Avid 2011 Annual Report Download - page 68

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63
position, but for which the fair value of such items is required to be disclosed. ASU No. 2011-04 is effective for fiscal years and
interim periods beginning after December 15, 2011, which is January 1, 2012 for Avid, and must be applied prospectively. The
Company adopted this ASU on January 1, 2012. Adoption did not have an impact on the Company's consolidated financial
position, results of operations or cash flows.
C. NET LOSS PER SHARE
The following table sets forth (in thousands) potential common shares, on a weighted-average basis, that were considered anti-
dilutive securities and excluded from the Diluted EPS calculations for the relevant periods either because the sum of the exercise
price per share and the unrecognized compensation cost per share was greater than the average market price of the Company's
common stock for the relevant period, or because they were considered contingently issuable. The contingently issuable potential
common shares result from certain stock options and restricted stock units granted to the Company's executive officers that vest
based on performance or market conditions.
Options
Non-vested restricted stock and restricted stock units
Anti-dilutive potential common shares
2011
5,987
494
6,481
2010
5,008
186
5,194
2009
4,308
707
5,015
During periods of net loss, certain potential common shares that would otherwise be included in the Diluted EPS calculation are
excluded because the effect would be anti-dilutive. The following table sets forth (in thousands) common stock equivalents that
were excluded from the calculation of Diluted EPS due to the net loss for the relevant period.
Options
Non-vested restricted stock and restricted stock units
Total anti-dilutive common stock equivalents
2011
21
78
99
2010
13
55
68
2009
12
15
27
D. FOREIGN CURRENCY FORWARD CONTRACTS
During the third and fourth quarters of 2010, the Company used foreign currency forward contracts to hedge the foreign exchange
currency risk associated with certain forecasted euro-denominated sales transactions. These contracts were designated and
qualified as cash flow hedges under the criteria of ASC Topic 815. Changes in the fair value of the effective portion of
derivatives designated and qualifying as cash flow hedges is initially reported as a component of accumulated other
comprehensive income in stockholders' equity and subsequently reclassified into revenues at the time the hedged transactions
affect earnings. The ineffective portion of the change in fair value is recognized directly into earnings. To date no amounts have
been recorded as a result of hedging ineffectiveness.
At December 31, 2011 and 2010, the Company did not hold any foreign currency forward contracts as hedges against forecasted
foreign-currency-denominated sales transactions.
The following tables set forth the effect of the Company's foreign currency forward contracts designated as hedging instruments
on the Company's statements of operations during the year ended December 31, 2010 (in thousands):
Derivatives Designated as Hedging
Instruments under ASC Topic 815
Foreign currency forward contracts
Amount of Loss Reclassified from Accumulated Other
Comprehensive Income (Loss) into Revenues (Effective Portion)
$(1,761)
As a hedge against the foreign exchange exposure of certain forecasted receivables, payables and cash balances of foreign
subsidiaries, the Company enters into short-term foreign currency forward contracts. The changes in fair value of the foreign
currency forward contracts intended to offset foreign currency exchange risk on cash flows associated with net monetary assets
are recorded as gains or losses in the Company's statement of operations in the period of change, because they do not meet the
criteria of ASC Topic 815 to be treated as hedges for accounting purposes. There are two objectives of the Company's foreign
currency forward contract program: (1) to offset any foreign currency exchange risk associated with cash receipts expected to be
received from the Company's customers and cash payments expected to be made to the Company's vendors over the next 30-day
period and (2) to offset the impact of foreign currency exchange on the Company's net monetary assets denominated in currencies