Quarterly report pursuant to Section 13 or 15(d)

Derivative Instruments and Hedging Activities (Tables)

v3.19.1
Derivative Instruments and Hedging Activities (Tables)
9 Months Ended
Mar. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Schedule of Derivative Instruments, Location, Designated and Non-Designated, Gains (Losses)
The gains (losses) on derivatives in cash flow hedging relationships recognized in OCI for the indicated periods were as follows:
Three months ended
Nine months ended
March 31,
March 31,
(In thousands)
2019
2018
2019
2018
Derivatives Designated as Hedging Instruments:
Rate lock agreements:
Amounts included in the assessment of effectiveness
$
(3,252
)
$
—

$
(8,649
)
$
—

Foreign exchange contracts:
Amounts included in the assessment of effectiveness
$
1,925

$
(581
)
$
2,163

$
560

Amounts excluded from the assessment of effectiveness
$
(53
)
$
—

$
(82
)
$
—

The locations and amounts of designated and non-designated derivative’s gains and losses reported in the condensed consolidated statements of operations for the indicated periods were as follows:
Three months ended March 31,
Three months ended March 31,
2019
2018
(In thousands)
Revenue
Cost of revenues
Interest expense
Other expense (income), net
Revenue
Cost of revenues
Interest expense
Other expense (income), net
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded
$
1,097,311

$
486,945

$
31,187

$
(9,282
)
$
1,021,294

$
368,356

$
28,119

$
(7,640
)
Gains (losses) on Derivatives Designated as Hedging Instruments:
Rate lock agreements:
Amount of gains (losses) reclassified from accumulated OCI to earnings
$
—

$
—

$
150

$
—

$
—

$
—

$
—

$
—

Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Foreign exchange contracts:
Amount of gains (losses) reclassified from accumulated OCI to earnings
$
655

$
(17
)
$
—

$
158

$
(65
)
$
570

$
189

$
—

Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Amount excluded from the assessment of effectiveness
$
—

$
—

$
—

$
(121
)
$
—

$
—

$
—

$
(374
)
Gains (losses) on Derivatives Not Designated as Hedging Instruments:
Amount of gains (losses) recognized in earnings
$
—

$
—

$
—

$
513

$
—

$
—

$
—

$
(7,484
)
Nine months ended March 31,
Nine months ended March 31,
2019
2018
(In thousands)
Revenue
Cost of revenues
Interest expense
Other income (expense), net
Revenue
Cost of revenues
Interest expense
Other income (expense), net
Total amounts presented in the condensed consolidated statement of operations in which the effects of cash flow hedges are recorded
$
3,310,469

$
1,276,592

$
84,087

$
(28,535
)
$
2,966,697

$
1,068,475

$
86,067

$
(19,847
)
Gains (losses) on Derivatives Designated as Hedging Instruments:
Rate lock agreements:
Amount of gains (losses) reclassified from accumulated OCI to earnings
$
—

$
—

$
527

$
—

$
—

$
—

$
—

$
—

Amount of gains (losses) reclassified from accumulated OCI to earnings as a result that a forecasted transaction is no longer probable of occurring
$
—

$
—

$
—

$
—

$
—

$
—

$
—

$
—

Foreign exchange contracts:
Amount of gains (losses) reclassified from accumulated OCI to earnings
$
3,343

$
(309
)
$
—

$
158

$
1,300

$
1,908

$
567

$
—

Amount excluded from the assessment of effectiveness recognized in earnings based on an amortization approach
$
80

$
(8
)
$
—

$
—

$
—

$
—

$
—

$
—

Amount excluded from the assessment of effectiveness
$
—

$
—

$
—

$
(208
)
$
—

$
—

$
—

$
(603
)
Gains (losses) on Derivatives Not Designated as Hedging Instruments:
Amount of gains (losses) recognized in earnings
$
—

$
—

$
—

$
576

$
—

$
—

$
—

$
(3,808
)
Schedule of Notional Amounts of Derivatives Outstanding
The U.S. dollar equivalent of all outstanding notional amounts of foreign currency hedge contracts, with maximum remaining maturities of approximately ten months as of March 31, 2019 and June 30, 2018 , were as follows:
(In thousands)
As of
March 31, 2019
As of
June 30, 2018
Cash flow hedge contracts - foreign currency
Purchase
$
66,713

$
8,116

Sell
$
164,955

$
115,032

Other foreign currency hedge contracts
Purchase
$
231,765

$
130,442

Sell
$
289,502

$
154,442

Schedule of Derivative Instruments, Fair Value
The locations and fair value of our derivatives reported in our Condensed Consolidated Balance Sheets as of the dates indicated below were as follows:
Asset Derivatives
Liability Derivatives
Balance Sheet
Location
As of
March 31, 2019
As of
June 30, 2018
Balance Sheet
Location
As of
March 31, 2019
As of
June 30, 2018
(In thousands)
Fair Value
Fair Value
Derivatives designated as hedging instruments
Rate lock contracts
Other current assets
$
—

$
219

Other current liabilities
$
—

$
5,158

Foreign exchange contracts
Other current assets
1,957

3,259

Other current liabilities
254

312

Total derivatives designated as hedging instruments
1,957

3,478

254

5,470

Derivatives not designated as hedging instruments
Foreign exchange contracts
Other current assets
2,289

1,907

Other current liabilities
1,562

1,358

Total derivatives not designated as hedging instruments
2,289

1,907

1,562

1,358

Total derivatives
$
4,246

$
5,385

$
1,816

$
6,828

Balances and Changes in Accumulated Other Comprehensive Income Related to Derivative Instruments
The changes in OCI, before taxes, related to derivatives for the indicated periods were as follows:
Three months ended
March 31,
Nine months ended
March 31,
(In thousands)
2019
2018
2019
2018
Beginning balance
$
(5,615
)
$
6,186

$
2,346

$
8,126

Amount reclassified to earnings
(946
)
(694
)
(3,719
)
(3,775
)
Net change in unrealized gains or losses
(1,379
)
(581
)
(6,567
)
560

Ending balance
$
(7,940
)
$
4,911

$
(7,940
)
$
4,911

Offsetting of Assets and Liabilities
The information related to the offsetting arrangements for the periods indicated was as follows (in thousands):
As of March 31, 2019
Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets
Description
Gross Amounts of Derivatives
Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets
Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets
Financial Instruments
Cash Collateral Received
Net Amount
Derivatives - Assets
$
4,246

$
—

$
4,246

$
(1,209
)
$
—

$
3,037

Derivatives - Liabilities
$
(1,816
)
$
—

$
(1,816
)
$
1,209

$
—

$
(607
)
As of June 30, 2018
Gross Amounts of Derivatives Not Offset in the Condensed Consolidated Balance Sheets
Description
Gross Amounts of Derivatives
Gross Amounts of Derivatives Offset in the Condensed Consolidated Balance Sheets
Net Amount of Derivatives Presented in the Condensed Consolidated Balance Sheets
Financial Instruments
Cash Collateral Received
Net Amount
Derivatives - Assets
$
5,385

$
—

$
5,385

$
(1,888
)
$
—

$
3,497

Derivatives - Liabilities
$
(6,828
)
$
—

$
(6,828
)
$
1,888

$
—

$
(4,940
)
Baidu