Derivative Financial Instruments

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

The Company transacts business in various foreign countries and is therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. Dollar amounts of revenues, costs, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in earnings caused by fluctuations in foreign exchange rates, the Company enters into forward contracts to buy and sell foreign currency. By policy, the Company does not enter into these contracts for trading purposes or speculation.

Counterparty default risk is considered low because the forward contracts that the Company enters into are over-the-counter instruments transacted with highly-rated financial institutions. The Company was not required and did not post collateral as of March 31, 2017 or December 31, 2016.

The Company's derivative instruments are recorded at fair value as a derivative asset or liability in the condensed consolidated balance sheets. The Company reports derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. Changes in fair value are recognized within 'Foreign currency gain (loss), net' in the condensed consolidated statements of operations. For the cash flow statement, the Company classifies cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within 'Cash used in operating activities'.

Results of Derivative Activities

The fair values of derivative assets and liabilities, net, which are reported in 'Accrued expenses and other liabilities' in the condensed consolidated balance sheets were:

	March 31, 2017						December 31, 2016
	Derivative Assets			Derivative Liabilities			Derivative Assets			Derivative Liabilities
	(in thousands)
Foreign currency forward exchange contracts
Level 1	$	—		$	—		$	—		$	—
Level 2	2,116			(3,410		)	6,541			(6,698		)
Level 3	—			—			—			—
	2,116			(3,410		)	6,541			(6,698		)
Netting of counterparty contracts	(2,116		)	2,116			(6,541		)	6,541
Foreign currency forward contract derivative liabilities	$	—		$	(1,294	)	$	—		$	(157	)

The notional amounts of outstanding foreign currency forward exchange contracts shown below report the total U.S. Dollar

equivalent position and the net contract fair values for each foreign currency position.

	March 31, 2017					December 31, 2016
	Notional		Fair Value			Notional		Fair Value
Japanese Yen	$	65,627	$	64		$	87,171	$	4,180
Singapore Dollar	34,747		103			94,763		(2,611		)
Euro	55,018		(186		)	71,228		(1,441		)
British Pound Sterling	18,727		—			14,332		(660		)
South Korean Won	17,739		(5		)	8,278		407
Other currencies	67,310		(1,270		)	52,449		(32		)
Total	$	259,168	$	(1,294	)	$	328,221	$	(157	)
Latest maturity date	April 2017					January 2016

Amounts reported in 'Foreign currency gain (loss), net' in the condensed consolidated statements of operations include both realized and unrealized gains/losses from foreign currency transactions and derivative contracts, and were as follows:

	Three Months Ended March 31,
	2017			2016
	(in thousands)
Foreign currency transaction gain	$	3,211		$	2,262
Foreign currency loss on foreign currency forward exchange contracts	(2,935		)	(3,509		)
Foreign currency gain (loss), net	$	276		$	(1,247	)