XML 53 R15.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Derivative Instruments | 3 Months Ended
--- | ---
Mar. 31, 2018
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments In August 2017 the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. We adopted this new standard on January 1, 2018. Among other provisions, the new standard required modifications to existing presentation and disclosure requirements on a prospective basis. As such, certain disclosures for the three months ended March 31, 2017, were modified to conform to the new disclosure requirements. For additional information on this new standard, please read Note 1, S ummary of Significant Accounting Policies, to these condensed consolidated financial statements. Foreign Currency Forward Contracts - Hedging Instruments Due to the global nature of our operations, portions of our revenues and operating expenses are recorded in currencies other than the U.S. dollar. The value of revenues and operating expenses 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 and operating expenses. Foreign currency forward contracts in effect as of March 31, 2018 and December 31, 2017, had durations of 1 to 21 months. These contracts have been designated as cash flow hedges and 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 of such contracts are recognized in revenues when the sale of product in the currency being hedged is recognized and in operating expenses when the expense in the currency being hedged is recorded. Prior to the adoption of ASU 2017-12, to the extent ineffective, hedge transaction gains and losses were reported in other income (expense), net. Upon adoption of ASU 2017-12, we recognize all fair value changes of derivatives in earnings in the same line item in our condensed 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 revenues and operating expenses is summarized as follows:
| Notional Amount
Foreign Currency: (In millions) | As of March 31, 2018 |  | As of December 31, 2017
Euro | $ | 1,734.9 |  |  | $ | 1,875.6 |
British pound | 110.5 |  |  | 150.9 |
Canadian dollar | 65.5 |  |  | 83.5 |
Swiss franc | 60.4 |  |  | 88.7 |
Total foreign currency forward contracts | $ | 1,971.3 |  |  | $ | 2,198.7 |
The pre-tax portion of the fair value of these foreign currency forward contracts that was included in accumulated other comprehensive income (loss) in total equity reflected net losses of $142.0 million and $113.0 million as of March 31, 2018 and December 31, 2017, respectively. We expect the net losses of $142.0 million to be settled over the next 21 months, of which $127.1 million is 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 revenues or operating expenses. 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 March 31, 2018 and December 31, 2017, credit risk did not change the fair value of our foreign currency forward contracts. The following tables summarize the effect of foreign currency forward contracts designated as hedging instruments in our condensed consolidated statements of income:
For the Three Months Ended March 31, 2018
Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions) | Net Gains/(Losses) Recognized in Operating Income (in millions)
Location |  | 2018 |  | Location |  | 2018
Revenues |  | $ | (32.9 | ) |  | Revenues |  | $ | (0.9 | )
Operating expenses |  | $ | 1.3 |  |  | Operating expenses |  | $ | (0.3 | )
For the Three Months Ended March 31, 2017
Net Gains/(Losses) Reclassified from AOCI into Operating Income (in millions) | Net Gains/(Losses) Recognized Directly into Net Income (in millions)
Location |  | 2017 |  | Location |  | 2017
Revenues |  | $ | 6.7 |  |  | Other income (expense) |  | $ | 4.0 |
Operating expenses |  | $ | (0.1 | ) |  | Other income (expense) |  | $ | (0.2 | )
Interest Rate Contracts - Hedging Instruments We have entered into interest rate swap contracts on certain borrowing transactions to manage our exposure to interest rate changes. In connection with the issuance of our 2.90% Senior Notes, 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 recognized as a component of our 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 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 contracts was $572.2 million and $564.9 million as of March 31, 2018 and December 31, 2017, respectively. Net losses of $5.6 million related to these contracts were recognized as a component of other income (expense), net for the three months ended March 31, 2018, as compared to net gains of $1.6 million in the prior year comparative period. Summary of Derivatives While certain of our derivative instruments 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 derivative instruments, including those designated as hedging instruments:
|  | Fair Value
(In millions) | Balance Sheet Location | As of March 31, 2018
Hedging Instruments: |  |
Asset derivatives | Other current assets | $ | 1.8 |
Liability derivatives | Accrued expenses and other | $ | 114.1 |
| Other long-term liabilities | $ | 32.2 |
Other Derivatives: |  |
Asset derivatives | Other current assets | $ | 1.4 |
Liability derivatives | Accrued expenses and other | $ | 1.4 |
|  | Fair Value
(In millions) | Balance Sheet Location | As of December 31, 2017
Hedging Instruments: |  |
Asset derivatives | Other current assets | $ | 0.7 |
| Investments and other assets | $ | 0.2 |
Liability derivatives | Accrued expenses and other | $ | 84.7 |
| Other long-term liabilities | $ | 23.6 |
Other Derivatives: |  |
Asset derivatives | Other current assets | $ | 1.8 |
Liability derivatives | Accrued expenses and other | $ | 3.0 |

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://www.xbrl.org/2003/role/presentationRef -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