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Hedging Activities And Financial Instruments
 12 Months Ended
Dec. 31, 2014
Hedging Activities And Financial Instruments [Abstract]  
Hedging Activities And Financial Instruments

Note 10 Hedging Activities and Financial Instruments

 

Generally accepted accounting principles require the Company to disclose its estimate of the fair value of material financial instruments, including those recorded as assets or liabilities, in its consolidated financial statements. The carrying amounts of current assets and liabilities approximate fair value due to their short-term maturities. Generally, the fair value of a fixed-rate instrument will increase as interest rates fall and decrease as interest rates rise.

 

The carrying amounts and fair values of the Company’s other financial instruments at December 31, 2014 and 2013 were as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2014

 

2013

(in thousands)

 

Carrying Amount

 

Fair Value

 

Carrying Amount

 

Fair Value

5.50% convertible notes

 

$

 —

 

$

 —

 

$
11,416 

 

$
12,035 

 

In November 2011, the Company entered into an indenture under which it privately placed $152,000 of 5.50% senior convertible notes due December 15, 2016 with institutional and accredited investors. The estimated fair value of the fixed-rate convertible notes in the table above differs from the amounts reflected on the balance sheet based on the difference between the mandatory redemption value and the market value of the notes. The remaining outstanding Notes were converted during the third quarter of 2014.

 

The foregoing estimate is subjective and involves uncertainties and matters of significant judgment. Changes in assumptions could significantly affect the Company’s estimates.

 

The Company conducts business in various countries using both the functional currencies of those countries and other currencies to effect cross border transactions. As a result, the Company is subject to the risk that fluctuations in foreign exchange rates between the dates that those transactions are entered into and their respective settlement dates will result in a foreign exchange gain or loss. When practicable, the Company endeavors to match assets and liabilities in the same currency on its balance sheet and those of its subsidiaries in order to reduce these risks. When appropriate, the Company enters into foreign currency contracts to hedge exposures arising from those transactions. The Company has elected not to prepare and maintain the documentation to qualify for hedge accounting treatment under ASC 815, “Derivatives and Hedging,” and therefore, all gains and losses (realized or unrealized) are recognized in “Interest and other expense, net” in the consolidated statements of income and comprehensive income. Depending on their fair value at the end of the reporting period, derivatives are recorded either in prepaid expenses and other current assets or in accrued liabilities on the consolidated balance sheet.

 

There were no foreign currency contracts outstanding at December 31, 2014 or at December 31, 2013.

 

The total impact of foreign currency related items on the consolidated statements of income and comprehensive income was a loss of $5,727, a loss of $773 and a gain of $145 for the years ended December 31, 2014, 2013 and 2012, respectively.