Derivatives

Our business is exposed to various market risks, including interest rate and foreign currency risks. We utilize derivative instruments to help us manage these risks. We do not hold or issue derivatives for speculative purposes.

Interest Rate Swaps

To mitigate interest rate exposure on our outstanding Credit Facility debt, we utilize the following types of derivative instruments:


•	Interest rate derivative contracts that effectively swap $100 million of floating rate debt at a 1.80 percent weighted-average fixed interest rate, plus the applicable Credit Facility spread. We entered into these swap contracts in 2011, and both contracts expire in July 2015.


•	Forward-starting interest rate derivative contracts that effectively swap $200 million of floating rate debt at a 2.93 percent weighted-average fixed interest rate, plus the applicable Credit Facility spread. We entered into these swap contracts in November 2013, and the contracts take effect in November 2015, with expiration in November 2020.

Because the terms of these swaps and the variable rate debt coincide, we do not expect any ineffectiveness. We have designated and accounted for these instruments as cash flow hedges, with changes in fair value being deferred in accumulated other comprehensive loss in the consolidated balance sheets.

Foreign Currency Forwards

To mitigate foreign currency exposure, we utilize the following types of derivative instruments:

•

Foreign currency forward contracts that hedge the foreign currency exposure on Euro-denominated receipts in U.S. Dollar functional entities. During 2013, we implemented a rolling 12-month hedging program to mitigate this exposure. Because the critical terms of the forward contracts and the forecasted cash flows coincide, we do not expect any ineffectiveness associated with these contracts. We have designated and accounted for these derivatives as cash flow hedges, with changes in fair value being deferred in accumulated other comprehensive loss in the consolidated balance sheets. The notional amount of outstanding foreign currency forwards under these agreements as of November 30, 2013 was approximately $15.9 million.

•

Short-term foreign currency forward contracts that manage market risks associated with fluctuations in balances that are denominated in currencies other than the local functional currency. We account for these forward contracts at fair value and recognize the associated realized and unrealized gains and losses in other expense (income), net, since we have not designated these contracts as hedges for accounting purposes. The following table summarizes the notional amounts of these outstanding foreign currency forward contracts as of November 30, 2013 and 2012 (in thousands):



	November 30, 2013		November 30, 2012
Notional amount of currency pair:
Contracts to buy USD with CAD	$	142,606	$	59,751
Contracts to buy CAD with GBP	C$	28,741	C$	—
Contracts to buy USD with EUR	$	17,522	$	2,594
Contracts to buy CHF with USD	$	15,308	$	—
Contracts to buy GBP with EUR	£	5,866	£	5,596
Contracts to buy USD with GBP	£	1,863	£	27,710

Fair Value of Derivatives

Since our derivative instruments are not listed on an exchange, we have evaluated fair value by reference to similar transactions in active markets; consequently, we have classified all of our derivative instruments within Level 2 of the fair value measurement hierarchy. The following table shows the classification, location, and fair value of our derivative instruments as of November 30, 2013 and 2012 (in thousands):



		Fair Value of Derivative Instruments
	Balance Sheet Location	November 30, 2013		November 30, 2012
Assets:
Derivatives designated as accounting hedges:
Foreign currency forwards	Other current assets	$	8	$	—
Derivatives not designated as accounting hedges:
Foreign currency forwards	Other current assets	1,548		—
Total		$	1,556	$	—

Liabilities:
Derivatives designated as accounting hedges:
Interest rate swaps	Other accrued expenses	$	3,366	$	3,587
Foreign currency forwards	Other accrued expenses	423		—
Derivatives not designated as accounting hedges:
Foreign currency forwards	Other accrued expenses	957		1,020
Total		$	4,746	$	4,607

The net gain (loss) on foreign currency forwards that are not designated as hedging instruments for the years ended November 30, 2013, 2012, and 2011, respectively, was as follows (in thousands):



		Amount of gain (loss) recognized in the consolidated statements of operations
	Location on consolidated statements of operations	2013		2012			2011
Foreign currency forwards	Other expense (income), net	$	5,372	$	(2,491	)	$	(1,581	)

The following table provides information about the gains (losses) on our cash flow hedging instruments for the years ended November 30, 2013, 2012, and 2011 (in thousands):



Derivatives in cash flow hedging relationships	Amount of gain/(loss) recognized in AOCI on derivative								Location of gain/(loss) reclassified from AOCI into income	Amount of gain/(loss) reclassified from AOCI into income
	2013			2012		2011				2013			2012			2011
Interest rate swaps	$	1,073		$	507	$	(1,408	)	Interest expense	$	(935	)	$	(813	)	$	(509	)
Foreign currency forwards	(153		)	—		—			Revenue	41			—			—
Total	$	920		$	507	$	(1,408	)		$	(894	)	$	(813	)	$	(509	)

The cumulative amount of unrecognized hedge losses recorded in AOCI is as follows (in thousands):



	Unrecognized losses, net of tax
	November 30, 2013			November 30, 2012
Interest rate swaps	$	(2,087	)	$	(2,225	)
Foreign currency forwards	(112		)	—
Total	$	(2,199	)	$	(2,225	)

The unrecognized losses relating to the foreign currency forwards are expected to be reclassified into revenue within the next 12 months, and approximately $0.9 million of the unrecognized losses relating to the interest rate swaps are expected to be reclassified into interest expense within the next 12 months.