Derivative Financial Instruments

Foreign Currency Exchange Rate Risk

The Company enters into foreign currency forward contracts not formally designated as hedges to manage the consolidated exchange rate risk associated with the remeasurement of non-functional currency denominated monetary assets and liabilities. Changes in fair value of foreign currency forward contracts are recognized in income at the end of each reporting period based on the difference between the contract rate and the spot rate. In general, these gains and losses are offset in the Consolidated Statements of Income by the reciprocal gains and losses from the underlying assets or liabilities which originally gave rise to the exposure. The net amount of the gains and losses related to derivative instruments recorded in other expense (income), net for the three and nine months ended September 30, 2018 were a net gain of $1.5 million and a net loss of $7.1 million, respectively. The net for the three and nine months ended September 30, 2017 were a net gain of $0.2 million and a net loss of $7.3 million, respectively.

The table below presents the net notional amounts of the Company’s outstanding foreign currency forward contracts by currency (in thousands):



	September 30,		December 31,
	2018		2017
European euro	$	78,747	$	34,800
Canadian dollar	15,665		7,426
Swedish kroner	13,701		59,373
Norwegian kroner	9,486		3,095
Brazilian real	8,451		7,794
Australian dollar	1,192		2,817
British pound sterling	1,037		34,317
Denmark Kroner	786		—
Japanese yen	727		3,362
	$	129,792	$	152,984

At September 30, 2018, the Company’s foreign currency forward contracts, in general, had maturities of three months or less.

The carrying amounts of the foreign exchange contracts included in the Consolidated Balance Sheets are as follows (in thousands):



	September 30, 2018				December 31, 2017
	Prepaid Expenses and Other Current Assets		Other Current Liabilities		Prepaid Expenses and Other Current Assets		Other Current Liabilities
Foreign exchange contracts	$	3,987	$	529	$	1,760	$	579