The Company is exposed to global market risks, including the effects of changes in foreign currency and interest rates. The Company uses derivative instruments to manage financial exposures that occur in the normal course of business and does not hold or issue derivatives for trading or speculative purposes.

The Company may elect to designate certain derivatives as hedging instruments under U.S. GAAP. The Company formally documents all relationships between designated hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking hedge transactions. This process includes linking all derivatives designated as hedges to forecasted cash flows and assessing, both at inception and on an ongoing basis, the effectiveness of the hedging relationships.

The Company's foreign exchange risk management program consists of designated cash flow hedges and undesignated hedges. As of June 30, 2020, the Company has hedge instruments, primarily for British Pound/U.S. Dollar, U.S. Dollar/Chinese Renminbi, U.S. Dollar/Canadian Dollar, Euro/U.S. Dollar, U.S. Dollar/Japanese Yen, and U.S. Dollar/Mexican Peso currency pairs. All derivatives are recognized on the unaudited consolidated balance sheets at fair value and classified based on the instrument’s maturity date.


(In thousands)	Balance Sheet Classification	June 30, 2020				December 31, 2019				June 30, 2019
Derivatives designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	19,441			$	4,040			$	10,427
Foreign currency contracts	Other long term assets	1,709				24				694
Interest rate swap contracts	Other long term assets	—				—				—
Total derivative assets designated as hedging instruments				$	21,150			$	4,064			$	11,121

Foreign currency contracts	Other current liabilities	$	16			$	8,772			$	2,425
Foreign currency contracts	Other long term liabilities	—				$	2,443			$	133
Total derivative liabilities designated as hedging instruments				$	16			$	11,215			$	2,558

Derivatives not designated as hedging instruments under ASC 815
Foreign currency contracts	Other current assets	$	1,106			$	2,337			$	1,112
Total derivative assets not designated as hedging instruments				$	1,106			$	2,337			$	1,112

Foreign currency contracts	Other current liabilities	$	4,494			$	9,510			$	8,830
Total derivative liabilities not designated as hedging instruments				$	4,494			$	9,510			$	8,830

The following table presents the amounts in the unaudited consolidated statements of operations in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items.


	Three months ended June 30,												Six months ended June 30,
	2020					2019					2020				2019
(In thousands)	Total		Amount of Gain (Loss) on Cash Flow Hedge Activity	Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total		Amount of Gain (Loss) on Cash Flow Hedge Activity		Total	Amount of Gain (Loss) on Cash Flow Hedge Activity
Net revenues	$	707,640	$1,489	$	1,191,729	$	4,420	$	1,637,880	$3,277		$2,396,451	$	8,212
Cost of goods sold	358,471		1,565	637,408		1,468		857,727		2,683		1,297,343	2,208
Interest expense, net	(11,336)		(9)	(5,988)		(9)		(17,296)		(18)		(10,226)	1,616
Other expense, net	(4,843)		—	(1,128)		152		(3,309)		21		(1,795)	792


(In thousands)	Balance as of March 31, 2020		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of June 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	37,965		(8,716)		3,049		26,200
Interest rate swaps	(568)		—		(9)		(559)
Total designated as cash flow hedges	$	37,397	$	(8,716)	$	3,040	$	25,641


(In thousands)	Balance as of December 31, 2019		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of June 30, 2020
Derivatives designated as cash flow hedges
Foreign currency contracts	(6,005)		38,159		5,954		26,200
Interest rate swaps	(577)		—		(18)		(559)
Total designated as cash flow hedges	$	(6,582)	$	38,159	$	5,936	$	25,641


(In thousands)	Balance as of March 31, 2019		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of June 30, 2019
Derivatives designated as cash flow hedges
Foreign currency contracts	11,765		5,870		6,040		11,595
Interest rate swaps	(604)		—		(9)		(595)
Total designated as cash flow hedges	$	11,161	$	5,870	$	6,031	$	11,000


(In thousands)	Balance as of December 31, 2018		Amount of gain (loss) recognized in other comprehensive income (loss) on derivatives		Amount of gain (loss) reclassified from other comprehensive income (loss) into income		Balance as of June 30, 2019
Derivatives designated as cash flow hedges
Foreign currency contracts	21,908		899		11,212		11,595
Interest rate swaps	954		67		1,616		(595)
Total designated as cash flow hedges	$	22,862	$	966	$	12,828	$	11,000

The following table presents the amounts in the unaudited consolidated statements of operations in which the effects of undesignated derivative instruments are recorded and the effects of fair value hedge activity on these line items.


	Three months ended June 30,															Six months ended June 30,
	2020						2019						2020					2019
(In thousands)	Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity		Total		Amount of Gain (Loss) on Fair Value Hedge Activity			Total		Amount of Gain (Loss) on Fair Value Hedge Activity
Other expense, net	$	(4,843)	$	841	$	(1,128)	$	(1,706)	$	(3,309)	$	(1,985)		$	(1,795)	$	(2,155)

The Company is exposed to gains and losses resulting from fluctuations in foreign currency exchange rates relating to transactions generated by its international subsidiaries in currencies other than their local currencies. These gains and losses are driven by non-functional currency generated revenue, non-functional currency inventory purchases, investments in U.S. Dollar denominated available-for-sale debt securities, and certain other intercompany transactions. The Company enters into foreign currency contracts to reduce the risk associated with the foreign currency exchange rate fluctuations on these transactions. Certain contracts are designated as cash flow hedges. As of June 30, 2020, December 31, 2019 and June 30, 2019, the aggregate notional value of the Company's outstanding cash flow hedges was $462.3 million, $879.8 million and $597.1 million, respectively, with contract maturities ranging from one to twenty-four months.

The Company may enter into long term debt arrangements with various lenders which bear a range of fixed and variable rates of interest. The nature and amount of the Company's long term debt can be expected to vary as a result of future business requirements, market conditions and other factors. The Company may elect to enter into interest rate swap contracts to reduce the impact associated with interest rate fluctuations. The interest rate swap

For contracts designated as cash flow hedges, the changes in fair value are reported as other comprehensive income (loss) and are recognized in current earnings in the period or periods during which the hedged transaction affects current earnings. Effective hedge results are classified in the unaudited consolidated statements of operations in the same manner as the underlying exposure.

The Company evaluated the probability of certain hedged forecasted transactions and determined certain transactions, against which hedges were designated, were no longer probable of occurring by the end of the originally specified time period, as a result of the impacts of COVID-19. The amounts recorded in other income (expense), previously recorded in accumulated other comprehensive income, as a result of the discontinuance of cash flow hedges were not material for the three and six months ended June 30, 2020.

The Company may elect to enter into foreign exchange forward contracts to mitigate the change in fair value of specific assets and liabilities on the unaudited consolidated balance sheets. These undesignated instruments are recorded at fair value as a derivative asset or liability on the unaudited consolidated balance sheets with their corresponding change in fair value recognized in other expense, net, together with the re-measurement gain or loss from the hedged balance sheet position. As of June 30, 2020, December 31, 2019 and June 30, 2019, the total notional value of the Company's outstanding undesignated derivative instruments was $319.1 million, $304.2 million and $464.7 million, respectively.

The Company enters into derivative contracts with major financial institutions with investment grade credit ratings and is exposed to credit losses in the event of non-performance by these financial institutions. This credit risk is generally limited to the unrealized gains in the derivative contracts. However, the Company monitors the credit quality of these financial institutions and considers the risk of counterparty default to be minimal.