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DERIVATIVE INSTRUMENTS
 12 Months Ended
Dec. 31, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS DERIVATIVE INSTRUMENTS
Interest Rate Hedging
The Company’s interest rate risk relates to U.S. dollar denominated variable interest rate borrowings. The Company uses interest rate swap derivative instruments to manage earnings and cash flow exposure resulting from changes in interest rates. These interest rate swaps apply a fixed interest rate on a portion of the Company's expected LIBOR-indexed floating-rate borrowings.
The Company held the following interest rate swaps as of December 31, 2020 and 2019 (dollar amounts in thousands):
December 31, 2020December 31, 2019December 31, 2020December 31, 2019
Hedged ItemNotional AmountDesignation DateEffective DateTermination DateFixed Interest RateEstimated Fair Value
Asset (Liability)
3-month USD LIBOR$— $50,000 February 6, 2017June 30, 2017June 30, 20201.834 %$— $(2)
1-month USD LIBOR— 100,000 February 6, 2017June 30, 2017June 30, 20201.652 %— 12 
1-month USD LIBOR100,000 100,000 March 27, 2017December 31, 2017June 30, 20211.971 %(929)(581)
1-month USD LIBOR150,000 150,000 December 13, 2017January 1, 2018December 31, 20222.201 %(6,152)(2,880)
1-month USD LIBOR150,000 150,000 December 13, 2017January 1, 2018December 31, 20222.201 %(6,405)(2,880)
1-month USD LIBOR100,000 100,000 December 13, 2017July 1, 2019June 30, 20242.423 %(7,724)(3,517)
1-month USD LIBOR50,000 50,000 December 13, 2017July 1, 2019June 30, 20242.423 %(3,778)(1,778)
1-month USD LIBOR200,000 200,000 December 13, 2017January 1, 2018December 31, 20242.313 %(16,243)(6,595)
1-month USD LIBOR75,000 75,000 October 10, 2018July 1, 2020June 30, 20253.220 %(9,836)(5,750)
1-month USD LIBOR75,000 75,000 October 10, 2018July 1, 2020June 30, 20253.199 %(9,826)(5,747)
1-month USD LIBOR75,000 75,000 October 10, 2018July 1, 2020June 30, 20253.209 %(9,783)(5,807)
1-month USD LIBOR100,000 100,000 December 18, 2018December 30, 2022December 31, 20272.885 %(10,407)(4,930)
1-month USD LIBOR100,000 100,000 December 18, 2018December 30, 2022December 31, 20272.867 %(10,431)(4,691)
1-month USD LIBOR125,000 — December 15, 2020July 31, 2025December 31, 20271.415 %(382)— 
1-month USD LIBOR50,000 — December 15, 2020July 1, 2025December 31, 20271.404 %(162)— 
1-month USD LIBOR225,000 — December 15, 2020July 31, 2025December 31, 20271.415 %(846)— 
1-month USD LIBOR225,000 — December 15, 2020July 31, 2025December 31, 20271.415 %(679)— 
1-month USD LIBOR75,000 — December 15, 2020July 1, 2025December 31, 20271.404 %(187)— 
Total interest rate derivatives designated as cash flow hedge$1,875,000 $1,325,000 $(93,769)$(45,145)

The Company has designated these derivative instruments as cash flow hedges. The Company assesses the effectiveness of these derivative instruments and has recorded the changes in the fair value of the derivative instrument designated as a cash flow hedge as unrealized gains or losses in accumulated other comprehensive loss (“AOCL”), net of tax, until the hedged item affected earnings, at which point any gain or loss was reclassified to earnings. If the hedged cash flow does not occur, or if it becomes probable that it will not occur, the Company will reclassify the remaining amount of any gain or loss on the related cash flow hedge recorded in AOCL to interest expense at that time.
Foreign Currency Hedging
From time to time the Company enters into foreign currency hedge contracts intended to protect the U.S. dollar value of certain forecasted foreign currency denominated transactions. The Company assesses the effectiveness of the contracts that are designated as hedging instruments. The changes in fair value of foreign currency cash flow hedges are recorded in AOCL, net of tax, until the hedged item affects earnings. Once the related hedged item affects earnings, the Company reclassifies amounts recorded in AOCL to earnings. If the hedged forecasted transaction does not occur, or if it becomes probable that it will not occur, the Company will reclassify the amount of any gain or loss on the related cash flow hedge to earnings at that time. For contracts not designated as hedging instruments, the changes in fair value of the contracts are recognized in other income, net in the consolidated statements of operation, along with the offsetting foreign currency gain or loss on the underlying assets or liabilities.

During the fourth quarter of 2020, the Company entered into foreign currency forward contracts, with a notional amount of $9.7 million to mitigate the foreign exchange risk related to certain intercompany loans denominated in Canadian Dollar ("CAD") and intercompany receivables denominated in Japanese Yen ("JPY"). The contracts are not designated as hedging instruments. The Company recognized a $0.2 million loss from the change in fair value of the contracts, which was included in other income, net in the consolidated statement of operations. The fair value of the foreign currency forward contracts was $0.2 million as of December 31, 2020.

The success of the Company’s hedging program depends, in part, on forecasts of certain activity denominated in foreign currency. The Company may experience unanticipated currency exchange gains or losses to the extent that there are differences
between forecasted and actual activities during periods of currency volatility. In addition, changes in currency exchange rates related to any unhedged transactions may affect earnings and cash flows.
Cross-Currency Rate Swaps
On October 2, 2017, the Company entered into cross currency swap agreements to convert a notional amount of $300.0 million equivalent to 291.2 million of Swiss francs ("CHF") denominated intercompany loans into U.S. dollars. The CHF denominated intercompany loans were the result of the purchase of intellectual property by a subsidiary in Switzerland as part of an acquisition.
On December 21, 2020, the Company entered into cross-currency swap agreements to convert a notional amount of $471.6 million equivalent to 420.1 million of a CHF denominated intercompany loan into U.S. dollars. The CHF denominated intercompany loan was the result of an intra-entity transfer of certain intellectual property rights to a subsidiary in Switzerland completed during the fourth quarter of 2020.
The objective of these cross-currency swaps is to reduce volatility of earnings and cash flows associated with changes in the foreign currency exchange rate. Under the terms of these contracts, which have been designated as cash flow hedges, the Company will make interest payments in Swiss Francs and receive interest in U.S. dollars. Upon the maturity of these contracts, the Company will pay the principal amount of the loans in Swiss Francs and receive U.S. dollars from the counterparties.
The Company held the following cross-currency rate swaps as of December 31, 2020 (dollar amounts in thousands):
December 31, 2020
Effective DateTermination DateFixed RateAggregate Notional AmountFair Value (Liability)
Pay CHFOctober 2, 2017October 2, 20211.85%CHF48,533 (4,335)
Receive U.S.$4.46%$50,000 
Pay CHFOctober 2, 2017October 2, 20221.95%CHF145,598 (11,262)
Receive U.S.$4.52%$150,000 
Pay CHFDecember 21, 2020December 20, 20253.00%CHF420,137 (7,843)
Receive U.S.$3.98%$471,640 
Total$(23,441)

On October 2, 2020 in accordance with the termination date, the Company settled a cross-currency swap designated as a cash flow hedge of an intercompany loan with an aggregate notional amount of $33.3 million. As a result of the settlement, the Company recorded a loss of $0.3 million in other income, net in the consolidated statement of operations.
The Company held the following cross-currency rate swaps as of December 31, 2019 (dollar amounts in thousands):
December 31, 2019
Effective DateTermination DateFixed RateAggregate Notional AmountFair Value (Liability)
Pay CHFOctober 2, 2017October 2, 20201.75%CHF32,355 $(101)
Receive U.S.$4.38%$33,333 
Pay CHFOctober 2, 2017October 2, 20211.85%CHF48,533 (119)
Receive U.S.$4.46%$50,000 
Pay CHFOctober 2, 2017October 2, 20221.95%CHF145,598 (289)
Receive U.S.$4.52%$150,000 
Total$(509)
During the year ended December 31, 2019, the Company settled cross-currency swaps designated as cash flow hedges of an intercompany loan with an aggregate notional amount of $66.7 million. The original maturity dates were October 2, 2020 however, as the intercompany loan settlement was consummated, the cross-currency swap was settled simultaneously. As a result of the settlements, the Company recorded a loss of $0.4 million in other income, net in the consolidated statement of operations.
The cross-currency swaps are carried on the consolidated balance sheet at fair value, and changes in the fair values are recorded as unrealized gains or losses in AOCL. For the years ended December 31, 2020 and 2019, the Company recorded a loss of $21.7 million and loss of $4.0 million, respectively, in other income, net related to change in fair value related to the foreign currency rate translation to offset the gains or losses recognized on the intercompany loans.
For the years ended December 31, 2020 and 2019, the Company recorded a loss of $17.1 million and a gain of $9.3 million, respectively, in AOCL related to change in fair value of the cross-currency swaps.
For the years ended December 31, 2020 and 2019, the Company recorded gains of $5.8 million and $7.0 million, respectively, in other income, net included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
The estimated gain that is expected to be reclassified to other income, net from AOCL as of December 31, 2020 within the next twelve months is $3.3 million. As of December 31, 2020, the Company does not expect any gains or losses will be reclassified into earnings as a result of the discontinuance of these cash flow hedges because the original forecasted transaction will not occur.
Net Investment Hedges
The Company manages certain foreign exchange risks through a variety of strategies, including hedging. The Company is exposed to foreign exchange risk from its international operations through foreign currency purchases, net investments in foreign subsidiaries, and foreign currency assets and liabilities created in the normal course of business. On October 1, 2018 and December 16, 2020, the Company entered into cross-currency swap agreements designated as net investment hedges to partially offset the effects of foreign currency on foreign subsidiaries.
The Company held the following cross-currency rate swaps designated as net investment hedges as of December 31, 2020 (dollar amounts in thousands):
December 31, 2020
Effective DateTermination DateFixed RateAggregate Notional AmountFair Value
Asset (Liability)
Pay EUROctober 3, 2018September 30, 2021—EUR44,859 $(1,884)
Receive U.S.$3.01%$52,000 
Pay EUROctober 3, 2018September 30, 2023—EUR51,760 (450)
Receive U.S.$2.57%$60,000 
Pay EUROctober 3, 2018September 30, 2025—EUR38,820 92 
Receive U.S.$2.19%$45,000 
Pay CHFDecember 16, 2020December 16, 2027—CHF222,300 (3,794)
Receive USD1.10%$250,000 
Total$(6,036)

During the year ended December 31, 2020, the Company settled cross-currency swaps designated as net investment hedge with an aggregate notional amount of $167.5 million and 128.3 million Pound Sterling respectively as a result of an intra-entity transfer of certain intellectual property rights to a subsidiary. The original settlement date was September 30, 2025. As a result of the settlement, the Company recorded a loss of $7.8 million in AOCL.
The Company held the following cross-currency rate swaps designated as net investment hedges as of December 31, 2019 (dollar amounts in thousands):
December 31, 2019
Effective DateTermination DateFixed RateAggregate Notional AmountFair Value Asset (Liability)
Pay EUROctober 3, 2018September 30, 2021—EUR44,859 $2,459 
Receive U.S.$3.01%$52,000 
Pay EUROctober 3, 2018September 30, 2023—EUR51,760 3,087 
Receive U.S.$2.57%$60,000 
Pay EUROctober 3, 2018September 30, 2025—EUR38,820 2,032 
Receive U.S.$2.19%$45,000 
Pay GBPOctober 3, 2018September 30, 20251.67%GBP128,284 (154)
Receive U.S.$2.71%$167,500 
Pay CHFOctober 3, 2018September 30, 2025—CHF165,172 1,221 
Receive GBP1.67%GBP128,284 
Total$8,645 

During the year ended December 31, 2019, the Company settled a cross-currency swap designated as a net-investment hedge of with an aggregate notional amount of $30.0 million. The original termination date was September 30, 2021. As a result of the settlement, the Company recorded a gain of $1.6 million in AOCL.
The cross-currency swaps were carried on the consolidated balance sheet at fair value and changes in the fair values were recorded as unrealized gains or losses in AOCL. For the year ended December 31, 2020 and 2019, the Company recorded a loss of $14.9 million and a gain of $20.5 million, respectively, in AOCL related to the change in fair value of the cross-currency swaps.
For the years ended December 31, 2020 and 2019, the Company recorded a gain of $7.6 million and $9.6 million, respectively, in interest income included in the consolidated statements of operations related to the interest rate differential of the cross-currency swaps.
The estimated gain that is expected to be reclassified to interest income from AOCL as of December 31, 2020 within the next twelve months is $3.4 million.
Counterparty Credit Risk
The Company manages its concentration of counterparty credit risk on its derivative instruments by limiting acceptable counterparties to a group of major financial institutions with investment grade credit ratings, and by actively monitoring their credit ratings and outstanding positions on an ongoing basis. Therefore, the Company considers the credit risk of the counterparties to be low. Furthermore, none of the Company’s derivative transactions are subject to collateral or other security arrangements, and none contain provisions that depend upon the Company’s credit ratings from any credit rating agency.
Fair Value of Derivative Instruments
The Company has classified all of its derivative instruments within Level 2 of the fair value hierarchy because observable inputs are available for substantially the full term of the derivative instruments. The fair values of the interest rate swaps and cross-currency swaps were developed using a market approach based on publicly available market yield curves and the terms of the swap. The Company performs ongoing assessments of counterparty credit risk.
The following table summarizes the fair value for derivatives designated as hedging instruments in the consolidated balance sheets as of December 31, 2020 and 2019:
 
 Fair Value as of December 31,
20202019
Location on Balance Sheet (1):
(In thousands)
Derivatives designated as hedges — Assets:
Prepaid expenses and other current assets
Cash Flow Hedges
Interest rate swap(2)
$— $12 
Cross-currency swap7,623 5,032 
Net Investment Hedges
Cross-currency swap5,297 7,952 
Other assets
Cash Flow Hedges
Interest rate swap(2)
— — 
Net Investment Hedges
Cross-currency swap— 3,465 
Total Derivatives designated as hedges — Assets$12,920 $16,461 
Derivatives designated as hedges — Liabilities
Accrued expenses and other current liabilities
Cash Flow Hedges
Interest rate swap(2)
$22,033 $6,635 
Cross-currency swap4,335 101 
Net Investment Hedges
Cross-currency swap1,884 — 
Other liabilities
Cash Flow Hedges
Interest rate swap(2)
71,736 38,522 
Cross-currency swap26,728 5,440 
Net Investment Hedges
Cross-currency swap9,449 2,772 
Total Derivative designated as hedges — Liabilities$136,165 $53,470 
 
(1)The Company classifies derivative assets and liabilities as current based on the cash flows expected to be incurred within the following 12 months.

(2)At December 31, 2020 and 2019, the total notional amounts related to the Company’s interest rate swaps were $1.9 billion and $1.3 billion, respectively.
The following presents the effect of derivative instruments designated as cash flow hedges and net investment hedges on the accompanying consolidated statements of operations during the years ended December 31, 2020 and 2019:
 
Balance in AOCL
Beginning of
Year		Amount of
Gain (Loss)
Recognized in
AOCL		Amount of Gain (Loss)
Reclassified from
AOCL into
Earnings		Balance in AOCL
End of Year		Location in
Statements of
Operations
 (In thousands)
Year Ended December 31, 2020
Cash Flow Hedges
Interest rate swap$(45,145)$(64,778)$(16,154)$(93,769)Interest expense
Cross-currency swap177 (17,147)(15,897)(1,073)Other income, net
Net Investment Hedges
Cross-currency swap10,229 (14,911)7,609 (12,291)Interest income
$(34,739)$(96,836)$(24,442)$(107,133)
Year Ended December 31, 2019
Cash Flow Hedges
Interest rate swap$619 $(43,493)$2,271 $(45,145)Interest expense
Cross-currency swap(6,190)9,334 2,967 177 Other income, net
Net Investment Hedges
Cross-currency swap(632)20,488 9,627 10,229 Interest income
$(6,203)$(13,671)$14,865 $(34,739)