Note 9 – Derivative Financial Instruments

Hedges of Foreign Currency Risk - We are exposed to fluctuations in various foreign currencies against our different functional currencies. We use foreign currency forward agreements to manage this exposure. At June 30, 2018, we had outstanding foreign currency forward contracts that are intended to preserve the economic value of foreign currency denominated monetary assets and liabilities; these instruments are not designated for hedge accounting treatment in accordance with ASC 815. There is no fair value of our foreign exchange hedges and therefore they are not recorded in our condensed consolidated balance sheets.

The table below sets forth outstanding foreign currency forward contracts at June 30, 2018 and December 31, 2017:

Notional Amount		Effective Date	Maturity Date	Index*	Weighted Average Fx Rate	Balance Sheet Hedge Designation
$	1,199	June 2018	August 2018	EUR/GPB	0.8854	Non-designated
	26,760	June 2018	August 2018	EUR/USD	1.1708	Non-designated
	9,817	June 2018	August 2018	GBP/USD	1.3224	Non-designated
	41,127	June 2018	August 2018	USD/CNY	6.6391	Non-designated
	923	June 2018	August 2018	USD/JPY	110.444	Non-designated
	38,601	June 2018	August 2018	USD/TWD	30.46	Non-designated

Notional Amount		Effective Date	Maturity Date	Index*	Weighted Average Fx Rate	Balance Sheet Hedge Designation
$	2,494	December 2017	January 2018	EUR/GBP	1.2009	Non-designated
	10,514	December 2017	January 2018	EUR/USD	1.2009	Non-designated
	10,612	December 2017	January 2018	GBP/USD	1.3541	Non-designated
	31,834	December 2017	January 2018	USD/CNY	6.5343	Non-designated
	1,594	December 2017	January 2018	USD/JPY	112.35	Non-designated
	30,594	December 2017	January 2018	USD/TWD	29.406	Non-designated

* EUR = Euro
GBP = British Pound Sterling
USD = United States Dollar
CNY = Chinese Yuan Renminbi
JPY = Japan Yen
TWD = Taiwan dollar

Hedges of Interest Rate Risk - The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps, including interest rate collars, as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The table below sets forth information related to the number of and the notional amount of our interest rate related derivative instruments:

	Number of Instruments		Notional Amount
	June 30, 2018	December 31, 2017	June 30, 2018		December 31, 2017
Interest rate swaps and collars	14	14	$	220,000	$	220,000

The table below sets forth the fair value of the Company’s interest rate related derivative financial instruments as well as their classification on our condensed consolidated balance sheets:

	Fair Value
	Other Current Assets				Other Assets
	June 30, 2018		December 31, 2017		June 30, 2018		December 31, 2017
Interest rate swaps and collars	$	1,639	$	486	$	5,530	$	3,398

The tables below sets forth the effect of the Company’s derivative financial instruments on the condensed consolidated statements of operations for the three and six months ended June 30, 2018 and 2017:

	Amount of Gain or (Loss) Recognized in OCI on Derivative					Location of Gain or (Loss) Reclassified from	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Net Income
Derivatives Designated as Hedging Instruments	June 30, 2018		June 30, 2017			Accumulated OCI into Income	June 30, 2018		June 30, 2017
Three Months Ended
Interest rate swaps and collars	$	1,103	$	(817	)	Interest expense	$	175	$	(170	)
Six Months Ended
Interest rate swaps and collars	$	3,507	$	(544	)	Interest expense	$	227	$	(423	)

We estimate that $1.6 million of net derivative gains included in accumulated other comprehensive income (“AOCI”) as of June 30, 2018 will be reclassified into earnings within the following 12 months. No gains or losses were reclassified from AOCI into earnings as a result of forecasted transactions that failed to occur during three or six months ended June 30, 2018 or 2017.

Derivatives Not Designated as Hedging	Amount of Gain or (Loss) Recognized in Net Income						Location of Gain or (Loss) Recognized in Net
Instruments	June 30, 2018			June 30, 2017			Income
Three Months Ended
Foreign currency forward contracts	$	(6,764	)	$	(70	)	Foreign currency (loss) gain, net
Six Months Ended
Foreign currency forward contracts	$	(5,370	)	$	(70	)	Foreign currency (loss) gain, net

At June 30, 2018 and December 31, 2017, the fair value of derivatives in a net asset position, which includes accrued interest but excludes any adjustments for nonperformance risk, related to these agreements was $7.2 million and $3.9 million, respectively. As of June 30, 2018 and December 31, 2017, the Company had not posted any collateral related to these agreements.