XML 27 R24.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Derivatives and Hedging Activity | 12 Months Ended
--- | ---
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives and Hedging Activity | 16. Derivatives and Hedging Activity We adopted ASU 2017-12 on January 1, 2019. Among other provisions, the new standard required modification to existing presentation and disclosure requirements on a prospective basis. As such, certain disclosures below conform to the disclosure requirements prior to the adoption of ASU 2017-12. We are exposed to market risks, including changes in foreign currency exchange rates and interest rates. To manage the risk related to these exposures, we enter into various derivative instruments that reduce these risks by creating offsetting exposures. We generally do not enter into derivative transactions for trading or speculative purposes. Foreign Exchange Risk Management We are exposed to foreign exchange risk when we earn revenues, pay expenses, or enter into monetary intercompany transfers denominated in a currency that differs from our functional currency, or other transactions that are denominated in a currency other than our functional currency. We use foreign exchange derivatives, typically forward contracts and options, to reduce our overall exposure to the effects of currency fluctuations on cash flows. These exposures are hedged, on average, for less than three years. Interest Rate Risk Management We enter into various long-term debt agreements. We use interest rate derivatives, typically swaps, to reduce our exposure to the effects of interest rate fluctuations on the forecasted interest rates for up to three years into the future. We have not received or pledged any collateral related to derivative arrangements at December 31, 2019. The notional and fair values of derivatives designated as hedging instruments are as follows at December 31, 2019 and 2018 (in millions):
|  |  |  |  | Derivative Assets |  | Derivative Liabilities |
Instrument |  | Notional Amount |  |  | Balance Sheet Classification |  | Fair Value |  |  | Balance Sheet Classification |  | Fair Value |
At December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | 800.0 |  |  | Other current assets |  | $ | 2.8 |  |  | Accrued compensation and |  | $ | 25.0 |
|  |  |  |  |  | Other noncurrent assets |  |  | 5.4 |  |  | other current liabilities |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  | Other noncurrent liabilities |  |  | 23.0 |
Foreign exchange contracts (1) |  |  | 31.7 |  |  | Other current assets |  |  | 4.5 |  |  | Accrued compensation and |  |  | 1.8 |
|  |  |  |  |  |  |  |  |  |  |  | other current liabilities |  |  |  |
|  |  |  |  |  | Other noncurrent assets |  |  | 8.5 |  |  | Other noncurrent liabilities |  |  | 2.6 |
Total |  | $ | 831.7 |  |  |  |  | $ | 21.2 |  |  |  |  | $ | 52.4 |
At December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | 850.0 |  |  | Other current assets |  | $ | 3.0 |  |  | Accrued compensation and |  | $ | 13.0 |
|  |  |  |  |  |  |  |  |  |  |  | other current liabilities |  |  |  |
Foreign exchange contracts (1) |  |  | 51.4 |  |  | Other current assets |  |  | 0.9 |  |  | Accrued compensation and |  |  | 4.9 |
|  |  |  |  |  |  |  |  |  |  |  | other current liabilities |  |  |  |
|  |  |  |  |  | Other noncurrent assets |  |  | 5.7 |  |  | Other noncurrent liabilities |  |  | 7.9 |
Total |  | $ | 901.4 |  |  |  |  | $ | 9.6 |  |  |  |  | $ | 25.8 |
(1) | Included within foreign exchange contracts at December 31, 2019 were $342.0 million of call options offset with $342.0 million of put options, and $12.1 million of buy forwards offset with $43.8 million of sell forwards. Included within foreign exchange contracts at December 31, 2018 were $276.4 million of call options offset with $276.4 million of put options, and $23.1 million of buy forwards offset with $72.9 million of sell forwards.
The effect of cash flow hedge accounting on accumulated other comprehensive loss were as follows (in millions):
Instrument |  | Amount of Gain (Loss) Recognized in Accumulated Other Comprehensive Loss (1) |  |  | Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Earnings |  |  | Amount of Gain (Loss) Recognized in Earnings Related to Amount Excluded from Effectiveness Testing |  |  | Statement of Earnings Classification
Year ended December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | (47.0 | ) |  | $ | (1.2 | ) |  | $ | — |  |  | Interest expense
Foreign exchange contracts |  |  | 9.9 |  |  |  | (1.6 | ) |  |  | (0.8 | ) |  | Commission revenue
|  |  |  |  |  |  | (1.4 | ) |  |  | 1.2 |  |  | Compensation expense
|  |  |  |  |  |  | (1.0 | ) |  |  | 0.9 |  |  | Operating expense
Total |  | $ | (37.1 | ) |  | $ | (5.2 | ) |  | $ | 1.3 |  |  |
Year ended December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | $ | (9.3 | ) |  | $ | 1.1 |  |  | $ | — |  |  | Interest expense
Foreign exchange contracts |  |  | (6.4 | ) |  |  | 2.3 |  |  |  | — |  |  | Commission revenue
|  |  |  |  |  |  | 1.3 |  |  |  | — |  |  | Compensation expense
|  |  |  |  |  |  | 1.0 |  |  |  | — |  |  | Operating expense
Total |  | $ | (15.7 | ) |  | $ | 5.7 |  |  | $ | — |  |  |
(1) | During 2019, the amount excluded from the assessment of hedge effectiveness for our foreign exchange contracts recognized in accumulated other comprehensive loss were a loss of $0.2 million.
We estimate that approximately $1.8 million of pretax income currently included within accumulated other comprehensive loss will be reclassified into earnings in the next twelve months.

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration