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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2019

Investments, All Other Investments [Abstract]

Carrying Amount and Estimated Fair Values of Financial Instruments

The carrying values and the estimated fair values of financial instruments at June 30, 2019 and December 31, 2018 consisted of the following: 

	June 30, 2019								December 31, 2018
(DOLLARS IN THOUSANDS)	Carrying Value				Fair Value				Carrying Value				Fair Value
LEVEL 1
Cash and cash equivalents(1)	$	426,717			$	426,717			$	634,897			$	634,897
LEVEL 2
Credit facilities and bank overdrafts(2)	4,949				4,949				4,695				4,695
Derivatives
Derivative assets	—				14,353				—				7,229
Derivative liabilities	—				6,342				—				6,907
Long-term debt:(3)
2020 Notes	298,954				303,208				298,499				300,356
2021 Euro Notes	338,505				344,904				337,704				341,094
2023 Notes	298,850				304,471				298,698				293,017
2024 Euro Notes	565,404				605,769				564,034				584,129
2026 Euro Notes	902,063				967,456				899,886				909,439
2028 Notes	396,535				435,181				396,377				401,231
2047 Notes	493,361				505,988				493,151				446,725
2048 Notes	785,890				887,584				785,788				783,925
Term Loan(2)	324,370				325,000				349,163				350,000
Amortizing Notes(4)	103,968				106,715				125,007				127,879

_______________________

(1) The carrying amount approximates fair value due to the short maturity of those instruments.

(2) The carrying amount approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments.

(3) The fair value of the Company's long-term debt was calculated using discounted cash flows applying current interest rates and current credit spreads based on its own credit risk.

(4) The fair value of the Amortizing Notes of the TEUs is based on the most recently quoted price for the outstanding securities, adjusted for any known significant deviation in value. The estimated fair value of these long-term obligations is not necessarily indicative of the amount that would be realized in a current market exchange.

Derivative Instruments Notional Amount Outstanding

The following table shows the notional amount of the Company’s derivative instruments outstanding as of June 30, 2019 and December 31, 2018: 

(DOLLARS IN THOUSANDS)	June 30, 2019				December 31, 2018
Foreign currency contracts	$	394,538			$	585,581
Cross currency swaps	600,000				600,000

Derivative Instruments Measured at Fair Value

The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy), as reflected in the Consolidated Balance Sheet as of June 30, 2019 and December 31, 2018: 

	June 30, 2019
(DOLLARS IN THOUSANDS)	Fair Value of Derivatives Designated as Hedging Instruments				Fair Value of Derivatives Not Designated as Hedging Instruments				Total Fair Value
Derivative assets(a)
Foreign currency contracts	$	1,745			$	388			$	2,133
Cross currency swaps	12,220				—				12,220
	$	13,965			$	388			$	14,353
Derivative liabilities(b)
Foreign currency contract	$	506			$	5,836			$	6,342

	December 31, 2018
(DOLLARS IN THOUSANDS)	Fair Value of Derivatives Designated as Hedging Instruments				Fair Value of Derivatives Not Designated as Hedging Instruments				Total Fair Value
Derivative assets(a)
Foreign currency contracts	$	4,122			$	2,020			$	6,142
Cross currency swaps	1,087				—				1,087
	$	5,209			$	2,020			$	7,229
Derivative liabilities(b)
Foreign currency contracts	$	205			$	6,702			$	6,907

 _______________________

(a) Derivative assets are recorded to Prepaid expenses and Other assets in the Consolidated Balance Sheet.

(b)

Derivative liabilities are recorded as Other current liabilities in the Consolidated Balance Sheet.

Derivative Instruments Which Were Not Designated as Hedging Instruments

The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments in the Consolidated Statement of Income and Comprehensive Income for the three and six months ended June 30, 2019 and 2018 (in thousands): 

	Amount of Gain (Loss)								Location of Gain (Loss) Recognized in Income on Derivative
(DOLLARS IN THOUSANDS)	Three Months Ended June 30,
	2019				2018
Foreign currency contracts(1)	$	(3,932	)		$	4,685			Other (income) expense, net
Deal contingent swaps(2)
Foreign currency contracts	—				10,979				Other income, net
Interest rate swaps	—				(24,937		)		Interest expense
Total	(3,932		)		(9,273		)
	Amount of Gain (Loss)								Location of Gain (Loss) Recognized in Income on Derivative
	Six Months Ended June 30,
(DOLLARS IN THOUSANDS)	2019				2018
Foreign currency contracts(1)	$	(3,006	)		$	1,070			Other income, net
Deal contingent swaps(2)
Foreign currency contracts	—				10,979				Other income, net
Interest rate swaps	—				(24,937		)		Interest expense
Total	$	(3,006	)		$	(12,888	)

 _______________________

(1) The foreign currency contract net gains (losses) offset any recognized gains (losses) arising from the revaluation of the related intercompany loans during the same respective periods.

(2)

In the second quarter of 2018, the Company entered into a foreign currency contract and two interest rate swap agreements, which were contingent upon the closing of the Frutarom acquisition.

Derivative Instruments Designated as Cash Flow and Net Investment Hedging Instruments

The following table shows the effect of the Company’s derivative and non-derivative instruments designated as cash flow and net investment hedging instruments, net of tax, in the Consolidated Statement of Income and Comprehensive Income for the three and six months ended June 30, 2019 and 2018 (in thousands): 

	Amount of Gain (Loss)  Recognized in OCI on Derivative								Location of Gain (Loss) Reclassified from AOCI into Income		Amount of Gain (Loss)  Reclassified from Accumulated OCI into Income
	Three Months Ended June 30,										Three Months Ended June 30,
	2019				2018						2019				2018
Derivatives in Cash Flow Hedging Relationships:
Foreign currency contracts	$	(2,539	)		$	10,241			Cost of goods sold		$	2,322			$	(2,330	)
Interest rate swaps (1)	216				216				Interest expense		(216		)		(216		)
Derivatives in Net Investment Hedging Relationships:
Foreign currency contracts	—				178				N/A		—				—
Cross currency swaps	(3,904		)		—				N/A		—				—
Non-Derivatives in Net Investment Hedging Relationships:
2024 Euro Notes	(4,823		)		28,682				N/A		—				—
2021 Euro Notes & 2026 Euro Notes	(10,611		)		—				N/A		—				—
Total	$	(21,661	)		$	39,317					$	2,106			$	(2,546	)
	Amount of (Loss) Gain Recognized in OCI on Derivative (Effective Portion)								Location of (Loss) Gain Reclassified from AOCI into Income (Effective Portion)		Amount of (Loss) Gain Reclassified from Accumulated OCI into Income (Effective Portion)
	Six Months Ended June 30,										Six Months Ended June 30,
	2019				2018						2019				2018
Derivatives in Cash Flow Hedging Relationships:
Foreign currency contracts	$	(2,850	)		$	9,498			Cost of goods sold		$	4,695			$	(4,523	)
Interest rate swaps (1)	432				432				Interest expense		(432		)		(432		)
Derivatives in Net Investment Hedging Relationships:
Foreign currency contracts	—				(518		)		N/A		—				—
Cross currency swaps	7,312				—				N/A		—				—
Non-Derivatives in Net Investment Hedging Relationships:
2024 Euro Notes	(617		)		12,705				N/A		—				—
2021 Euro Notes & 2026 Euro Notes	(1,358		)		—				N/A		—				—
Total	$	2,919			$	22,117					$	4,263			$	(4,955	)

 _______________________

(1)

Interest rate swaps were entered into as pre-issuance hedges for bond offerings.

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Tabular disclosure of the effective portion of the gains and losses on derivative instruments designated (and non-derivative instruments) designated and qualifying in cash flow hedges and net investment hedges that was recognized in other comprehensive income (loss) during the current period.

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Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position.

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Tabular disclosure of assets and liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

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Tabular disclosure of the notional amounts of outstanding derivative positions.

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Tabular disclosure of derivative instrument not designated or qualifying as hedging instrument.

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