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Derivative Financial Instruments
3 Months Ended
Mar. 31, 2018
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

Note 9 – Derivative Financial Instruments

Hedges of Foreign Currency Risk - We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward agreements to manage this exposure. At March 31, 2018, we had outstanding foreign currency forward contracts that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities; these instruments are not designated for hedge accounting treatment in accordance with ASC 815.  There is no fair value of our foreign exchange hedges and therefore they are not recorded in our condensed consolidated balance sheets.  

The table below sets forth outstanding foreign currency forward contracts at March 31, 2018 and December 31, 2017:

Notional Amount

 

 

Effective Date

 

Maturity Date

 

Index*

Weighted Average Fx Rate

 

Balance Sheet Hedge Designation

$

229

 

 

March 2018

 

April 2018

 

CNY/JPY

16.8277

 

Non-designated

 

20,267

 

 

March 2018

 

April 2018

 

EUR/USD

1.2348

 

Non-designated

 

10,685

 

 

March 2018

 

April 2018

 

GBP/USD

1.4047

 

Non-designated

 

59,061

 

 

March 2018

 

April 2018

 

USD/CNY

6.2862

 

Non-designated

 

2,476

 

 

March 2018

 

April 2018

 

USD/JPY

105.933

 

Non-designated

 

53,763

 

 

March 2018

 

April 2018

 

USD/TWD

29.001

 

Non-designated

 

 

 

 

 

 

 

 

 

 

 

 

Notional Amount

 

 

Effective Date

 

Maturity Date

 

Index*

Weighted Average Fx Rate

 

Balance Sheet Hedge Designation

$

2,494

 

 

December 2017

 

January 2018

 

EUR/GBP

1.2009

 

Non-designated

 

10,514

 

 

December 2017

 

January 2018

 

EUR/USD

1.2009

 

Non-designated

 

10,612

 

 

December 2017

 

January 2018

 

GBP/USD

1.3541

 

Non-designated

 

31,834

 

 

December 2017

 

January 2018

 

USD/CNY

6.5343

 

Non-designated

 

1,594

 

 

December 2017

 

January 2018

 

USD/JPY

112.35

 

Non-designated

 

30,594

 

 

December 2017

 

January 2018

 

USD/TWD

29.406

 

Non-designated

 

 

 

 

 

 

 

 

 

 

 

 

*  EUR = Euro

 

 

 

 

 

 

 

    GBP = British Pound Sterling

 

 

 

 

 

 

 

    USD = United States Dollar

 

 

 

 

 

    CNY = Chinese Yuan Renminbi

 

 

 

 

 

    JPY =  Japan Yen

 

 

 

 

 

 

 

    TWD = Taiwan dollar

 

 

 

 

 

 

 

Hedges of Interest Rate Risk - The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps, including interest rate collars, as part of its interest rate risk management strategy.  Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The table below sets forth information related to the number of and the notional amount of our interest rate related derivative instruments:

 

 

Number of Instruments

 

Notional Amount

 

 

 

March 31, 2018

 

December 31, 2017

 

March 31, 2018

 

 

December 31, 2017

 

Interest rate swaps and collars

 

14

 

6

 

$

220,000

 

 

$

150,000

 

 

The table below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their classification on our condensed consolidated balance sheets:

 

 

 

Fair Value

 

 

 

Other Current Assets

 

 

Other Assets

 

 

 

March 31, 2018

 

 

December 31, 2017

 

 

March 31, 2018

 

 

December 31, 2017

 

Interest rate swaps and collars

 

$

1,128

 

 

$

486

 

 

$

5,104

 

 

$

3,398

 

 

The tables below sets forth the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations for the three months ended:

Derivatives Designated as Hedging Instruments

 

Amount of Gain or (Loss) Recognized in OCI on Derivative

 

 

Location of Gain or (Loss) Reclassified from Accumulated OCI into Income

 

Amount of Gain or (Loss) Reclassified from Accumulated OCI into Net Income

 

 

 

March 31, 2018

 

 

March 31, 2017

 

 

 

 

March 31, 2018

 

 

March 31, 2017

 

Interest rate swaps and collars

 

$

2,404

 

 

$

783

 

 

Interest expense

 

$

52

 

 

$

(255

)

 

We estimate that $1.1 million of net derivative gains included in accumulated other comprehensive income (“AOCI”) as of March 31, 2018 will be reclassified into earnings within the following 12 months. No gains or losses were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during three months ended March, 31, 2018 or 2017.

 

Derivatives Not Designated as Hedging Instruments

 

Amount of Gain or (Loss) Recognized in Net Income

 

 

Location of Gain or (Loss) Recognized in Net Income

 

 

March 31, 2018

 

 

March 31, 2017

 

 

 

Foreign currency forward contracts

 

$

1,394

 

 

$

-

 

 

Foreign currency (loss) gain, net

 

At March 31, 2018 and December 31, 2017, the fair value of derivatives in a net asset position, which includes accrued interest but excludes any adjustments for nonperformance risk, related to these agreements was $6.2 million and $3.9 million, respectively.  As of March 31, 2018 and December 31, 2017, the Company had not posted any collateral related to these agreements.