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Derivative Instruments
 9 Months Ended
Sep. 30, 2015
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 revenues are earned in currencies other than the U.S. dollar. The value of revenues 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 revenues.
Foreign currency forward contracts in effect as of September 30, 2015 and December 31, 2014 had durations of 1 to 15 months. These contracts have been designated as cash flow hedges and accordingly, to the extent effective, any unrealized gains or losses on these foreign currency forward contracts are reported in accumulated other comprehensive income (loss) (referred to as AOCI in the tables below). Realized gains and losses for the effective portion of such contracts are recognized in revenue when the sale of product in the currency being hedged is recognized. To the extent ineffective, hedge transaction gains and losses are reported in other income (expense), net.
The notional value of foreign currency forward contracts that were entered into to hedge forecasted revenues is summarized as follows:
 
Notional Amount
Foreign Currency: (In millions)
As of
September 30,
2015
 
As of
December 31,
2014
Euro
$
1,146.1

 
$
1,174.6

Canadian dollar
17.4

 
56.7

British pound sterling
12.0

 
34.5

Japanese yen
9.3

 
16.6

Australian dollar
5.4

 
19.9

Total foreign currency forward contracts
$
1,190.2

 
$
1,302.3


The portion of the fair value of these foreign currency forward contracts that was included in accumulated other comprehensive income (loss) in total equity reflected gains of $23.3 million and $72.1 million as of September 30, 2015 and December 31, 2014, respectively. We expect all contracts to be settled over the next 15 months and any amounts in accumulated other comprehensive income (loss) to be reported as an adjustment to revenue. 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 September 30, 2015 and December 31, 2014, credit risk did not 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 on our condensed consolidated statements of income:
For the Three Months Ended September 30,
Net Gains/(Losses)
Reclassified from AOCI into Operating Income
(Effective Portion)
 
Net Gains/(Losses)
Recognized into Net Income
(Ineffective Portion)
Location
 
2015
 
2014
 
Location
 
2015
 
2014
Revenue
 
$
43.9

 
$
2.9

 
Other income (expense)
 
$
2.0

 
$
(0.5
)

For the Nine Months Ended September 30,
Net Gains/(Losses)
Reclassified from AOCI into Operating Income
(Effective Portion)
 
Net Gains/(Losses)
Recognized into Net Income
(Ineffective Portion)
Location
 
2015
 
2014
 
Location
 
2015
 
2014
Revenue
 
$
119.3

 
$
(7.1
)
 
Other income (expense)
 
$
5.4

 
$
(1.6
)

Interest Rate Contracts - Hedging Instruments
We may enter 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 Lock Contracts
During the three months ended September 30, 2015, we entered into treasury rate locks that were designated as cash flow hedges to hedge against changes in the 10-year and 30-year U.S. treasury interest rates that could have impacted our anticipated debt offering. In connection with the issuance of our 4.05% and 5.20% Senior Notes, as described in Note 10, Indebtedness, we settled the treasury rate locks and realized an $8.5 million gain. As the hedging relationship was effective, the gain was recorded in AOCI and will be recognized in other income (expense), net over the life of the 4.05% and 5.20% Senior Notes.
Interest Rate Swap Contracts
In connection with the issuance of our 2.90% Senior Notes, as described in Note 10, Indebtedness, we entered into interest rate swaps with an aggregate notional amount of $675.0 million, which expire on September 15, 2020. The interest rate swap contracts are designated as hedges of the fair value changes in the 2.90% Senior Notes attributable to changes in interest rates. Since the specific terms and notional amount of the swaps match the debt being hedged, it is assumed to be a highly effective hedge and all changes in the fair value of the swaps are recorded as a component of the 2.90% Senior Notes with no net impact recorded in income. Any net interest payments made or received on the interest rate swap contracts are recognized as a component of interest expense in our condensed consolidated statements of income.
Foreign Currency Forward Contracts - Other Derivatives
We also enter into other foreign currency forward contracts, usually with one month durations, 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 contracts was $787.2 million and $365.2 million as of September 30, 2015 and December 31, 2014, respectively. Net losses of $8.1 million and $4.2 million related to these contracts were recognized as a component of other income (expense), net, for three and nine months ended September 30, 2015, respectively, as compared to net losses of $7.7 million and $11.5 million, respectively, in the prior year comparative periods.
Summary of Derivatives
While certain of our derivatives are subject to netting arrangements with our counterparties, we do not offset derivative assets and liabilities in our condensed consolidated balance sheets.
The following table summarizes the fair value and presentation in our condensed consolidated balance sheets of our outstanding derivatives including those designated as hedging instruments:
(In millions)
Balance Sheet Location
Fair Value As of September 30, 2015
Hedging Instruments:
 
 
Asset derivatives
Other current assets
$
54.1

 
Investments and other assets
$
5.6

Liability derivatives
Accrued expenses and other
$
17.6

 
Other long-term liabilities
$
8.5

Other Derivatives:
 
 
Asset derivatives
Other current assets
$
1.7

Liability derivatives
Accrued expenses and other
$
5.2

 
 
 
(In millions)
Balance Sheet Location
Fair Value As of December 31, 2014
Hedging Instruments:
 
 
Asset derivatives
Other current assets
$
69.5

 
Investments and other assets
$
1.9

Other Derivatives:
 
 
Asset derivatives
Other current assets
$
1.3

Liability derivatives
Accrued expenses and other
$
5.4