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Financial Instruments
 6 Months Ended
Jun. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments
Financial Instruments

The Company established risk management policies and procedures, which seek to reduce the Company’s risk exposure to fluctuations in foreign currency exchange rates and interest rates. However, there can be no assurance that these policies and procedures will be successful. Although the instruments utilized involve varying degrees of credit, market and interest risk, the counterparties to the agreements are expected to perform fully under the terms of the agreements. The Company monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective. Additionally, in the event of default under the Company’s master derivative agreements, the non-defaulting party has the option to set-off any amounts owed with regard to open derivative positions.

Foreign Currency Exchange Rate Risk

The Company’s objective in managing exposure to foreign currency fluctuations is to limit the exposure of certain cash flows and earnings to foreign currency exchange rate changes through the use of various derivative contracts. The Company experiences foreign currency risks in its global operations as a result of various factors, including intercompany local currency denominated loans, rental operations in various currencies and purchasing fleet in various currencies.

Interest Rate Swap Arrangement

The Company has entered into a three-year LIBOR-based interest rate swap arrangement on a portion of its outstanding ABL Credit Facility. The aggregate amount of the swap is equal to a portion of the U.S. dollar principal amount of the ABL Credit Facility and the payment dates of the swap coincide with the interest payment dates of the ABL Credit Facility. The swap contract provides for the Company to pay a fixed interest rate and receive a floating rate. The variable interest rate resets monthly. The swap has been accounted for as cash flow hedge of a portion of the ABL Credit Facility.

The following table summarizes the outstanding interest rate swap arrangement as of June 30, 2017 (dollars in millions):
 
Aggregate Notional Amount
 
Receive Rate
 
Receive Rate as of June 30, 2017
 
Pay Rate
ABL Credit Facility
$
350.0

 
1 month LIBOR + 1.75%
 
3.0
%
 
3.5
%


The following table summarizes the estimated fair value of the Company's financial instruments (in millions).
 
Fair Value of Financial Instruments
 
Prepaid & Other Current Assets
 
Accrued Liabilities
 
June 30,
2017
 
December 31,
2016
 
June 30,
2017
 
December 31,
2016
Derivatives Designated as Hedging Instruments
 
 
 
 
 
 
 
Interest rate swap
$
—

 
$
—

 
$
1.0

 
$
—

Derivatives Not Designated as Hedging Instruments


 


 


 


Foreign currency forward contracts
$
—

 
$
0.1

 
$
—

 
$
—



The following table summarizes the gains and losses on derivative instruments for the periods indicated. Gains and losses recognized on foreign currency forward contracts and the effective portion of interest rate swaps are included in the condensed consolidated statements of operations together with the corresponding offsetting gains and losses on the underlying hedged transactions. All gains and losses recognized are included in "Selling, general and administrative" in the condensed consolidated statements of operations (in millions).
 
Gain (Loss) Recognized
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
Derivatives Designated as Cash Flow Hedges
 
 
 
 
 
 
 
Interest rate swap - effective portion
$
—

 
$
—

 
$
—

 
$
—

Interest rate swap - ineffective portion
$
—

 
$
—

 
$
(0.1
)
 
$
—

Derivatives Not Designated as Hedging Instruments
 
 
 
 
 
 
 
Foreign currency forward contracts
$
(0.4
)
 
$
(0.2
)
 
$
(3.6
)
 
$
(0.1
)