Tucows 2015 Annual Report Download - page 202

Effects of derivative instruments on income and other comprehensive income (OCI)
Derivatives in Cash Flow
Hedging Relationship
Amount of
Gain or
(Loss)
Recognized
in OCI, net
of tax, on
Derivative
(Effective
Portion)
Location of
Gain or
(Loss)
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion)
Amount of
Gain or
(Loss)
Reclassified
from
Accumulated
OCI into
Income, net
of tax,
(Effective
Portion)
Location of
Gain or
(Loss)
Recognized
in Income on
Derivative
(ineffective
Portion and
Amount
Excluded
from
Effectiveness
Testing)
Amount of
Gain or
(Loss)
Recognized in
Income on
Derivative
(ineffective
Portion and
Amount
Excluded
from
Effectiveness),
net of tax
Operating
expenses $ (1,205,554)
Foreign currency forward
contracts – year ended December
31, 2015 $ (487,011)
Cost of
revenues (338,900)
Operating
expenses $ (189,526)
Operating
expenses (463,160)
Foreign currency forward
contracts – year ended December
31, 2014 (377,460)
Cost of
revenues (163,495)
Operating
expenses (13,535)
In addition to the above, for those foreign currency forward contracts not designated as hedges, the Company has
recorded a loss of $0.5 million upon settlement and a loss of $0.1 million for the change in fair value of outstanding
contracts for the year ended December 31, 2015, in the consolidated statement of comprehensive income. The Company
has recorded a loss of $0.3 million upon settlement and a loss of $50,000 for the change in fair value of outstanding
contracts for the year ended December 31, 2014, in the consolidated statement of comprehensive income.
9. Loan payable:
The Company has credit agreements (collectively the “Amended Credit Facility”) with the Bank of Montreal (the
“Bank” or “BMO”) that were amended on November 19, 2012, and which provide it with access to two revolving demand
loan facilities (the “2012 Demand Loan Facilities”), a treasury risk management facility and an operating demand loan.
Two Revolving Demand Loan Facilities.
The 2012 Demand Loan Facilities are governed by the terms of the Offer Letter, dated as of November 19, 2012,
by and between the Company and the Bank and filed with the SEC on November 21, 2012.
Under the terms of the Amended Credit Facility, our prior demand loan facilities have been amended to provide
an aggregate of $14 million in funds available through the 2012 Demand Loan Facilities, which consist of a demand loan
revolving facility (the “2012 DLR Loan”) and a demand loan revolving reducing facility (the “2012 DLRR Loan”). The
2012 DLR Loan accrues interest at the Bank’s U.S. Base Rate plus 1.25%. The Company may elect to pay interest on the
2012 DLRR Loan either at the Bank’s U.S. Base Rate plus 1.25% or LIBOR plus 2.50%. Aggregate advances under the
2012 Demand Loan Facilities may not exceed $14 million and no more than $2 million of such advances may be used to
finance repurchases of Company common stock. The 2012 Demand Loan Facilities are subject to an undrawn aggregate
standby fee of 0.20% following the first draw, which such fee is payable quarterly in arrears.
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