DERIVATIVE FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

In the normal course of business, the company uses derivative financial instruments to manage the risk of fluctuations in foreign currency exchange rates. The Company has a hedging program whereby it enters into a series of foreign exchange forward contracts with durations of twelve months or less that are designated as cash flow hedges of forecasted Russian ruble, Polish zloty and Indian rupee transactions. As of June 30, 2019, all of the Company’s foreign exchange forward contracts were designated as hedges and there is no financial collateral (including cash collateral) required to be posted by the Company related to the foreign exchange forward contracts.

The fair value of derivative instruments on the Company’s consolidated balance sheets as of June 30, 2019 and December 31, 2018 were as follows:



		As of June 30, 2019				As of December 31, 2018
	Balance Sheet Classification	Asset Derivatives		Liability Derivatives		Asset Derivatives		Liability Derivatives
Foreign exchange forward contracts - Designated as hedging instruments	Prepaid expenses and other current assets	$	2,689			$	181
	Accrued expenses and other current liabilities			$	—			$	3,475

The Company records changes in the fair value of its cash flow hedges in accumulated other comprehensive loss in the consolidated balance sheet until the forecasted transaction occurs. When the forecasted transaction occurs, the Company reclassifies the related gain or loss on the cash flow hedge to cost of revenues (exclusive of depreciation and amortization). In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the Company reclassifies the gain or loss on the related cash flow hedge into income. If the Company does not elect hedge accounting, or the contract does not qualify for hedge accounting treatment, the changes in fair value from period to period are recorded in income.

The changes in the fair value of foreign currency derivative instruments in our unaudited condensed consolidated statements of income and comprehensive income for the three and six months ended June 30, 2019 and 2018 were as follows:



	Three Months Ended June 30,					Six Months Ended June 30,
	2019		2018			2019			2018
Foreign exchange forward contracts - Designated as hedging instruments:
Change in fair value recognized in accumulated other comprehensive loss	$	1,984	$	(2,696	)	$	5,983		$	(2,606	)
Net gain/(loss) reclassified from accumulated other comprehensive loss into cost of revenues (exclusive of depreciation and amortization)	$	342	$	(937	)	$	(110	)	$	(937	)
Foreign exchange forward contracts - Not designated as hedging instruments:
Net gain recognized in foreign exchange (loss)/gain	$	—	$	—		$	—		$	44