DERIVATIVE INSTRUMENTS

Cash flow hedges

Our locations in Canada and the Philippines primarily serve US-based clients. The revenues from these clients is billed and collected in US Dollars, but the expenses related to these revenues are paid in Canadian Dollars and Philippine Pesos. We enter into derivative contracts, in the form of forward contracts and range forward contracts (a transaction where both a call option is purchased and a put option is sold) to mitigate this foreign currency exchange risk. The contracts cover periods commensurate with expected exposure, generally

three

twelve

months. We have elected to designate our derivatives as cash flow hedges in order to associate the results of the hedges with forecasted expenses.

Unrealized gains and losses are recorded in accumulated other comprehensive income (“AOCI”) and will be re-classified to operations as the forecasted expenses are incurred, typically within

one

year. During the

six

months ended

June 30, 2019

and

2018,

our cash flow hedges were highly effective and hedge ineffectiveness was

not

material.

The following table shows the notional amount of our foreign exchange cash flow hedging instruments as of

June

30,

2019:

	Local Currency Notional Amount		U.S. Dollar Notional Amount
Philippine Peso		2,764,000,014		52,227,335
			$	52,227,335

Derivative assets and liabilities associated with our hedging activities are measured at gross fair value as described in Note

"Fair Value Measurements," and are included in prepaid expense and other current assets and accrued expenses and other current liabilities in our condensed consolidated balance sheets, respectively.

Non-designated hedges

We have also entered into foreign currency range forward contracts and interest swap contract as required by our lenders. These hedges are

not

designated hedges under ASC

815,

Derivatives and Hedging.

These contracts generally do

not

exceed

years in duration.

Unrealized gains and losses and changes in fair value of these derivatives are recognized as incurred in Exchange gains (losses), net in the Consolidated Statements of Comprehensive Income (Loss). The following table presents these amounts for the

three

and

six

months ended

June

30,

2019

and

2018:

Derivatives not designated under ASC 815	For the Three Months Ended June 30, 2019			For the Three Months Ended June 30, 2018			For the Six Months Ended June 30, 2019			For the Six Months Ended June 30, 2018
Foreign currency forward contracts	$	342		$	-		$	315		$	-
Interest rate swap	$	(405	)	$	(14	)	$	(630	)	$	(14	)