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Derivative Financial Instruments | 3 Months Ended
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Mar. 31, 2018
Derivative Financial Instruments |
Derivative Financial Instruments | 4. Derivative Financial Instruments The Company uses derivative financial instruments to manage certain exposures to the variability of interest rates and foreign currency exchange rates. The Company’s objective is to offset increases and decreases in expenses resulting from these exposures with gains and losses on the derivative contracts, thereby reducing volatility of earnings. The Company does not use derivative contracts for speculative or trading purposes. The Company recognizes derivatives, on a gross basis, in the Consolidated Balance Sheet at fair value. Cash flows from derivatives are classified according to the nature of the cash receipt or payment in the Consolidated Statement of Cash Flows. Cash Flow Hedges Foreign Currency Forward Contracts The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on operating expenses denominated in currencies other than the U.S. dollar. Changes in the fair value of the contracts are recorded in accumulated other comprehensive loss in the Consolidated Balance Sheet and subsequently reclassified into earnings in the period during which the hedged transaction is recognized. The reclassified amount is reported in the same financial statement line item as the hedged item. If the foreign currency forward contracts are terminated or can no longer qualify as hedging instruments prior to maturity, the fair value of the contracts recorded in accumulated other comprehensive loss may be recognized in the Consolidated Statement of Income based on an assessment of the contracts at the time of termination. The Company entered into foreign currency forward contracts in March 2018 for a portion of its forecasted operating expenses denominated in the Norwegian Krone. As of March 31, 2018, the contracts had maturities of one to twelve months and an aggregate notional value of $8.3 million. The fair value of the contracts was not material as of March 31, 2018. Contract losses recognized in other comprehensive income during the three months ended March 31, 2018 as well as losses expected to be reclassified into earnings in the next 12 months were not material. There were no amounts reclassified from accumulated other comprehensive loss into earnings during the three months ended March 31, 2018. Interest Rate Swaps The Company entered into an interest rate swap agreement with an original notional value of $72.5 million in connection with its Credit Facility in July 2016. The Company terminated the swap agreement on March 6, 2017, which resulted in the reclassification of $1.8 million of unrealized gains that were previously recorded in accumulated other comprehensive loss into earnings during the three months ended April 1, 2017. Non-designated Hedges Foreign Currency Forward Contracts The Company uses foreign currency forward contracts to reduce the earnings impact that exchange rate fluctuations have on non-U.S. dollar balance sheet exposures. The Company recognizes gains and losses on the foreign currency forward contracts in interest income and other, net in the Consolidated Statement of Income in the same period as the remeasurement loss and gain of the related foreign currency denominated asset or liability. The Company does not apply hedge accounting to these foreign currency forward contracts. As of March 31, 2018 and April 1, 2017, the Company held one foreign currency forward contract denominated in the Norwegian Krone with a notional value of $2.6 million and $4.0 million, respectively. The fair value of the contracts was not material as of March 31, 2018 or April 1, 2017. The contract held as of March 31, 2018 has a maturity date of June 28, 2018 and it was not designated as a hedging instrument. The before-tax effect of derivative instruments not designated as hedging instruments was as follows (in thousands):
|  | Three Months Ended |  |  |
Loss Recognized in Income |  | March 31, 2018 |  | April 1, 2017 |  | Location |
Foreign currency forward contracts |  | $ | (123 | ) | $ | (94 | ) | Interest income and other, net |

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- References No definition available. + Details
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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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