Quarterly report pursuant to Section 13 or 15(d)

Derivative Contracts

v3.8.0.1
Derivative Contracts
9 Months Ended
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE CONTRACTS
DERIVATIVE CONTRACTS
The following table summarizes the fair values and the presentation of our derivative financial instruments in the Condensed Consolidated Balance Sheets:
(In thousands)
Balance Sheet Component
 
September 30,
2017
 
December 31,
2016
Derivative financial instruments:
 
 
 
 
 
Common Stock options/warrants
Investments, net
 
$
2,020

 
$
4,017

Embedded conversion option
2033 Senior Notes, net of discount and estimated fair value of embedded derivatives
 
$

 
$
(16,736
)
Forward contracts
Unrealized gains on forward contracts are recorded in Other current assets and prepaid expenses. Unrealized (losses) on forward contracts are recorded in Accrued expenses.
 
$
(264
)
 
$
39


We enter into foreign currency forward exchange contracts to cover the risk of exposure to exchange rate differences arising from inventory purchases on letters of credit. Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.
To qualify the derivative instrument as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At September 30, 2017 and December 31, 2016, our derivative financial instruments do not meet the documentation requirements to be designated as hedges. Accordingly, we recognize the changes in Fair value of derivative instruments, net in our Condensed Consolidated Statements of Operations. The following table summarizes the losses and gains recorded for the nine months ended September 30, 2017 and 2016:
 
Three months ended September 30,
 
Nine months ended September 30,
(In thousands)
2017
 
2016
 
2017
 
2016
Derivative gain (loss):
 
 
 
 
 
 
 
Common Stock options/warrants
$
(342
)
 
$
(12
)
 
$
(854
)
 
$
(4,728
)
2033 Senior Notes
(6,829
)
 
(5,795
)
 
3,185

 
(1,061
)
Forward contracts
(379
)
 
106

 
(362
)
 
(100
)
Total
$
(7,550
)
 
$
(5,701
)
 
$
1,969

 
$
(5,889
)