XML 38 R22.htm IDEA: XBRL DOCUMENT
v3.3.1.900

Derivatives and Hedging Activities | 12 Months Ended
--- | ---
Dec. 31, 2015
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Derivatives and Hedging Activities | Note 12 Derivatives and Hedging Activities We report all derivative instruments on our Consolidated Balance Sheets at fair value and establish criteria for designation and effectiveness of transactions entered into for hedging purposes. As a large global organization, we face exposure to market risks, such as fluctuations in foreign currency exchange rates and interest rates. To manage the volatility relating to these exposures, we enter into various derivative instruments from time to time under our risk management policies. We designate derivative instruments as hedges on a transaction basis to support hedge accounting. The changes in fair value of these hedging instruments offset in part or in whole corresponding changes in the fair value or cash flows of the underlying exposures being hedged. We assess the initial and ongoing effectiveness of our hedging relationships in accordance with our policy. We do not purchase, hold or sell derivative financial instruments for trading purposes. Our practice is to terminate derivative transactions if the underlying asset or liability matures or is sold or terminated, or if we determine the underlying forecasted transaction is no longer probable of occurring. We record the fair value positions of all derivative financial instruments on a net basis by counterparty for which a master netting arrangement is utilized. Foreign Currency Forward Contracts Designated as Cash Flow Hedges The primary purpose of our cash flow hedging activities is to manage the potential changes in value associated with the amounts receivable or payable on equipment and raw material purchases that are denominated in foreign currencies in order to minimize the impact of the changes in foreign currencies. We record gains and losses on foreign currency forward contracts qualifying as cash flow hedges in other comprehensive income to the extent that these hedges are effective and until we recognize the underlying transactions in net earnings, at which time we recognize these gains and losses in other expense, net, on our Consolidated Statements of Operations. Cash flows from derivative financial instruments are classified as cash flows from operating activities on the Consolidated Statements of Cash Flows. These contracts generally have original maturities of less than 12 months. Net unrealized after-tax gains (losses) related to these contracts that were included in other comprehensive income were $5.9 million, $3.8 million and $2.6 million for the years ended December 31, 2015, 2014 and 2013. The unrealized amounts in other comprehensive income will fluctuate based on changes in the fair value of open contracts during each reporting period. We estimate that $5.9 million of net unrealized derivative gains included in accumulated other comprehensive income (AOCI) will be reclassified into earnings within the next twelve months. Foreign Currency Forward Contracts Not Designated as Hedges Our subsidiaries have foreign currency exchange exposure from buying and selling in currencies other than their functional currencies. The primary purposes of our foreign currency hedging activities are to manage the potential changes in value associated with the amounts receivable or payable on transactions denominated in foreign currencies and to minimize the impact of the changes in foreign currencies related to foreign currency-denominated interest-bearing intercompany loans and receivables and payables. The changes in fair value of these derivative contracts are recognized in other income, net, on our Consolidated Statements of Operations and are largely offset by the remeasurement of the underlying foreign currency-denominated items indicated above. Cash flows from derivative financial instruments are classified as cash flows from investing activities on the Consolidated Statements of Cash Flows. These contracts generally have original maturities of less than 12 months. Interest Rate Swaps From time to time, we may use interest rate swaps to manage our mix of fixed and floating interest rates on our outstanding indebtedness. In the fourth quarter of 2014, we terminated the swaps that we entered into in 2013. The swaps were associated with the 6.5% Senior Notes although the 6.5% Senior Notes remained outstanding. The termination resulted in a $3 million gain, which is being amortized over the remaining life of the 6.5% Senior Note and included in interest expense on our Consolidated Statements of Operations. As a result of our interest rate swap agreements, interest expense was reduced by $2 million in 2014 and less than $1 million in 2013. At December 31, 2015 and 2014 we had no outstanding interest rate swaps. Interest Rate and Currency Swaps In 2014, in connection with exercising the $100 million delayed draw under the senior secured credit facility, we entered into a series of interest rate and currency swaps in a notional amount of $100 million. These swaps convert the U.S. dollar denominated variable rate obligation under the credit facility into a fixed Brazilian real-denominated obligation. The delayed draw and the interest rate and currency swaps are used to fund expansion and general corporate purposes of our Brazilian subsidiaries. Net Investment Hedge During the second quarter of 2015, we entered into a series of foreign currency exchange forwards totaling €270 million. These foreign currency exchange forwards hedged a portion of the net investment in a certain European subsidiary against fluctuations in foreign exchange rates and expired in June 2015. The loss of $3.5 million ($2.2 million after tax) is recorded in AOCI on our Consolidated Balance Sheet. The €400 million 4.50% notes issued in June 2015 are designated as a net investment hedge, hedging a portion of our net investment in a certain European subsidiary against fluctuations in foreign exchange rates. The change in the fair value of the debt was $(12.4) million ($(7.6) million after tax) at December 31, 2015, and is reflected in long-term debt on our Consolidated Balance Sheet. In March 2015, we entered into a series of cross-currency swaps with a combined notional amount of $425 million, hedging a portion of the net investment in a certain European subsidiary against fluctuations in foreign exchange rates. The fair value of this hedge as of December 31, 2015 was $(12.0) million ($(7.4) million after tax) on our Consolidated Balance Sheet. Semi-annual interest settlements resulted in AOCI of $5.9 million ($3.6 million after tax). For derivative instruments that are designated and qualify as hedges of net investments in foreign operations, settlements and changes in fair values of the derivative instruments are recognized in unrealized net gains or loss on derivative instruments for net investment hedge, a component of AOCI, net of taxes, to offset the changes in the values of the net investments being hedged. Any portion of the net investment hedge that is determined to be ineffective is recorded in other income, net on the Consolidated Statements of Operations Other Derivative Instruments During the second quarter of 2015, we entered into a series of foreign currency exchange options to partially protect our euro-denominated earnings from a decline in the value of the euro. The options expired during 2015. We may enter into other derivative instruments from time to time to manage exposure to foreign exchange rates and to gain access to international financing transactions. These instruments can potentially limit foreign exchange exposure by swapping borrowings denominated in one currency for borrowings denominated in another currency. Fair Value of Derivative Instruments See Note 13, “Fair Value Measurements and Other Financial Instruments,” for a discussion of the inputs and valuation techniques used to determine the fair value of our outstanding derivative instruments. The following table details the fair value of our derivative instruments included on our Consolidated Balance Sheets.
|  | Cash Flow Hedge |  |  | Net Investment Hedge |  |  | Non-Designated as Hedging Instruments |  |  | Total |
|  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |
(In millions) |  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
Derivative Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | 3.2 |  |  | $ | 4.3 |  |  | $ | — |  |  | $ | — |  |  | $ | 25.0 |  |  | $ | 41.3 |  |  | $ | 28.2 |  |  | $ | 45.6 |
Interest rate and currency swaps |  |  | 44.0 |  |  |  | 17.8 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 44.0 |  |  |  | 17.8 |
Total Derivative Assets (2) |  | $ | 47.2 |  |  | $ | 22.1 |  |  | $ | — |  |  | $ | — |  |  | $ | 25.0 |  |  | $ | 41.3 |  |  | $ | 72.2 |  |  | $ | 63.4 |
Derivative Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  | $ | (1.3 | ) |  | $ | (0.4 | ) |  | $ | — |  |  | $ | — |  |  | $ | (43.5 | ) |  | $ | (67.6 | ) |  | $ | (44.8 | ) |  | $ | (68.0 | )
Cross-currency swaps |  |  | — |  |  |  | — |  |  |  | (12.0 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (12.0 | ) |  |  | — |
Total Derivative Liabilities(2) |  | $ | (1.3 | ) |  | $ | (0.4 | ) |  | $ | (12.0 | ) |  | $ | — |  |  | $ | (43.5 | ) |  | $ | (67.6 | ) |  | $ | (56.8 | ) |  | $ | (68.0 | )
Net Derivatives (1) |  | $ | 45.9 |  |  | $ | 21.7 |  |  | $ | (12.0 | ) |  | $ | — |  |  | $ | (18.5 | ) |  | $ | (26.3 | ) |  | $ | 15.4 |  |  | $ | (4.6 | )
(1) | Excludes $437.3 million of euro-denominated debt designated as a net investment hedge at December 31, 2015.
(2) | The Company’s derivative transactions are typically governed by master agreements that contain netting and set-off clauses. The netting clauses often stipulate that matching counterparties may offset asset and liability positions of the same nature and maturing at the same time, with only the net payment due required to be delivered. The set-off provisions, in the event of certain default or termination events, can allow the non-defaulting party rights of set-off for net obligations owed by the defaulting party. The following table reconciles gross positions without the impact of master netting agreements to the balance sheet classification:
|  | Other Current Assets |  |  | Other Current Liabilities |  |  | Other Non-current Assets |  |  | Other Non-current Liabilities |
|  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |  |  | December 31, |
(In millions) |  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
Gross position |  | $ | 36.2 |  |  | $ | 34.3 |  |  | $ | (44.8 | ) |  | $ | (48.8 | ) |  | $ | 36.0 |  |  | $ | 27.1 |  |  | $ | (12.0 | ) |  | $ | (17.2 | )
Impact of master netting agreements |  |  | (24.1 | ) |  |  | (25.2 | ) |  |  | 24.1 |  |  |  | 25.2 |  |  |  | — |  |  |  | (9.3 | ) |  |  | — |  |  |  | 9.3 |
Net amounts recognized on the Consolidated Balance Sheet |  | $ | 12.1 |  |  | $ | 9.1 |  |  | $ | (20.7 | ) |  | $ | (23.6 | ) |  | $ | 36.0 |  |  | $ | 17.8 |  |  | $ | (12.0 | ) |  | $ | (7.9 | )
The following table details the effect of our derivative instruments on our Consolidated Statements of Operations.
|  | Amount of Gain (Loss) Recognized in |
|  | Earnings on Derivatives |
|  | Year Ended December 31, |
(In millions) |  | 2015 |  |  | 2014 |  |  | 2013 |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Cash Flow Hedges: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts(1) |  | $ | 9.6 |  |  | $ | 1.9 |  |  | $ | 2.7 |
Interest rate and currency swaps(2) |  |  | 36.9 |  |  |  | 13.5 |  |  |  | — |
Treasury locks(3) |  |  | 0.1 |  |  |  | 0.1 |  |  |  | 0.1 |
Sub-total cash flow hedges |  |  | 46.6 |  |  |  | 15.5 |  |  |  | 2.8 |
Fair Value Hedges: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps |  |  | 0.4 |  |  |  | 1.8 |  |  |  | — |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts |  |  | 32.0 |  |  |  | 0.4 |  |  |  | (8.5 | )
Total |  | $ | 79.0 |  |  | $ | 17.7 |  |  | $ | (5.7 | )
| (1) | Amounts recognized on the foreign currency forward contracts were included in other income (expense), net.
(2) | As of December 31, 2015, amounts recognized on the interest rate and currency swaps included a $42.9 million gain which offset a loss on the remeasurement of the hedged debt, which is included in other income (expense), net and interest expense of $6.0 million related to the hedge of the interest payments. As of December 31, 2014, amounts recognized on the interest rate and currency swaps included a $16.5 million gain which offset a loss on remeasurement of the hedged debt, which is included in other income (expense), net and interest expense of $3.0 million related to the hedge of interest payments.
(3) | Amounts recognized on the treasury locks were included in interest expense.

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 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41620-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624163-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579240-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624177-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41641-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579245-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624258-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5708775-113959 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5708773-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5618551-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5580258-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=56946850&loc=d3e41638-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration