6. DERIVATIVES AND HEDGING ACTIVITIES

Derivatives Not Designated As Hedging Instruments

The Company uses forward contracts to hedge a portion of its balance sheet foreign exchange re-measurement risk and to hedge certain planned foreign currency expenditures. As of June 30, 2017, the Company had foreign exchange contracts outstanding with maturities of up to twelve months and aggregate notional values of $359 million (based on exchange rates as of June 30, 2017). Unrealized gains and losses resulting from these contracts are recognized in other income (expense), net and partially offset corresponding foreign exchange gains and losses on the balances and expenditures being hedged. These instruments are not held for speculative or trading purposes and are not designated as hedges for hedge accounting and are marked to market each period through earnings.

The following table presents the balance sheet location and fair value of the Company’s derivatives not designated as hedging instruments:

		Fair Value of Asset (Liability)
	Balance Sheet Location	June 30, 2017			December 31, 2016
Foreign currency contracts	Prepaid expenses and other current assets	$	8,452		$	289
Foreign currency contracts	Other accrued liabilities		(513	)		(8,349	)
Total derivatives not designated as hedging instruments		$	7,939		$	(8,060	)

The pretax impact of these foreign currency forward contracts, both matured and outstanding, on the Condensed Consolidated Statements of Operations and Comprehensive Income is as follows:

Foreign Currency Forward Contracts	Location of Gain (Loss)	Gain (Loss) Recognized
Three Months Ended June 30, 2017	Other income (expense), net	$	12,553
Three Months Ended June 30, 2016	Other income (expense), net	$	(7,953	)
Six Months Ended June 30, 2017	Other income (expense), net	$	14,409
Six Months Ended June 30, 2016	Other income (expense), net	$	(6,789	)

Derivative Instruments Designated As Net Investment Hedge

During 2017, the Company entered into foreign exchange forward contracts that are designated as net investment hedges and are intended to mitigate a portion of the foreign currency risk on the Euro net investment in a foreign subsidiary. As of June 30, 2017, the Company held forward contracts with outstanding maturities of six months and aggregate notional values of $75.0 million.

Hedge effectiveness is assessed each quarter based on the net investment in the foreign subsidiary designated as the hedged item and the overall changes in the fair value of the forward contracts. For hedges that meet the effectiveness requirements, changes in fair value are recorded as a component of other comprehensive income (loss), net of tax. Any change in fair value that is the result of ineffectiveness is recognized immediately in earnings. As of June 30, 2017, there was no ineffectiveness on the instruments designated as net investment hedges.

The following table presents the balance sheet location and fair value of the derivatives designated as net investment hedges:

		Fair Value of Asset (Liability)
	Balance Sheet Location	June 30, 2017			December 31, 2016
Foreign currency contracts	Prepaid expenses and other current assets	$	—		$	—
Foreign currency contracts	Other accrued liabilities		(5,405	)		—
Total derivatives designated as net investment hedging instruments		$	(5,405	)	$	—

The after tax impact of the effective portion of the forward contracts designated as net investment hedging instruments on the Condensed Consolidated Statements of Operations and Comprehensive Income is as follows:

Foreign Currency Forward Contracts	Location of Loss	Effective Portion of Loss Recognized
Three Months Ended June 30, 2017	Other comprehensive income (loss), net of tax	$	(2,996	)
Three Months Ended June 30, 2016	Other comprehensive income (loss), net of tax		—
Six Months Ended June 30, 2017	Other comprehensive income (loss), net of tax	$	(3,351	)
Six Months Ended June 30, 2016	Other comprehensive income (loss), net of tax		—