The Company’s exposure to interest rate risk relates primarily to outstanding variable rate debt and adverse movements in the related market rates. Typically, the most significant component of the Company’s interest rate risk relates to amounts outstanding under the 2019 Credit Agreement and the 2019 Term Loan.

The Company has arrangements with certain customers under which it has a firm commitment to deliver copper based superconductor wire at a fixed price. In order to minimize the volatility that fluctuations in the price of copper have on the Company’s sales of these commodities, the Company enters into commodity hedge contracts. At September 30, 2020 and December 31, 2019, the Company had fixed price commodity contracts with notional amounts aggregating $10.2 million and $5.6 million, respectively. As commodity contracts settle, gains (losses) as a result of changes in fair values are adjusted to the contracts with the customers through revenues.

The Company generates a substantial portion of its revenues and expenses in international markets, principally Germany, other countries in the European Union and Switzerland, which subjects its operations to the exposure of exchange rate fluctuations. The impact of currency exchange rate movement can be positive or negative in any period. The Company periodically enters into forward currency contracts in order to minimize the volatility that fluctuations in currency translation have on its monetary transactions. Under these arrangements, the Company typically agrees to purchase a fixed amount of a foreign currency in exchange for a fixed amount of U.S. Dollars or other currencies on specified dates with maturities of less than twelve months, with some agreements extending to longer periods. These transactions do not qualify for hedge accounting and, accordingly, the instrument is recorded at fair value with the corresponding gains and losses recorded in the consolidated statements of income and comprehensive income. The Company had notional amounts outstanding under forward currency contracts and cross-currency interest rate swap agreements as of (dollars in millions):

(1)	Derivatives not designated as accounting hedges.

(2)	Derivatives designated as accounting hedges.

In addition, the Company periodically enters into purchase and sales contracts denominated in currencies other than the functional currency of the parties to the transaction. The Company accounts for these transactions separately valuing the “embedded derivative” component of these contracts. The contracts, denominated in currencies other than the functional currency of the transacting parties, amounted to $12.2 million for the delivery of products and $6.5 million for the purchase of products at September 30, 2020 and $12.3 million for the delivery of products and $6.1 million for the purchase of products at December 31, 2019. The changes in the fair value of these embedded derivatives are recorded in interest and other income (expense), net in the consolidated statements of income and comprehensive income (loss).

The derivative instruments described above are recorded in the unaudited condensed consolidated balance sheets as follows (dollars in millions):


	September 30, 2020		December 31, 2019
Derivatives designated as hedging instruments
Interest rate cross-currency swap agreements
Other current assets	$	9.0	$	10.1
Other current liabilities		(4.3)		—
Other long-term liabilities		(33.9)		(16.9)
Total derivatives designated as hedging instruments		(29.2)		(6.8)

Derivatives not designated as hedging instruments
Forward currency contracts
Other current assets	$	0.3	$	0.9
Other current liabilities		(0.2)		(0.4)
Embedded derivatives in purchase and delivery contracts
Other current assets		0.4		0.1
Other current liabilities		—		(0.6)
Fixed price commodity contracts
Other current assets		2.1		0.3
Total derivatives not designated as hedging instruments		2.6		0.3

Total derivatives	$	(26.6)	$	(6.5)

The following is a summary of the activity included in the unaudited condensed consolidated statements of income and comprehensive income related to the above described derivative instruments (in millions):


		Three Months Ended September 30,				Nine Months Ended September 30,
	Financial Statement Classification	2020		2019		2020		2019
Derivatives not designated as hedging instruments
Forward currency contracts	Interest and other income (expense), net	$	(0.2)	$	(1.0)	$	(0.4)	$	1.3
Embedded derivatives in purchase and delivery contracts	Interest and other income (expense), net		(0.1)		(0.1)		0.8		—
Total		$	(0.3)	$	(1.1)	$	0.4	$	1.3
Derivatives designated as Cash Flow hedging instruments
Interest rate cross-currency swap agreements
Interest incurred	Interest and other income (expense), net	$	(1.1)	$	—	$	(1.9)	$	—
Unrealized losses on contracts	Accumulated other comprehensive income		(0.2)		—		(22.1)		—
Total		$	(1.3)	$	—	$	(24.0)	$	—
Derivatives designated as Net Investment hedging instruments
Interest rate cross-currency swap agreements
Interest earned	Interest and other income (expense), net	$	2.5	$	—	$	7.7	$	—
Unrealized losses on contracts	Accumulated other comprehensive income		(21.9)		—		(0.3)		—
Total		$	(19.4)	$	—	$	7.4	$	—