XML 39 R21.htm IDEA: XBRL DOCUMENT v3.8.0.1
Derivative Instruments
 12 Months Ended
Dec. 31, 2017
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. 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):
 
December 31, 2017
 
December 31, 2016
Currency
Notional Value

USD Equivalent

 
Notional Value

USD Equivalent

 
 
 
 
 
 
Derivatives Designated as Hedging Instruments:
 
 
 
 
Japanese Yen
—

$
—

 
342,500

$
2,960

Hungarian Forint
—

—

 
39,000

130

Singapore Dollar
—

—

 
150

97

Derivatives Not Designated as Hedging Instruments:
Japanese Yen
455,000

$
4,049

 
650,000

$
5,554

British Pound
1,650

2,232

 
1,350

1,658

Korean Won
1,825,000

1,708

 
1,750,000

1,450

Hungarian Forint
545,000

2,110

 
425,000

1,448

Singapore Dollar
—

—

 
1,350

929

Taiwanese Dollar
37,725

1,278

 
26,000

802

Swiss Franc
1,365

1,401

 
—

—


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, 2017
 
December 31, 2016
 
 
December 31, 2017
 
December 31, 2016
Derivatives Designated as Hedging Instruments:
Cash flow hedge forward contracts
Prepaid
expenses and
other current
assets
 
$
—

 
$
43

 
Accrued
expenses
 
$
—

 
$
—

Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts
Prepaid expenses and other current assets
 
$
16

 
$
1

 
Accrued expenses
 
$
13

 
$
11


The following table summarizes 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, 2017
 
December 31, 2016
 
 
 
December 31, 2017
 
December 31, 2016
Gross amounts of recognized assets
 
$
16

 
$
117

 
Gross amounts of recognized liabilities
 
$
13

 
$
11

Gross amounts offset
 
—

 
(73
)
 
Gross amounts offset
 
—

 
—

Net amount of assets presented
 
$
16

 
$
44

 
Net amount of liabilities presented
 
$
13

 
$
11


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
 
Year Ended December 31,
2017
 
2016
 
2015
Derivatives Designated as Hedging Instruments:
Gains (losses) recorded in shareholders' equity (effective portion)
Accumulated other comprehensive income (loss), net of tax
 
$
—

 
$
37

 
$
206

Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)
Revenue
 
$
30

 
$
(438
)
 
$
(387
)
 
Research, development, and engineering expenses
 
3

 
13

 
14

 
Selling, general, and administrative expenses
 
8

 
27

 
172

 
Total gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations
 
$
41

 
$
(398
)
 
$
(201
)
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)

$
270

 
$
(515
)
 
$
(13
)

The following table summarizes the changes in accumulated other comprehensive income (loss), net of tax, related to derivative instruments (in thousands):
Balance as of December 31, 2015
$
206

Net unrealized loss on cash flow hedges
(567
)
Reclassification of net realized loss on cash flow hedges into current operations
398

Balance as of December 31, 2016
37

Net unrealized gain on cash flow hedges
4

Reclassification of net realized gain on cash flow hedges into current operations
(41
)
Balance as of December 31, 2017
$
—