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Derivative Instruments
 12 Months Ended
Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments DERIVATIVE INSTRUMENTS
Foreign Currency Forward Contracts - Hedging Instruments
Due to the global nature of our operations, portions of our revenue and operating expense are recorded in currencies other than the U.S. dollar. The value of revenue and operating expense measured in U.S. dollars is therefore subject to changes in foreign currency exchange rates. In order to mitigate these changes, we use foreign currency forward contracts to lock in exchange rates associated with a portion of our forecasted international revenue and operating expense.
Foreign currency forward contracts in effect as of December 31, 2021 and 2020, had durations of 1 to 15 months and 1 to 24 months, respectively. These contracts have been designated as cash flow hedges and unrealized gains or losses on the portion of these foreign currency forward contracts that are included in the effectiveness test are reported in accumulated other comprehensive income (loss) (referred to as AOCI in the table below). Realized gains and losses of such contracts are recognized in revenue when the sale of product in the currency being hedged is recognized and in operating expense when the expense in the currency being hedged is recorded. We recognize all cash flow hedge reclassifications from accumulated other comprehensive income (loss) and fair value changes of excluded portions in the same line item in our consolidated statements of income that has been impacted by the hedged item.
The notional value of foreign currency forward contracts that were entered into to hedge forecasted revenue and operating expense is summarized as follows:
 Notional Amount
As of December 31,
(In millions)20212020
Euro$1,828.0 $2,979.1 
British pound166.2 250.6 
Japanese yen72.7 — 
Canadian dollar59.9 — 
Total foreign currency forward contracts$2,126.8 $3,229.7 
The pre-tax portion of the fair value of these foreign currency forward contracts that were included in accumulated other comprehensive income (loss) in total equity is summarized as follows:
For the Years Ended December 31,
(In millions)202120202019
Unrealized gains$60.8 $— $6.9 
Unrealized (losses)(7.0)(212.5)(6.4)
Net unrealized gains (losses)$53.8 $(212.5)$0.5 
We expect the net unrealized gains of $53.8 million to be settled over the next 15 months, of which $48.2 million of these unrealized gains are expected to be settled over the next 12 months, with any amounts in accumulated other comprehensive income (loss) to be reported as an adjustment to revenue or operating expense. We consider the impact of our and our counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its contractual obligations. As of December 31, 2021 and 2020, credit risk did not materially change the fair value of our foreign currency forward contracts.
The following table summarizes the effect of foreign currency forward contracts designated as hedging instruments in our consolidated statements of income:
For the Years Ended December 31,
Net Gains/(Losses)
Reclassified from AOCI into Operating Income (in millions)
Net Gains/(Losses)
Recognized in Operating Income (in millions)
Location202120202019Location202120202019
Revenue$(60.0)$18.3 $118.6 Revenue$(8.4)$(9.9)$2.9 
Operating expense(0.8)3.3 (3.3)Operating expense— — 0.2 
Interest Rate Contracts - Hedging Instruments
We have entered into interest rate lock contracts or interest rate swap contracts on certain borrowing transactions to manage our exposure to interest rate changes and to reduce our overall cost of borrowing.
Interest Rate Swap Contracts
In connection with the issuance of our 2.90% Senior Notes due September 15, 2020, we entered into interest rate swaps with an aggregate notional amount of $675.0 million, which were originally set to expire on September 15, 2020. The interest rate swap contracts were designated as hedges of the fair value changes in our 2.90% Senior Notes attributable to changes in interest rates. In May 2020 we settled our interest rate swap contracts, in conjunction with our early redemption of our 2.90% Senior Notes, resulting in a gain of approximately $3.3 million, which was recorded as a component of interest expense in our consolidated statements of income during the year ended December 31, 2020.
Net Investment Hedges - Hedging Instruments
In February 2012 we entered into a joint venture agreement with Samsung BioLogics establishing an entity, Samsung Bioepis, to develop, manufacture and market biosimilar products. In June 2018 we exercised our option under our joint venture agreement to increase our ownership percentage in Samsung Bioepis from approximately 5.0% to approximately 49.9%. The share purchase transaction was completed in November 2018 and, upon closing, we paid 759.5 billion South Korean won ($676.6 million) to Samsung BioLogics. Our investment in the equity of Samsung Bioepis is exposed to the currency fluctuations in the South Korean won.
In order to mitigate these currency fluctuations between the U.S. dollar and South Korean won, we have entered into foreign currency forward contracts. Foreign currency forward contracts in effect as of December 31, 2021, had remaining durations of 10 months. These contracts have been designated as net investment hedges. We recognize changes in the spot exchange rate in accumulated other comprehensive income (loss). The pre-tax portion of the fair value of these foreign currency forward contracts that were included in accumulated other comprehensive income (loss) in total equity reflected net gains of $10.6 million and net losses of $21.2 million as of December 31, 2021 and 2020, respectively. We exclude fair value changes related to the forward rate from our hedging relationship and will amortize the forward points in other income (expense), net in our consolidated statements of income over the term of the contract. The pre-tax portion of the fair value of the forward points that were included in accumulated other comprehensive income (loss) in total equity reflected net losses of $3.6 million and net gains of $0.2 million as of December 31, 2021 and 2020, respectively.
The following table summarizes the effect of our net investment hedges in our consolidated financial statements:
For the Years Ended December 31,
Net Gains/(Losses)
Recognized in Other Comprehensive Income (Effective Portion) (in millions)		Net Gains/(Losses)
Recognized in Other Comprehensive Income (Amounts Excluded from Effectiveness Testing) (in millions)		Net Gains/(Losses)
Recognized in Net Income
(Amounts Excluded from Effectiveness Testing) (in millions)
Location202120202019Location202120202019Location202120202019
Gains (losses) on net investment hedge$46.0 $(35.1)$25.3 Gains (losses) on net investment hedge$(3.2)$4.5 $3.3 Other income (expense)$(0.6)$2.9 $7.0 
For additional information on our collaboration arrangements with Samsung Bioepis, please read Note 18, Collaborative and Other Relationships, to these consolidated financial statements.
Foreign Currency Forward Contracts - Other Derivative Instruments
We also enter into other foreign currency forward contracts, usually with durations of one month or less, to mitigate the foreign currency risk related to certain balance sheet positions. We have not elected hedge accounting for these transactions.
The aggregate notional amount of these outstanding foreign currency forward contracts was $1,268.0 million and $1,158.0 million as of December 31, 2021 and 2020, respectively. Net losses of $43.3 million, net gains of $30.1 million and net losses of $5.9 million related to these contracts were recorded as a component of other income (expense), net for the years ended December 31, 2021, 2020 and 2019, respectively.
Summary of Derivative Instruments
While certain of our derivative instruments are subject to netting arrangements with our counterparties, we do not offset derivative assets and liabilities in our consolidated balance sheets. The amounts in the table below would not be substantially different if the derivative assets and liabilities were offset.
The following table summarizes the fair value and presentation in our consolidated balance sheets of our outstanding derivative instruments, including those designated as hedging instruments:
As of December 31,
(In millions)Balance Sheet Location20212020
Cash Flow Hedging Instruments:
Asset derivative instrumentsOther current assets$66.2 $— 
Investments and other assets5.5 — 
Liability derivative instrumentsAccrued expense and other6.6 157.1 
Other long-term liabilities— 35.7 
Net Investment Hedging Instruments:
Asset derivative instrumentsOther current assets4.1 — 
Liability derivative instrumentsAccrued expense and other— 19.7 
Other Derivative Instruments:
Asset derivative instrumentsOther current assets5.1 20.5 
Liability derivative instrumentsAccrued expense and other4.2 4.7