Derivative Financial Instruments

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

The Company utilizes cash flow hedges to mitigate its currency risk arising from its global delivery resources and to reduce variability in interest cash flows from its outstanding debt. As of September 30, 2019, the Company has recorded $0.4 million and $0.0 million of existing gains in accumulated other comprehensive income for the foreign currency hedges and interest rate swap, respectively. The Company estimates that $0.4 million and $0.0 million of gains reported in accumulated other comprehensive income are expected to be reclassified into earnings within the next 12 months. The amounts related to foreign currency hedges that were reclassified into cost of services were a net gain of $0.4 million and $0.9 million during the three and nine month period ended September 30, 2019, and a net loss of $0.6 million and $1.0 million during the three and nine month period ended September 30, 2018. The amounts related to the interest rate swap that were reclassified into cost of services were a net gain of $0.0 million during the three and nine month periods ended September 30, 2019 and September 30, 2018.

The Company classifies cash flows from its derivative programs as cash flows from operating activities in the consolidated statements of cash flows. As of September 30, 2019, the Company’s currency forward contracts have maturities extending no later than December 31, 2020.

As of September 30, 2019, the notional amounts of the Company's open foreign currency forward contracts and interest rate swap were approximately $29.5 million and $100.0 million, respectively. As of December 31, 2018, the notional amounts of the Company's open foreign currency forward contracts and interest rate swap were approximately $52.0 million and $0.0 million, respectively. As of September 30, 2019, the Company held no

derivatives, or non-derivative hedging instruments, that were designated as fair value or net investment hedges. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.