In the normal course of business, the Company is exposed to foreign currency exchange rate risk and interest rate risk on its variable-rate debt. To manage these risks, the Company utilizes a variety of practices including, where considered appropriate, derivative instruments. The Company has no derivative instruments for trading or speculative purposes or derivatives with credit risk-related contingent features. All derivative instruments used by the Company are either exchange traded or are entered into with major financial institutions in order to reduce credit risk and risk of nonperformance by third parties. The fair values of the Company’s derivative instruments are determined using observable inputs and are considered Level 2 assets or liabilities.

The Company utilizes currency forward, swap and, to a lesser extent, option contracts to selectively hedge its exposure to foreign currency risk when it is practical and economical to do so. The use of these contracts minimizes transactional exposure to exchange rate changes. We designate certain of our foreign currency hedges as cash flow hedges. Changes in the fair value of cash flow hedges are reported as a component of Accumulated other comprehensive loss, net of tax and reclassified into earnings when the forecasted transaction affects earnings. For foreign exchange contracts not designated as cash flow hedges, changes in the contracts’ fair values are recorded to net income each period.

The Company selectively hedges its exposure to interest rate increases on variable-rate, long-term debt when it is practical and economical to do so. Changes in the fair value of interest rate contracts considered cash flow hedges are reported as a component of Accumulated other comprehensive loss, net of tax and reclassified into earnings when the forecasted transaction affects earnings. Interest rate contracts are also used to hedge changes in the fair value of a portion of our senior unsecured notes attributable to changes in the benchmark interest rate. Changes in the fair value of the interest rate contracts and corresponding portion of the hedged debt are recognized in interest expense.

The Company also uses cross currency swap contracts to selectively hedge its exposure to foreign currency related changes in our net investments in certain foreign operations. We designate these cross currency swap contracts as net investment hedges. Changes in the fair value of these hedges are deferred within the foreign currency translation component of Accumulated other comprehensive loss, net of tax and reclassified into earnings when the foreign investment is sold or substantially liquidated.

During the three months ended June 30, 2022, cross-currency swaps with a combined notional value of €488.8 million ($550.0 million) were terminated and a total settlement of $35.8 million was received from the counterparties. Immediately following the termination of the aforementioned swaps, the Company entered into cross-currency swaps with a combined notional value of €450.0 million ($478.2 million), maturing on April 1, 2024 and 2025 and October 1, 2026, designated as a hedge of a portion of the Company’s net investment in Euro-denominated subsidiaries. These contracts involve the periodic exchange of U.S. dollar fixed interest rate payments for fixed Euro-denominated payments over the respective contract terms, in addition to an exchange of notional amounts upon maturity. One cross-currency swap involves the periodic exchange of U.S dollar variable interest rate payments for Euro-denominated variable payments.

During 2019 and 2021, the Company entered into a series of pay-fixed, receive-variable interest rate swaps, maturing on January 31, 2027 and December 31, 2027. During March of 2022, the interest rate swaps, which had a combined notional value of $500.0 million were terminated and a total settlement of $23.6 million was received from the counterparties. The settlement amount, which represents the fair value of contracts at the time of termination, was recorded in Accumulated other comprehensive loss, net of tax and will be amortized as a component of Interest expense over the remaining term of the hedged forecasted transaction.

During March of 2022, immediately following the termination of the aforementioned interest rate swaps, the Company entered into pay-fixed, receive-variable interest rate swaps, maturing on January 31, 2027 and December 31, 2027. The swaps have a combined notional value of $500.0 million which declines over the terms of the underlying contracts. The terms of the interest rate swaps mirror the terms of the underlying debt, including timing of the payments and interest rates.

In addition, the Company entered into a fixed to float interest rate swap with a notional amount of $173.4 million during the three months ended June 30, 2022, maturing on October 1, 2026. The swap was designated as a fair value hedge for a portion of our 6.875% senior unsecured notes due in 2026. The contract involves the periodic exchange of fixed interest rate payments for variable payments.


	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedges:
Foreign exchange contracts - net investment hedge	Accounts receivable, net	$	1.2	Accrued expenses and other current liabilities	$	—
Foreign exchange contracts - net investment hedge	Other assets	4.0		Other liabilities	3.2
Interest rate contracts - cash flow hedge	Accounts receivable, net	0.2		Other liabilities	—
Interest rate contracts - cash flow hedge	Other assets	9.0		Other liabilities	—
Interest rate contracts - fair value hedge	Other assets	—		Other liabilities	0.2
Total derivatives designated as hedges		$	14.4		$	3.4

Derivatives not designated as hedges:
Foreign exchange contracts	Accounts receivable, net	—		Accrued expenses and other current liabilities	1.4
Total derivatives not designated as hedges		$	—		$	1.4
Total derivatives		$	14.4		$	4.8

The following table presents the fair value of asset and liability derivatives and the respective locations on the Condensed Consolidated Balance Sheets at December 31, 2021 (in millions):


	Asset Derivatives			Liability Derivatives
	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as hedges:
Foreign exchange contracts - net investment hedge	Accounts receivable, net	$	1.6	Accrued expenses and other current liabilities	$	—
Foreign exchange contracts - net investment hedge	Other assets	—		Other liabilities	9.8
Interest rate contracts - cash flow hedge	Accounts receivable, net	0.2		Accrued expenses	—
Interest rate contracts - cash flow hedge	Other assets	3.3		Other liabilities	2.1
Total derivatives designated as hedges		$	5.1		$	11.9

Derivatives not designated as hedges:
Foreign exchange contracts	Accounts receivable, net	0.2		Accounts payable	0.6
Total derivatives not designated as hedges		$	0.2		$	0.6
Total derivatives		$	5.3		$	12.5

The following table provides the net effect that derivative instruments designated in hedging relationships had on Accumulated other comprehensive loss, net of tax and results of operations (in millions):


Derivatives Designated in Hedging Relationships	Unrealized Gain (Loss) Recognized in AOCI on Derivatives, Net of Tax								Location of (Loss) Gain Reclassified from AOCI	Loss Reclassified from AOCI

	Three Months Ended				Six Months Ended					Three Months Ended				Six Months Ended
	June 30,				June 30,					June 30,				June 30,
	2022		2021		2022		2021			2022		2021		2022		2021
Derivatives designated as cash flow hedge
Foreign exchange contracts	$	—	$	0.7	$	—	$	0.1	Net sales	$	—	$	(0.4)	$	—	$	(1.0)
Foreign exchange contracts	0.3		(1.0)		0.2		(0.1)		Other income (expense), net	—		(1.2)		(0.1)		(0.6)
Interest rate contracts	6.4		(2.1)		28.1		2.0		Interest expense	(0.5)		—		(1.5)		—
Derivatives designated as net investment hedge
Foreign exchange contracts	30.0		(1.8)		43.6		5.2
Total gain (loss)	$	36.7	$	(4.2)	$	71.9	$	7.2		$	(0.5)	$	(1.6)	$	(1.6)	$	(1.6)

The Company's designated derivative instruments are highly effective. As such, related to the hedge ineffectiveness or amounts excluded from hedge effectiveness testing, there were no gains or losses recognized immediately in income for the three and six months ended June 30, 2022 and 2021, other than those related to the cross-currency swap, noted below.

The Company’s net investment hedges were designated with terms based on the spot rate of the EUR. Future changes in the components related to the spot change on the notional will be recorded in OCI and remain there until the hedged subsidiaries are substantially liquidated. All coupon payments are recorded in earnings and the initial value of excluded components currently recorded in Accumulated other comprehensive loss, net of tax as an unrealized translation adjustment are amortized to interest expense over the remaining term of the swap. For the three months ended June 30, 2022 and 2021, we recognized as income $2.2 million and $1.0 million, respectively, in Interest expense as derivative amounts excluded from effectiveness testing. For the six months ended June 30, 2022 and 2021, we recognized as income $4.8 million and $2.1 million, respectively, in Interest expense as derivative amounts excluded from effectiveness testing.


Derivatives Not Designated as Cash Flow Hedging Instruments	Location of Gain (Loss) Recognized in Income	Amount of Gain (Loss) Recognized in Income

		Three Months Ended				Six Months Ended
		June 30, 2022		June 30, 2021		June 30, 2022		June 30, 2021
Foreign exchange contracts	Other income (expense), net	$	0.6	$	6.3	$	(0.5)	$	(0.3)