Derivative Financial Instruments |
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| Derivative Financial Instruments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Financial Instruments |
NOTE 8. DERIVATIVE FINANCIAL INSTRUMENTS The Company’s primary exchange rate risk management objective is to mitigate the uncertainty of anticipated cash flows attributable to changes in foreign currency exchange rates. The Company primarily focuses on mitigating changes in cash flows resulting from sales denominated in currencies other than the U.S. dollar. The Company manages this risk primarily by using currency forward and option contracts. If the anticipated transactions are deemed probable, the resulting relationships are formally designated as cash flow hedges. At March 31, 2016, the Company’s derivative contracts had a remaining maturity of less than one year. The counterparty to these transactions had both long-term and short-term investment grade credit ratings. The maximum net exposure of the Company’s credit risk to the counterparty is generally limited to the aggregate unrealized loss of all contracts with that counterparty. The Company’s exposure of counterparty credit risk is limited to the aggregate unrealized loss of $1,075 on all contracts at March 31, 2016. The Company’s derivative counterparty has strong credit ratings and as a result, the Company does not require collateral to facilitate transactions. The Company held the following contracts designated as hedged instruments as of March 31, 2016 and December 31, 2015:
The Company accounts for these contracts as cash flow hedges and tests effectiveness by determining whether changes in the expected cash flow of the derivative offset, within a range, changes in the expected cash flow of the hedged item. For contracts that qualify as effective hedge instruments, the effective portion of gains and losses resulting from changes in fair value of the instruments are included in accumulated other comprehensive loss and reclassified to sales in the period the underlying hedged item is recognized in earnings. Gains (losses) of $(141) and $1,599 were reclassified to sales during the three months ended March 31, 2016 and 2015, respectively. Gains (losses) of $0 and $107 were reclassified to discontinued operations, net of tax, during the three months ended March 31, 2016 and 2015, respectively. As of December 31, 2015, the Company reported an accumulated derivative instrument loss of $68. During the three months ended March 31, 2016, the Company reported accumulated other comprehensive loss of $712, as a result of the change in fair value of these contracts and reclassifications to sales as discussed above, resulting in an accumulated derivative instrument loss of $780 reported as of March 31, 2016. The following table presents the balance sheet classification and fair value of derivative instruments as of March 31, 2016 and December 31, 2015:
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