Derivative Instruments

12 Months Ended

Dec. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 5. Derivative Instruments

The notional amount of the Company's derivative instruments is summarized as follows (in millions):

	As of December 31,
	2020		2019
Designated derivatives:
Cash flow hedges:
Foreign currency contracts	$	722.1	$	484.0
Interest rate lock contracts	650.0		—
Fair value hedges:
Interest rate swap contracts	300.0		300.0
Total designated derivatives	$	1,672.1	$	784.0
Non-designated derivatives	174.1		162.9
Total	$	1,846.2	$	946.9

The fair value of derivative instruments on the Consolidated Balance Sheets was as follows:

		As of December 31,
	Balance Sheet Location	2020		2019
Derivative assets:
Derivatives designated as hedging instruments:
Foreign currency contracts as cash flow hedges	Other current assets	$	27.8	$	2.2
Foreign currency contracts as cash flow hedges	Other long-term assets	10.0		0.3
Interest rate lock contracts	Other long-term assets	30.7		—
Interest rate swap contracts	Other long-term assets	20.3		—
Total derivatives designated as hedging instruments		$	88.8	$	2.5
Derivatives not designated as hedging instruments	Other current assets	0.2		—
Total derivative assets		$	89.0	$	2.5
Derivative liabilities:
Derivatives designated as hedging instruments:
Foreign currency contracts	Other accrued liabilities	$	0.2	$	6.6
Foreign currency contracts	Other long-term liabilities	0.2		—
Interest rate swap contracts	Other long-term liabilities	—		3.1
Total derivatives designated as hedging instruments		$	0.4	$	9.7
Derivatives not designated as hedging instruments	Other accrued liabilities	0.1		0.2
Total derivative liabilities		$	0.5	$	9.9

Designated Derivatives

The Company uses foreign currency forward contracts to hedge the Company's planned cost of revenues and operating expenses denominated in foreign currencies. These derivatives are designated as cash flow hedges and typically have maturities of thirty-six months or less.

In 2020, the Company entered into interest rate locks with large financial institutions, which fix the benchmark interest rates of future debt issuance for an aggregate notional amount of $650.0 million. These contracts are designated as cash flow hedges and are expected to terminate within 4 years and 9 months.

In 2019, the Company entered into interest rate swaps with an aggregate notional amount of $300.0 million designated as fair value hedges of our fixed-rate 2041 Notes. These swaps convert the fixed interest rates of the notes to floating interest rates based on the London InterBank Offered Rate (LIBOR). All interest rate swaps will expire within nine years or less.

Effect of Derivative Instruments on the Consolidated Statements of Operations

For cash flow hedges, the Company recognized an unrealized gain of $63.5 million, and unrealized losses of $6.3 million and $8.7 million in accumulated other comprehensive loss for the effective portion of its derivative instruments during the years ended December 31, 2020, 2019, and 2018, respectively.

For foreign currency forward contracts, the Company reclassified losses of $9.0 million and $3.8 million and a gain of $0.9 million out of accumulated other comprehensive loss to cost of revenues and operating expenses in the Consolidated Statement of Operations during the years ended December 31, 2020, 2019, and 2018, respectively. As of December 31, 2020, an estimated $27.7 million of unrealized net gain within accumulated other comprehensive loss is expected to be reclassified into earnings within the next twelve months.

Non-Designated Derivatives

The Company also uses foreign currency forward contracts to mitigate variability in gains and losses generated from the remeasurement of certain monetary assets and liabilities denominated in foreign currencies. These foreign exchange forward contracts typically have maturities of approximately one to four months. The outstanding non-designated derivative instruments are carried at fair value. Changes in the fair value of these derivatives recorded in other expense, net within the Consolidated Statements of Operations were not material during the years ended December 31, 2020, 2019, and 2018, respectively.

See Note 1, Description of Business, Basis of Presentation and Significant Accounting Policies, for the Company’s policy regarding the offsetting of derivative assets and derivative liabilities.