XML 25 R14.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Derivatives and Risk Management | 9 Months Ended
--- | ---
Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives and Risk Management | Derivatives and Risk Management Due to the global nature of our operations, we are exposed to foreign currency exchange rate fluctuations. In addition, due to certain loans with floating interest rates, we are also subject to the impact of changes in interest rates on our interest payments. We enter into foreign currency exchange rate (“FX”) derivative contracts and interest rate swap contracts to reduce the impact of foreign currency rate and interest rate fluctuations on earnings and cash flow. We measure all outstanding derivatives each period end at fair value and report the fair value as either financial assets or liabilities in the condensed consolidated balance sheets. We do not enter into derivative contracts for speculative purposes. At inception of the contract, the derivative is designated as either a freestanding derivative or a hedge. Derivatives that are not designated as hedging instruments are referred to as freestanding derivatives with changes in fair value included in earnings. If the derivative qualifies for hedge accounting, depending on the nature of the hedge and hedge effectiveness, changes in the fair value of the derivative will either be recognized immediately in earnings or recorded in other AOCI until the hedged item is recognized in earnings upon settlement/termination. FX derivative gains and losses in AOCI are reclassified to the consolidated statement of income (loss) as shown in the tables below and interest rate swap gains and losses in AOCI are reclassified to interest expense in the consolidated statement of income (loss). We evaluate hedge effectiveness at inception and on an ongoing basis. If a derivative is no longer expected to be highly effective, hedge accounting is discontinued. Hedge ineffectiveness, if any, is recorded in earnings. Cash flows from derivative contracts are reported as operating activities in the condensed consolidated statements of cash flows. Freestanding Derivative FX Contracts The gross notional amount of freestanding derivatives outstanding at September 30, 2017 and December 31, 2016 was $239.0 million and $489.1 million, respectively. These derivative contracts are designed to offset the FX effects in earnings of various intercompany loans, our EIB loan, and trade receivables. We recorded net losses for these freestanding derivatives of $0.7 million and $7.9 million for the three and nine months ended September 30, 2017, respectively, and net gains (losses) of $(1.8) million and $0.4 million for the three and nine months ended September 30, 2016, respectively. These gains and losses are included in ‘Foreign exchange and other gains (losses)’ in the condensed consolidated statements of income (loss). Cash Flow Hedges Notional amounts of open derivative contracts designated as cash flow hedges (in thousands):
Description of Contract |  | September 30, 2017 |  | December 31, 2016
FX derivative contracts to be exchanged for British Pounds |  | $ | 16,928 |  |  | $ | 6,663 |
FX derivative contracts to be exchanged for Japanese Yen |  | 44,618 |  |  | 57,840 |
FX derivative contracts to be exchanged for Canadian Dollars |  | 13,341 |  |  | — |
Interest rate swap contracts |  | 62,917 |  |  | 63,246 |
|  | $ | 137,804 |  |  | $ | 127,749 |
After-tax net loss associated with derivatives designated as cash flow hedges recorded in the ending balance of AOCI and the amount expected to be reclassified to earnings in the next 12 months (in thousands):
Description of Contract |  | September 30, 2017 |  | Net Amount Expected to be Reclassified to Earnings in the Next 12 Months
FX derivative contracts |  | $ | (287 | ) |  | $ | (287 | )
Interest rate swap contracts |  | (261 | ) |  | (69 | )
|  | $ | (548 | ) |  | $ | (356 | )
Pre-tax gains (losses) for derivative contracts designated as cash flow hedges recognized in Other Comprehensive Income (Loss) (“OCI”) and the amount reclassified to earnings from AOCI (in thousands):
|  |  |  | Three Months Ended September 30,
|  |  |  | 2017 |  | 2016
Description of Contract |  | Location in Earnings of Reclassified Gain or Loss |  | Losses Recognized in OCI |  | (Losses) Gains Reclassified from AOCI to Earnings |  | (Losses) Gains Recognized in OCI |  | Losses Reclassified from AOCI to Earnings
FX derivative contracts |  | Foreign exchange and other (losses) gains |  | $ | (2,537 | ) |  | $ | (1,623 | ) |  | $ | 2,535 |  |  | $ | 2,795 |
FX derivative contracts |  | SG&A |  | — |  |  | 269 |  |  | — |  |  | (1,876 | )
Interest rate swap contracts |  | Interest expense |  | — |  |  | 797 |  |  | 263 |  |  | (163 | )
|  |  |  | $ | (2,537 | ) |  | $ | (557 | ) |  | $ | 2,798 |  |  | $ | 756 |
|  |  |  | Nine Months Ended September 30,
|  |  |  | 2017 |  | 2016
Description of Contract |  | Location in Earnings of Reclassified Gain or Loss |  | Losses Recognized in OCI |  | (Losses) Gains Reclassified from AOCI to Earnings |  | Losses Recognized in OCI |  | Gains (Losses) Reclassified from AOCI to Earnings
FX derivative contracts |  | Foreign exchange and other (losses) gains |  | $ | (10,124 | ) |  | $ | (6,833 | ) |  | $ | (5,932 | ) |  | $ | 2,943 |
FX derivative contracts |  | SG&A |  | — |  |  | 1,623 |  |  | — |  |  | (3,437 | )
Interest rate swap contracts |  | Interest expense |  | — |  |  | 1,009 |  |  | (38 | ) |  | (252 | )
|  |  |  | $ | (10,124 | ) |  | $ | (4,201 | ) |  | $ | (5,970 | ) |  | $ | (746 | )
The following tables present the fair value on a gross basis, and the location of, derivative contracts reported in the condensed consolidated balance sheets (in thousands):
September 30, 2017 |  | Liability Derivatives
Derivatives Designated as Hedging Instruments |  | Balance Sheet Location |  | Fair Value (1)
Interest rate swap contracts |  | Accrued liabilities |  | $ | 875 |
Interest rate swap contracts |  | Other long-term liabilities |  | 932 |
FX derivative contracts |  | Accrued liabilities |  | 724 |
Total derivatives designated as hedging instruments |  |  |  | 2,531 |
Derivatives Not Designated as Hedging Instruments |  |  |  |
FX derivative contracts |  | Accrued liabilities |  | 1,456 |
Total derivatives not designated as hedging instruments |  |  |  | 1,456 |
|  |  |  | $ | 3,987 |
December 31, 2016 |  | Asset Derivatives |  | Liability Derivatives
Derivatives Designated as Hedging Instruments |  | Balance Sheet Location |  | Fair Value (1) |  | Balance Sheet Location |  | Fair Value (1)
Interest rate swap contracts |  | Prepaid expenses and other current assets |  | $ | — |  |  | Accrued liabilities |  | $ | 942 |
Interest rate swap contracts |  | Other assets |  | — |  |  | Other long-term liabilities |  | 1,392 |
FX derivative contracts |  | Prepaid expenses and other current assets |  | 4,911 |  |  | Accrued liabilities |  | — |
Total derivatives designated as hedging instruments |  |  |  | 4,911 |  |  |  |  | 2,334 |
Derivatives Not Designated as Hedging Instruments |  |  |  |  |  |  |  |
FX derivative contracts |  | Prepaid expenses and other current assets |  | 3,358 |  |  | Accrued liabilities |  | — |
Total derivatives not designated as hedging instruments |  |  |  | 3,358 |  |  |  |  | — |
|  |  |  | $ | 8,269 |  |  |  |  | $ | 2,334 |
(1) | For the classification of input used to evaluate the fair value of our derivatives, refer to “Note 6. Fair Value Measurements.”

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 -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