XML 27 R15.htm IDEA: XBRL DOCUMENT
v3.22.2

Financial Instruments | 6 Months Ended
--- | ---
Jun. 30, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | 7. 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. We may be exposed to interest rate risk on existing debt or forecasted debt issuance. To mitigate this risk, we may enter into interest rate hedge contracts. As of June 30, 2022, we had outstanding interest rate hedges with a notional value of $600 million which have been accounted for as cash flow hedges. We terminated $600 million of interest rate hedges during the first quarter of 2022, concurrent with the issuance of new long-term debt. Total realized pre-tax gains of $39.0 million related to these interest rate hedges have been recorded in accumulated other comprehensive income and will be reclassified to earnings over the related maturity of the related interest rate hedging instrument. Our primary foreign currency hedge contracts pertain to the Canadian dollar, the British pound, the Mexican peso and the Chinese yuan. The gross U.S. dollar equivalent notional amount of all foreign currency derivative hedges outstanding at June 30, 2022 was $568.3 million. Based on foreign exchange rates as of June 30, 2022, we estimate that $2.6 million of net derivative losses included in accumulated other comprehensive income as of June 30, 2022 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, 2022 and December 31, 2021 were as follows:
|  |  |  |  | Fair Value |
(In millions) |  | Location |  |  | June 30, 2022 |  |  | December 31, 2021 |
Assets: |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current assets |  |  | $ | 5.7 |  |  | $ | 4.1 |
Interest rate hedges |  | Other non-current assets |  |  |  | 58.9 |  |  |  | - |
|  | Total assets |  |  | $ | 64.6 |  |  | $ | 4.1 |
Liabilities: |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current liabilities |  |  | $ | 0.9 |  |  | $ | 1.4 |
Commodity contracts |  | Other current liabilities |  |  |  | 9.4 |  |  |  | 0.1 |
|  | Total liabilities |  |  | $ | 10.3 |  |  | $ | 1.5 |
The effects of derivative financial instruments on the statements of comprehensive income for the six months ended June 30, 2022 and 2021 were as follows:
(In millions) |  | Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships |
|  | Six Months Ended June 30, 2022 |
|  | Cost of products sold |  |  | Interest expense |  |  | Other income, net |
Total amounts per Consolidated Statements of Comprehensive Income |  | $ | 2,585.7 |  |  | $ | 52.3 |  |  | $ | 1.5 |
The effects of fair value and cash flow hedging: |  |  |  |  |  |  |  |  |
Gain (loss) on fair value hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Hedged items |  |  | - |  |  |  | - |  |  |  | (8.9 | )
Derivative designated as hedging instruments |  |  | - |  |  |  | - |  |  |  | 5.1 |
Gain (loss) on cash flow hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | 3.0 |  |  |  | - |  |  |  | - |
Commodity contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | (0.3 | ) |  |  | - |  |  |  | - |
Interest rate contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | - |  |  |  | 1.4 |  |  |  | - |
(In millions) |  | Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships |
|  | Six Months Ended June 30, 2021 |
|  | Cost of products sold |  |  | Interest expense |  |  | Other expense, net |
Total amounts per Consolidated Statements of Comprehensive Income |  | $ | 2,357.2 |  |  | $ | 42.6 |  |  | $ | 2.0 |
The effects of fair value and cash flow hedging: |  |  |  |  |  |  |  |  |
Gain (loss) on fair value hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Hedged items |  |  | - |  |  |  | - |  |  |  | 1.7 |
Derivative designated as hedging instruments |  |  | - |  |  |  | - |  |  |  | (3.7 | )
Gain (loss) on cash flow hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | (0.7 | ) |  |  | - |  |  |  | - |
Commodity contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | 0.9 |  |  |  | - |  |  |  | - |
Interest rate contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | - |  |  |  | 0.3 |  |  |  | - |
The effects of derivative financial instruments on the statements of comprehensive income for the three months ended June 30, 2022 and 2021 were as follows:
(In millions) |  | Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships |
|  | Three Months Ended June 30, 2022 |
|  | Cost of products sold |  |  | Interest expense |  |  | Other income, net |
Total amounts per Consolidated Statements of Comprehensive Income |  | $ | 1,347.9 |  |  | $ | 30.5 |  |  | $ | 0.2 |
The effects of fair value and cash flow hedging: |  |  |  |  |  |  |  |  |
Gain (loss) on fair value hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Hedged items |  |  | - |  |  |  | - |  |  |  | (7.8 | )
Derivative designated as hedging instruments |  |  | - |  |  |  | - |  |  |  | 6.2 |
Gain (loss) on cash flow hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | 2.1 |  |  |  | - |  |  |  | - |
Commodity contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | (0.4 | ) |  |  | - |  |  |  | - |
Interest rate contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | - |  |  |  | 1.2 |  |  |  | - |
(In millions) |  | Classification and Amount of Gain (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships |
|  | Three Months Ended June 30, 2021 |
|  | Cost of products sold |  |  | Interest expense |  |  | Other income, net |
Total amounts per Consolidated Statements of Comprehensive Income |  | $ | 1,230.3 |  |  | $ | 21.2 |  |  | $ | 1.3 |
The effects of fair value and cash flow hedging: |  |  |  |  |  |  |  |  |
Gain (loss) on fair value hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Hedged items |  |  | - |  |  |  | - |  |  |  | 2.5 |
Derivative designated as hedging instruments |  |  | - |  |  |  | - |  |  |  | (3.7 | )
Gain (loss) on cash flow hedging relationships |  |  |  |  |  |  |  |  |
Foreign exchange contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | 0.1 |  |  |  | - |  |  |  | - |
Commodity contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | 0.8 |  |  |  | - |  |  |  | - |
Interest rate contracts: |  |  |  |  |  |  |  |  |
Amount of gain or (loss) reclassified from accumulated other comprehensive (loss) income into income |  |  | - |  |  |  | 0.1 |  |  |  | - |
The cash flow hedges recognized in other comprehensive income were a net loss of $0.5 million and a net loss of $0.6 million in the six months ended June 30, 2022 and 2021, respectively. The cash flow hedges recognized in other comprehensive income were a net gain of $0.2 million and a net gain of $1.4 million in the three months ended June 30, 2022 and 2021, respectively.

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://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
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration