Quarterly report pursuant to Section 13 or 15(d)

Derivative Contracts

v3.3.0.814
Derivative Contracts
9 Months Ended
Sep. 30, 2015
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,
2015
 
December 31,
2014
Derivative financial instruments:
 
 
 
 
 
Common Stock options/warrants
Investments, net
 
$
5,543

 
$
6,314

Embedded conversion option
2033 Senior Notes, net of discount and estimated fair value of embedded derivatives
 
$
18,968

 
$
65,947

Forward contracts
Unrealized gains on forward contracts are recorded in Prepaid expenses and other current assets. Unrealized losses on forward contracts are recorded in Accrued expenses.
 
$
65

 
$
36


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, 2015 and December 31, 2014, 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 three and nine months ended September 30, 2015 and 2014:
 
Three months ended September 30,
 
Nine months ended September 30,
(In thousands)
2015
 
2014
 
2015
 
2014
Derivative gain (loss):
 
 
 
 
 
 
 
Common Stock options/warrants
$
(4,070
)
 
$
651

 
$
(2,645
)
 
$
388

2033 Senior Notes
36,132

 
2,521

 
(31,818
)
 
3,291

Forward contracts
182

 
133

 
363

 
79

Total
$
32,244

 
$
3,305

 
$
(34,100
)
 
$
3,758


The outstanding forward contracts at September 30, 2015 and December 31, 2014, have been recorded at fair value, and their maturity details are as follows:
(In thousands)
Days until maturity
 
Contract value
 
Fair value at
 September 30, 2015
 
Effect on income (loss)
0 to 30
 
$
2,790

 
$
2,840

 
$
50

31 to 60
 
1,966

 
1,979

 
13

61 to 90
 
195

 
197

 
2

91 to 120
 

 

 

More than 120
 

 

 

Total
 
$
4,951

 
$
5,016

 
$
65

(In thousands)
Days until maturity
 
Contract value
 
Fair value at
 December 31, 2014
 
Effect on income (loss)
0 to 30
 
$
750

 
$
780

 
$
30

31 to 60
 
90

 
93

 
3

61 to 90
 

 

 

91 to 120
 
68

 
71

 
3

121 to 180
 

 

 

More than 180
 

 

 

Total
 
$
908

 
$
944

 
$
36