Derivative Financial Instruments

The following table presents the fair values of the Company's derivative instruments as of March 31, 2018 and 2017 (in thousands):



	Derivatives
	Asset				Liability
	March 31,				March 31,
	2018		2017		2018		2017
Designated as hedging instruments:
Cash flow hedges	$	—	$	48	$	—	$	402

Under certain agreements with the respective counterparties to the Company's derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets or accrued and other current liabilities on the consolidated balance sheets as of March 31, 2018 and 2017.

The fair values of the Company’s derivative instruments not designated as hedging instruments were not material as of March 31, 2018 or March 31, 2017. The following table presents the amounts of gains and losses on the Company's derivative instruments designated as hedging instruments for fiscal years 2018, 2017 and 2016 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (loss) (in thousands):



	Amount of Gain (Loss) Deferred as a Component of Accumulated Other Comprehensive Loss								Amount of Loss (Gain) Reclassified from Accumulated Other Comprehensive Loss to Costs of Goods Sold
	2018			2017		2016			2018		2017			2016
Designated as hedging instruments:
Cash flow hedges	$	(8,499	)	$	2,928	$	(2,432	)	$	5,808	$	(1,670	)	$	(3,296	)

Cash Flow Hedges: The Company enters into cash flow hedge contracts to protect against exchange rate exposure of forecasted inventory purchases. These hedging contracts mature within four months. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. Cash flows from such hedges are classified as operating activities in the consolidated statements of cash flows. Hedging relationships are discontinued when hedging contract is no longer eligible for hedge accounting, or is sold, terminated or exercised, or when the Company removes hedge designation for the contract. Gains and losses in the fair value of the effective portion of the discontinued hedges continue to be reported in accumulated other comprehensive loss until the hedged inventory purchases are sold, unless it is probable that the forecasted inventory purchases will not occur by the end of the originally specified time period or within an additional two-month period of time thereafter. As of March 31, 2018, there were no currency forward contracts outstanding related to forecasted inventory purchases. As of March 31, 2017, the notional amounts of currency forward contracts outstanding related to forecasted inventory purchases was $59.4 million. The Company estimates that $3.2 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of March 31, 2018 will be reclassified into earnings within the next 12 months.

Other Derivatives: The Company also enters into currency forward and swap contracts to reduce the short-term effects of currency fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of its subsidiaries. These forward and swap contracts generally mature within one month. The primary risk managed by using forward and swap contracts is the currency exchange rate risk. The gains or losses on these contracts are recognized in other income (expense), net in the consolidated statements of operations based on the changes in fair value. The notional amounts of these contacts outstanding as of March 31, 2018 and 2017 were $47.2 million and $56.7 million, respectively. Open forward and swap contracts as of March 31, 2018 and 2017 consisted of contracts in Taiwanese Dollars, Australian Dollars, Mexican Pesos, Japanese Yen, Canadian Dollars and British Pounds to be settled at future dates at pre-determined exchange rates.

The fair value of all currency forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates. Cash flows from these contracts are classified as operating activities in the consolidated statements of cash flows.