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Derivative Financial Instruments | 9 Months Ended
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Sep. 30, 2018
Derivative Financial Instruments |
Derivative Financial Instruments | NOTE 5. DERIVATIVE FINANCIAL INSTRUMENTS Foreign Currency Exchange Rate Exposure The Company uses forward foreign currency exchange contracts to secure a foreign currency exchange rate when a contract is executed involving payment in a foreign currency in order to minimize cash flow exposure to fluctuating exchange rates. Such exposure results from portions of the Company’s forecasted cash outflows being denominated in currencies other than the U.S. dollar, primarily the Swiss franc. The derivative instruments the Company uses to hedge this exposure are not designated as cash flow hedges, and as a result, changes in their fair value are recorded in other (expense) income, net, on the Company's condensed consolidated statements of operations and comprehensive loss. The fair values of forward foreign currency exchange contracts are estimated using current exchange rates and interest rates and take into consideration the current creditworthiness of the counterparties. Information regarding the specific instruments used by the Company to hedge its exposure to foreign currency exchange rate fluctuations is provided below. The following table summarizes the Company’s forward foreign currency exchange contracts outstanding as of September 30, 2018 (notional amounts in thousands):
|  |  |  | Aggregate Notional |  |
|  |  |  | Amount in Foreign |  |
Foreign Exchange Contracts |  | Number of Contracts |  | Currency |  | Maturity
Swiss francs |  | 2 |  | 6,002 |  | Nov. 2018 - Mar. 2019
Total |  | 2 |  |  |  |
The maximum length of time over which the Company is hedging its exposure to changes in exchange rates is March 2019. The derivative liability balance of $45,566 is recorded in accrued and other liabilities on the condensed consolidated balance sheet as of September 30, 2018, and the net loss associated with the Company's derivative instruments of $45,566 is recognized in other (expense) income, net on the condensed consolidated statement of operations and comprehensive loss for the three and nine months ended September 30, 2018. As of September 30, 2018, we had open forward foreign currency exchange contracts with notional amounts of $6.2 million. A hypothetical 10% strengthening in the Swiss francs exchange rates compared with the U.S. dollar relative to exchange rates at September 30, 2018 would have resulted in a reduction in the value received over the remaining life of these contracts of approximately $0.6 million and, if realized, would negatively affect earnings during the remaining life of the contracts.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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