Derivative Financial Instruments

12 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

We use derivative instruments to manage risks caused by fluctuations in foreign exchange rates. The primary objective of our derivative instruments is to protect the value of foreign-currency-denominated receivable and cash balances from the effects of volatility in foreign exchange rates that might occur prior to conversion to their functional currencies. We principally utilize foreign currency forward contracts, which enable us to buy and sell foreign currencies in the future at fixed exchange rates and economically offset changes in foreign exchange rates. We routinely enter into contracts to offset exposures denominated in the British pound, Euro and Canadian dollar.

Foreign-currency-denominated receivable and cash balances are remeasured at foreign exchange rates in effect on the balance sheet date with the effects of changes in foreign exchange rates reported in other income (expense), net. The forward contracts are not designated as hedges and are marked to market through other income (expense), net. Fair value changes in the forward contracts help mitigate the changes in the value of the remeasured receivable and cash balances attributable to changes in foreign exchange rates. The forward contracts are short-term in nature and typically have average maturities at inception of less than three months.

The following tables summarize our outstanding foreign currency forward contracts, by currency at September 30, 2016 and 2015:

		September 30, 2016
	Contract Amount				Fair Value
	Foreign Currency		US$		US$
		(In thousands)
Sell foreign currency:
Euro (EUR)	EUR	7,850	$	8,743	—
Buy foreign currency:
British pound (GBP)	GBP	7,721	$	10,000	—

		September 30, 2015
	Contract Amount				Fair Value
	Foreign Currency		US$		US$
		(In thousands)
Sell foreign currency:
Canadian dollar (CAD)	CAD	2,750	$	2,045	$	—
Euro (EUR)	EUR	5,600	$	6,296	—
Buy foreign currency:
British pound (GBP)	GBP	6,943	$	10,550	—

The foreign currency forward contracts were entered into on September 30 of each fiscal year; therefore, their fair value was $0 at September 30, 2016 and 2015.

Gains (losses) on derivative financial instruments are recorded in our consolidated statements of income and comprehensive income as a component of other income (expense), net. These amounts are shown below for the years ended September 30, 2016, 2015 and 2014:

	Year Ended September 30,
	2016			2015			2014
	(In thousands)
Gain (loss) on foreign currency forward contracts	$	(2,911	)	$	(62	)	$	256