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Derivatives and Hedging
 6 Months Ended
Jun. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Derivatives and Hedging
We are exposed to changes in foreign currency exchange rates, primarily relating to intercompany debt and certain forecasted sales transactions denominated in currencies other than the U.S. dollar, as well as to changes in interest rates as a result of our variable-rate debt. Consequently, we use derivative financial instruments to manage and mitigate such risk. We do not enter into derivative transactions for speculative or trading purposes.
We utilize a variety of derivative instruments, all of which are designated as cash flow hedges, including:
•foreign exchange forward contracts to hedge certain forecasted sales transactions denominated in foreign currency, all of which had maturities of 18 months or less as of June 30, 2021;
•a cross-currency swap arrangement used to manage variability due to movements in foreign currency exchange rates related to a Euro-denominated intercompany loan; and
•pay-fixed rate, receive-floating rate interest rate swap arrangements to effectively convert portions of our variable-rate debt to fixed.
The risk management strategies related to our use of derivatives are consistent with those described in our 2020 Form 10-K.
The following table summarizes our outstanding derivative instruments on a gross basis:
Notional Amount
Fair Value of Derivative Assets(2)
Fair Value of Derivative Liabilities(2)
 June 30, 2021December 31, 2020June 30, 2021December 31, 2020June 30, 2021December 31, 2020
Derivative Instrument:
Level 2:
Foreign exchange forward contracts$309.2 $276.2 $1.8 $— $7.0 $15.8 
Cross-currency swap(1)
1,411.5 1,461.9 — — 129.0 167.2 
Interest rate swaps2,011.6 2,022.0 15.9 2.0 22.0 33.4 
Total hedges$3,732.3 $3,760.1 $17.7 $2.0 $158.0 $216.4 
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(1)The notional values of the cross-currency swap have been translated from Euros to U.S. dollars at the foreign currency rates in effect of approximately 1.19 and 1.22 as of June 30, 2021 and December 31, 2020, respectively.
(2)In our balance sheets, all derivative assets are recorded within prepaid expenses and other current assets and all derivative liabilities are recorded within accrued expenses and other current liabilities.
The following table summarizes the effect of our designated cash flow hedging derivative instruments on accumulated other comprehensive income (loss) (AOCI):
Unrealized Gains (Losses) Recognized in Other Comprehensive Income
 Three Months EndedSix Months Ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Derivative Instrument:
Foreign exchange forward contracts(1)
$0.9 $(8.0)$3.0 $6.3 
Cross-currency swap(3.4)(7.3)(5.5)30.4 
Interest rate swaps(1.7)0.3 25.3 (21.7)
Total hedges$(4.2)$(15.0)$22.8 $15.0 
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(1)Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.
The following tables summarize the locations and amounts of gains (losses) recognized within earnings related to our cash flow hedging relationships:
Three Months Ended June 30, 2021Three Months Ended June 30, 2020
RevenueInterest ExpenseOther Income (Expense), NetRevenueInterest ExpenseOther Income (Expense), Net
Foreign exchange forward contracts:
Reclassified from AOCI into income$(2.3)$— $— $1.2 $— $— 
Cross-currency swap:
Reclassified from AOCI into income(1)
— 6.7 (15.1)— 7.5 (22.6)
Interest rate swaps:
Reclassified from AOCI into income— (8.7)— — (6.4)— 
Total hedges$(2.3)$(2.0)$(15.1)$1.2 $1.1 $(22.6)
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(1)The amount reflected in other income (expense), net includes $14.8 million and $22.4 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during the three months ended June 30, 2021 and 2020, respectively.
Six Months Ended June 30, 2021Six Months Ended June 30, 2020
RevenueInterest ExpenseOther Income (Expense), NetRevenueInterest ExpenseOther Income (Expense), Net
Foreign exchange forward contracts:
Reclassified from AOCI into income$(3.4)$— $— $2.0 $— $— 
Cross-currency swap:
Reclassified from AOCI into income(1)
— 13.3 43.0 — 15.1 (2.4)
Interest rate swaps:
Reclassified from AOCI into income— (17.3)— — (8.9)— 
Total hedges$(3.4)$(4.0)$43.0 $2.0 $6.2 $(2.4)
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(1)The amount reflected in other income (expense), net includes $(43.7) million and $2.1 million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by the cross-currency swap during the six months ended June 30, 2021 and 2020, respectively.
As of June 30, 2021, we estimate that $14.3 million of net deferred losses related to our designated cash flow hedges will be recognized in earnings over the next 12 months. No amounts have been excluded from our hedge effectiveness testing.