Derivative Financial Instruments and Hedging Activities (Tables)

9 Months Ended

May 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair value of derivative instruments located on consolidated balance sheets

The following table presents the fair values of the Company’s derivative instruments recorded in the Condensed Consolidated Balance Sheets utilized for foreign currency risk management purposes as of May 31, 2019 and August 31, 2018 (in thousands):



	Fair Values of Derivative Instruments
	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	Fair Value as of May 31, 2019(1)		Fair Value as of August 31, 2018(1)		Balance Sheet Location	Fair Value as of May 31, 2019(1)		Fair Value as of August 31, 2018(1)
Derivatives designated as hedging instruments:
Forward foreign exchange contracts	Prepaid expenses and other current assets	$	644	$	225	Accrued expenses	$	3,853	$	13,364
Derivatives not designated as hedging instruments:
Forward foreign exchange contracts	Prepaid expenses and other current assets	$	5,216	$	10,125	Accrued expenses	$	26,851	$	46,171

⁽¹⁾ Classified as Level 2 in the fair-value hierarchy.

Net gains from forward contracts recorded in consolidated statements of operations

The following table presents the net gains from forward contracts recorded in the Condensed Consolidated Statements of Operations for the periods indicated (in thousands):



Derivatives Not Designated as Hedging Instruments Under ASC 815	Location of (Loss) Gain on Derivatives Recognized in Net Income	Amount of (Loss) Gain Recognized in Net Income on Derivatives
		Three months ended						Nine months ended
		May 31, 2019			May 31, 2018			May 31, 2019		May 31, 2018
Forward foreign exchange contracts⁽¹⁾	Cost of revenue	$	(33,476	)	$	(19,785	)	$	9,332	$	25,959

⁽¹⁾

During the three months ended May 31, 2019 and 2018, the Company recognized $28.3 million and $23.1 million, respectively, of foreign currency gains in cost of revenue, which are offset by the losses from the forward foreign exchange contracts. During the nine months ended May 31, 2019 and 2018, the Company recognized $24.3 million and $12.5 million, respectively, of foreign currency losses in cost of revenue, which are offset by the gains from the forward foreign exchange contracts.

Schedule of Notional Amounts of Outstanding Derivative Positions

The following table presents the interest rate swaps outstanding as of May 31, 2019, which have been designated as hedging instruments and accounted for as cash flow hedges:



Interest Rate Swap Summary	Hedged Interest Rate Payments	Aggregate Notional Amount (in millions)		Effective Date	Expiration Date ⁽¹⁾
Forward Interest Rate Swap
Anticipated Debt Issuance	Fixed	$	200.0	October 22, 2018	December 15, 2020	⁽²⁾
Interest Rate Swaps⁽³⁾
2017 Term Loan Facility	Variable	$	200.0	September 30, 2016	June 30, 2019
2017 Term Loan Facility	Variable	$	200.0	October 11, 2018	August 31, 2020
2018 Term Loan Facility	Variable	$	350.0	August 24, 2018	August 24, 2020


⁽¹⁾	The contracts will be settled with the respective counterparties on a net basis at the expiration date for the forward interest rate swap and at each settlement date for the interest rate swaps.


⁽²⁾	If the anticipated debt issuance occurs before December 15, 2020, the contracts will be terminated simultaneously with the debt issuance.

⁽³⁾

The Company pays interest based upon a fixed rate as agreed upon with the respective counterparties and receives variable rate interest payments based on the one-month LIBOR for the $500.0 million Term Loan Facility, expiring on November 8, 2022 (the “2017 Term Loan Facility”), for which $400.0 million is hedged, and based on the three-month LIBOR for the $350.0 million Term Loan Facility, which expires on August 24, 2020 (the “2018 Term Loan Facility”).