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Derivatives and Hedging
 12 Months Ended
Dec. 31, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Derivatives and Hedging
The following table summarizes the fair value of our derivative instruments as well as the location of the asset and/or liability on the consolidated balance sheets as of December 31, 2023 and December 31, 2022 (in millions):
Fair Value of
Asset Derivatives
December 31,
Balance Sheet Location20232022
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contractsOther current assets$— $0.1 
Interest rate swap contractsOther current assets5.2 4.4 
Interest rate swap contractsOther assets, net— 2.8 
Total$5.2 $7.3 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsOther current assets0.2 0.1 
Total asset position$5.4 $7.4 
Fair Value of
Liability Derivatives
December 31,
Balance Sheet Location20232022
Derivatives designated as cash flow hedging instruments:
Foreign currency forward contractsAccounts payable and accrued expenses$— $2.6 
Interest rate swap contractsOther long-term liabilities2.6 — 
2.6 2.6 
Derivatives not designated as hedging instruments:
Foreign currency forward contractsAccounts payable and accrued expenses4.5 2.8 
Total liability position$7.1 $5.4 
Our derivative instruments are subject to a master netting agreement with each respective counterparty bank and are therefore net settled at their respective maturity date. Although we have the legal right of offset under the master netting agreements, we have elected to present these contracts on a gross basis on the accompanying consolidated balance sheets as of December 31, 2023 and 2022. Gains and losses related to our derivative instruments are presented as an adjustment to reconcile net income to net cash provided by or used in operating activities in the consolidated statements of cash flows.
Cash Flow Hedging Instruments
Foreign Currency Forward Contracts
As of December 31, 2023, there were no notional amounts on our foreign currency contracts designated as cash flow hedging instruments. As of December 31, 2022, the notional amounts of our foreign currency forward contracts designated as cash flow hedging instruments was approximately $100.0 million.
During the year ended December 31, 2023, we recorded net gains of $8.6 million in accumulated other comprehensive loss related to foreign currency forward contracts, and released net gains of $5.9 million in cost of products for the underlying sales that were recognized. Additionally, for the year ended December 31, 2023, $2.8 million of net gains related to the amortization of forward points were released from other comprehensive income and recognized in cost of goods sold. Based on the current valuation, we expect to reclassify net losses of $0.4 million related to foreign currency forward contracts from accumulated other comprehensive income into earnings during the next 12 months.
For the years ended December 31, 2022 and 2021, we recognized net gains of $2.0 million and $2.4 million in accumulated other comprehensive loss related to forward currency forward contracts. For the years ended December 31, 2022 and 2021, we released net gains of $4.8 million and $1.7 million, respectively, into cost of goods sold related to foreign currency forward contracts.
Interest Rate Swap Contracts
We used interest rate swaps in order to mitigate the risk of changes in interest rates associated with our variable-rate Term Loan B, which was replaced by our 2023 Term Loan B as a part of our debt modification in March 2023 (see Note 7). As part of this modification, we entered into a termination agreement to unwind our existing interest rate swaps, and as a result, we received proceeds of $5.6 million. As of December 31, 2023, we have a deferred gain of $3.2 million recognized in other comprehensive income related to these proceeds, which will be amortized into interest expense over the remaining term of the contract.
In April 2023, we entered into interest rate swaps designated as cash flow hedges in order to mitigate the risk of interest rate fluctuations associated with our 2023 Term Loan B. Over the life of the 2023 Term Loan B, we will receive variable interest payments from the counterparty lenders in exchange for fixed interest rate payments, which are made at a weighted average rate of 3.36% across our interest rate swap contracts without exchange of the underlying notional amount, which was $400.0 million as of December 31, 2023. Our interest rate swap contracts that were unwound as a part of our debt modification discussed above had a combined notional amount of $192.3 million at December 31, 2022.
The following tables summarize the net effect of all cash flow hedges on the consolidated financial statements for the periods presented (in millions):
Gain (Loss) Recognized in Other Comprehensive Income
Year Ended December 31,
Derivatives designated as cash flow hedging instruments202320222021
Foreign currency forward contracts$8.6 $2.0 $2.4 
Interest rate swap contracts6.9 14.2 4.4 
Total$15.5 $16.2 $6.8 
Gain (Loss) Reclassified from Other Comprehensive Income into Earnings
Year Ended December 31,
Derivatives designated as cash flow hedging instruments202320222021
Foreign currency forward contracts$5.9 $4.8 $1.7 
Interest rate swap contracts8.2 (1.6)(4.8)
Total$14.1 $3.2 $(3.1)
Based on the current valuation as of December 31, 2023, we expect to reclassify a net gain of $5.2 million related to the interest rate swap contracts from accumulated other comprehensive loss into earnings during the next 12 months.
Foreign Currency Forward Contracts Not Designated as Hedging Instruments
We use foreign currency forward contracts that are not designated as qualifying cash flow hedging instruments to mitigate our exposure to fluctuations in foreign currency exchange rates due to the remeasurement of certain balance sheet payables and receivables denominated in foreign currencies, as well as gains and losses resulting from the translation of the operating results of our international subsidiaries into U.S. dollars for financial reporting purposes. These contracts generally mature within 12 months from inception. As of December 31, 2023, 2022 and 2021, the notional amounts of our foreign currency forward contracts used to mitigate the exposures discussed above were approximately $209.4 million, $162.9 million, and $67.8 million, respectively. We estimate the fair values of foreign currency forward contracts based on pricing models using current market rates, and record all derivatives on our consolidated balance sheet at fair value, with changes in fair value recorded in our consolidated statements of operations. Foreign currency forward contracts are classified under Level 2 of the fair value hierarchy (see Note 17).
The following table summarizes the location of net gains and losses for each type of our derivative contracts recognized in the consolidated statements of operations for the periods presented (in millions):
Amount of Net Gain Recognized in Income on Derivative Instruments
Derivatives not designated as hedging instrumentsLocation of Net Gain Recognized in Income on Derivative InstrumentsYears Ended December 31,
202320222021
Foreign currency forward contractsOther income, net$19.6 $44.5 $14.4 
During the years ended December 31, 2023, 2022 and 2021, we recognized net foreign currency transactional losses of $6.4 million, $18.3 million, and $6.4 million, respectively, in our consolidated statements of operations.