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Derivative Instruments
 3 Months Ended
Mar. 31, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
 
 
Note 3—Derivative Instruments
 
The primary risk managed by the Company using derivative instruments is commodity price risk. Natural gas and electricity forward contracts and put and call options are entered into as hedges against unfavorable fluctuations in market prices of natural gas and electricity. The Company does not apply hedge accounting to IDT Energy’s forward contracts and put and call options, therefore the changes in fair value are recorded in earnings.
 
The summarized volume of IDT Energy’s outstanding electricity call options as of March 31, 2012 was as follows:
 
Commodity
  
Settlement Dates
  
Volume
Electricity
  
From May 2012 to August 2012
  
139,200 MWh
 
The Company’s subsidiary, GOGAS, issued an option and warrants. The GOGAS stock option was issued in June 2011 and is exercisable until April 9, 2015 at an exercise price of $5.0 million. The GOGAS warrants were issued in November 2010 and expired on November 12, 2011. The Company’s subsidiary, GEIC, issued a stock option in April 2010 that was exchanged in June 2011 for the GOGAS stock option. At March 31, 2012, the fair value of the GOGAS stock option was nil.
 
The fair value of outstanding derivative instruments recorded as assets in the accompanying consolidated balance sheets were as follows:
 
Asset Derivatives
  
Balance Sheet Location
  
March 31, 2012
    
December 31, 2011
  
       
(in thousands)
  
Derivatives not designated or not qualifying as hedging instruments:
                
Energy contracts and options
  
Other current assets
   $ 27     $ 446  
 
The fair value of outstanding derivative instruments recorded as liabilities in the accompanying consolidated balance sheets were as follows:
 
Liability Derivatives
  
Balance Sheet Location
  
March 31, 2012
    
December 31, 2011
  
       
(in thousands)
  
Derivatives not designated or not qualifying as hedging instruments:
                
Energy contracts and options
  
Other current liabilities
   $ —     $ 938  
 
The effects of derivative instruments on the consolidated statements of operations were as follows:
 
   
Amount of (Gain) Loss Recognized on Derivatives
  
   
Three Months Ended
March 31,
  
 Derivatives not designated or not qualifying as hedging instruments
  
Location of (Gain) Loss Recognized on Derivatives
  
2012
    
2011
  
       
(in thousands)
  
Energy contracts and options
  
Direct cost of revenues
   $ (510 )   $ (120 )
GOGAS warrants
  
Selling, general and administrative expense
     —       (85 )
                 
Total
       $ (510 )   $ (205 )
 
 
  
At March 31, 2012 and December 31, 2011, the Company's energy contracts and options were all traded on the New York Mercantile Exchange which mitigated the Company's exposure to credit loss from nonperformance by the counterparty.
 
On October 31, 2011, MF Global, the Company’s former clearing broker, filed for bankruptcy protection. On that date, IDT Energy held $1.65 million of cash on deposit with MF Global in support of hedging positions related to IDT Energy’s commodity supply. Assets held by MF Global were placed under the control of the court appointed bankruptcy trustee to be released as deemed appropriate. In November 2011, the Company transferred its hedging securities to an alternative clearing broker. In October 2011, the Company recognized a $0.45 million loss, relating to its cash deposit with MF Global, based on management’s best estimate of the unrecoverable amount. As of March 31, 2012, the remaining balance of $0.35 million is included in ”Other current assets” in the Company’s consolidated balance sheet, as such cash was not readily available for withdrawal. The Company believes that the $0.35 million due from the bankrupt broker is collectible.