Derivative Instruments

3 Months Ended

Mar. 31, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company enters into cash flow hedges from time to time to reduce the exposure to variability in certain expected future cash flows. The type of cash flow hedges the Company enters into includes foreign currency contracts and interest rate exchange contracts that effectively convert a portion of floating-rate debt to fixed-rate debt and are designed to reduce the impact of interest rate changes on future interest expense.

The effective portion of gains or losses on interest rate exchange contracts is reported in Accumulated other comprehensive income (loss) in Shareholders’ equity and reclassified into net income in the same period or periods in which the hedged transaction affects net income. The remaining gain or loss in excess of the cumulative change in the present value of future cash flows or the hedged item, if any, is recognized into net income during the period of change. See Note 13 for the amount of loss reclassified into income for interest rate contracts for the three months endedMarch 31, 2017 and 2016. As of March 31, 2017, the Company did not have any interest rate contracts outstanding.

In 2010 and 2011, the Company entered into two separate forward starting interest rate contracts in anticipation of the issuance of the 4.2% Senior Notes and the 4.5% Senior Notes. The Company cash settled these two interest rate contracts in 2010 and 2011 for a total of $68.9 million, which is being amortized into interest expense over the 10 year term of the debt instruments. Approximately $6.6 million of the pre-tax amount included in accumulated other comprehensive income (loss) in shareholders’ equity at March 31, 2017 will be recognized to net income over the next 12 months as the underlying hedged transactions are realized.

During the three months ended March 31, 2017, the Company entered into four foreign currency forward contracts with a combined notional value of €180 million that have not been designated as hedges for accounting purposes. These contracts are used to manage foreign currency exposure related to changes in the value of intercompany loans caused by changes in foreign exchange rates. The change in the fair value of the foreign currency forward contracts and the corresponding change in the fair value of the intercompany loans of the Company are both recorded through earnings each period as incurred.  During the three months ended March 31, 2017, the Company recorded a net gain of $0.4 million within Other income (expense) - net in the Condensed Consolidated Statements of Operations related to these forward contracts.

Fair values relating to derivative financial instruments reflect the estimated amounts that the Company would receive or pay to sell or buy the contracts based on quoted market prices of comparable contracts at each balance sheet date. The following table sets forth the fair value amounts of derivative instruments held by the Company as of March 31, 2017 and December 31, 2016:

	Fair Value Assets (Liabilities)
	March 31, 2017			December 31, 2016		Balance Sheet Caption
	(In thousands)
Forward exchange contracts	$	(373	)	$	—	Accrued expenses