Foreign Currency Exchange Rate Contracts and Hedging

Certain of the Company's foreign currency exchange rate forward contracts are designated cash flow hedges of forecasted sales (Designated Derivative Contracts) and are subject to foreign currency exchange rate risk. These contracts allow the Company to sell Euros and British Pounds in exchange for US dollars at specified contract rates. Forward contracts are used to hedge forecasted sales over specific quarters.

The Company may also enter into foreign currency exchange rate contracts that are not designated as hedging instruments (Non-Designated Derivative Contracts), and these contracts are generally entered into to offset the anticipated gains and losses on certain intercompany balances until the expected time of repayment.

The fair value of the notional amount of both the Designated and Non-Designated Derivative Contracts are recorded in other current assets or other accrued expenses in the condensed consolidated balance sheets. Changes in the fair value of Designated Derivative Contracts are recognized as a component of accumulated other comprehensive income (loss) (AOCI) within stockholders' equity, and are recognized in earnings in the condensed consolidated statements of comprehensive income (loss) during the period which approximates the time the corresponding third-party sales occur.

As of September 30, 2017, the Company had total notional value of $165,504 for foreign currency exchange rate forward contracts, which included the following:



	Designated Derivative Contracts	Non-Designated Derivative Contracts
Notional amount	$88,815	$76,689
Fair value recorded in other current assets	—	509
Fair value recorded in other current liabilities	(5,583)	(3,177)

As of September 30, 2017, the Company had Designated Derivative Contracts with four counterparties and Non-Designated Derivative Contracts with six counterparties. As of September 30, 2017, the Company had Designated Derivative and Non-Designated Contracts with various maturity dates within the next three to six months. During the three months ended September 30, 2017, the Company settled Designated Derivative Contracts with total notional amounts of approximately $32,810.

The non-performance risk of the Company and the counterparties did not have a material impact on the fair value of the derivative instruments. During the three and six months ended September 30, 2017, the designated hedges remained effective. The effective portion of the gain or loss on the derivative instrument is recognized in AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. As of September 30, 2017, the amount of unrealized losses on foreign currency exchange rate hedges recognized in AOCI (see Note 10, "Accumulated Other Comprehensive Loss", for additional information) is expected to be reclassified into income within the next nine months.

The following table summarizes the effect of Designated Derivative Contracts:



	Three Months Ended September 30,
	2017	2016
Amount of (loss) gain recognized in other comprehensive income (loss) on derivative instruments (effective portion)	$(3,900)	$439
Location of amount reclassified from accumulated other comprehensive loss into income (effective portion)	Net Sales	Net Sales
Amount of (loss) gain reclassified from accumulated other comprehensive loss into income (effective portion)	$(2,283)	$1,851
Location of amount excluded from effectiveness testing	Selling, general and administrative expenses	Selling, general and administrative expenses
Amount of gain excluded from effectiveness testing	$439	$163



	Six Months Ended September 30,
	2017	2016
Amount of (loss) gain recognized in other comprehensive income (loss) on derivative instruments (effective portion)	$(9,790)	$4,903
Location of amount reclassified from accumulated other comprehensive loss into income (effective portion)	Net Sales	Net Sales
Amount of (loss) gain reclassified from accumulated other comprehensive loss into income (effective portion)	$(2,283)	$1,676
Location of amount excluded from effectiveness testing	Selling, general and administrative expenses	Selling, general and administrative expenses
Amount of gain excluded from effectiveness testing	$772	$355

The following table summarizes the effect of Non-Designated Derivative Contracts:



	Three Months Ended September 30,
	2017	2016
Location of amount recognized in income on derivative instruments	Selling, general and administrative expenses	Selling, general and administrative expenses
Amount of loss recognized in income on derivative instruments	$(1,065)	$(290)



	Six Months Ended September 30,
	2017	2016
Location of amount recognized in income on derivative instruments	Selling, general and administrative expenses	Selling, general and administrative expenses
Amount of loss recognized in income on derivative instruments	$(2,668)	$(881)

The Company entered into Non-Designated Derivative Contracts with notional amounts totaling $3,112, which are expected to mature over the next four months and no Designated Derivative Contracts were entered into subsequent to September 30, 2017. All hedging contracts at November 9, 2017 were held by a total of six counterparties.