Avid 2004 Annual Report Download - page 79

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65
The following table summarizes the Company’s long-lived assets, by country (in thousands):
December 31,
2004
2003
Long-lived assets:
United States
$25,025
$20,722
Other countries
8,030
5,235
Total long-lived assets
$33,055
$25,957
O. FINANCIAL INSTRUMENTS
Forward-Exchange Contracts
As of December 31, 2004, there were no forward-exchange contracts outstanding. At December 31, 2003, the Company
had approximately $25.3 million of foreign currency forward-exchange contracts outstanding, denominated in euros,
Japanese yen, British pounds, Singapore dollars, Canadian dollars and Australian dollars, as a hedge against the foreign
exchange exposure of certain forecasted third-party and intercompany receivables, payables and cash balances.
There are two objectives of the Company’s foreign currency forward-exchange contract program: (1) to offset any foreign
exchange currency risk associated with cash receipts expected to be received from our customers 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 other than the U.S. dollar. These forward-exchange contracts typically mature within 30 days of purchase.
The changes in fair value of the forward-exchange contracts intended to offset foreign currency exchange risk on forecasted
cash flows are recorded as gains or losses in the Company’s statement of operations in the period of change, because they
do not meet the criterion of SFAS No.133, Accounting for Derivative Instruments and Hedging Activities, to be treated as
hedges for accounting purposes.
The forward-exchange contracts associated with offsetting the impact of foreign currency exchange risk on the Company’s
net monetary assets are accounted for as fair value hedges under SFAS No. 133. Specifically, the forward-exchange
contracts are recorded at fair value at the origination date, and gains or losses on the contracts are recognized in earnings;
the changes in fair value of the net monetary assets attributable to changes in foreign currency are an adjustment to the
carrying amount and are recognized in earnings in the period of change.
Net realized and unrealized gains (losses) of ($1.7) million, ($0.6) million and $0.5 million resulting from foreign currency
transactions, remeasurement, and forward-exchange contracts were included in results of operations for the years ended
December 31, 2004, 2003 and 2002, respectively.
P. NET INCOME PER COMMON SHARE
Basic and diluted net income per share were as follows (in thousands, except per share data):
For the Year Ended December 31,
2004
2003
2002
Net income
$71,701
$40,889
$2,999
Weighted average common shares outstanding − basic
32,485
29,192
26,306
Weighted average potential common stock:
Options
2,483
3,461
554
Warrant
35
–
–
Weighted average common shares outstanding − diluted
35,003
32,653
26,860
Net income per common share − basic
$2.21
$1.40
$0.11
Net income per common share − diluted
$2.05
$1.25
$0.11
Common stock options, restricted shares and a warrant that were considered anti-dilutive securities and excluded from the
diluted net income per share calculations were as follows, on a weighted-average basis: