Derivative Instruments

12 Months Ended

Dec. 31, 2016

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivative Instruments

6. Derivative Instruments

The Company’s primary objective for holding derivative instruments is to reduce its exposure to foreign currency rate changes. The Company reduces its exposure by entering into forward foreign exchange contracts with respect to operating expenses that are forecast to be incurred in currencies other than U.S. dollars. Substantially all of the Company’s revenue and capital purchasing activities and a majority of its operating expenditures are transacted in U.S. dollars. However, certain operating expenditures are incurred in or exposed to other currencies, primarily the Israeli shekel, the British Pound and the Euro.

The Company has established forecasted transaction currency risk management programs to protect against fluctuations in fair value and the volatility of future cash flows caused by changes in exchange rates. The Company’s currency risk management program includes forward foreign exchange contracts designated as cash flow hedges. These forward foreign exchange contracts generally mature within 12 months. The Company does not enter into derivative financial instruments for trading purposes.

Derivative instruments measured at fair value and their classification on the consolidated balance sheets are presented in the following tables (in thousands):

	Liability as of December 31,
	2016				2015
	Notional Amount		Fair Value		Notional Amount		Fair Value
Foreign exchange forward contract derivatives in cash flow hedging    relationships -  included in accrued and other current liabilities	$	60,756	$	639	$	47,231	$	595

Gains (losses) on derivative instruments accounted for as hedges and their classification on the consolidated statement of operations, are presented in the following tables (in thousands):

	Years ended December 31,
	2016			2015			2014
Foreign Exchange Forward Contract Derivatives in cash flow     hedging relationships:
Gains recognized in OCI (a)	$	1,775		$	834		$	191
Losses recognized in OCI (a)	$	(1,909	)	$	(1,399	)	$	(1,846	)
Gains recognized from accumulated OCI into net loss (b)	$	257		$	—		$	55
Losses recognized from accumulated OCI into net loss (b)	$	(347	)	$	(972	)	$	(708	)

(a) Net change in the fair value of the effective portion classified in other comprehensive income (loss) (“OCI”).

(b) Effective portion of cash flow hedges reclassified from accumulated other income (loss), into net loss, of which $(8), $(107) and $(72) were recognized within cost of sales for the years ended December 31, 2016, 2015 and 2014, respectively, and $(82), $(865), and $(581) were recognized within operating expenses for the year ended December 31, 2016, 2015 and 2014, respectively. All amounts are reflected with the respective consolidated statement of operations.