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Derivative Financial Instruments and Hedging | 9 Months Ended
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Sep. 30, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments and Hedging | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGINGHedging Activities In the normal course of business, we are exposed to interest rate, commodity price and foreign currency exchange rate fluctuations. At times, we mitigate these risk exposures through the use of derivatives such as cross-currency swaps, foreign currency forward contracts, interest rate swaps, commodity forwards and futures. In accordance with our policy, derivatives are only used for hedging purposes. We do not use derivatives for trading or speculative purposes. Foreign Currency Exchange Risk The Company uses forward contracts to mitigate its foreign currency exchange rate exposure due to forecasted sales of finished goods and future settlement of foreign currency denominated assets and liabilities. Derivatives used to hedge forecasted transactions and specific cash flows associated with foreign currency denominated financial assets and liabilities that meet the criteria for hedge accounting are designated as cash flow hedges. The effective portion of gains and losses is deferred as a component of Accumulated other comprehensive loss and is recognized in earnings at the time the hedged item affects earnings, in the same line item as the underlying hedged item. These contracts typically mature within two years. For the three and nine months ended September 30, 2021 and 2020, the amounts reclassified into income were not material. The Company has established revenue hedging, balance sheet risk management and net investment hedging programs to protect against volatility of future foreign currency cash flows and changes in fair value caused by volatility in foreign exchange rates. We conduct our business worldwide in U.S. dollars and the functional currencies of our foreign subsidiaries, including euro, Indian rupee, British pound sterling, Australian dollars and several other foreign currencies. Changes in foreign currency exchange rates could have a material adverse impact on our financial results that are reported in U.S. dollars. We are also exposed to foreign currency exchange rate risk related to our foreign subsidiaries, including intercompany loans denominated in non-functional currencies and net purchases and sales in non-functional currencies. We have certain foreign currency exchange rate risk management programs that use foreign currency forward contracts and cross-currency swaps. These forward contracts and cross-currency swaps are generally used to offset the potential income statement effects from intercompany loans denominated in non-functional currencies. These programs mitigate but do not entirely eliminate foreign currency exchange rate risk. The Company enters into certain derivative contracts in accordance with its risk management strategy that do not meet the criteria for hedge accounting, but which have the impact of largely mitigating foreign currency exposure. These foreign exchange contracts are accounted for on a full mark to market basis through earnings, with gains and losses recorded as a component of Other income, net. The net loss related to these contracts was $0.2 million and $3.3 million for the three and nine months ended September 30, 2021, respectively, and a net gain of $3.1 million and $2.7 million for the three and nine months ended September 30, 2020, respectively. These contracts typically mature within one year. The following table summarizes the gross notional amounts and fair values of the designated and non-designated hedges discussed in the above sections as of September 30, 2021:
|  | Fair Value |  | Gross Notional Amount
In millions |  | Designated |  | Non-Designated |  | Designated |  | Non-Designated
Foreign Exchange Contracts |  |  |  |  |  |  |  |
Other current assets |  | $ | 8.9 |  |  | $ | — |  |  | $ | 768.2 |  |  | $ | — |
Other current liabilities |  | — |  |  | — |  |  | — |  |  | 270.1
Cross-currency Swaps |  |  |  |  |  |  |  |
Other current assets |  | 5.1 |  |  | — |  |  | 579.7 |  |  | — |
Total |  | $ | 14.0 |  |  | $ | — |  |  | $ | 1,347.9 |  |  | $ | 270.1 |
The following table summarizes the gross notional amounts and fair values of the designated and non-designated hedges discussed in the above sections as of December 31, 2020:
|  | Fair Value |  | Gross Notional Amount
In millions |  | Designated |  | Non-Designated |  | Designated |  | Non-Designated
Foreign Exchange Contracts |  |  |  |  |  |  |  |
Other current assets |  | $ | 9.2 |  |  | $ | 0.5 |  |  | $ | 793.6 |  |  | $ | 1.3 |
Other current liabilities |  | (3.9) |  |  | (1.5) |  |  | 928.0 |  |  | 319.6 |
Cross-currency Swaps |  |  |  |  |  |  |  |
Other current liabilities |  | (26.0) |  |  | — |  |  | 613.2 |  |  | — |
Total |  | $ | (20.7) |  |  | $ | (1.0) |  |  | $ | 2,334.8 |  |  | $ | 320.9 |
Interest Rate Risk The Company may use interest rate swap contracts on certain investing and borrowing transactions to manage its net exposure to interest rate changes and to reduce its overall cost of borrowing. The Company does not use leveraged swaps and, in general, does not leverage any of its investment activities that would put principal capital at risk. For the nine months ended September 30, 2021 and 2020 the amounts reclassified into income were not material. Commodity Price Risk The Company may use commodity forward contracts and futures to mitigate its exposure to commodity price changes and to reduce its overall cost of manufacturing. For the nine months ended September 30, 2021 and 2020 the amounts recognized as income or expense were not material.

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- 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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
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