Derivatives

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

DERIVATIVES

From time to time, we enter into foreign exchange forward contracts to offset the earnings impacts of exchange rate fluctuations on certain monetary assets and liabilities. We do not enter into derivative instruments for any purpose other than to manage foreign currency exposure. That is, we do not engage in currency exchange rate speculation using derivative instruments.

We may hedge our net recognized foreign currency assets and liabilities with forward foreign exchange contracts to reduce the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These derivative instruments hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value with changes in the fair value recorded as other income. These derivative instruments do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged. As of March 31, 2020, total outstanding contract notional amounts were $7.8 million. At March 31, 2020, these outstanding balance sheet hedging derivatives had maturities of 79 days or less.

The fair value of our derivative instruments was included in our condensed consolidated balance sheets as follows (in thousands):

	Balance Sheet Classification	As of
		March 31, 2020		December 31, 2019
Derivative instruments not designated as cash flow hedges:
Foreign currency forward contracts	Prepaids and other current assets	$	7	$	295
	Accrued liabilities	124		9

The effect of derivative instruments on our condensed consolidated statements of operations was as follows (in thousands):

	Statement of Operations Classification	Three Months Ended March 31,
		2020			2019
Derivative instruments designated as cash flow hedges:
Gain recognized in other comprehensive loss before reclassifications	---	$	—		$	(35	)
Gain reclassified from accumulated other comprehensive loss to earnings for the effective portion	Interest expense	—			81
Income tax expense	Income tax benefit	—			(16		)
Derivative instruments not designated as cash flow hedges:
(Gain) loss recognized in earnings	Other, net	$	(13	)	$	505
Income tax expense (benefit)	Income tax benefit	3			(101		)

For additional information related to our derivatives, see Notes 4 and 11.