Derivative Financial Instruments

Interest Rate Risk

To manage interest rate risk, the Company enters into interest rate swap contracts to adjust the amount of total debt that is subject to variable interest rates.

As of June 30, 2018, the Company had interest rate swap contracts outstanding with notional amounts aggregating $200.0 million that are not designated as hedging instruments. The Company's outstanding interest rate swap contracts mature in October 2018.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency risk to the extent that we enter into transactions denominated in currencies other than our or our subsidiaries' respective functional currencies (non-functional currency risk), such as affiliation agreements, programming contracts, certain accounts payable and trade receivables (including intercompany amounts) that are denominated in a currency other than the applicable functional currency.

Other Derivatives

The RLJE Warrants held by the Company meet the definition of a derivative and are included in Other assets in the consolidated balance sheet. In addition, the interest on the RLJE Term Loans to be paid in shares of RLJE common stock is an embedded derivative. Both the RLJE Warrants and the embedded derivative for the future interest to be paid in shares of RLJE common stock are remeasured at the end of each period with changes in fair value recorded in the consolidated statements of income. For the three months ended June 30, 2018 and 2017, the Company recorded a gain of $0.6 million and $9.9 million, respectively, and for the six months ended June 30, 2018 and 2017, the Company recorded a gain of $12.3 million and $21.1 million, respectively, related to these derivatives, which is included in Miscellaneous, net in the condensed consolidated statement of income.

The fair values of the Company's derivative financial instruments included in the condensed consolidated balance sheets are as follows:



(In thousands)	Balance Sheet Location	June 30, 2018		December 31, 2017
Derivatives not designated as hedging instruments:
Assets:
Foreign currency derivatives	Prepaid expenses and other current assets	$	1,101	$	943
Foreign currency derivatives	Other assets	2,045		2,858
Interest rate swap contracts	Prepaid expenses and other current assets	760		1,444
Other derivatives	Other assets	51,411		37,065
Liabilities:
Foreign currency derivatives	Accrued liabilities	759		1,223
Foreign currency derivatives	Other liabilities	3,039		3,252

The amounts of gains and losses related to the Company's derivative financial instruments designated as hedging instruments are as follows:



(In thousands)	Gain or (Loss) on Derivatives Recognized in OCI					Location of Gain or (Loss) in Earnings	Gain or (Loss) Reclassified from Accumulated OCI into Earnings (a)
	Three Months Ended June 30,						Three Months Ended June 30,
	2018		2017				2018		2017
Derivatives in cash flow hedging relationships:
Interest rate swap contracts	$	—	$	(65	)	Interest expense	$	—	$	115


(a)	There were no gains or losses recognized in earnings related to any ineffective portion of hedging relationships or related to any amount excluded from the assessment of hedge effectiveness for the three months ended June 30, 2018 and 2017.



(In thousands)	Gain or (Loss) on Derivatives Recognized in OCI				Location of Gain or (Loss) in Earnings	Gain or (Loss) Reclassified from Accumulated OCI into Earnings (a)
	Six Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Derivatives in cash flow hedging relationships:
Interest rate swap contracts	$	—	$	256	Interest expense	$	—	$	117


(a)	There were no gains or losses recognized in earnings related to any ineffective portion of hedging relationships or related to any amount excluded from the assessment of hedge effectiveness for the six months ended June 30, 2018 and 2017.

The amounts of gains and losses related to the Company's derivative financial instruments not designated as hedging instruments are as follows:



(In thousands)	Location of Gain or (Loss) Recognized in Earnings on Derivatives	Amount of Gain or (Loss) Recognized in Earnings on Derivatives
		Three Months Ended June 30,						Six Months Ended June 30,
		2018			2017			2018			2017
Derivatives not designated as hedging relationships:
Interest rate swap contracts	Interest expense	$	(538	)	$	(7	)	$	(684	)	$	(5	)
Foreign currency derivatives	Miscellaneous, net	474			(1,236		)	181			(1,503		)
Other derivatives	Miscellaneous, net	602			9,946			12,289			21,063
Total		$	538		$	8,703		$	11,786		$	19,555