DERIVATIVE FINANCIAL INSTRUMENTS

We selectively use derivative instruments to reduce market risk associated with changes in foreign currency exchange rates and interest rates. The use of derivatives is intended for hedging purposes only and we do not enter into derivative instruments for speculative purposes. A description of each type of derivative used to manage risk is included in the following paragraphs.

Derivative Instruments Qualifying and Designated as Cash Flow Hedges

During the year ended December 31, 2013, we entered into five interest rate swaps with notional amounts totaling $1,173.0 million to hedge interest rate exposures related to variable rate borrowings under the Senior Secured Credit Facilities. The interest rate swaps are in place until September 29, 2017.

During the three months ended March 31, 2017, we entered into three 1.5% interest rate caps with aggregate notional amounts totaling $600 million to hedge the variable interest rate exposures on our 2024 Dollar Term Loans. These caps are effective beginning September 30, 2017 through December 31, 2019 and include an aggregate deferred premium of $8.6 million which will be paid quarterly over the term of the cap.

The following table presents the location and fair values using Level 2 inputs of derivative instruments that qualify and have been designated as cash flow hedges included in our condensed consolidated balance sheets:



	June 30, 2017		December 31, 2016
Prepaid and other assets:
Interest rate swaps	$	0.5	$	0.1
Total assets	$	0.5	$	0.1
Other accrued liabilities:
Interest rate swaps	$	0.1	$	0.8
Interest rate caps	$	2.5	$	—
Other liabilities
Interest rate caps	$	1.7	$	—
Total liabilities	$	4.3	$	0.8

For derivative instruments that qualify and are designated as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current period earnings.

The following tables set forth the locations and amounts recognized during the three and six months ended June 30, 2017 and 2016 for these cash flow hedges.



	Amount of (Gain) Loss Recognized in OCI on Derivatives (Effective Portion)					Location of (Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of (Gain) Loss Reclassified from Accumulated OCI to Income (Effective Portion)				Location of (Gains) Losses Recognized in Income on Derivatives (Ineffective Portion)	Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion)
Derivatives in Cash Flow Hedging Relationships	Three Months Ended June 30, 2017		Three Months Ended June 30, 2016				Three Months Ended June 30, 2017		Three Months Ended June 30, 2016			Three Months Ended June 30, 2017		Three Months Ended June 30, 2016
Interest rate contracts	$	2.2	$	(0.5	)	Interest expense, net	$	0.2	$	1.6	Interest expense, net	$	0.4	$	0.9



	Amount of (Gain) Loss Recognized in OCI on Derivatives (Effective Portion)				Location of (Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of (Gain) Loss Reclassified from Accumulated OCI to Income (Effective Portion)				Location of (Gains) Losses Recognized in Income on Derivatives (Ineffective Portion)	Amount of (Gain) Loss Recognized in Income on Derivatives (Ineffective Portion)
Derivatives in Cash Flow Hedging Relationships	Six Months Ended June 30, 2017		Six Months Ended June 30, 2016			Six Months Ended June 30, 2017		Six Months Ended June 30, 2016			Six Months Ended June 30, 2017		Six Months Ended June 30, 2016
Interest rate contracts	$	3.7	$	1.7	Interest expense, net	$	0.7	$	3.2	Interest expense, net	$	2.0	$	3.3

Derivative Instruments Not Designated as Cash Flow Hedges

We periodically enter into foreign currency forward contracts to reduce market risk and hedge our balance sheet exposures and cash flows for subsidiaries with exposures denominated in currencies different from the functional currency of the relevant subsidiary. These contracts have not been designated as hedges and all gains and losses are marked to market through other (income) expense, net in the condensed consolidated statement of operations.

During the year ended December 31, 2013, we purchased a €300.0 million 1.5% interest rate cap on our Euro Term Loan that is in place until September 29, 2017. We paid a premium of $3.1 million for the interest rate cap. The interest rate cap was not designated as a hedge and the changes in the fair value of the derivative instrument are recorded in current period earnings and are included in interest expense.

During the three months ended March 31, 2017, we purchased a 1.25% interest rate cap with a notional amount of €388.0 million to hedge the variable interest rate exposures on our 2023 Euro Term Loans. We paid a premium equal to $0.6 million for the interest rate cap which is effective beginning September 30, 2017 through December 31, 2019. Changes in the fair value of the derivative instrument are recorded in current period earnings and are included in interest expense.

The following table presents the location and fair values using Level 2 inputs of derivative instruments that have not been designated as hedges included in our condensed consolidated balance sheets:



	June 30, 2017		December 31, 2016
Prepaid and other assets:
Foreign currency contracts	$	—	$	0.1
Other assets
Interest rate caps	$	0.1	$	—
Total assets	$	0.1	$	0.1
Other accrued liabilities:
Foreign currency contracts	$	2.0	$	0.5
Total liabilities	$	2.0	$	0.5

Fair value gains and losses of derivative contracts, as determined using Level 2 inputs, that have not been designated for hedge accounting treatment are recorded in earnings as follows:



		Three Months Ended June 30,				Six Months Ended June 30,
Derivatives Not Designated as Hedging Instruments under ASC 815	Location of (Gain) Loss Recognized in Income on Derivatives	2017		2016		2017		2016
Interest rate caps	Interest expense	$	0.1	$	—	$	0.4	$	—
Foreign currency forward contracts	Other expense, net	$	4.8	$	1.6	$	7.2	$	4.0