FINANCIAL INSTRUMENTS AND DERIVATIVES (Tables)
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12 Months Ended |
Dec. 31, 2011
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Fair Value and Consolidated Balance Sheet Location of the Company's Derivatives |
The following tables summarize the fair value and consolidated balance sheet location of the Company's derivatives at December 31, 2011 and December 31, 2010:
| | | | | | | | | | | | | | | | | | | | | | December 31, 2011 | | | | Prepaid Expenses and Other Current Assets | | Other Noncurrent Assets, Net | | Accrued Liabilities | | Other Noncurrent Liabilities | | (in thousands) | | | | | | | | | | | | Designated as Hedges | | | | | | Foreign exchange forward contracts | | $ | 5,464 |
| | $ | 896 |
| | $ | 641 |
| | $ | 107 |
| | Commodity contracts | | — |
| | 15 |
| | 257 |
| | 2 |
| | Interest rate swaps | | 2,539 |
| | 3,160 |
| | — |
| | 1,050 |
| | Cross currency basis swaps | | — |
| | 19,838 |
| | 13,790 |
| | 117,974 |
| | Total | | $ | 8,003 |
| | $ | 23,909 |
| | $ | 14,688 |
| | $ | 119,133 |
| | Not Designated as Hedges | | | | | | Foreign exchange forward contracts | | $ | 1,943 |
| | $ | — |
| | $ | 3,150 |
| | $ | — |
| | DIO equity option contracts | | — |
| | — |
| | — |
| | 419 |
| | Interest rate swaps | | — |
| | — |
| | 105 |
| | 476 |
| | Cross currency basis swaps | | — |
| | — |
| | $ | — |
| | $ | 67,690 |
| | Total | | $ | 1,943 |
| | $ | — |
| | $ | 3,255 |
| | $ | 68,585 |
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| | | | | | | | | | | | | | | | | | | | December 31, 2010 | | | Prepaid Expenses and Other Current Assets | | Other Noncurrent Assets, Net | | Accrued Liabilities | | Other Noncurrent Liabilities | (in thousands) | | | | | | | | | | Designated as Hedges | | | | | Foreign exchange forward contracts | | $ | 2,455 |
| | $ | 21 |
| | $ | 1,139 |
| | $ | 135 |
| Commodity contracts | | 88 |
| | — |
| | — |
| | — |
| Interest rate swaps | | — |
| | — |
| | 4,213 |
| | 871 |
| Cross currency basis swaps | | — |
| | — |
| | 21,516 |
| | 147,589 |
| Total | | $ | 2,543 |
| | $ | 21 |
| | $ | 26,868 |
| | $ | 148,595 |
| Not Designated as Hedges | | | | | Foreign exchange forward contracts | | $ | 821 |
| | $ | — |
| | $ | 600 |
| | $ | — |
| Interest rate swaps | | — |
| | — |
| | 104 |
| | 556 |
| Total | | $ | 821 |
| | $ | — |
| | $ | 704 |
| | $ | 556 |
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Amounts Recorded in AOCI, Net of Tax, Related to Cash Flow Hedging Instruments |
Amounts recorded in AOCI related to cash flow hedging instruments at:
| | | | | | | | | | December 31, | (in thousands, net of tax) | 2011 | | 2010 | | | | | Beginning balance | $ | (1,468 | ) | | $ | (4,799 | ) | Changes in fair value of derivatives | (14,357 | ) | | 1,248 |
| Reclassifications to earnings from equity | 3,088 |
| | 2,083 |
| Total activity | (11,269 | ) | | 3,331 |
| Ending balance | $ | (12,737 | ) | | $ | (1,468 | ) |
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Amounts Recorded in AOCI, Net of Tax, Related to Hedges of Net Investments in Foreign Operations |
Amounts recorded in AOCI related to hedges of net investments in foreign operations at: | | | | | | | | | | December 31, | (in thousands, net of tax) | 2011 | | 2010 | | | | | Beginning balance | $ | 45,417 |
| | $ | 111,115 |
| Foreign currency translation adjustment | (200,121 | ) | | (33,208 | ) | Changes in fair value of: | |
| | |
| foreign currency debt | (9,553 | ) | | (16,311 | ) | derivative hedge instruments | 20,527 |
| | (16,179 | ) | Total activity | (189,147 | ) | | (65,698 | ) | Ending balance | $ | (143,730 | ) | | $ | 45,417 |
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Cash Flow Hedging
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Summary of Notional Amounts and Fair Value of the Company's Hedges |
The following tables summarize the notional amounts and fair value of the Company's cash flow hedges and non-designated derivatives at December 31, 2011: | | | | | | | | | | | | | | Foreign Exchange Forward Contracts | | Notional Amount Maturing in the Year | | Fair Value Net Asset (Liability) | (in thousands) | | 2012 | | 2013 | | December 31, 2011 | Forward sale, 13.2 million Australian dollars | | $ | 11,895 |
| | $ | 1,076 |
| | $ | (736 | ) | Forward purchase, 6.9 million British pounds | | (10,456 | ) | | (190 | ) | | 554 |
| Forward sale, 35.0 million Canadian dollars | | 26,709 |
| | 8,226 |
| | 1,061 |
| Forward purchase, 14.9 million Danish kroner | | (2,597 | ) | | — |
| | 4 |
| Forward sale, 97.5 million euros | | 83,981 |
| | 43,167 |
| | 2,188 |
| Forward sale, 0.5 billion Japanese yen | | 9,998 |
| | (3,105 | ) | | (803 | ) | Forward sale, 159.3 million Mexican pesos | | 11,391 |
| | — |
| | 45 |
| Forward purchase, 11.8 million Norwegian kroner | | (1,974 | ) | | — |
| | 72 |
| Forward sale, 5.4 million Polish zlotys | | 1,568 |
| | — |
| | (6 | ) | Forward sale, 2.5 million Singapore dollars | | 1,924 |
| | — |
| | (14 | ) | Forward sale, 5.7 billion South Korean won | | 4,940 |
| | — |
| | (31 | ) | Forward purchase, 1.2 billion Swedish kronor | | (139,982 | ) | | (27,873 | ) | | 1,347 |
| Forward sale, 25.3 million Swiss francs | | 20,202 |
| | 7,637 |
| | 770 |
| Forward sale, 47.0 million Taiwanese dollars | | 1,553 |
| | — |
| | (46 | ) | | | | | | | | Total foreign exchange forward contracts | | $ | 19,152 |
| | $ | 28,938 |
| | $ | 4,405 |
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| | | | | | | | | | | | | | | | | | | | | | | | | | Interest Rate Swaps | | Notional Amount Maturing in the Year | | Fair Value Net Asset (Liability) |
(in thousands) | | 2012 | | 2013 | | 2014 | | 2015 | | 2016 and Beyond | | December 31, 2011 | Euro | | $ | 1,221 |
| | $ | 1,221 |
| | $ | 934 |
| | $ | 934 |
| | $ | 2,101 |
| | $ | (581 | ) | Japanese yen | | — |
| | — |
| | 162,956 |
| | — |
| | — |
| | 739 |
| Swiss francs | | — |
| | — |
| | — |
| | — |
| | 69,197 |
| | (553 | ) | Total interest rate swaps | | $ | 1,221 |
| | $ | 1,221 |
| | $ | 163,890 |
| | $ | 934 |
| | $ | 71,298 |
| | $ | (395 | ) |
| | | | | | | | | | | | | | Commodity Contracts | | Notional Amount Maturing in the Year | | Fair Value Net Asset (Liability) | (in thousands) | | 2012 | | 2013 | | December 31, 2011 | Silver swap - U.S. dollar | | $ | 3,216 |
| | $ | 327 |
| | $ | (62 | ) | Platinum swap - U.S. dollar | | 1,452 |
| | 84 |
| | (182 | ) | Total commodity contracts | | $ | 4,668 |
| | $ | 411 |
| | $ | (244 | ) |
| | | | | | | | | | | | Notional | | | | | Amounts | | | | | Maturing in the | | Fair Value Net | Cross Currency Basis Swaps | | Year | | Asset (Liability) | (in thousands) | | 2014 | | December 31, 2011 | Euro 449.8 million @ $1.45 rec. EUR 3 mth. EURIBOR pay USD 3 mth. LIBOR | | $ | 581,568 |
| | $ | (67,690 | ) | Total cross currency basis swaps | | $ | 581,568 |
| | $ | (67,690 | ) |
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Fair Value and Consolidated Balance Sheet Location of the Company's Derivatives |
The following tables summarize the statements of operations impact of the Company’s cash flow hedges for the years ended December 31, 2011 and 2010:
| | | | | | | | | | | | December 31, 2011 | Derivatives in Cash Flow Hedging | | Gain (Loss) in AOCI | | Classification of Gains (Losses) | | Effective Portion Reclassified from AOCI into Income | | | | | (in thousands) | | | | Interest rate contracts | | $ | (30,008 | ) | | Interest expense | | $ | (4,903 | ) | Foreign exchange forward contracts | | 6,858 |
| | Cost of products sold | | 1,503 |
| Foreign exchange forward contracts | | 377 |
| | SG&A expenses | | 39 |
| Commodity contracts | | (191 | ) | | Cost of products sold | | 273 |
| Total | | $ | (22,964 | ) | | | | $ | (3,088 | ) |
| | | | | | | | Derivatives in Cash Flow Hedging | | Classification of Gains (Losses) | | Ineffective portion Recognized in Income | | | (in thousands) | | Interest rate contracts | | Other expense, net | | $ | (6,151 | ) | Foreign exchange forward contracts | | Interest expense | | (403 | ) | Foreign exchange forward contracts | | Interest expense | | (1,307 | ) | Commodity contracts | | Interest expense | | 2 |
| Total | | | | $ | (7,859 | ) |
| | | | | | | | | | | | December 31, 2010 | | | | | | | | Derivatives in Cash Flow Hedging | | Gain (Loss) in AOCI | | Classification of Gains (Losses) | | Effective Portion Reclassified from AOCI into Income | | | | | (in thousands) | | | | Interest rate contracts | | $ | (1,978 | ) | | Interest expense | | $ | (5,636 | ) | Foreign exchange forward contracts | | 2,314 |
| | Cost of products sold | | 665 |
| Foreign exchange forward contracts | | 670 |
| | SG&A expenses | | 630 |
| Commodity contracts | | 324 |
| | Cost of products sold | | 662 |
| Total | | $ | 1,330 |
| | | | $ | (3,679 | ) |
| | | | | | | | Derivatives in Cash Flow Hedging | | Classification of Gains (Losses) | | Ineffective portion Recognized in Income | | | (in thousands) | | Interest rate contracts | | Other expense, net | | $ | 232 |
| Foreign exchange forward contracts | | Interest expense | | (672 | ) | Commodity contracts | | Interest expense | | (14 | ) | Total | | | | $ | (454 | ) |
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Net Investment Hedging
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Summary of Notional Amounts and Fair Value of the Company's Hedges |
The following tables summarize the notional amounts and fair value of the Company's cross currency basis swaps that are designated as hedges of net investments in foreign operations at December 31, 2011:
| | | | | | | | | | | | | | | | | | Cross Currency Basis Swaps | | Notional Amounts Maturing in the Year | | Fair Value Net Asset (Liability) |
(in thousands) | | 2012 | | 2013 | | 2014 | | December 31, 2011 | Swiss franc 592.5 million @ 1.12 pay CHF 3 mth. LIBOR rec. USD 3 mth. LIBOR | | $ | 60,254 |
| | $ | 484,910 |
| | $ | 85,591 |
| | $ | (99,917 | ) | Euro 618.0 million @ $1.27 pay EUR 3 mth. EURIBOR rec. USD 3 mth. LIBOR | | — |
| | 799,105 |
| | — |
| | (12,009 | ) | Total cross currency basis swaps | | $ | 60,254 |
| | $ | 1,284,015 |
| | $ | 85,591 |
| | $ | (111,926 | ) |
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Gain (Loss) on Derivatives in the Consolidated Statement of Operatoins |
The following tables summarize the statements of operations impact of the Company’s hedges of net investments for the years ended December 31, 2011 and 2010: | | | | | | | | | | | | December 31, 2011 | | | | | | | | Derivatives in Net Investment Hedging | | Gain (Loss) in AOCI | | Classification of Gains (Losses) | | Gain (Loss) Recognized in Income | | | | | (in thousands) | | | | Cross currency interest rate swaps | | $ | 3,308 |
| | Interest income | | $ | 1,085 |
| | | | | Interest expense | | (108 | ) | Cross currency interest rate swaps | | 30,125 |
| | Interest expense | | (5,675 | ) | Foreign exchange forward contracts | | (2,462 | ) | | Interest expense | | — |
| Total | | $ | 30,971 |
| | | | $ | (4,698 | ) |
| | | | | | | | | | | | December 31, 2010 | | | | | | | | Derivatives in Net Investment Hedging | | Gain (Loss) in AOCI | | Classification of Gains (Losses) | | Gain (Loss) Recognized in Income | | | | | (in thousands) | | | | Cross currency interest rate swaps | | $ | (61,211 | ) | | Interest income | | $ | 869 |
| | | |
| | Interest expense | | (105 | ) | Cross currency interest rate swaps | | 34,862 |
| | Interest expense | | (2,508 | ) | Total | | $ | (26,349 | ) | | | | $ | (1,744 | ) |
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Fair Value Hedging
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Summary of Notional Amounts and Fair Value of the Company's Hedges |
The following tables summarize the notional amounts and fair value of the Company's fair value hedges at December 31, 2011:
| | | | | | | | | | | | | | | | | | | | | | | | | | Fair Value Net | Interest Rate Contracts | | Notional Amounts Maturing in the Year | | Asset (Liability) | (in thousands) | | 2014 | | 2015 | | 2016 and Beyond | | December 31, 2011 | U. S. dollar | | 45,000 |
| | 60,000 |
| | 45,000 |
| | 4,463 |
| Total interest rate contracts | | $ | 45,000 |
| | $ | 60,000 |
| | $ | 45,000 |
| | $ | 4,463 |
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Gain (Loss) on Derivatives in the Consolidated Statement of Operatoins |
The following tables summarize the statements of operations impact of the Company’s hedges of fair value for the years ended December 31, 2011 and 2010:
| | | | | | | | | | | | December 31, 2011 | | | | | | | | Derivatives in Cash Flow Hedging | | | | | | | | | Classification of Gains (Losses) | | December 31, | (in thousands) | | | 2011 | | 2010 | Interest rate contracts | | Interest expense | | $ | 6,328 |
| | $ | — |
| Total | | | | $ | 6,328 |
| | $ | — |
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Not Designated as Hedging Instrument
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Gain (Loss) on Derivatives in the Consolidated Statement of Operatoins |
The following table summarizes the statements of operations impact of the Company’s hedges not designated as hedging for the years ended December 31, 2011 and 2010:
| | | | | | | | | | | | Derivatives Not Designated as Hedging | | | | | | | | | Classification of Gains (Losses) | | December 31, | (in thousands) | | | 2011 | | 2010 | Foreign exchange forward contracts (a) | | Other expense, net | | $ | (2,921 | ) | | $ | 1,181 |
| DIO equity option contracts | | Other expense, net | | 383 |
| | — |
| Interest rate contracts | | Interest expense | | (186 | ) | | (155 | ) | Cross currency interest rate contracts (a) | | Other expense, net | | (68,432 | ) | | — |
| Cross currency interest rate contracts | | Interest income | | 1,219 |
| | — |
| Total | | | | $ | (69,937 | ) | | $ | 1,026 |
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