Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2021

Derivative Instruments and Hedging Activities

Schedule of notional amounts outstanding under foreign currency contracts

The Company had notional amounts outstanding under forward currency contracts and cross-currency interest rate swap agreements as of (dollars in millions):

	September 30, 2021					December 31, 2020
	Notional Amount in U.S. Dollars		Fair Value			Notional Amount in U.S. Dollars		Fair Value
Forward currency contracts (1):
Assets	$	10.4	$	—		$	175.8	$	2.1
Liabilities		114.1		(0.7	)		102.5		(0.4	)
Cross-currency and interest rate swap agreements (2):
Liabilities		505.0		(21.9	)		505.0		(53.9	)
Long-term debt
Liabilities		318.1		(20.2	)		335.5		(37.6	)
Total	$	947.6	$	(42.8	)	$	1,118.8	$	(89.8	)

(1) Derivatives not designated as accounting hedges.

(2) Derivatives designated as accounting hedges.

Schedule of fair value and balance sheet location of derivative instruments

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

	September 30, 2021			December 31, 2020
Derivatives designated as hedging instruments
Interest rate cross-currency swap agreements
Other current assets	$	7.1		$	7.6
Other current liabilities		(8.5	)		(4.3	)
Other long-term liabilities		(20.5	)		(57.2	)
		(21.9	)		(53.9	)
Long-term debt
Long-term debt		(20.2	)		(37.6	)
Total derivatives designated as hedging instruments	$	(42.1	)	$	(91.5	)
Derivatives not designated as hedging instruments
Forward currency contracts
Other current assets	$	—		$	2.1
Other current liabilities		(0.7	)		(0.4	)
Embedded derivatives in purchase and delivery contracts
Other current assets		—			0.1
Other current liabilities		(0.1	)		—
Fixed price commodity contracts
Other current assets		0.8			3.1
Total derivatives not designated as hedging instruments		—			4.9
Total derivatives	$	(42.1	)	$	(86.6	)

Schedule of impact on net income of unrealized gains and losses resulting from changes in the fair value of derivative instruments

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

		Location of gain (loss) recognized in income on derivative
		Three Months Ended September 30,						Nine Months Ended September 30,
	Financial Statement Classification	2021			2020			2021			2020
Derivatives not designated as hedging instruments
Forward currency contracts	Interest and other income (expense), net	$	(0.9	)	$	(0.2	)	$	(4.8	)	$	(0.4	)
Embedded derivatives in purchase and delivery contracts	Interest and other income (expense), net		0.1			(0.1	)		(0.3	)		0.8
			(0.8	)		(0.3	)		(5.1	)		0.4
Derivatives designated as cash flow hedging instruments
Interest rate cross-currency swap agreements	Interest and other income (expense), net	$	(1.2	)	$	(1.1	)	$	(3.5	)	$	(1.9	)
Derivatives designated as net investment hedging instruments
Interest rate cross-currency swap agreements	Interest and other income (expense), net		2.6			2.5			7.6			7.7
			1.4			1.4			4.1			5.8
Total		$	0.6		$	1.1		$	(1.0	)	$	6.2

		Amount of unrealized gain (loss) on contracts recognized in other comprehensive income (loss)
		Three Months Ended September 30,					Nine Months Ended September 30,
	Financial Statement Classification	2021		2020			2021		2020
Derivatives designated as cash flow hedging instruments
Interest rate cross-currency swap agreements	Accumulated other comprehensive income, net of tax	$	0.9	$	(0.2	)	$	11.5	$	(22.1	)
		$	0.9	$	(0.2	)	$	11.5	$	(22.1	)
Derivatives designated as net investment hedging instruments
Interest rate cross-currency swap agreements	Accumulated other comprehensive income, net of tax	$	7.4	$	(21.9	)	$	25.6	$	(0.3	)
Long-term debt	Accumulated other comprehensive income, net of tax		2.2		(8.2	)		22.2		(15.3	)
		$	9.6	$	(30.1	)	$	47.8	$	(15.6	)
Total		$	10.5	$	(30.3	)	$	59.3	$	(37.7	)