Financial Instruments and Hedging Activities

6 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments and Hedging Activities

Derivatives Not Designated as Hedges

Forward Currency Contracts

We have operations in a number of international locations where currency exchange rates can be volatile. We utilize foreign currency forward contracts to mitigate the risks associated with changes in foreign currency exchange rates so that our exposure to foreign currencies will be mitigated or offset by the gains or losses on the foreign currency forward contracts. Generally, we enter into such contracts for less than 90 days and have no cash requirements until maturity. As of March 31, 2020 and September 30, 2019, we had outstanding contracts with a total notional value of $54.5 million and $189.6 million, respectively.

We did not designate any forward contracts as hedging instruments for the six months ended March 31, 2020 or 2019. Therefore, changes in fair value of foreign currency forward contracts were recognized within Other (expense) income, net in our consolidated statements of operations. The cash flows related to the settlement of forward contracts not designated as hedging instruments are included in cash flows from investing activities within our condensed consolidated statement of cash flows.

A summary of the derivative instruments is as follows (dollars in thousands):

Derivatives Not Designated as Hedges	Balance Sheet Classification	Fair Value
		March 31, 2020			September 30, 2019
Foreign currency forward contracts	Prepaid expenses and other current assets	$	—		$	597
Foreign currency forward contracts	Accrued expenses and other current liabilities	$	(297	)	$	(327	)

A summary of income (loss) related to foreign currency forward contracts for the three and six months ended March 31, 2020 and 2019 is as follows (dollars in thousands):

	Income Statement Classification	Three Months Ended March 31,					Six Months Ended March 31,
Derivatives Not Designated as Hedges	Income (Loss) Recognized	2020			2019		2020		2019
Foreign currency forward contracts	Other income (expense), net	$	(143	)	$	2,170	$	442	$	440