XML 18 R24.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Financial Instruments | 12 Months Ended
--- | ---
Dec. 31, 2019
Investments, All Other Investments [Abstract] |
Financial Instruments | Financial Instruments Debt Instruments The carrying values of the Notes vary from their fair values. The fair values of the Notes were determined by reference to the quoted market prices of these securities (Level 2 input based on the GAAP fair value hierarchy). The carrying value of the Company’s Term Loan Facility approximates its fair value (Level 3 input based on the GAAP fair value hierarchy). The estimated fair value, as well as the carrying value, of the Company's debt instruments are shown below (in millions):
December 31, | 2019 |  | 2018
Estimated aggregate fair value (1) | $ | 2,384.6 |  |  | $ | 1,921.6 |
Aggregate carrying value (1) (2) | 2,334.4 |  |  | 1,967.2 |
(1) | Term Loan Facility and Notes (excludes "other" debt).
(2) | Excludes the impact of unamortized debt issuance costs and original issue discount.
Cash, Cash Equivalents and Restricted Cash The Company has cash that is legally restricted as to use or withdrawal. A reconciliation of cash and cash equivalents reported on the accompanying consolidated balance sheets to cash, cash equivalents and restricted cash reported on the consolidated statements of cash flows is shown below (in millions):
December 31, | 2019 |  | 2018 |  | 2017
Balance sheet - cash and cash equivalents | $ | 1,487.7 |  |  | $ | 1,493.2 |  |  | $ | 1,500.4 |
Restricted cash included in other current assets | 15.9 |  |  | 8.7 |  |  | — |
Restricted cash included in other long-term assets | 6.8 |  |  | 17.9 |  |  | — |
Statement of cash flows - cash, cash equivalents and restricted cash | $ | 1,510.4 |  |  | $ | 1,519.8 |  |  | $ | 1,500.4 |
Marketable Equity Securities Marketable equity securities, which the Company accounts for under the fair value option, are included in the accompanying consolidated balance sheets as shown below (in millions):
December 31, | 2019 |  | 2018
Other current assets | $ | 17.1 |  |  | $ | 4.8 |
Other long-term assets | 42.1 |  |  | 42.5 |
| $ | 59.2 |  |  | $ | 47.3 |
Unrealized gains and losses arising from changes in the fair value of the marketable equity securities are recognized in other (income) expense, net in the accompanying consolidated statements of income. The fair value of the marketable equity securities is determined by reference to quoted market prices in active markets (Level 1 input based on the GAAP fair value hierarchy). Equity Securities Without Readily Determinable Fair Values As of December 31, 2019 and 2018, investments in equity securities without readily determinable fair values of $15.2 million and $12.7 million, respectively, are included in other long-term assets in the accompanying consolidated balance sheets. Such investments are valued at cost, less any impairment, and adjusted for changes resulting from observable, orderly transactions for identical or similar securities. For the year ended December 31, 2019, the Company recognized an impairment charge of $5.0 million related to one of its equity securities without a readily determinable fair value. Derivative Instruments and Hedging Activities Foreign Exchange The Company uses forwards, swaps and other derivative contracts to reduce the effects of fluctuations in foreign exchange rates on known foreign currency exposures. Gains and losses on the derivative instruments are intended to offset gains and losses on the hedged transaction in an effort to reduce exposure to fluctuations in foreign exchange rates. The principal currencies hedged by the Company include the Mexican peso, various European currencies, the Thai baht, the Japanese yen, the Philippine peso and the Chinese renminbi. Foreign currency derivative contracts not designated as hedging instruments consist principally of hedges of cash transactions, intercompany loans and certain other balance sheet exposures. Net Investment Hedges The Company uses cross-currency interest rate swaps which are designated as net investment hedges of the foreign currency rate exposure of its investment in certain Euro-denominated subsidiaries. For the year ended December 31, 2019, contra interest expense on net investment hedges was $1.8 million and is included in interest expense in the accompanying consolidated statement of income. Interest Rate Swaps As of December 31, 2018, the estimated fair value of forward starting interest rate swap contracts with a notional amount of $500.0 million was $14.7 million and is included in other current liabilities in the accompanying consolidated balance sheet. Balance Sheet Classification The notional amount, estimated aggregate fair value and related balance sheet classification of the Company's foreign currency and net investment hedge contracts are shown below (in millions, except for maturities):
December 31, | 2019 |  | 2018
Fair value of foreign currency contracts designated as cash flow hedges: |  |  |
Other current assets | $ | 44.0 |  |  | $ | 20.6 |
Other long-term assets | 7.3 |  |  | 2.8 |
Other current liabilities | (4.5 | ) |  | (8.4 | )
Other long-term liabilities | (0.2 | ) |  | (2.0 | )
| 46.6 |  |  | 13.0 |
Notional amount | $ | 1,465.8 |  |  | $ | 1,499.0 |
Outstanding maturities in months, not to exceed | 24 |  |  | 24 |
Fair value of derivatives designated as net investment hedges: |  |  |
Other long-term liabilities | $ | (4.4 | ) |  | $ | — |
Notional amount | $ | 300.0 |  |  | $ | — |
Outstanding maturities in months, not to exceed | 57 |  |  | N/A |
Fair value of foreign currency contracts not designated as hedge instruments: |  |  |
Other current assets | $ | 6.9 |  |  | $ | 6.1 |
Other current liabilities | (3.2 | ) |  | (4.8 | )
| 3.7 |  |  | 1.3 |
Notional amount | $ | 697.0 |  |  | $ | 654.0 |
Outstanding maturities in months, not to exceed | 12 |  |  | 12 |
Total fair value | $ | 45.9 |  |  | $ | 14.3 |
Total notional amount | $ | 2,462.8 |  |  | $ | 2,153.0 |
Accumulated Other Comprehensive Loss - Derivative Instruments and Hedge Activities Pretax amounts related to foreign currency, interest rate swap and net investment hedge contracts that were recognized in and reclassified from accumulated other comprehensive loss are shown below (in millions):
For the year ended December 31, | 2019 |  | 2018 |  | 2017
Gains (losses) recognized in accumulated other comprehensive loss: |  |  |  |  |
Foreign currency contracts | $ | 82.4 |  |  | $ | 50.5 |  |  | $ | 28.8 |
Interest rate swap contracts | (9.2 | ) |  | (14.7 | ) |  | — |
Net investment hedges | (4.4 | ) |  | — |  |  | — |
| 68.8 |  |  | 35.8 |  |  | 28.8 |
(Gains) losses reclassified from accumulated other comprehensive loss to: |  |  |  |  |
Net sales | 3.8 |  |  | 2.3 |  |  | 2.1 |
Cost of sales | (52.6 | ) |  | (21.6 | ) |  | 7.4 |
Interest expense | 1.1 |  |  | — |  |  | — |
| (47.7 | ) |  | (19.3 | ) |  | 9.5 |
Comprehensive income | $ | 21.1 |  |  | $ | 16.5 |  |  | $ | 38.3 |
As of December 31, 2019 and 2018, pretax net gains (losses) of $19.4 million and ($1.7) million, respectively, related to the Company’s derivative instruments and hedge activities were recorded in accumulated other comprehensive loss. During the next twelve month period, net gains (losses) expected to be reclassified into earnings are shown below (in millions):
Net gains related to foreign currency contracts | $ | 39.5 |
Net losses related to interest rate swap contracts | (2.4 | )
Net losses related to net investment hedges | — |
Total | $ | 37.1 |
Such gains and losses will be reclassified at the time that the underlying hedged transactions are realized. For the years ended December 31, 2019, 2018 and 2017, the Company recognized tax expense of $5.5 million, $3.3 million and $15.9 million, respectively, in other comprehensive income related to its derivative instruments and hedge activities. Fair Value Measurements GAAP provides that fair value is an exit price, defined as a market-based measurement that represents the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Fair value measurements are based on one or more of the following three valuation techniques:
Market: |  | This approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.
Income: |  | This approach uses valuation techniques to convert future amounts to a single present value amount based on current market expectations.
Cost: |  | This approach is based on the amount that would be required to replace the service capacity of an asset (replacement cost).
Further, GAAP prioritizes the inputs and assumptions used in the valuation techniques described above into a three-tier fair value hierarchy as follows:
Level 1: |  | Observable inputs, such as quoted market prices in active markets for identical assets or liabilities that are accessible at the measurement date.
Level 2: |  | Inputs, other than quoted market prices included in Level 1, that are observable either directly or indirectly for the asset or liability.
Level 3: |  | Unobservable inputs that reflect the entity’s own assumptions about the exit price of the asset or liability. Unobservable inputs may be used if there is little or no market data for the asset or liability at the measurement date.
The Company discloses fair value measurements and the related valuation techniques and fair value hierarchy level for its assets and liabilities that are measured or disclosed at fair value. Items Measured at Fair Value on a Recurring Basis Fair value measurements and the related valuation techniques and fair value hierarchy level for the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 and 2018, are shown below (in millions):
| December 31, 2019
| Frequency |  | Asset (Liability) |  | Valuation Technique |  | Level 1 |  | Level 2 |  | Level 3
Foreign currency contracts, net | Recurring |  | $ | 50.3 |  |  | Market / Income |  | $ | — |  |  | $ | 50.3 |  |  | $ | — |
Net investment hedges | Recurring |  | (4.4 | ) |  | Market / Income |  | — |  |  | (4.4 | ) |  | — |
Marketable equity securities | Recurring |  | 59.2 |  |  | Market |  | 59.2 |  |  | — |  |  | — |
| December 31, 2018
| Frequency |  | Asset (Liability) |  | Valuation Technique |  | Level 1 |  | Level 2 |  | Level 3
Foreign currency contracts, net | Recurring |  | $ | 14.3 |  |  | Market / Income |  | $ | — |  |  | $ | 14.3 |  |  | $ | — |
Interest rate swap contract | Recurring |  | (14.7 | ) |  | Market / Income |  | — |  |  | (14.7 | ) |  | — |
Marketable equity securities | Recurring |  | 47.3 |  |  | Market |  | 47.3 |  |  | — |  |  | — |
The Company determines the fair value of its derivative contracts using quoted market prices to calculate the forward values and then discounts such forward values to the present value. The discount rates used are based on quoted bank deposit or swap interest rates. If a derivative contract is in a net liability position, the Company adjusts these discount rates, if required, by an estimate of the credit spread that would be applied by market participants purchasing these contracts from the Company’s counterparties. If an estimate of the credit spread is required, the Company uses significant assumptions and factors other than quoted market rates, which would result in the classification of its derivative liabilities within Level 3 of the fair value hierarchy. As of December 31, 2019 and 2018, there were no derivative contracts that were classified within Level 3 of the fair value hierarchy. In addition, there were no transfers in or out of Level 3 of the fair value hierarchy during 2019 and 2018. For further information on fair value measurements and the Company’s defined benefit pension plan assets, see Note 9, "Pension and Other Postretirement Benefit Plans." Items Measured at Fair Value on a Non-Recurring Basis The Company measures certain assets and liabilities at fair value on a non-recurring basis, which are not included in the table above. As these non-recurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy. In 2019, as a result of the acquisition of Xevo (Note 3, "Acquisitions"), Level 3 fair value estimates of $93.2 million related to intangible assets are recorded in the accompanying consolidated balance sheet as of December 31, 2019. The estimated fair values of these assets were based on third-party valuations and management's estimates, generally utilizing the income and cost approaches. In 2019, as a result of the deconsolidation of GACC (Note 5, "Investments in Affiliates and Other Related Party Transactions"), the Company is accounting for its investment in GACC under the equity method. The Level 3 fair value estimate related to the Company's equity interest was based on the present value of future cash flows and reflects a discount for the lack of control and the lack of marketability associated with equity interests. In 2019, the Company completed a quantitative goodwill impairment assessment for one of its reporting units. The Level 3 fair value estimate of the reporting unit was based on a third-party valuation and management's estimates, using a combination of the discounted cash flow method and guideline public company method. In 2018, as a result of the Lear FAWSN transaction (Note 5, "Investments in Affiliates and Other Related Party Transactions"), Level 3 fair value estimates related to property, plant and equipment of $11.0 million, intangible assets of $7.5 million and noncontrolling interests of $14.0 million are recorded in the accompanying consolidated balance sheets as of December 31, 2019 and 2018. In addition, the Lear FAWSN transaction required a Level 3 fair value estimate related to the Company's previously held equity interest of $23.0 million. These Level 3 fair value estimates were determined as of the effective date of the transaction. Fair value estimates of property, plant and equipment were based on independent appraisals, giving consideration to the highest and best use of the assets. Key assumptions used in the appraisals were based on a combination of market and cost approaches, as appropriate. Fair value estimates of customer-based intangible assets were based on the present value of future earnings attributable to the asset group after recognition of required returns to other contributory assets. Fair value estimates of noncontrolling and equity interests were based on the present value of future cash flows and a value to earnings multiple approach and reflect discounts for the lack of control and the lack of marketability associated with noncontrolling and equity interests. As of December 31, 2019 and 2018, there were no additional significant assets or liabilities measured at fair value on a non-recurring basis. For further information on assets and liabilities measured at fair value on a non-recurring basis, see Note 2, "Summary of Significant Accounting Policies," Note 3, "Acquisitions," and Note 5, "Investments in Affiliates and Other Related Party Transactions."

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_InvestmentsAllOtherInvestmentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration