DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

We transact business in various foreign countries and are therefore exposed to foreign currency exchange rate risk that impacts the reported U.S. Dollar amounts of revenues, expenses, and certain foreign currency monetary assets and liabilities. In order to manage exposure to fluctuations in foreign currency and to reduce the volatility in earnings caused by fluctuations in foreign exchange rates, we enter into forward contracts to buy and sell foreign currency. By policy, we do not enter into these contracts for trading purposes or speculation.

Counterparty default risk is considered low because the forward contracts that we enter into are over-the-counter instruments transacted with highly-rated financial institutions. We were not required to and did not post collateral as of March 31, 2020 or December 31, 2019.

Our derivative instruments are recorded at fair value as a derivative asset or liability in the condensed consolidated balance sheets. We report derivative instruments with the same counterparty on a net basis when a master netting arrangement is in place. Changes in fair value are recognized within ‘Foreign currency gains (losses), net’ in the condensed consolidated statements of operations. For the condensed consolidated statements of cash flows, we classify cash flows from derivative instruments at settlement in the same category as the cash flows from the related hedged items within ‘Cash provided by operating activities.’

Results of Derivative Activities

The fair values of derivative assets and liabilities, net, all of which are classified as Level 2, reported within ‘Accrued expenses and other liabilities’ or ‘Prepaid expenses and other assets’ in the condensed consolidated balance sheets were:


	March 31, 2020						December 31, 2019
	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
	(in thousands)
Forward foreign currency exchange contracts	$	1,990	$	(2,983)	$	535	$	(424)
Netting of counterparty contracts	(1,990)		1,990		(424)		424
Foreign currency forward contract derivatives	$	—	$	(993)	$	111	$	—

The notional amounts of outstanding foreign currency forward exchange contracts presented below report the total U.S. Dollar equivalent position and the net contract fair values for each foreign currency position.


	March 31, 2020						December 31, 2019
	Notional		Fair Value		Notional		Fair Value
	(in thousands)
Euro	$	27,818	$	(82)	$	46,757	$	36
Singapore Dollar	37,416		(1,730)		31,255		344
Japanese Yen	28,022		(517)		11,823		63
South Korean Won	22,453		458		10,328		(82)
British Pound Sterling	4,816		192		9,155		(104)
Other currencies	23,219		686		24,969		(146)
Total	$	143,744	$	(993)	$	134,287	$	111

Latest maturity date	April 2020						January 2020

Amounts reported in ‘Foreign currency losses, net’ in the condensed consolidated statements of operations include both realized and unrealized gains (losses) from foreign currency transactions and derivative contracts, and were:


	Three Months Ended March 31,
	2020		2019
	(in thousands)
Foreign currency transaction gains (losses)	$	1,027	$	(1,433)
Foreign currency forward exchange contracts gains (losses)	(1,258)		216
Foreign currency losses, net	$	(231)	$	(1,217)