Financial Instruments

9 Months Ended

Sep. 30, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Foreign Currency Forward Contracts

The Company uses foreign currency forward contracts to hedge a portion of its foreign currency exchange rate exposure to forecasted foreign currency denominated cash flows. These instruments are not held for speculative or trading purposes.

A summary of the Company's designated and non-designated cash flow hedges follows:


	September 30, 2019						December 31, 2018
(in millions)	Fair Value⁽¹⁾		Notional Value		Fair Value⁽¹⁾		Notional Value
Designated hedges	$	(1.3)	$	119.3	$	0.2	$	95.0
Non-designated hedges	(0.4)		48.0		0.1		49.9

⁽¹⁾The fair value of foreign currency forward contracts is included in other current assets. The fair value was estimated using observable market inputs such as forward and spot prices of the underlying exchange rate pair. Based on these inputs, derivative assets and liabilities are classified as Level 2 in the fair value hierarchy.

For instruments that are designated and qualify as cash flow hedges, the Company had foreign currency forward contracts with maturities less than one year. The changes in the fair value of the contracts are recorded in accumulated other comprehensive income (loss) and recognized in the same line item as the impact of the hedged item, revenues or cost of sales, when the underlying forecasted transaction impacts earnings. Gains and losses on the contracts representing hedge components excluded from the assessment of hedged effectiveness are recognized in the same line item as the hedged item, revenues or cost of sales, currently.

The change in accumulated other comprehensive income (loss) related to cash flow hedges for the three and nine months ended September 30, follows:


(in millions)	2019		2018
Balance as of July 1	$	(3.2)	$	(3.5)
Other comprehensive loss before reclassifications	(1.8)		(0.1)
Amounts reclassified from accumulated other comprehensive loss	0.6		0.1

Other comprehensive (loss) income	(1.2)		—
Balance as of September 30	$	(4.4)	$	(3.5)

(in millions)	2019		2018
Balance as of January 1	$	(3.2)	$	(4.0)
Other comprehensive income before reclassifications	(1.5)		0.2
Amounts reclassified from accumulated other comprehensive loss	0.3		0.3

Other comprehensive (loss) income	(1.2)		0.5
Balance as of September 30	$	(4.4)	$	(3.5)

For instruments that are not designated as a cash flow hedge, the Company had foreign exchange contracts with maturities less than one year. The unrealized gains and losses resulting from these contracts were immaterial and are recognized in other non-operating (income) expense, net and partially offset corresponding foreign exchange gains and losses on these balances.

Deferred Compensation Rabbi Trust

The Company has established a Rabbi Trust to provide for a degree of financial security to cover its obligations associated with its deferred compensation plan. Contributions to the Rabbi Trust by the Company are made at the discretion of management and generally are made in cash and invested in money-market funds. The Company consolidates the Rabbi Trust and therefore includes the investments in its Condensed Consolidated Balance Sheets. As of September 30, 2019 and December 31, 2018, the Company had $5.9 million and $10.7 million of cash, respectively, and $5.3 million and $4.3 million of short-term investments, respectively. The short-term investments are measured at fair value using quoted market prices in active markets (i.e., Level 1 measurements) with changes in fair value recorded in net income and the associated cash flows presented as operating cash flows.

Other Financial Instruments

Other financial instruments include cash and cash equivalents, accounts receivable, net, accounts payable, accrued liabilities and other, and long-term debt. The carrying value for cash and cash equivalents, accounts receivable, net, accounts payable and accrued liabilities and other approximates fair value because of their short-term nature and generally negligible credit losses (refer to Note 14 for the fair value of long-term debt).