012
Aggregate unrealized net gain/(loss) at beginning of year |  | $ | (8,352) |  | $ | 9,559 |  | $ | (5,852)
Add: Net gain/(loss) from change in fair value of cash flow hedges |  |  | (12,121) |  |  | (13,721) |  |  | 17,748
Less: Net (gain)/loss reclassified to earnings from effective hedges |  |  | 2,128 |  |  | (4,190) |  |  | (2,337)
Aggregate unrealized net gain/(loss) at end of year |  | $ | (18,345) |  | $ | (8,352) |  | $ | 9,559
The Company's foreign exchange cash flow hedging instruments as of December 31, 2014 and 2013 are summarized as follows (in thousands). All hedging instruments are forward contracts.
As of December 31, 2014 |  | Local Currency Notional Amount |  | U.S. Dollar Notional Amount |  |  | % Maturing in 2015 |  | Contracts Maturing Through
Canadian Dollar |  | 1,500 |  | $ | 1,441 |  |  | 100.0% |  | June 2015
Philippine Peso |  | 17,428,000 |  |  | 398,046 | (1) |  | 40.0% |  | August 2019
Mexican Peso |  | 2,532,000 |  |  | 179,089 |  |  | 29.7% |  | September 2019
New Zealand Dollar |  | 490 |  |  | 381 |  |  | 100.0% |  | July 2015
|  |  |  | $ | 578,957 |  |  |  |  |
As of December 31, 2013 |  | Local Currency Notional Amount |  | U.S. Dollar Notional Amount |  |  |  |  |
Canadian Dollar |  | 7,500 |  | $ | 7,336 |  |  |  |  |
Philippine Peso |  | 17,355,000 |  |  | 404,638 | (1) |  |  |  |
Mexican Peso |  | 2,305,500 |  |  | 166,132 |  |  |  |  |
British Pound Sterling |  | 1,200 |  |  | 1,853 | (2) |  |  |  |
New Zealand Dollars |  | 150 |  |  | 117 |  |  |  |  |
|  |  |  | $ | 580,076 |  |  |  |  |
(1) Includes contracts to purchase Philippine pesos in exchange for New Zealand dollars and Australian dollars, which are translated into equivalent U.S. dollars on December 31, 2014 and December 31, 2013. (2) Includes contracts to purchase British pound sterling in exchange for Euros, which are translated into equivalent U.S. dollars on December 31, 2013. The Company's interest rate swap arrangements as of December 31, 2014 and 2013 were as follows:
|  |  | Notional Amount |  | Variable Rate Received |  | Fixed Rate Paid |  | Contract Commencement Date |  | Contract Maturity Date
As of December 31, 2014 |  | $ | 25 million |  | 1 - month LIBOR |  |  | 2.55 | % |  | April 2012 |  | April 2016
| and 2013 |  |  | 15 million |  | 1 - month LIBOR |  |  | 3.14 | % |  | May 2012 |  | May 2017
|  |  | $ | 40 million |  |  |  |  |  |  |  |  |  |
Fair Value Hedges The Company enters into foreign exchange forward contracts to economically hedge against foreign currency exchange gains and losses on certain receivables and payables of the Company's foreign operations. Changes in the fair value of derivative instruments designated as fair value hedges are recognized in earnings in Other income (expense), net. As of December 31, 2014 and 2013, the total notional amount of the Company's forward contracts used as fair value hedges was $242.5 million and $204.5 million, respectively. Derivative Valuation and Settlements The Company's derivatives as of December 31, 2014 and 2013 were as follows (in thousands):
|  |  | December 31, 2014
Designation: |  | Designated as Hedging Instruments |  | Not Designated as Hedging Instruments
Derivative contract type: |  | Foreign Exchange |  |  | Interest Rate |  | Foreign Exchange |  | Leases
Derivative classification: |  | Cash Flow |  |  | Cash Flow |  | Fair Value |  | Embedded Derivative
Fair value and location of derivative in |  |  |  |  |  |  |  |  |  |  |  |
| the Consolidated Balance Sheet: |  |  |  |  |  |  |  |  |  |  |  |
Prepaids and other current assets |  | $ | 192 |  | $ | - |  | $ | 797 |  | $ | -
Other long-term assets |  |  | 389 |  |  | - |  |  | - |  |  | -
Other current liabilities |  |  | (12,680) |  |  | (988) |  |  | (5) |  |  | -
Other long-term liabilities |  |  | (17,070) |  |  | (452) |  |  | - |  |  | -
| Total fair value of derivatives, net |  | $ | (29,169) |  | $ | (1,440) |  | $ | 792 |  | $ | -
|  |  | December 31, 2013
Designation: |  | Designated as Hedging Instruments |  | Not Designated as Hedging Instruments
Derivative contract type: |  | Foreign Exchange |  |  | Interest Rate |  | Foreign Exchange |  | Leases
Derivative classification: |  | Cash Flow |  |  | Cash Flow |  | Fair Value |  | Embedded Derivative
Fair value and location of derivative in the |  |  |  |  |  |  |  |  |  |  |  |
| Consolidated Balance Sheet: |  |  |  |  |  |  |  |  |  |  |  |
Prepaids and other current assets |  | $ | 3,379 |  | $ | - |  | $ | 97 |  | $ | -
Other long-term assets |  |  | 1,439 |  |  | - |  |  | - |  |  | -
Other current liabilities |  |  | (4,595) |  |  | (1,028) |  |  | (815) |  |  | (116)
Other long-term liabilities |  |  | (11,708) |  |  | (1,124) |  |  | - |  |  | -
| Total fair value of derivatives, net |  | $ | (11,485) |  | $ | (2,152) |  | $ | (718) |  | $ | (116)
The effect of derivative instruments on the Consolidated Statements of Comprehensive Income (Loss) for the year ended December 31, 2014 and 2013 were as follows (in thousands):
|  | Year Ended December 31,
|  | 2014 |  | 2013
Designation: | Designated as Hedging Instruments |  | Designated as Hedging Instruments
Derivative contract type: | Foreign Exchange |  |  | Interest Rate |  | Foreign Exchange |  |  | Interest Rate
Derivative classification: | Cash Flow |  |  | Cash Flow |  | Cash Flow |  |  | Cash Flow
Amount of gain or (loss) recognized in other |  |  |  |  |  |  |  |  |  |  |
| comprehensive income (loss) - effective |  |  |  |  |  |  |  |  |  |  |
| portion, net of tax | $ | (11,926) |  | $ | (195) |  | $ | (13,530) |  | $ | (191)
Amount and location of net gain or (loss) reclassified |  |  |  |  |  |  |  |  |  |  |
| from accumulated OCI to income - effective portion: |  |  |  |  |  |  |  |  |  |  |
Revenue | $ | (2,429) |  | $ | - |  | $ | 7,973 |  | $ | -
Interest expense |  | - |  |  | (1,060) |  |  | - |  |  | (1,047)
|  | Year Ended December 31,
|  | 2014 |  | 2013
Designation: | Not Designated as Hedging Instruments |  | Not Designated as Hedging Instruments
Derivative contract type: | Foreign Exchange |  | Leases |  |  | Foreign Exchange |  |  | Leases
Derivative classification: | Option and Forward Contracts |  | Fair Value |  | Embedded Derivative |  | Option and Forward Contracts |  | Fair Value |  | Embedded Derivative
Amount and location of net gain |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| or (loss) recognized in the |  |  |  |  |  |  |  |  |  |  |  |  |
| Consolidated Statement of |  |  |  |  |  |  |  |  |  |  |  |  |
| Comprehensive Income (Loss): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cost of services | $ | - |  | $ | - |  | $ | (116) |  | $ | - |  | $ | - |  | $ | 162
Other income (expense), net |  | - |  |  | (386) |  |  | - |  |  | - |  |  | (6,360) |  |  | -

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80748-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5618551-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624258-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624163-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708773-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41620-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624177-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5580258-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 20: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 + Details
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