We use derivatives as part of the normal business operations to manage our exposure to fluctuations in interest rates associated with variable interest rate debt and decrease the volatility of cash flows affected by changes in interest rates.

On January 31, 2019, the Company entered into a business combination contingent interest rate swap in a notional amount of $200.0 million (the “January 2019 Swap”) to hedge part of the floating interest rate exposure under the First Lien Dollar Term Facility. The January 2019 Swap became effective on June 3, 2019 and will terminate on June 3, 2022. The January 2019 Swap economically converts a portion of the variable rate debt to fixed rate debt. The Company receives floating interest payments monthly based on one-month LIBOR and pays a fixed rate of 2.56% to the counterparty. Prior to September 25, 2019, the Company did not apply hedge accounting to the January 2019 Swap. Changes in fair value were recorded to interest expense.

On September 25, 2019, the Company amended the January 2019 Swap to extend its term to mature on June 1, 2023 and lower the rate to 2.31% (the “Amended January 2019 Swap”). We concurrently entered into an incremental $50.0 million notional swap at 1.5% and maturing on June 1, 2023 (the “September 2019 Swap”).

Additionally, on September 25, 2019, we designated as cash flow hedges the Amended January 2019 Swap and the September 2019 Swap and applied hedge accounting. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without exchange of the underlying notional amount. Changes in fair value are recorded in accumulated other comprehensive income (loss) and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

On March 27, 2020, we entered into an interest rate swap that amended the Amended January 2019 Swap to a lower rate of 2.1% and extended the maturity to June 3, 2024 (the “Second Amended January 2019 Swap”). We designated the Second Amended January 2019 Swap as a cash flow hedge and applied hedge accounting.

A summary of our interest rate swaps is as follows:


Interest Rate Swap Agreements	Designation	Maturity Date	Rate	Notional Value		Debt Instrument Hedged	Percentage of Debt Instrument Outstanding
June 30, 2021
September 2019 Swap	Cash flow hedge	June 1, 2023	1.50%	$	50.0	First Lien Dollar Term Facility	20%
Second Amended January 2019 Swap	Cash flow hedge	June 1, 2024	2.09%		200.0	First Lien Dollar Term Facility	80%
				$	250.0		100%

December 31, 2020
September 2019 Swap	Cash flow hedge	June 1, 2023	1.50%	$	50.0	First Lien Dollar Term Facility	18%
Second Amended January 2019 Swap	Cash flow hedge	June 1, 2024	2.09%		200.0	First Lien Dollar Term Facility	74%
				$	250.0		92%

The Second Amended January 2019 Swap contains an insignificant financing element that is amortized over the term of the hedging relationship.

As of June 30, 2021, we anticipate having to reclassify $4.6 million from accumulated other comprehensive income (loss) into earnings during the next twelve months to offset the variability of the hedged items during this period.

The following table summarizes the total fair values of derivative assets and liabilities and the respective classification in the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020. The net amount of derivatives can be reconciled to the tabular disclosure of fair value in Note 10, “Fair Value Measurement”:


Interest Rate Swap Agreements	Balance Sheet Classification	June 30, 2021		December 31, 2020
Designated as cash flow hedges	Accrued liabilities and other	$	4.6	$	4.6
Designated as cash flow hedges	Derivative instruments		6.0		9.6
		$	10.6	$	14.2

The following table presents the effect of our derivative financial instruments on our unaudited condensed consolidated statement of operations. The income effects of our derivative activities are reflected in interest expense.


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Total interest expense presented in the statement of operations	$	6.0	$	5.5	$	11.6	$	11.7
Interest rate swap agreements designated as cash flow hedges	$	0.9	$	0.4		1.9		0.7