FINANCIAL INSTRUMENTS

Investments in Debt and Equity Securities

During the first quarter of 2013, the Company liquidated its entire portfolio of available-for-sale securities. The available-for-sale securities were sold for total cash consideration of $9.4 million and the resulting net gain on sale of $0.1 million was recognized in Interest income and other, net in the accompanying Consolidated Statements of Operations.

Realized gain for the year ended December 31, 2013 was $0.1 million. No realized losses were incurred for the year ended December 31, 2013. Realized gains and losses are included in Interest income and other, net in the accompanying Consolidated Statements of Operations.

Derivative Financial Instruments

The Company derives a portion of its revenues in foreign currencies, predominantly in Europe and Japan, as part of its ongoing business operations. In addition, a portion of its assets are held in the nonfunctional currencies of its subsidiaries. The Company enters into foreign currency forward contracts to manage a portion of the volatility related to transactions that are denominated in foreign currencies. The Company's foreign currency forward contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions that are independent of those exposures.

In accordance with the terms of the Credit Agreement in Note 12. "Long-Term Debt Obligations", the Company had previously maintained an interest rate swap (the "Interest Rate Swap"). As of December 31, 2013, the notional amount of the Interest Rate Swap was $10.3 million. In July 2014, the Company amended the terms of the Credit Agreement such that the interest rate swap is no longer required. Accordingly, the Company settled the Interest Rate Swap on September 30, 2014.

The Company is exposed to the risk that the counterparties to its hedges may be unable to meet the terms of these agreements. To mitigate the risk, only contracts with carefully selected highly-rated major financial institutions are entered into. In the event of non-performance by these counterparties, the asset position carrying values of the financial instruments represent the maximum amount of loss that can be incurred; however, no losses as a result of counterparty defaults are expected. The Company does not require and is not required to pledge collateral for these financial instruments. The Company does not enter into foreign currency forward contracts for trading or speculative purposes and is not party to any leveraged derivative instruments.

As of December 31, 2014 and 2013, the total notional values of the Company's derivative assets and liabilities were as follows (in thousands):



	December 31, 2014		December 31, 2013
Euro	$	15,982	$	21,990
Japanese yen	3,391		4,588
British pound	1,784		5,653
Interest rate swap	—		10,307
Total	$	21,157	$	42,538

The Company recognizes derivative on the accompanying Consolidated Balance Sheets at fair value. The following table shows the Company's derivatives as of December 31, 2014 and 2013 (in thousands):



	December 31, 2014		December 31, 2013		Balance Sheet Classification
Derivative assets:
Foreign exchange contracts	$	1,258	$	185	Prepaid expenses and other current assets
Derivative liabilities:
Foreign exchange contracts	—		927		Accounts payable and accrued liabilities
Interest rate swap	—		11		Other long-term liabilities

The effective portions of designated cash flow hedges are recorded in OCI until the hedged item is recognized in operations. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges are adjusted to fair value through operations.

Derivative instruments designated as cash flow hedges must be de-designated as hedges when it is probable the forecasted hedged transaction will not occur in the initially identified time period or within a subsequent two-month time period. Deferred gains and losses associated with such derivative instruments are reclassified immediately into operations through Other income (expense), net on the Consolidated Statements of Operations. Any subsequent changes in fair value of such derivative instruments are reflected in Other income (expense), net unless they are re-designated as hedges of other transactions.

As of December 31, 2013, the Interest Rate Swap was not designated as a hedging relationship. All other derivative assets and liabilities were designated as hedging relationships as of December 31, 2014 and 2013.

The following table shows the effect, net of tax, of the Company's derivative instruments on the accompanying Consolidated Statements of Operations and OCI for the years ended December 31, 2014, 2013 and 2012 (in thousands):



	Year ended December 31,
	2014		2013			2012
Derivatives in cash flow hedging relationships:
Net gain (loss) recognized in OCI, net of tax	$	1,867	$	(796	)	$	(794	)
Net gain reclassified from accumulated OCI into Revenue	1,303		800			1,226
Net gain reclassified from accumulated OCI into Other income (expense), net	55		158			—
Net gain recognized in Other income (expense), net	11		74			109
Derivatives not designated as hedging relationships:
Net gain (loss) recognized in Other income (expense), net	59		(122		)	(539		)

As of December 31, 2014, the Company's existing foreign currency forward exchange contracts mature within 12 months. The deferred amounts related to the Company's derivatives recorded in OCI as of December 31, 2014 and 2013, and expected to be recognized into earnings over the next 12 months are net gain (loss) of $1.1 million and $(0.8) million, respectively.