Derivative Financial Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

A. FAIR VALUE OF DERIVATIVE INSTRUMENTS

Derivative financial instruments are presented as other assets or other payables. For asset derivatives and liability derivatives, the fair values of the Company’s outstanding derivative instruments as of December 31, 2019 and December 31, 2018 are summarized below:

	Asset Derivatives (*)				Liability Derivatives (**)
	December 31,				December 31,
	2019		2018		2019		2018
Derivatives designated as hedging instruments
Foreign exchange contracts	23,820		22,327		7,489		22,637
Cross-currency interest rate swaps	6,183		4,378		—		—
	$	30,003	$	26,705	$	7,489	$	22,637
Derivatives not designated as hedging instruments
Foreign exchange contracts	66		222		337		1,299
	$	66	$	222	$	337	$	1,299

^(*)  Presented as part of other receivables and long-term other receivables.

^(**)  Presented as part of other payables and long-term other payables.

B. EFFECT ON CASH FLOW HEDGING

The effect of derivative instruments on cash flow hedging and the relationship between income and other comprehensive income for the years ended December 31, 2019 and December 31, 2018, are summarized below:

	Gain (Loss) Recognized in Other Comprehensive Income on Effective- Portion of Derivative, net					Gain (Loss) on of Derivative Reclassified from Accumulated Other Comprehensie Income (*),(**)				Amount Excluded from Effectiveness Testing Recognized in Income (***)
	December 31, 2019		December 31, 2018			December 31, 2019		December 31, 2018		December 31, 2019			December 31, 2018
Derivatives designated as hedging instruments:
Foreign exchange contracts	$	24,328	$	(6,249	)	$	13,057	$	10,180	$	5,447		$	2,726
Derivatives not designated as hedging instruments:
Foreign exchange contracts and other derivatives instruments	$	—	$	—		$	—	$	—	$	(1,876	)	$	1,457

^(*)  Presented as part of revenues/cost of revenue and equity in net earning of affiliated companies and partnerships.

^(***)  As of December 31, 2019, this amount includes gains of $2,327 reclassified into earnings as a result of the discontinuance of cash flow hedges because it was probable that the original forecast transaction would not occur by the end of the originally specified time frame.

^(***)  As of December 31, 2019, presented as part of revenues. As of December, 2018, presented as part of financial income (expenses), net.

Note 19 - DERIVATIVE FINANCIAL INSTRUMENTS (Cont.)

C. NET EFFECT OF CROSS-CURRENCY SWAPS

The net effect on earnings from the cross-currency swaps in 2019 was a gain of approximately $3,900, of which approximately $3,300 was offset against exchange rate difference related to Series A Notes and approximately $600 was offset against interest expenses.

D. FORWARD CONTRACTS

The notional amounts of outstanding foreign exchange forward contracts at December 31, 2019 is summarized below:

	Forward contracts
	Buy				Sell
	December 31,				December 31,
	2019		2018		2019		2018
Euro	$	81,258	$	102,485	$	330,433	$	414,211
GBP	9,380		6,764		38,606		23,559
NIS	—		598,200		—		—
Other	35,662		41,467		63,093		57,266
	$	126,300	$	748,916	$	432,132	$	495,036