XML 43 R29.htm IDEA: XBRL DOCUMENT v3.19.3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables)
9 Months Ended
Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of Derivative Financial Instruments Used to Manage Currency Exchange Rate Risk and Interest Rate Risk

The Company uses derivative financial instruments to manage interest rate and foreign currency risks, as summarized below. It is the Company's policy not to enter into derivative financial instruments for speculative purposes. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates.
 
Notional Amount
 
September 30, 2019
 
December 31, 2018
 
(in millions)
Foreign currency forward exchange contracts
$
1,247.7

 
$
1,378.2

Cross currency swap contracts
300.0

 
300.0


Schedule of Location and Fair Value Amounts of Derivative Instruments Reported in Consolidated Condensed Balance Sheets
The following table presents the location and fair value amounts of derivative instruments reported in the consolidated condensed balance sheets (in millions):
 
 
 
 
Fair Value
Derivatives designated as hedging instruments
 
Balance Sheet
Location
 
September 30, 2019
 
December 31, 2018
Assets
 
 
 
 

 
 

Foreign currency contracts
 
Other current assets
 
$
27.7

 
$
29.1

Foreign currency contracts
 
Other assets
 
$
1.6

 
$

Cross currency swap contracts
 
Other assets
 
$
19.2

 
$
0.8

Liabilities
 
 
 
 

 
 

Foreign currency contracts
 
Accounts payable and accrued liabilities
 
$
4.4

 
$
4.4

Foreign currency contracts
 
Other long-term liabilities
 
$

 
$
0.8


Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Assets
The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions):
 
 
 
 
 
 
 
Gross Amounts
Not Offset in
the Consolidated
Balance Sheet
 
 
 
 
 
Gross Amounts
Offset in the
Consolidated
Balance Sheet
 
 
 
 
 
 
 
Net Amounts
Presented in the
Consolidated
Balance Sheet
 
 
September 30, 2019
Gross
Amounts
 
Financial
Instruments
 
Cash
Collateral
Received
 
Net
Amount
Derivative assets
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
29.3

 
$

 
$
29.3

 
$
(4.0
)
 
$

 
$
25.3

Cross currency swap contracts
$
19.2

 
$

 
$
19.2

 
$

 
$

 
$
19.2

Derivative liabilities
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
4.4

 
$

 
$
4.4

 
$
(4.0
)
 
$

 
$
0.4

December 31, 2018
 

 
 

 
 

 
 

 
 

 
 

Derivative assets
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
29.1

 
$

 
$
29.1

 
$
(3.6
)
 
$

 
$
25.5

Cross currency swap contracts
$
0.8

 
$

 
$
0.8

 
$

 
$

 
$
0.8

Derivative liabilities
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
5.2

 
$

 
$
5.2

 
$
(3.6
)
 
$

 
$
1.6


Schedule of Effect of Master-Netting Agreements and Rights of Offset, Derivative Liabilities
The following table presents the effect of master-netting agreements and rights of offset on the consolidated condensed balance sheets (in millions):
 
 
 
 
 
 
 
Gross Amounts
Not Offset in
the Consolidated
Balance Sheet
 
 
 
 
 
Gross Amounts
Offset in the
Consolidated
Balance Sheet
 
 
 
 
 
 
 
Net Amounts
Presented in the
Consolidated
Balance Sheet
 
 
September 30, 2019
Gross
Amounts
 
Financial
Instruments
 
Cash
Collateral
Received
 
Net
Amount
Derivative assets
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
29.3

 
$

 
$
29.3

 
$
(4.0
)
 
$

 
$
25.3

Cross currency swap contracts
$
19.2

 
$

 
$
19.2

 
$

 
$

 
$
19.2

Derivative liabilities
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
4.4

 
$

 
$
4.4

 
$
(4.0
)
 
$

 
$
0.4

December 31, 2018
 

 
 

 
 

 
 

 
 

 
 

Derivative assets
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
29.1

 
$

 
$
29.1

 
$
(3.6
)
 
$

 
$
25.5

Cross currency swap contracts
$
0.8

 
$

 
$
0.8

 
$

 
$

 
$
0.8

Derivative liabilities
 

 
 

 
 

 
 

 
 

 
 

Foreign currency contracts
$
5.2

 
$

 
$
5.2

 
$
(3.6
)
 
$

 
$
1.6


Schedule of Effect of Derivative Instruments on Consolidated Condensed Statements of Operations and Consolidated Condensed Statements of Comprehensive Income
The following tables present the effect of derivative and non-derivative hedging instruments on the consolidated condensed statements of operations and consolidated condensed statements of comprehensive income (in millions):
 
 
Amount of Gain or (Loss)
Recognized in OCI
on Derivative
 
 
 
Amount of Gain or (Loss)
Reclassified from
Accumulated OCI
into Income
 
 
Three Months Ended   
September 30,
 
 Location of Gain or
(Loss) Reclassified from
Accumulated OCI
into Income
 
Three Months Ended   
September 30,
 
 
 
 
 
2019
 
2018
 
2019
 
2018
Cash flow hedges
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$
22.1

 
$
12.1

 
Cost of sales
 
$
12.8

 
$
(4.6
)
 
 
 
 
 
 
Selling, general, and administrative expenses
 
$
0.6

 
$
(0.4
)
 
 
Amount of Gain or (Loss)
Recognized in OCI
on Derivative
 
 
 
Amount of Gain or (Loss)
Reclassified from
Accumulated OCI
into Income
 
 
Nine Months Ended   
September 30,
 
 Location of Gain or
(Loss) Reclassified from
Accumulated OCI
into Income
 
Nine Months Ended   
September 30,
 
 
 
 
 
2019
 
2018
 
2019
 
2018
Cash flow hedges
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$
32.9

 
$
28.2

 
Cost of sales
 
$
31.7

 
$
(18.8
)
 
 
 
 
 
 
Selling, general, and administrative expenses
 
$
1.4

 
$
(2.5
)

 
 
Amount of Gain or (Loss)
Recognized in OCI
on Derivative
 
 
 
Amount of Gain or (Loss)
Recognized in Income on Derivative (Amount Excluded from
Effectiveness Testing)
 
 
Three Months Ended   
September 30,
 
 Location of Gain or
(Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
 
Three Months Ended   
September 30,
 
 
 
 
 
2019
 
2018
 
2019
 
2018
Net investment hedges
 
 
 
 
 
 
 
 
 
 
Cross currency swap contracts
 
$
16.3

 
$
(0.5
)
 
Interest (income) expense, net
 
$
1.7

 
$
1.6


 
 
Amount of Gain or (Loss)
Recognized in OCI
on Derivative
(Effective Portion)
 
 
 
Amount of Gain or (Loss)
Recognized in Income on Derivative (Amount Excluded from
 Effectiveness Testing)
 
 
Nine Months Ended   
September 30,
 
 Location of Gain or
(Loss) Reclassified from
Accumulated OCI
into Income
 
Nine Months Ended   
September 30,
 
 
 
 
 
2019
 
2018
 
2019
 
2018
Net investment hedges
 
 
 
 
 
 
 
 
 
 
Cross currency swap contracts
 
$
18.4

 
$
(10.5
)
 
Interest (income) expense, net
 
$
5.0

 
$
1.8

Foreign currency denominated debt
 
$

 
$
6.8

 
 
 
 
 
 

 
 
 
 
Amount of Gain or (Loss)
Recognized in Income on
Derivative
 
 
 
 
Three Months Ended   
September 30,
 
 
Location of Gain or (Loss)
Recognized in Income on
Derivative
 
Fair value hedges
 
2019
 
2018
Foreign currency contracts
 
Other income, net
 
$
2.1

 
$

 
 
 
 
Amount of Gain or (Loss)
Recognized in Income on
Derivative
 
 
 
 
Nine Months Ended   
September 30,
 
 
Location of Gain or (Loss)
Recognized in Income on
Derivative
 
Fair value hedges
 
2019
 
2018
Foreign currency contracts
 
Other income, net
 
$
(2.1
)
 
$

 
 
 
 
Amount of Gain or (Loss)
Recognized in Income on
Derivative
 
 
 
 
Three Months Ended   
September 30,
 
 
Location of Gain or (Loss)
Recognized in Income on
Derivative
 
Derivatives not designated as hedging instruments
 
2019
 
2018
Foreign currency contracts
 
Other income, net
 
$
3.2

 
$
5.9

 
 
 
 
Amount of Gain or (Loss)
Recognized in Income on
Derivative
 
 
 
 
Nine Months Ended   
September 30,
 
 
Location of Gain or (Loss)
Recognized in Income on
Derivative
 
Derivatives not designated as hedging instruments
 
2019
 
2018
Foreign currency contracts
 
Other income, net
 
$
1.7

 
$
7.3


Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss)
The following table presents the effect of cash flow hedge accounting on the consolidated condensed statements of operations:
 
Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships
 
Three Months Ended   
September 30, 2019
 
Nine Months Ended   
September 30, 2019
 
Cost of sales
 
Selling, general, and administrative expenses
 
Other Income, net
 
Cost of sales
 
Selling, general, and administrative expenses
 
Other Income, net
 
 
 
 
 
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of fair value or cash flow hedges are recorded
$
(292.4
)
 
$
(306.2
)
 
$
4.6

 
$
(828.2
)
 
$
(895.0
)
 
$
7.8

The effects of fair value and cash flow hedging:
 
 
 
 
 
 
 
 
 
 
 
Gain (loss) on fair value hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts:
 
 
 
 
 
 
 
 
 
 
 
Hedged items

 

 
(1.0
)
 

 

 
5.3

Derivatives designated as hedging instruments

 

 
1.0

 

 

 
(5.3
)
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach

 

 
1.1

 

 

 
3.2

Gain (loss) on cash flow hedging relationships:
 
 
 
 
 
 
 
 
 
 
 
Foreign currency contracts:
 
 
 
 
 
 
 
 
 
 
 
Amount of gain (loss) reclassified from accumulated OCI into income
$
12.8

 
$
0.6

 
$

 
$
31.7

 
$
1.4

 
$


 
Location and Amount of Gain or (Loss) Recognized in Income on Cash Flow Hedging Relationships
 
Three Months Ended September 30, 2018
Nine Months Ended September 30, 2018
 
Cost of sales
 
Selling, general, and administrative expenses
 
 
Cost of sales
 
Selling, general, and administrative expenses
 
 
 
 
 
 
Total amounts of income and expense line items presented in the consolidated statements of operations in which the effects of fair value or cash flow hedges are recorded
$
(224.9
)
 
$
(269.5
)
 
 
$
(704.7
)
 
$
(800.4
)
 
The effects of fair value and cash flow hedging:
 
 
 
 
 
 
 
 
 
Gain (loss) on cash flow hedging relationships:
 
 
 
 
 
 
 
 
 
Foreign currency contracts:
 
 
 
 
 
 
 
 
 
Amount of gain (loss) reclassified from accumulated OCI into income
$
(4.6
)
 
$
(0.4
)
 
 
$
(18.8
)
 
$
(2.5
)