Financial Instruments

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure

ch as changes in interest rates. In an effort to manage interest rate risk, we may enter into interest rate hedging arrangements from time to time. We do not utilize derivative financial instruments for trading or speculative purposes.

In 2018, we entered into two forward starting interest rate swaps with notional amounts of $200.0 million. In 2019, we entered into three additional forward starting interest rate swaps with notional amounts of $150.0 million. We entered into these interest rate swap contracts to hedge our exposure to the changes in the interest rates on an anticipated debt offering in late 2019. These forward starting swaps were appropriately designated as cash flow

hedges, with any changes in fair value recorded in AOCL. We determined the fair values of these interest rate swaps by using standard market conventions and techniques such as discounted cash flow analysis, option pricing models and termination cost at each balance sheet date. The inputs used to value these interest rate swaps fall within Level 2 of the fair value hierarchy.

In November 2019, we issued $400.0 million of 2.88% senior unsecured notes due 2029 (see Note 8) and terminated all of the forward starting interest rate swaps, resulting in a cash payment of $35.6 million to the counter parties, which was recorded in AOCL and is being recognized through interest expense over the term of the notes. The remaining unamortized amount as of December 31, 2019 was $35.0 million.