Derivative instruments

12 Months Ended

Jul. 31, 2014

Derivative instruments

7. Derivative instruments

Certain of our foreign operations have revenues and expenses transacted in currencies other than its functional currency. In order to mitigate foreign currency exchange risk, we use forward contracts to lock in exchange rates associated with a portion of our forecasted international expenses.

As of July 31, 2014, we do not have outstanding forward contracts. As of July 31, 2013, we had forward contracts outstanding with notional amounts totaling $6.7 million in the Canadian dollar. These contracts were designated as cash flow hedges, and the unrealized loss of $0.1 million, net of tax, on these contracts were reported in Accumulated other comprehensive income as of July 31, 2013. Liability and asset derivatives designated as hedging instruments are presented in other assets and other liabilities, respectively, on our Consolidated Balance Sheets. Realized gains and (losses) on the cash flow hedges are recognized in income in the period when the payment of expenses is recognized. During fiscal year 2014 and 2013, we recorded approximately $0.2 million of realized gain and $(0.1) million of realized loss, respectively, included in in our Consolidated Statements of Operations.