Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

The Company uses derivatives to manage selected foreign currency exchange rate risk for its investments in foreign subsidiaries and interest rate risk related to its variable rate debt. The Company documents its risk management strategy and hedge effectiveness at the inception of and during the term of each hedge. The Company's derivative instruments are measured at fair value within the accompanying condensed consolidated balance sheets either as an asset or a liability.

Interest Rate Swap

On January 31, 2019, the Company executed two interest rate swaps for a total notional amount of $310.0 million to fix the LIBOR portion of its interest rate on its variable rate debt at 2.52% through January 31, 2022. There is no significant credit risk associated with the potential failure of any counterparty to perform under the terms of the interest rate swaps.

Net Investment Hedge

On May 15, 2019, the Company terminated its foreign currency exchange rate contracts with total notional amounts of approximately $88.0 million. The Company recognized a gain of $2.5 million, net of taxes of $0.8 million, upon termination of the contracts, which was recorded in comprehensive income. On May 15, 2019, the Company entered into new foreign currency exchange rate contracts with total notional amounts of $81.3 million. As of September 30, 2020, the amount of notional foreign currency exchange rate contracts outstanding was approximately $81.3 million. There is no significant credit risk associated with the potential failure of any counterparty to perform under the terms of the foreign currency exchange rate contracts.

The tables below represent the fair value of the Company's derivative instruments (in millions):

		September 30, 2020				December 31, 2019
Derivative Type	Balance Sheet Location	Assets		Liabilities		Assets		Liabilities
Interest Rate Swap	Other liabilities	$	—	$	10.0	$	—	$	6.2
Net Investment Hedge	Other assets/liabilities	$	0.2	$	—	$	—	$	1.4

		Three Months Ended September 30,						Nine Months Ended September 30,
Derivative Type	Income Statement Location	2020			2019			2020			2019
Interest Rate Swap	Comprehensive income (loss)	$	1.2	1	$	(0.6)	1	$	(2.8)	1	$	(5.7)	1
Net Investment Hedge	Comprehensive (loss) income	$	(1.2)	2	$	1.0	2	$	1.2	2	$	(0.7)	2

(1) Amounts presented are net of taxes of $0.4 million and $0.2 million for the three months ended September 30, 2020 and 2019, respectively and $1.0 million and $2.0 million for the nine months ended September 30, 2020 and 2019, respectively.

(2) Amounts presented are net of taxes of $0.4 million and $0.3 million for the three months ended September 30, 2020 and 2019, respectively and $0.4 million and $0.3 million for the nine months ended September 30, 2020 and 2019, respectively.

On January 1, 2019, the Company adopted ASU No. 2017-12, Targeted Improvements to Accounting for Hedging Activities ("ASU No. 2017-12"), and reclassified $0.2 million from retained earnings to other comprehensive income related to the cumulative ineffective portion of the net investment hedge. See Note 13, Fair Value Measurements, for additional information on the Company's derivative asset and liabilities.