Foreign Currency Exchange Rate Contracts and Hedging

Certain of the Company's foreign currency exchange rate forward contracts are designated as 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 various foreign currencies in exchange for US dollars at specified contract rates, and 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), which 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 loss (AOCI) within stockholders' equity, and are recognized in earnings in the condensed consolidated statements of comprehensive loss during the period which approximates the time the corresponding third-party sales occur.

As of June 30, 2018, the Company's outstanding hedging contracts were held by an aggregate of five counterparties, all with various maturity dates within the next nine months.

As of June 30, 2018, the Company had the following foreign currency exchange rate forward contracts:



	Designated Derivative Contracts		Non-Designated Derivative Contracts		Total
Notional value	$	126,332	$	18,802	$	145,134
Fair value recorded in other current assets	8,182		478		8,660

No Designated Derivative Contracts were entered into or settled during the three months ended June 30, 2018. The Company entered into Non-Designated Derivative Contracts with notional values totaling approximately $14,000 during the three months ended June 30, 2018. No Non-Designated Derivative Contracts were settled during the three months ended June 30, 2018.

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 months ended June 30, 2018, the Designated Derivative Contracts remained effective and that portion of any gain or loss was recognized in AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. As of June 30, 2018, the amount of unrealized gains on foreign currency exchange rate forward contracts recognized in AOCI is expected to be reclassified into income within the next 12 months. Refer to Note 10, "Accumulated Other Comprehensive Loss," for further information.

The following table summarizes the effect of Designated Derivative Contracts:



	Three Months Ended June 30,
	2018		2017
Amount of gain (loss) on derivative instruments (effective portion) recognized in other comprehensive loss	$	6,770	$	(5,890	)
Amount of gain excluded from effectiveness testing recognized in SG&A expenses	846		333

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



	Three Months Ended June 30,
	2018		2017
Amount of gain (loss) on derivative instruments recognized in SG&A expenses	$	487	$	(1,603	)

Subsequent to June 30, 2018 through August 3, 2018, no Designated Derivative Contracts or Non-Designated Derivative Contracts were entered into by the Company.