Derivatives

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives:The Company periodically enters into derivative financial instruments, typically interest rate swap agreements, interest rate caps, and foreign currency contracts to reduce its exposure to fluctuations in interest rates on variable-rate debt and foreign currency exchange rates. The Company does not utilize derivative financial instruments with a level of complexity or with a risk greater than the exposure to be managed nor does it enter into or hold derivatives for trading or speculative purposes. The Company periodically reviews the creditworthiness of the counterparty to assess the counterparty’s ability to honor its obligation. Counterparty default would expose the Company to fluctuations in interest and currency rates. Derivative financial instruments are recognized at fair value in the Consolidated Balance Sheets, in accordance with the guidance of ASC Topic 815 “Derivatives and Hedging” (“ASC 815”).

The following table summarizes the fair value of derivative instruments in the Company's Consolidated Balance Sheets as of the dates indicated (amounts in thousands):

	September 30, 2020			December 31, 2019
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate contracts	Other assets	$	—	Other assets	$	323
Interest rate contracts	Other liabilities	46,570		Other liabilities	17,807
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other assets	2,877		Other assets	552
Foreign currency contracts	Other liabilities	17,690		Other liabilities	5,856

Derivatives Designated as Hedging Instruments:

Changes in fair value of derivative contracts designated as cash flow hedging instruments are recognized in other comprehensive income ("OCI"). As of September 30, 2020 and December 31, 2019, the notional amount of interest rate contracts designated as cash flow hedging instruments was $932.3 million and $959.0 million, respectively. Derivatives designated as cash flow hedging instruments were evaluated and remain highly effective at September 30, 2020 and have initial terms of one to six years. The Company estimates that approximately $10.1 million of net derivative loss included in OCI will be reclassified into earnings within the next 12 months.

The following table summarizes the effects of derivatives designated as cash flow hedging instruments on the consolidated financial statements for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands):

	Loss recognized in OCI, net of tax
	Three Months Ended September 30,				Nine Months Ended September 30,
Derivatives designated as cash flow hedging instruments	2020		2019		2020		2019
Interest rate contracts	$	(1,089)	$	(6,245)	$	(27,953)	$	(20,160)
	Loss reclassified from OCI into income
	Three Months Ended September 30,				Nine Months Ended September 30,
Location of loss reclassified from OCI into income	2020		2019		2020		2019
Interest expense, net	$	(3,175)	$	(413)	$	(6,488)	$	(611)

Derivatives Not Designated as Hedging Instruments:

Changes in fair value of derivative contracts not designated as hedging instruments are recognized in earnings. The Company also enters into foreign currency contracts to economically hedge the foreign currency re-measurement exposure related to certain balances that are denominated in currencies other than the functional currency of the entity. As of September 30, 2020 and December 31, 2019, the notional amount of foreign currency contracts that are not designated as hedging instruments was $466.2 million and $469.9 million, respectively.

The following table summarizes the effects of derivatives not designated as hedging instruments on the Company’s Consolidated Income Statements for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands):

		Amount of gain or (loss) recognized in income
		Three Months Ended September 30,
Derivatives not designated as hedging instruments	Location of gain or (loss) recognized in income	2020		2019
Foreign currency contracts	Foreign exchange gains	$	2,280	$	4,270
Foreign currency contracts	Interest expense, net	(322)		(1,141)
Interest rate contracts	Interest expense, net	—		15
		Amount of gain or (loss) recognized in income
		Nine Months Ended September 30,
Derivatives not designated as hedging instruments	Location of gain or (loss) recognized in income	2020		2019
Foreign currency contracts	Foreign exchange gains	$	27,437	$	(3,401)
Foreign currency contracts	Interest expense, net	(2,135)		(2,628)
Interest rate contracts	Interest expense, net	—		(492)