Derivative Instruments

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company’s foreign currency risk management strategy is principally designed to mitigate the potential financial impact of changes in the value of transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. Currently, the Company enters into two types of hedges to manage this risk. The first are economic hedges which utilize foreign currency forward contracts with maturities of up to 45 days to manage the exposure to fluctuations in foreign currency exchange rates arising primarily from foreign-denominated receivables and payables. The gains and losses on these derivatives are intended to be offset by the changes in the fair value of the assets and liabilities being hedged. These economic hedges are not designated as hedging instruments for hedge accounting treatment. The second are cash flow hedges which utilize foreign currency forward contracts with maturities of up to 18 months to hedge specific forecasted transactions of the Company's foreign subsidiaries with the goal of protecting our budgeted revenues and expenses against foreign currency exchange rate changes compared to our budgeted rates. These cash flow hedges are designated as hedging instruments for hedge accounting treatment.

The Company had the following outstanding forward contracts (in thousands):

	As of December 31, 2014			As of December 31, 2013
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Designated as Hedging Instruments:
Japanese Yen	1,225,000	$	10,211	625,000	$	6,122
Hungarian Forint	803,000	3,099		570,175	2,603
Singapore Dollar	3,515	2,564		2,867	2,346
British Pound	491	732		613	1,010
Canadian Dollar	758	688		985	932
Derivatives Not Designated as Hedging Instruments:
Japanese Yen	535,000	$	4,464	294,500	$	2,797
British Pound	1,400	2,183		1,100	1,820
Hungarian Forint	410,000	1,569		123,000	568
Singapore Dollar	1,225	922		—	—
Taiwanese Dollar	28,000	883		27,000	908
Korean Won	940,000	858		650,000	620
Euro	—	—		2,828	3,887
Chinese Yuan	—	—		9,000	1,467
Brazilian Real	—	—		250	106

Information regarding the fair value of the outstanding forward contracts was as follows (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	Fair Value				Balance Sheet Location	Fair Value
		December 31, 2014		December 31, 2013			December 31, 2014		December 31, 2013
Derivatives Designated as Hedging Instruments:
Cash flow hedge forward contracts	Prepaid expenses and other current assets	$	108	$	204	Accrued expenses	$	84	$	98
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	6	$	6	Accrued expenses	$	13	$	24

The table below details the gross activity for all derivative assets and liabilities which were presented on a net basis on the Consolidated Balance Sheets due to the right of offset with each counterparty (in thousands):

Asset Derivatives						Liability Derivatives
	December 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Gross amounts of recognized assets	$	188		$	210	Gross amounts of recognized liabilities	$	149		$	122
Gross amounts offset	(74		)	—		Gross amounts offset	(52		)	—
Net amount of assets presented	$	114		$	210	Net amount of liabilities presented	$	97		$	122

Information regarding the effect of derivative instruments, net of the underlying exposure, on the consolidated financial statements was as follows (in thousands):

	Location in Financial Statements
		2014			2013			2012
Derivatives Designated as Hedging Instruments:
Gains (losses) recorded in shareholders' equity (effective portion)	Accumulated other comprehensive income (loss), net of tax	$	32		$	104		$	—
Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)	Product revenue	(14		)	—			—
	Research, development, and engineering expenses	(42		)	—			—
	Selling, general, and administrative expenses	10			—			—
	Total gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations	$	(46	)	$	—		$	—
Gains (losses) recognized in current operations (ineffective portion and discontinued derivatives)	Foreign currency gain (loss)	$	—		$	—		$	—
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	540		$	(193	)	$	(722	)

The following table provides the changes in accumulated other comprehensive income (loss), net of tax, related to derivative instruments (in thousands):

Balance as of December 31, 2013	$	104
Reclassification of net realized loss on cash flow hedges into current operations	46
Net unrealized loss on cash flow hedges	(118		)
Balance as of December 31, 2014	$	32

Net gains expected to be reclassified from accumulated other comprehensive income (loss), net of tax, into current operations within the next twelve months are $47,000.