Avid 2014 Annual Report Download - page 75

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69
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 earnings per share 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 conditions, market conditions, or a combination of performance or market conditions.
Year Ended December 31,
2014 2013 2012
Options 4,748 5,193 6,069
Non-vested restricted stock units 118 352 638
Anti-dilutive potential common shares 4,866 5,545 6,707
D. FOREIGN CURRENCY CONTRACTS
As a hedge against the foreign exchange exposure of certain forecasted receivables, payables and cash balances of its 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 these contracts have not been accounted for
as hedges. 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 following 30 days and (2) to offset the impact of foreign currency exchange on the
Company’s net monetary assets denominated in currencies other than the functional currency of the legal entity. These forward
contracts typically mature within 30 days of execution. At December 31, 2014 and 2013, the Company had foreign currency forward
contracts outstanding with aggregate notional values of $25.4 million and $21.0 million, respectively, as hedges against such
forecasted foreign-currency-denominated receivables, payables and cash balances.
The Company may also enter into short-term foreign currency spot and forward contracts as a hedge against the foreign currency
exchange risk associated with certain of its net monetary assets denominated in foreign currencies. At December 31, 2014 and 2013,
the Company had such foreign currency contracts with aggregate notional values of $2.8 million and $5.4 million, respectively.
Because these contracts have not been accounted for as hedges, the changes in fair value of these foreign currency contracts are
recorded as gains or losses in the Company’s statement of operations.
The following table sets forth the balance sheet classification and fair values of the Company’s foreign currency contracts at
December 31, 2014 and 2013 (in thousands):
Derivatives Not Designated as Hedging Instruments Under
Accounting Standards Codification (“ASC”) Topic 815 Balance Sheet Classification Fair Value at
December 31, 2014 Fair Value at
December 31, 2013
Financial assets:
Foreign currency contracts Other current assets $— $59
Financial liabilities:
Foreign currency contracts Accrued expenses and
other current liabilities $518 $228
The following table sets forth the net foreign exchange gains (losses) recorded as marketing and selling expenses in the Company’s
statements of operations during the years ended December 31, 2014, 2013 and 2012 that resulted from the gains and losses on
Company’s foreign currency contracts not designated as hedging instruments and the revaluation of the related hedged items (in
thousands):
Derivatives Not Designated as Hedging
Instruments Under ASC Topic 815
Net Loss Recorded in Marketing and Selling Expenses
2014 2013 2012
Foreign currency contracts $(908) $(187) $(707)