| Price | 54.57 | EPS | 1 | |
| Shares | 11 | P/E | 42 | |
| MCap | 589 | P/FCF | 22 | |
| Net Debt | 94 | EBIT | 21 | |
| TEV | 683 | TEV/EBIT | 32 | TTM 2019-09-30, in MM, except price, ratios |
| 10-Q | 2020-09-30 | Filed 2020-11-05 |
| 10-Q | 2020-06-30 | Filed 2020-08-06 |
| 10-Q | 2020-03-31 | Filed 2020-05-07 |
| 10-K | 2019-12-31 | Filed 2020-03-04 |
| 10-Q | 2019-09-30 | Filed 2019-11-06 |
| 10-Q | 2019-06-30 | Filed 2019-08-07 |
| 10-Q | 2019-03-31 | Filed 2019-05-08 |
| 10-K | 2018-12-31 | Filed 2019-03-05 |
| 10-Q | 2018-09-30 | Filed 2018-11-07 |
| 10-Q | 2018-06-30 | Filed 2018-08-08 |
| 10-Q | 2018-03-31 | Filed 2018-05-09 |
| 10-K | 2017-12-31 | Filed 2018-03-06 |
| 10-Q | 2017-09-30 | Filed 2017-11-09 |
| 10-Q | 2017-06-30 | Filed 2017-08-09 |
| 10-Q | 2017-03-31 | Filed 2017-05-10 |
| 10-K | 2016-12-31 | Filed 2017-03-08 |
| 10-Q | 2016-09-30 | Filed 2016-11-08 |
| 10-Q | 2016-06-30 | Filed 2016-08-08 |
| 10-Q | 2016-03-31 | Filed 2016-05-10 |
| 10-K | 2015-12-31 | Filed 2016-03-09 |
| 10-Q | 2015-09-30 | Filed 2015-11-06 |
| 10-Q | 2015-06-30 | Filed 2015-08-10 |
| 10-Q | 2015-03-31 | Filed 2015-05-08 |
| 10-K | 2014-12-31 | Filed 2015-03-11 |
| 10-Q | 2014-09-30 | Filed 2014-11-12 |
| 10-Q | 2014-06-30 | Filed 2014-08-13 |
| 10-Q | 2014-03-31 | Filed 2014-05-14 |
| 10-K | 2013-12-31 | Filed 2014-03-18 |
| 10-Q | 2013-09-30 | Filed 2013-11-13 |
| 10-Q | 2013-06-30 | Filed 2013-08-09 |
| 10-Q | 2013-03-31 | Filed 2013-05-15 |
| 10-K | 2012-12-31 | Filed 2013-03-15 |
| 10-Q | 2012-09-30 | Filed 2012-11-14 |
| 10-Q | 2012-06-30 | Filed 2012-08-14 |
| 10-Q | 2012-03-31 | Filed 2012-05-11 |
| 10-K | 2011-12-31 | Filed 2012-03-16 |
| 10-Q | 2011-09-30 | Filed 2011-11-10 |
| 10-Q | 2011-06-30 | Filed 2011-08-11 |
| 10-Q | 2011-03-31 | Filed 2011-05-13 |
| 10-K | 2010-12-31 | Filed 2011-03-22 |
| 10-Q | 2010-09-30 | Filed 2010-11-12 |
| 10-Q | 2010-06-30 | Filed 2010-08-13 |
| 10-Q | 2010-03-31 | Filed 2010-05-14 |
| 10-K | 2009-12-31 | Filed 2010-03-22 |
| 8-K | 2020-11-05 | |
| 8-K | 2020-09-08 | |
| 8-K | 2020-08-06 | |
| 8-K | 2020-08-01 | |
| 8-K | 2020-05-07 | |
| 8-K | 2020-02-12 | |
| 8-K | 2020-02-12 | |
| 8-K | 2019-11-27 | |
| 8-K | 2019-11-06 | |
| 8-K | 2019-09-09 | |
| 8-K | 2019-08-07 | |
| 8-K | 2019-07-02 | |
| 8-K | 2019-06-14 | |
| 8-K | 2019-05-31 | |
| 8-K | 2019-05-08 | |
| 8-K | 2019-03-18 | |
| 8-K | 2019-02-13 | |
| 8-K | 2019-02-13 | |
| 8-K | 2018-11-07 | |
| 8-K | 2018-09-04 | |
| 8-K | 2018-08-08 | |
| 8-K | 2018-05-09 | |
| 8-K | 2018-02-14 | |
| 8-K | 2018-02-14 | |
| 8-K | 2018-01-24 | |
| 8-K | 2018-01-05 |
| Item 1. Consolidated Financial Statements |
| EX-10.1 | ex_211180.htm |
| EX-10.2 | ex_211174.htm |
| EX-31.1 | ex_202961.htm |
| EX-31.2 | ex_202962.htm |
| EX-32.1 | ex_202963.htm |
| EX-32.2 | ex_202964.htm |
| Balance Sheet | Income Statement | Cash Flow |
|---|---|---|
|
Assets, Equity
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Rev, G Profit, Net Income
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Ops, Inv, Fin
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
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| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
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| | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number
TUCOWS INC.
(Exact Name of Registrant as Specified in Its Charter)
| | |
| (State or Other Jurisdiction of | (I.R.S. Employer |
| Incorporation or Organization) | Identification No.) |
(Address of Principal Executive Offices) (Zip Code)
(
(Registrant's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
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Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T §232.405 of this chapter during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | |
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| Non-accelerated filer ☐ | Smaller reporting company |
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| Emerging Growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes
As of November 2, 2020, there were
Form 10-Q Quarterly Report
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TRADEMARKS, TRADE NAMES AND SERVICE MARKS
Tucows®, EPAG®, Hover®, OpenSRS®, Platypus®, Ting®, eNom®, Roam®, Roam Mobility®, Bulkregister®, Ascio®, Cedar®, and YummyNames® are registered trademarks of Tucows Inc. or its subsidiaries. Other service marks, trademarks and trade names of Tucows Inc. or its subsidiaries may be used in this Quarterly Report on Form 10-Q (this “Quarterly Report”). All other service marks, trademarks and trade names referred to in this Quarterly Report are the property of their respective owners. Solely for convenience, any trademarks referred to in this Quarterly Report may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we or the owner of such trademark, as applicable, will not assert, to the fullest extent under applicable law, our or its rights, or the right of the applicable licensor, to these trademarks.
Item 1. Consolidated Financial Statements
Tucows Inc.
Consolidated Balance Sheets
(Dollar amounts in thousands of U.S. dollars)
(unaudited)
| September 30, | December 31, | |||||||
| 2020 | 2019 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance for doubtful accounts of $ as of September 30, 2020 and $ as of December 31, 2019 | ||||||||
| Inventory | ||||||||
| Prepaid expenses and deposits | ||||||||
| Derivative instrument asset, current portion (note 5) | ||||||||
| Prepaid domain name registry and ancillary services fees, current portion (note 11) | ||||||||
| Income taxes recoverable | ||||||||
| Total current assets | ||||||||
| Prepaid domain name registry and ancillary services fees, long-term portion (note 11) | ||||||||
| Property and equipment | ||||||||
| Right of use operating lease asset | ||||||||
| Contract costs | ||||||||
| Intangible assets (note 6) | ||||||||
| Goodwill (note 6) | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Customer deposits | ||||||||
| Derivative instrument liability, current portion (note 5) | ||||||||
| Operating lease liability, current portion (note 12) | ||||||||
| Deferred revenue, current portion (note 10) | ||||||||
| Accreditation fees payable, current portion | ||||||||
| Income taxes payable | ||||||||
| Total current liabilities | ||||||||
| Derivative instrument liability, long-term portion (note 5) | ||||||||
| Deferred revenue, long-term portion (note 10) | ||||||||
| Accreditation fees payable, long-term portion | ||||||||
| Operating lease liability, long-term portion (note 12) | ||||||||
| Loan payable (note 7) | ||||||||
| Other long-term liability (note 4 (b)) | ||||||||
| Deferred tax liability | ||||||||
| Stockholders' equity (note 14) | ||||||||
| Preferred stock - par value, shares authorized; issued and outstanding | ||||||||
| Common stock - par value, shares authorized; shares issued and outstanding as of September 30, 2020 and shares issued and outstanding as of December 31, 2019 | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive income (note 5) | ||||||||
| Total stockholders' equity | ||||||||
| Total liabilities and stockholders' equity | $ | $ | ||||||
| Contingencies (note 18) | ||||||||
See accompanying notes to consolidated financial statements
Consolidated Statements of Operations and Comprehensive Income
(Dollar amounts in thousands of U.S. dollars, except per share amounts)
(unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | ||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||||
| Net revenues (note 10) | $ | $ | $ | $ | |||||||||||||
| Cost of revenues (note 10) | |||||||||||||||||
| Cost of revenues | |||||||||||||||||
| Network expenses | |||||||||||||||||
| Depreciation of property and equipment | |||||||||||||||||
| Amortization of intangible assets (note 6) | |||||||||||||||||
| Impairment of property and equipment | |||||||||||||||||
| Total cost of revenues | |||||||||||||||||
| Gross profit | |||||||||||||||||
| Expenses: | |||||||||||||||||
| Sales and marketing | |||||||||||||||||
| Technical operations and development | |||||||||||||||||
| General and administrative | |||||||||||||||||
| Depreciation of property and equipment | |||||||||||||||||
| Loss on disposition of property and equipment | |||||||||||||||||
| Amortization of intangible assets (note 6) | |||||||||||||||||
| Impairment of definite life intangible assets (note 6) | |||||||||||||||||
| Loss (gain) on currency forward contracts (note 5) | ( | ) | ( | ) | ( | ) | |||||||||||
| Total expenses | |||||||||||||||||
| Income from operations | |||||||||||||||||
| Other income (expenses): | |||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||||
| Gain on sale of Ting customer assets, net (note 17) | |||||||||||||||||
| Other expense, net | ( | ) | ( | ) | |||||||||||||
| Total other income (expenses) | ( | ) | ( | ) | ( | ) | |||||||||||
| Income before provision for income taxes | |||||||||||||||||
| Provision for income taxes (note 8) | |||||||||||||||||
| Net income for the period | |||||||||||||||||
| Other comprehensive income, net of tax | |||||||||||||||||
| Unrealized income (loss) on hedging activities | ( | ) | |||||||||||||||
| Net amount reclassified to earnings (note 5) | |||||||||||||||||
| Other comprehensive income (loss) net of tax expense (income) of and for the three months ended September 30, 2020 and September 30, 2019, and for the nine months ended September 30, 2020 and September 30, 2019 (note 5) | ( | ) | |||||||||||||||
| Comprehensive income, net of tax for the period | $ | $ | $ | $ | |||||||||||||
| Basic earnings per common share (note 9) | $ | $ | $ | $ | |||||||||||||
| Shares used in computing basic earnings per common share (note 9) | |||||||||||||||||
| Diluted earnings per common share (note 9) | $ | $ | $ | $ | |||||||||||||
| Shares used in computing diluted earnings per common share (note 9) | |||||||||||||||||
See accompanying notes to consolidated financial statements
Consolidated Statements of Cash Flows
(Dollar amounts in thousands of U.S. dollars)
(unaudited)
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Cash provided by: | ||||||||||||||||
| Operating activities: | ||||||||||||||||
| Net income for the period | $ | $ | $ | $ | ||||||||||||
| Items not involving cash: | ||||||||||||||||
| Depreciation of property and equipment | ||||||||||||||||
| Impairment of property and equipment | ||||||||||||||||
| Amortization of debt discount and issuance costs | ||||||||||||||||
| Amortization of intangible assets | ||||||||||||||||
| Net amortization contract costs | ( | ) | ( | ) | ( | ) | ||||||||||
| Impairment of definite life intangible assets | ||||||||||||||||
| Accretion of contingent consideration | ||||||||||||||||
| Other | ||||||||||||||||
| Deferred income taxes (recovery) | ( | ) | ( | ) | ||||||||||||
| Excess tax benefits on share-based compensation expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Net Right of use operating assets/Operating lease liability | ( | ) | ( | ) | ||||||||||||
| Loss on disposal of domain names | ||||||||||||||||
| Loss (gain) on change in the fair value of forward contracts | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Disposal of Ting Mobile customer assets (note 17) | ||||||||||||||||
| Stock-based compensation | ||||||||||||||||
| Change in non-cash operating working capital: | ||||||||||||||||
| Accounts receivable | ( | ) | ( | ) | ||||||||||||
| Inventory | ( | ) | ( | ) | ( | ) | ||||||||||
| Prepaid expenses and deposits | ( | ) | ( | ) | ( | ) | ||||||||||
| Prepaid domain name registry and ancillary services fees | ( | ) | ||||||||||||||
| Income taxes recoverable | ( | ) | ( | ) | ( | ) | ||||||||||
| Accounts payable | ( | ) | ( | ) | ||||||||||||
| Accrued liabilities | ( | ) | ( | ) | ||||||||||||
| Customer deposits | ||||||||||||||||
| Deferred revenue | ( | ) | ( | ) | ( | ) | ||||||||||
| Accreditation fees payable | ( | ) | ( | ) | ( | ) | ||||||||||
| Net cash provided by operating activities | ||||||||||||||||
| Financing activities: | ||||||||||||||||
| Proceeds received on exercise of stock options | ||||||||||||||||
| Payment of tax obligations resulting from net exercise of stock options | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Repurchase of common stock | ( | ) | ( | ) | ( | ) | ||||||||||
| Proceeds received on loan payable | ||||||||||||||||
| Repayment of loan payable | ( | ) | ||||||||||||||
| Payment of loan payable costs | ( | ) | ( | ) | ||||||||||||
| Net cash (used in) provided by financing activities | ( | ) | ||||||||||||||
| Investing activities: | ||||||||||||||||
| Additions to property and equipment | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Acquisition of Cedar Holdings Group, net of cash of (note 4(b)) | ( | ) | ||||||||||||||
| Acquisition of Ascio Technologies, net of cash of (note 4(a)) | ( | ) | ||||||||||||||
| Acquisition of intangible assets | ( | ) | ( | ) | ( | ) | ||||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Increase (decrease) in cash and cash equivalents | ( | ) | ( | ) | ( | ) | ||||||||||
| Cash and cash equivalents, beginning of period | ||||||||||||||||
| Cash and cash equivalents, end of period | $ | $ | $ | $ | ||||||||||||
| Supplemental cash flow information: | ||||||||||||||||
| Interest paid | $ | $ | $ | $ | ||||||||||||
| Income taxes paid, net | $ | $ | $ | $ | ||||||||||||
| Supplementary disclosure of non-cash investing and financing activities: | ||||||||||||||||
| Property and equipment acquired during the period not yet paid for | $ | $ | $ | $ | ||||||||||||
| Fair value of shares issued for acquisition of Cedar Holdings Group | $ | $ | $ | $ | ||||||||||||
| Fair value of contingent consideration for acquisition of Cedar Holdings Group | $ | $ | $ | $ | ||||||||||||
| Acquisition of intangible assets transferred from other assets | $ | $ | $ | $ | ||||||||||||
See accompanying notes to consolidated financial statements
NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. Organization of the Company:
Tucows Inc. (referred to throughout this report as the “Company”, “Tucows”, “we”, “us” or through similar expressions) provides simple useful services that help people unlock the power of the Internet. The Company provides US consumers and small businesses with mobile phone services nationally and high-speed fixed Internet access in selected towns. The Company offers Mobile Service Enabler ("MSE") solutions, as well as professional services to other retail mobile providers. The Company is also a global distributor of Internet services, including domain name registration, digital certificates, and email. It provides these services primarily through a global Internet-based distribution network of Internet Service Providers, web hosting companies and other providers of Internet services to end-users.
2. Basis of Presentation:
The accompanying unaudited interim consolidated balance sheets, and the related consolidated statements of operations and comprehensive income and cash flows reflect all adjustments, consisting of normal recurring adjustments, that are, in the opinion of management, necessary for a fair presentation of the financial position of Tucows and its subsidiaries as at September 30, 2020 and the results of operations and cash flows for the interim periods ended September 30, 2020 and 2019. The results of operations presented in this Quarterly Report on Form 10-Q are not necessarily indicative of the results of operations that may be expected for future periods.
The accompanying unaudited interim consolidated financial statements have been prepared by Tucows in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in the Company's annual audited consolidated financial statements and accompanying notes have been condensed or omitted. Other than the exception noted below, these interim consolidated financial statements and accompanying notes follow the same accounting policies and methods of application used in the annual financial statements and should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2019 included in Tucows' 2019 Annual Report on Form 10-K filed with the SEC on March 4, 2020 (the “2019 Annual Report”). There have been no material changes to our significant accounting policies and estimates during the three and nine months ended September 30, 2020 as compared to the significant accounting policies and estimates described in our 2019 Annual Report, except as described in Note 3 – Recent Accounting Pronouncements, Note 10 - Revenue and Note 17 - Other income.
3. Recent Accounting Pronouncements:
In August 2018, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement (“ASU 2018-15”). ASU 2018-15 helps entities evaluate the accounting for fees paid by a customer in a cloud computing arrangement (hosting arrangement) by providing guidance on accounting for implementation costs when the cloud computing arrangement does not include a license and is accounted for as a service contract. The amendments in ASU 2018-15 require an entity (customer) in a hosting arrangement to assess which implementation costs to capitalize vs expense as it relates to a service contract. The amendments also require the entity (customer) to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company adopted ASU 2018-15 in the first quarter of 2020 to all implementation costs incurred after the date of adoption. The new guidance did not have a material impact on our consolidated financial statements.
In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides optional guidance for a limited period of time to ease the potential burden of reference rate reform on financial reporting. The amendments in ASU 2020-04 apply to contract modifications that replace a reference rate affected by reference rate reform and contemporaneous modifications of other contract terms related to the replacement of the reference rate. The following optional expedients for applying the requirements of certain Topics or Industry Subtopics in the Codification are permitted for contracts that are modified because of reference rate reform and that meet certain scope guidance:
| 1. | Modifications of contracts within the scope of Topics 310, Receivables, and 470, Debt, should be accounted for by prospectively adjusting the effective interest rate. | |
| 2. | Modifications of contracts within the scope of Topic 842, Leases, should be accounted for as a continuation of the existing contracts with no reassessments of the lease classification and the discount rate or remeasurements of lease payments that otherwise would be required under those Topics for modifications not accounted for as separate contracts. | |
| 3. | Modifications of contracts do not require an entity to reassess its original conclusion about whether that contract contains an embedded derivative that is clearly and closely related to the economic characteristics and risks of the host contract under Subtopic 815-15, Derivatives and Hedging— Embedded Derivatives |
The amendments in ASU 2020-04 are effective for all entities as of March 12, 2020 through December 31, 2022. The Company is currently charged interest and standby fees associated with its Amended 2019 Credit Facility (as defined below) based on LIBOR which are partially hedged by interest rate swaps, which are also based on LIBOR. Both the credit facility agreement and the interest rate swaps will need to be amended when an alternative reference rate is chosen, at which time we may adopt some of the practical expedients provided by ASU 2020-04.
4. Acquisitions:
| (a) | Ascio |
| (b) | Cedar |
In the fourth quarter of 2019, the Company entered into a Stock Purchase Agreement to purchase all of the issued and outstanding shares of Cedar Holdings Group, Incorporated (“Cedar”), a fiber Internet provider business based in Durango, Colorado. The transaction closed on January 1, 2020, following receipt of all regulatory approvals. The purchase price was $
The amortization period for the customer relationships and network rights are and years, respectively.
| Cash Consideration, including working capital adjustment | $ | |||
| Share-based payment | ||||
| Fair value of contingent payments | ||||
| Total estimated purchase price | ||||
| Cash and Cash Equivalents | ||||
| Accounts Receivables, net | ||||
| Other current assets | ||||
| Property and equipment | ||||
| Right of use operating lease | ||||
| Intangible assets, consisting of customer relationships and network rights | ||||
| Total identifiable assets | ||||
| Accounts payable and accrued liabilities | ( | ) | ||
| Deferred tax liability | ( | ) | ||
| Operating lease liability | ( | ) | ||
| Total liabilities assumed | ( | ) | ||
| Total net assets (liabilities) assumed | ||||
| Total goodwill | $ |
In connection with this acquisition, the Company incurred total acquisition related costs of $
The following table presents selected unaudited pro forma information for the Company assuming the acquisition of Cedar had occurred as of January 1, 2019. This pro forma information does not purport to represent what the Company’s actual results would have been if the acquisition had occurred as of the date indicated or what results would be for any future periods.
| Unaudited | Unaudited | |||||||
| For the Three Months Ended September 30, | For the Nine Months Ended September 30, | |||||||
| 2019 | 2019 | |||||||
| Net revenues | $ | $ | ||||||
| Net income | ||||||||
| Basic earnings per common share | ||||||||
| Diluted earnings per common share | $ | $ | ||||||
The amount of revenue recognized since the acquisition date included in the consolidated statements of operations and comprehensive income statement for the three and nine months ended September 30, 2020 is $
The net income recognized since the acquisition date included in the consolidated statements of operations and comprehensive income for the three and nine months ended September 30, 2020 is a loss of $
| Maturity date (Dollar amounts in thousands of U.S. dollars) | Notional amount of U.S. dollars | Weighted average exchange rate of U.S. dollars | Fair value Asset / (Liability) | |||||||||
| October - December 2020 | ( | ) | ||||||||||
| January - March 2021 | ||||||||||||
| April - June 2021 | ||||||||||||
| July - September 2021 | ||||||||||||
| $ | $ | |||||||||||
As of September 30, 2020, the notional amount of the Company's interest rate swap designated as a cash flow hedge was $
The effect of these derivative instruments on our consolidated financial statements were as follows (amounts presented do not include any income tax effects).
| Derivatives (Dollar amounts in thousands of U.S. dollars) | Balance Sheet Location | As of September 30, 2020 Fair Value Asset (Liability) | As of December 31, 2019 Fair Value Asset (Liability) | |||||||
| Foreign Currency forward contracts designated as cash flow hedges (net) | Derivative instruments | $ | $ | |||||||
| Interest rate swap contract designated as a cash flow hedge (net) | Derivative instruments | ( | ) | $ | ||||||
| Foreign Currency forward contracts not designated as cash flow hedges (net) | Derivative instruments | |||||||||
| Total foreign currency and interest swap forward contracts (net) | Derivative instruments | $ | $ | |||||||
| Gains and losses on cash flow hedges | Tax impact | Total AOCI | ||||||||||
| Opening AOCI balance - June 30, 2020 | $ | $ | ( | ) | $ | |||||||
| Other comprehensive income (loss) before reclassifications | ( | ) | ||||||||||
| Amount reclassified from AOCI | ( | ) | ||||||||||
| Other comprehensive income (loss) for the three months ended September 30, 2020 | ( | ) | ||||||||||
| Ending AOCI Balance - September 30, 2020 | $ | $ | ( | ) | $ | |||||||
Movement in accumulated other comprehensive income (AOCI) balance for the nine months ended September 30, 2020 (Dollar amounts in thousands of U.S. dollars)
| Gains and losses on cash flow hedges | Tax impact | Total AOCI | ||||||||||
| Opening AOCI balance - December 31, 2019 | $ | $ | ( | ) | $ | |||||||
| Other comprehensive income (loss) before reclassifications | ( | ) | ||||||||||
| Amount reclassified from AOCI | ( | ) | ||||||||||
| Other comprehensive income (loss) for the nine months ended September 30, 2020 | ( | ) | ||||||||||
| Ending AOCI Balance - September 30, 2020 | $ | $ | ( | ) | $ | |||||||
| Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative | Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | ||||||
| Operating expenses | $ | ( | ) | ||||||
| Foreign currency forward contracts for the three months ended September 30, 2020 | $ | Cost of revenues | $ | ( | ) | ||||
| Interest rate swap contract for the three months ended September 30, 2020 | $ | Interest expense, net | $ | ( | ) | ||||
| Operating expenses | $ | ( | ) | ||||||
| Foreign currency forward contracts for the three months ended September 30, 2019 | $ | ( | ) | Cost of revenues | $ | ( | ) | ||
| Interest rate swap contract for the three months ended September 30, 2019 | $ | Interest expense, net | $ | ||||||
Effects of derivative instruments on income and other comprehensive income (OCI) for the nine months ended September 30, 2020 are as follows (Dollar amounts in thousands of U.S. dollars)
| Derivatives in Cash Flow Hedging Relationship | Amount of Gain or (Loss) Recognized in OCI, net of tax, on Derivative | Location of Gain or (Loss) Reclassified from AOCI into Income | Amount of Gain or (Loss) Reclassified from AOCI into Income | ||||||
| Operating expenses | $ | ( | ) | ||||||
| Foreign currency forward contracts for the nine months ended September 30, 2020 | $ | Cost of revenues | $ | ( | ) | ||||
| Interest rate swap contract for the nine months ended September 30, 2020 | $ | ( | ) | Interest expense, net | $ | ( | ) | ||
| Operating expenses | $ | ( | ) | ||||||
| Foreign currency forward contracts for the nine months ended September 30, 2019 | $ | Cost of revenues | $ | ( | ) | ||||
| Interest rate swap contract for the nine months ended September 30, 2019 | $ | Interest expense, net | $ | ||||||
In addition to the above, for those foreign currency forward contracts not designated as hedges, the Company recorded the following fair value adjustments on settled and outstanding contracts (Dollar amounts in thousands of U.S. dollars):
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| Forward currency contracts not designated as hedges: | 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Gain (loss) on settlement | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | ||||
| Gain (loss) on change in fair value | $ | $ | $ | $ | ||||||||||||