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DERIVATIVE FINANCIAL INSTRUMENTS | 6 Months Ended
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Jun. 30, 2017
DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] |
DERIVATIVE FINANCIAL INSTRUMENTS |
4. | DERIVATIVE FINANCIAL INSTRUMENTS
The Company enters into non-designated foreign currency derivatives, primarily comprised of foreign currency forward contracts, for which hedge accounting does not apply. The changes in the fair market value of these non-designated derivatives are included in other income/expense in the Company's consolidated statements of income. The Company uses non-designated foreign currency derivatives to hedge foreign-currency-denominated intercompany transactions and to partially mitigate the impact of foreign-currency fluctuations. The fair value of the non-designated foreign currency derivatives is based on third-party quotes. As of June 30, 2017, the Company did not hold any non-designated derivative contracts. As of June 30, 2016, the Company held non-designated derivative contracts with notional amounts of 500 million Japanese yen ($4.8 million), 11.5 billion Korean won ($10.0 million), 3.9 million Canadian dollars ($3.0 million) and 16.0 million South African rand ($1.1 million). Gains and losses related to non-designated derivative contracts are recorded as part of Other Income (Expense). The following table summarizes gains (losses) related to derivative instruments not designated as hedging instruments during the three- and six-month periods ended June 30, 2017 and 2016 (U.S. dollars in thousands):
Derivatives not designated as hedging instruments: |  | Location of Gain (Loss) Recognized in Income |  | Amount of Gain (Loss) Recognized in Income |
| Three Months Ended June 30, |  |  | Six Months Ended June 30, |
| 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Foreign currency contracts |  | Other income (expense) |  | $ | -- |  |  | $ | (474 | ) |  | $ | (485 | ) |  | $ | (478 | )
The Company designates as cash-flow hedges those foreign currency forward contracts it enters to hedge forecasted intercompany transactions that are subject to foreign currency exposures. Changes in the fair value of these forward contracts designated as cash-flow hedges are recorded as a component of accumulated other comprehensive income (loss) within shareholders' equity (deficit), and are recognized in the consolidated statement of income during the period which approximates the time the hedged transaction is settled. As of June 30, 2017, the Company held forward contracts designated as foreign currency cash flow hedges with notional amounts totaling 2.2 billion Japanese yen and 1.0 million Euros ($19.6 million and $1.1 million, respectively), compared to 2.9 billion Japanese yen and 9.0 million euros ($28.1 million and $10.0 million, respectively) as of June 30, 2016, to hedge forecasted foreign-currency-denominated intercompany transactions. The fair value of these hedges were $0.3 million and $(2.9) million as of June 30, 2017 and 2016, respectively. The contracts held at June 30, 2017 have maturities through June 2018, and accordingly, all unrealized gains and losses on foreign currency cash flow hedges included in accumulated other comprehensive loss will be recognized in current earnings over the next 12 months. The following table summarizes gains (losses) related to derivative instruments recorded in other comprehensive income (loss) during the three-month periods ended June 30, 2017 and 2016 (U.S. dollars in thousands):
Derivatives designated as hedging instruments: |  | Amount of Gain (Loss) Recognized in Other Comprehensive Loss |
| Three Months Ended June 30, |  |  | Six Months Ended June 30, |
| 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Foreign currency forward contracts related to intercompany license fee, product sales, and selling expense hedges |  | $ | 207 |  |  | $ | (1,170 | ) |  | $ | (180 | ) |  | $ | (2,860 | )
The following table summarizes gains (losses) relating to derivative instruments reclassified from accumulated other comprehensive loss into income during the three- and six-month periods ended June 30, 2017 and 2016 (U.S. dollars in thousands):
Derivatives designated as hedging instruments: |  | Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income |  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income |
| Three Months Ended June 30, |  |  | Six Months Ended June 30, |
| 2017 |  |  | 2016 |  |  | 2017 |  |  | 2016 |
Foreign currency forward contracts related to intercompany license fees and product sales hedges |  | Revenue |  | $ | 134 |  |  | $ | (401 | ) |  | $ | 109 |  |  | $ | (479 | )
Foreign currency forward contracts related to intercompany selling expense hedges |  | Selling expenses |  | $ | 269 |  |  | $ | (525 | ) |  | $ | 228 |  |  | $ | (632 | )
As of June 30, 2017 and December 31, 2016, there were $0.2 million and $0.6 million, respectively, of unrealized gains/(losses) included in accumulated other comprehensive loss related to foreign currency cash flow hedges. The remaining $74.9 million and $84.7 million as of June 30, 2017 and December 31, 2016, respectively, in accumulated other comprehensive loss are related to cumulative translation adjustments. The Company assesses hedge effectiveness at least quarterly. During the three- and six- month periods ended June 30, 2017 and 2016, all hedges were determined to be effective. The Company reports its derivatives at fair value as either other current assets or accrued expenses within its consolidated balance sheet. See Note 13 Fair Value.

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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 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41620-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624163-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579240-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624177-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41641-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579245-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624258-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708775-113959 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708773-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5618551-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5580258-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41638-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
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