DERIVATIVE FINANCIAL INSTRUMENTS |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| DERIVATIVE INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Foreign currency forward contracts are utilized to mitigate the impact of currency fluctuations on assets and liabilities denominated in foreign currencies as well as on forecasted transactions denominated in foreign currencies. These contracts are considered derivative instruments and are recognized as either assets or liabilities and measured at fair value. For contracts that are designated and qualify as cash flow hedges, the gain or loss on the contracts is reported as a component of other comprehensive income (“OCI”) and reclassified from accumulated other comprehensive income (“AOCI”) into the “Sales” or “Cost of sales” line item on the Consolidated Statements of Operations when the underlying hedged transaction affects earnings, or “Other operating expense, net” when the hedging relationship is deemed to be ineffective. As of March 31, 2018 and December 31, 2017, the notional amounts of the derivative financial instruments designated to qualify for cash flow hedges were $43.3 million and $38.2 million, respectively. The Company expects approximately $0.1 million of expense, net of income tax effect, to be reclassified from AOCI to earnings within the next 12 months. As of March 31, 2018 and December 31, 2017, the notional amounts of the derivative financial instruments not qualifying or otherwise designated as hedges were $35.8 million and $30.3 million, respectively. For the three months ended March 31, 2018 and 2017, losses of $0.4 million and gains of $0.6 million, respectively, were recorded related to this type of derivative financial instrument. For contracts that are not designated as hedges, the gain or loss on the contract is recognized in current earnings in the “Other operating expense, net” line item on the Consolidated Statements of Operations. The following table presents the fair value on the Consolidated Balance Sheets of the foreign currency forward contracts (in thousands):
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