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Derivatives and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

The effect of net investment hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and six months ended June 30, 2019 and 2018 was as follows (in thousands):



Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended June 30,					Six Months Ended June 30,
		2019			2018		2019		2018
Foreign currency debt		$	(34,309	)	$	226,115	$	29,606	$	151,843
Cross-currency interest rate swaps (included component) ⁽¹⁾		(9,689		)	—		5,826		—
Cross-currency interest rate swaps (excluded component) ⁽²⁾		6,141			—		3,551		—
Total		$	(37,857	)	$	226,115	$	38,983	$	151,843

Amount of gain or (loss) recognized in earnings:
	Location of gain or (loss)	Three Months Ended June 30,					Six Months Ended June 30,
	Location of gain or (loss)	2019			2018		2019		2018
Cross-currency interest rate swaps (excluded component) ⁽²⁾	Interest expense	$	4,928		$	—	$	9,091	$	—
Total		$	4,928		$	—	$	9,091	$	—


⁽¹⁾	Included component represents foreign exchange spot rates.

⁽²⁾

Excluded component represents cross-currency basis spread and interest rates.

Summary of cash flow hedges

The effect of cash flow hedges on accumulated other comprehensive income and the condensed consolidated statements of operations for the three and six months ended June 30, 2019 and 2018 was as follows (in thousands):



Amount of gain or (loss) recognized in accumulated other comprehensive income:
		Three Months Ended June 30,						Six Months Ended June 30,
		2019			2018			2019			2018
Foreign currency forward and option contracts (included component) ⁽¹⁾		$	(2,599	)	$	47,031		$	8,366		$	41,590
Foreign currency option contracts (excluded component) ⁽²⁾		(1,405		)	—			(1,405		)	—
Total		$	(4,004	)	$	47,031		$	6,961		$	41,590

Amount of gain or (loss) reclassified from accumulated other comprehensive income to income:
		Three Months Ended June 30,						Six Months Ended June 30,
	Location of gain or (loss)	2019			2018			2019			2018
Foreign currency forward contracts	Revenues	$	18,684		$	(12,904	)	$	28,545		$	(31,319	)
Foreign currency forward contracts	Cost of revenues	(9,745		)	6,778			(15,074		)	16,101
Total		$	8,939		$	(6,126	)	$	13,471		$	(15,218	)

Amount of gain or (loss) excluded from effectiveness testing included in income:
		Three Months Ended June 30,						Six Months Ended June 30,
	Location of gain or (loss)	2019			2018			2019			2018
Foreign currency forward contracts	Other income (expense)	$	—		$	4,777		$	88		$	6,430
Foreign currency option contracts (excluded component) ⁽²⁾	Revenues	(17		)	—			(17		)	—
Total		$	(17	)	$	4,777		$	71		$	6,430


⁽¹⁾	Included component represents foreign exchange spot rates.

⁽²⁾

Excluded component represents option's time value.

Schedule of derivatives not designated as hedging instruments in the Company's condensed consolidated statements of operations

The following table presents the effect of derivatives not designated as hedging instruments in the Company's condensed consolidated statements of operations (in thousands):



Amount of gain or (loss) recognized in earnings:
		Three Months Ended June 30,						Six Months Ended June 30,
	Location of gain or (loss)	2019			2018			2019		2018
Embedded derivatives	Revenues	$	(185	)	$	3,909		$	722	$	1,464
Economic hedge of embedded derivatives	Revenues	598			(1,468		)	541		(938		)
Foreign currency forward contracts	Other income (expense)	10,148			47,796			18,499		43,676
Total		$	10,561		$	50,237		$	19,762	$	44,202

Schedule of derivative instruments recognized in the Company's condensed consolidated balance sheets

The following table presents the fair value of derivative instruments recognized in the Company's condensed consolidated balance sheets as of June 30, 2019 and December 31, 2018 (in thousands):



	June 30, 2019				December 31, 2018
	Assets ⁽¹⁾		Liabilities ⁽²⁾		Assets ⁽¹⁾		Liabilities ⁽²⁾
Designated as hedging instruments:
Cash flow hedges
Foreign currency forward and option contracts	$	42,781	$	187	$	38,606	$	865
Net investment hedges
Cross-currency interest rate swaps	9,377		—		—		—
Total designated as hedging	52,158		187		38,606		865

Not designated as hedging instruments:
Embedded derivatives	4,947		1,943		4,656		2,426
Economic hedges of embedded derivatives	1,873		19		525		180
Foreign currency forward contracts	4,021		23,979		29,287		6,269
Total not designated as hedging	10,841		25,941		34,468		8,875
Total Derivatives	$	62,999	$	26,128	$	73,074	$	9,740


⁽¹⁾	As presented in the Company's condensed consolidated balance sheets within other current assets and other assets.

⁽²⁾

As presented in the Company's condensed consolidated balance sheets within other current liabilities and other liabilities.

Schedule of offsetting derivative assets and liabilities

The following table presents information related to these offsetting arrangements as of June 30, 2019 and December 31, 2018 (in thousands):



	Gross Amounts Offset in Consolidated Balance Sheet
	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Net Amounts		Gross Amounts not Offset in the Balance Sheet			Net
June 30, 2019
Derivative assets	$	80,919	$	—	$	80,919	$	(32,248	)	$	48,671
Derivative liabilities	35,931		—		35,931		(32,248		)	3,683

December 31, 2018
Derivative assets	$	73,074	$	—	$	73,074	$	(6,517	)	$	66,557
Derivative liabilities	9,740		—		9,740		(6,517		)	3,223

Schedule of offsetting derivative assets and liabilities

The following table presents information related to these offsetting arrangements as of June 30, 2019 and December 31, 2018 (in thousands):



	Gross Amounts Offset in Consolidated Balance Sheet
	Gross Amounts		Gross Amounts Offset in the Balance Sheet		Net Amounts		Gross Amounts not Offset in the Balance Sheet			Net
June 30, 2019
Derivative assets	$	80,919	$	—	$	80,919	$	(32,248	)	$	48,671
Derivative liabilities	35,931		—		35,931		(32,248		)	3,683

December 31, 2018
Derivative assets	$	73,074	$	—	$	73,074	$	(6,517	)	$	66,557
Derivative liabilities	9,740		—		9,740		(6,517		)	3,223

- Definition

Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item.

+ References

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+ Details