XML 26 R16.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Financial Instruments | 6 Months Ended
--- | ---
Jun. 30, 2018
Financial Instruments |
8. | Financial Instruments
We do not enter into financial instruments for trading or speculative purposes. We principally use financial instruments to reduce the impact of changes in foreign currency exchange rates and commodities used as raw materials in our products. The principal derivative financial instruments we enter into on a routine basis are foreign exchange contracts. Derivative financial instruments are recorded at fair value. The counterparties to derivative contracts are major financial institutions. We are subject to credit risk on these contracts equal to the fair value of these instruments. Management currently believes that the risk of incurring material losses is unlikely and that the losses, if any, would be immaterial to the Company. Raw materials used by the Company are subject to price volatility caused by weather, supply conditions, geopolitical and economic variables, and other unpredictable external factors. As a result, from time to time, we enter into commodity swaps to manage the price risk associated with forecasted purchases of materials used in our operations. Our primary foreign currency hedge contracts pertain to the Canadian dollar, the British pound, and the Mexican peso. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at June 30, 2018 was $355.7 million. Based on foreign exchange rates as of June 30, 2018, we estimate that $1.2 million of net foreign currency derivative gains included in other accumulated comprehensive loss as of June 30, 2018 will be reclassified to earnings within the next twelve months. The fair values of derivative instruments on the consolidated balance sheets as of June 30, 2018 and December 31, 2017 were as follows:
(In millions) |  |  |  | Fair Value |
|  | Location |  | June 30, 2018 |  |  | December 31, 2017 |
Assets |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current assets |  | $ | 8.9 |  |  | $ | 0.8 |
Net investment hedges |  | Other current assets |  |  | 0.5 |  |  |  | — |
Commodity contracts |  | Other current assets |  |  | — |  |  |  | 0.2 |
|  | Total assets |  | $ | 9.4 |  |  | $ | 1.0 |
Liabilities |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current liabilities |  | $ | 1.9 |  |  | $ | 5.6 |
Commodity contracts |  | Other current liabilities |  |  | 0.1 |  |  |  | — |
Net investment hedges |  | Other current liabilities |  |  | — |  |  |  | 0.8 |
|  | Total current liabilities |  | $ | 2.0 |  |  | $ | 6.4 |
The effects of derivative financial instruments on the statements of comprehensive income for the six and three months ended June 30, 2018 and 2017 were as follows:
|  |  |  | Gain (Loss) Recognized in Income Six Months Ended June 30, |
(In millions) Type of hedge |  | Location |  | 2018 |  |  | 2017 |
Cash flow |  | Cost of products sold |  | $ | — |  |  | $ | 1.0 |
Fair value |  | Other expense (income), net |  |  | 1.4 |  |  |  | (0.5 | )
Total |  |  |  | $ | 1.4 |  |  | $ | 0.5 |
|  |  |  | Gain (Loss) Recognized in Income Three Months Ended June 30, |
(In millions) Type of hedge |  | Location |  | 2018 |  |  | 2017 |
Cash flow |  | Cost of products sold |  | $ | 0.5 |  |  | $ | 1.6 |
Fair value |  | Other expense (income), net |  |  | 1.5 |  |  |  | 0.6 |
Total |  |  |  | $ | 2.0 |  |  | $ | 2.2 |
The effective portion of cash flow hedges recognized in other comprehensive income were net gains of $4.0 million and $3.7 million in the six months ended June 30, 2018 and 2017, respectively. The effective portion of cash flow hedges recognized in other comprehensive income were net losses of $0.3 million and $1.6 million in the three months ended June 30, 2018 and 2017, respectively. In the six and three months ended June 30, 2018 and 2017, the ineffective portion of cash flow hedges recognized in other (income) expense, net, was insignificant.

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