DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company uses derivative financial instruments to manage its currency exchange rate risk and its interest rate risk as summarized below. Notional amounts are stated in United States dollar equivalents at spot exchange rates at the respective dates. The Company does not enter into these arrangements for trading or speculation purposes.



	Notional Amount
	December 31, 2019		December 31, 2018
	(in millions)
Foreign currency forward exchange contracts	$	1,336.5	$	1,378.2
Cross currency swap contracts	300.0		300.0

The following table presents the location and fair value amounts of derivative instruments reported in the consolidated balance sheets (in millions):



		Fair Value
	Balance Sheet Location	December 31, 2019		December 31, 2018
Derivatives designated as hedging instruments
Assets
Foreign currency contracts	Other current assets	$	14.2	$	29.1
Foreign currency contracts	Other assets	$	3.2	—
Cross currency swap contracts	Other assets	$	13.3	$	0.8
Liabilities
Foreign currency contracts	Accrued and other liabilities	$	6.4	$	4.4
Foreign currency contracts	Other long-term liabilities	$	—	$	0.8

The following table presents the effect of master-netting agreements and rights of offset on the consolidated balance sheets (in millions):



							Gross Amounts Not Offset in the Consolidated Balance Sheet
			Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts Presented in the Consolidated Balance Sheet		Gross Amounts Not Offset in the Consolidated Balance Sheet
December 31, 2019	Gross Amounts		Gross Amounts Offset in the Consolidated Balance Sheet		Net Amounts Presented in the Consolidated Balance Sheet		Financial Instruments			Cash Collateral Received		Net Amount
Derivative Assets
Foreign currency contracts	$	17.4	$	—	$	17.4	$	(5.7	)	$	—	$	11.7
Cross currency swap contracts	$	13.3	$	—	$	13.3	$	—		$	—	$	13.3
Derivative Liabilities
Foreign currency contracts	$	6.4	$	—	$	6.4	$	(5.7	)	$	—	$	0.7
December 31, 2018
Derivative Assets
Foreign currency contracts	$	29.1	$	—	$	29.1	$	(3.6	)	$	—	$	25.5
Cross currency swap contracts	$	0.8	$	—	$	0.8	$	—		$	—	$	0.8
Derivative Liabilities
Foreign currency contracts	$	5.2	$	—	$	5.2	$	(3.6	)	$	—	$	1.6

The following tables present the effect of derivative and non-derivative hedging instruments on the consolidated statements of operations and consolidated statements of comprehensive income:



	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)				Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income

	2019		2018			2019		2018
	(in millions)					(in millions)
Cash flow hedges
Foreign currency contracts	$	23.5	$	35.9	Cost of sales	$	40.9	$	(17.3	)
					Selling, general, and administrative expenses	$	1.9	$	(2.3	)



	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion)				Location of Gain or (Loss) Reclassified from Accumulated OCI into Income	Amount of Gain or (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing)
	2019		2018			2019		2018
	(in millions)					(in millions)
Net investment hedges
Cross currency swap contracts	$	12.5	$	0.8	Interest expense	$	6.6	$	3.5
Foreign currency denominated debt	$	—	$	6.8

In June 2018, the Company repaid and dedesignated its €370.0 million of outstanding long-term debt which had been previously designated as a net investment hedge, and concurrently entered into cross currency swap contracts, which were designated as a net investment hedge. The cross currency swaps have an expiration date of June 15, 2028. At maturity of the cross currency swap contracts, the Company will deliver the notional amount of €257.2 million and will receive $300.0 million from the counterparties. The Company will receive semi-annual interest payments from the counterparties based on a fixed interest rate until maturity of the agreements.



		Amount of Gain or (Loss) Recognized in Income on Derivative (a)
	Location of Gain or (Loss) Recognized in Income on Derivative
		2019		2018		2017
		(in millions)
Fair value hedges
Foreign currency contracts	Other (income) expense, net	$	1.4	$	0.5	$	—
Interest rate swap agreements	Interest expense	$	—	$	—	$	(1.1	)

___________________________________________________________


(a)	The gains and losses on the interest rate swap agreements were fully offset by the changes in the fair value of the fixed-rate debt being hedged. In December 2017, the interest rate swap was settled at a loss of $0.7 million, which was amortized to interest expense over the remaining life of the debt.



		Amount of Gain or (Loss) Recognized in Income on Derivative
	Location of Gain or (Loss) Recognized in Income on Derivative	Amount of Gain or (Loss) Recognized in Income on Derivative
		2019		2018		2017
		(in millions)
Derivatives not designated as hedging instruments
Foreign currency contracts	Other (income) expense, net	$	0.3	$	9.7	$	(11.5	)

The following table presents the effect of cash flow hedge accounting on the consolidated statements of operations:



	Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Twelve Months Ended December 31, 2019
	Cost of sales			Selling, general, and administrative expenses			Other (Income) Expense, net
	Cost of sales			Selling, general, and administrative expenses			Other (Income) Expense, net
Total amounts of income and expense line items shown in the consolidated statements of operations in which the effects of fair value or cash flow hedges are recorded	$	(1,114.4	)	$	(1,242.2	)	$	8.2
The effects of fair value and cash flow hedging:
Gain (loss) on fair value hedging relationships:
Foreign currency contracts:
Hedged items	—			—			2.9
Derivatives designated as hedging instruments	—			—			(2.9		)
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach	—			—			4.3
Gain (loss) on cash flow hedging relationships:
Foreign currency contracts:
Amount of gain (loss) reclassified from accumulated OCI into income	$	40.9		$	1.9		$	—



	Location and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
	Twelve Months Ended December 31, 2018
	Cost of sales			Selling, general, and administrative expenses			Other (Income) Expense, net
	Cost of sales			Selling, general, and administrative expenses			Other (Income) Expense, net
Total amounts of income and expense line items shown in the consolidated statements of operations in which the effects of fair value or cash flow hedges are recorded	$	(939.4	)	$	(1,088.5	)	$	4.0
The effects of fair value and cash flow hedging:
Gain (loss) on fair value hedging relationships:
Foreign currency contracts:
Hedged items	—			—			—
Derivatives designated as hedging instruments	—			—			—
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach	—			—			0.5
Gain (loss) on cash flow hedging relationships:
Foreign currency contracts:
Amount of gain (loss) reclassified from accumulated OCI into income	$	(17.3	)	$	(2.3	)	$	—

The Company expects that during 2020 it will reclassify to earnings a $6.5 million gain currently recorded in "Accumulated Other Comprehensive Loss." For the years ended December 31, 2019, 2018, and 2017, the Company did not record any gains or losses due to hedge ineffectiveness.