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Derivatives | 6 Months Ended
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Jun. 30, 2016
Derivative Instruments and Hedges, Assets [Abstract] |
Derivatives | Derivatives The use of financial instruments, including derivatives, exposes the Company to market risk related to changes in interest rates, foreign currency exchange rates and commodity prices. The Company primarily uses derivatives to manage its interest rate exposure, to achieve a desired proportion of variable and fixed-rate debt, to manage the risk associated with the volatility of future cash flows denominated in foreign currencies, to manage changes in fair value resulting from changes in foreign currency exchange rates and to manage the risk associated with the volatility of future cash flows associated with changes in commodity prices. The Company does not use derivative instruments for speculative or trading purposes. Fair Value Hedges-Interest Rate Swap Agreements The Company generally enters into interest rate swap agreements related to existing debt obligations with initial maturities ranging from five to ten years, although the Company may enter into interest rate swap agreements with respect to debt obligations with shorter or longer maturities. The Company’s interest rate swap agreements have the economic effect of modifying the fixed interest obligations associated with approximately $596.0 million of the medium-term notes so that the interest payable on these medium-term notes effectively became variable. The Company uses these interest rate swap agreements to manage its interest rate exposure and to achieve a desired proportion of variable and fixed-rate debt. The critical terms of the interest rate swap agreements match the critical terms of the medium-term notes that the interest rate swap agreements pertain to, including the notional amounts and maturity dates. These transactions are characterized as fair value hedges for accounting purposes because they protect the Company against changes in the fair values of certain fixed-rate borrowings due to benchmark interest rate movements. The changes in fair values of these interest rate swap agreements are recognized as interest expense in the Condensed Consolidated Statements of Operations with the corresponding amounts included in other assets or other noncurrent liabilities in the Condensed Consolidated Balance Sheets. The amount of net gain (loss) attributable to the risk being hedged is recognized as interest expense in the Condensed Consolidated Statements of Operations with the corresponding amount included in Current Portion of Long-term Debt and Long-term Debt. The periodic interest settlements for the interest rate swap agreements are recorded as interest expense and are included as a part of cash flows from operating activities. Cash Flow Hedges-Forward-Starting Interest Rate Swaps The Company also uses derivatives to hedge interest rates on anticipated issuances of medium-term and long-term notes. The Company generally uses these instruments to hedge interest rates on anticipated debt issuances occurring within one year or less of the inception date of the derivative, although the Company may use such instruments to hedge interest rates on anticipated issuances occurring beyond one year of the inception date of the derivative. The Company uses these instruments to reduce the volatility in future interest payments that would be made pursuant to the anticipated issuances of the notes. These derivatives are designated as cash flow hedges. The changes in fair values of these instruments are recognized in other comprehensive income (loss), and after the notes are issued and the derivative instruments are settled, the amount in other comprehensive income (loss) is amortized to interest expense in the Condensed Consolidated Statements of Operations over the term of the related notes. The cash paid or received from the settlement of forward-starting interest rate swaps is included in cash flows from operating activities. Cash Flow Hedges-Cross-Currency Interest Rate Swap Agreements The Company’s foreign exchange risk management policy emphasizes hedging foreign currency intercompany financing activities with derivatives, and the hedges and related intercompany financing arrangements generally have maturity dates of three years or less from inception. The Company may use such instruments to hedge intercompany financing arrangements with maturities of more than three years. The Company uses derivative instruments, such as cross-currency interest rate swap agreements, to hedge currency risk associated with foreign currency-denominated assets and liabilities associated with intercompany financing activities. In connection with intercompany financing arrangements entered into in April 2015, the Company entered into two cross-currency interest rate swap agreements to manage the related foreign currency exchange risk of the intercompany financing arrangements. As of June 30, 2016, the notional value of outstanding cross-currency interest rate swaps was $186.2 million, and the cross-currency interest rate swaps are intended to eliminate uncertainty in cash flows in U.S. Dollars and British Pounds in connection with the intercompany financing arrangements. The cross-currency interest rate swap agreements have been designated as qualifying hedging instruments and are accounted for as cash flow hedges. The critical terms of the cross-currency interest rate swap agreements correspond to the terms of the intercompany financing arrangements, including the annual principal and interest payments being hedged, and the cross-currency interest rate swap agreements mature at the same time as the intercompany financing arrangements. The Company uses the hypothetical derivative method to measure the effectiveness of its cross-currency interest rate swap agreements. The fair values of these cross-currency interest rate swap agreements are recognized as other assets or other noncurrent liabilities in the Condensed Consolidated Balance Sheets. The effective portions of the changes in fair values of these cross-currency interest rate swap agreements are reported in accumulated other comprehensive income (loss) in the Condensed Consolidated Balance Sheets and an amount is reclassified out of accumulated other comprehensive income (loss) into other expense, net, in the same period that the carrying value of the underlying foreign currency intercompany financing arrangements are remeasured. The ineffective portion of the unrealized gains and losses on these cross-currency interest rate swaps, if any, is recorded immediately to other expense, net. The Company evaluates the effectiveness of its cross-currency swap agreements on a quarterly basis, and the Company did not record any ineffectiveness for the six months ended June 30, 2016 and 2015. The cash flows related to the cross-currency interest rate swap agreements, including amounts related to the periodic interest settlements and the principal balances, are included in cash flows from operating activities. Foreign Currency Forward Contracts The Company’s foreign exchange risk management policy generally emphasizes hedging certain transaction exposures of 2 year durations or less. The Company transacts business in various foreign currencies and periodically enters into primarily foreign currency forward contracts to offset the risks associated with the effects of certain foreign currency exposures. The Company designates certain of these instruments as hedges of probable forecasted foreign currency denominated sales or purchases. In addition, the Company does not designate certain of these instruments as hedges based on the underlying exposure. As of June 30, 2016, including contracts designated and not designated as hedges, the notional amounts of the forward contracts held to purchase U.S. Dollars in exchange for other major international currencies were $921.2 million, the notional amounts of the forward contracts held to sell U.S. Dollars in exchange for other major international currencies were $284.0 million, and the notional amounts of additional forward contracts held to buy and sell international currencies were $295.2 million. The net gains (losses) related to forward contracts designated as hedges are included in accumulated other comprehensive income (loss) until the hedged transaction occurs or when the hedged transaction is no longer probable of occurring. The net gains (losses) in accumulated other comprehensive income (loss) are generally reclassified to either cost of products sold in the Condensed Consolidated Statements of Operations because the foreign currency contracts hedge purchases of inventory. The net gains (losses) associated with foreign currency contracts that are not designated as hedges are included in other (income) expense in the Condensed Consolidated Statements of Operations.The cash flows related to these foreign currency contracts are included in cash flows from operating activities. Hedging instruments are not available for certain currencies in countries in which the Company has operations. In these cases, the Company uses alternative means in an effort to achieve an economic offset to the local currency exposure such as invoicing and/or paying intercompany and third party transactions in U.S. Dollars. The Company reports its derivative positions in the Condensed Consolidated Balance Sheets on a gross basis and does not net asset and liability derivative positions with the same counterparty. The Company monitors its positions with, and the credit quality of, the financial institutions that are parties to its financial transactions. Commodity Contracts The Company enters into commodity-based derivatives in order to mitigate the risk associated with the impact changes in prices of commodities could have on the cost of certain of the Company’s raw materials. These commodity-based derivatives provide the Company with cost certainty, and in certain instances, allow the Company to benefit should the cost of the commodity fall below certain dollar thresholds. At June 30, 2016, the Company had approximately $14.4 million notional amount outstanding of commodity-based derivatives that are not designated as effective hedges for accounting purposes and have maturity dates through December 2016. Fair market value gains or losses associated with commodity derivative instruments are included in the results of operations and are classified in cost of products sold. The following table summarizes the Company’s outstanding derivative instruments designated as hedges and their effects on the Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 (in millions):
|  |  |  | Assets |  |  |  | Liabilities
Derivatives designated as hedging instruments |  | Balance Sheet Location |  | June 30, 2016 |  | December 31, 2015 |  | Balance Sheet Location |  | June 30, 2016 |  | December 31, 2015
Interest rate swaps |  | Other assets |  | $ | 24.2 |  |  | $ | 2.2 |  |  | Other noncurrent liabilities |  | $ | — |  |  | $ | 5.3 |
Forward-starting interest rate swaps |  | Prepaid expenses and other |  | — |  |  | 0.1 |  |  | Other accrued liabilities |  | — |  |  | 3.2 |
Cross-currency interest rate swaps |  | Other assets |  | — |  |  | 0.6 |  |  | Other noncurrent liabilities |  | 26.8 |  |  | 3.3 |
Foreign exchange contracts on inventory-related purchases |  | Prepaid expenses and other and other assets |  | 11.1 |  |  | 6.6 |  |  | Other accrued liabilities |  | 2.4 |  |  | 0.1 |
Foreign exchange contracts on intercompany borrowings |  | Prepaid expenses and other |  | 0.3 |  |  | — |  |  | Other accrued liabilities |  | 0.2 |  |  | 1.6 |
Total assets |  |  |  | $ | 35.6 |  |  | $ | 9.5 |  |  | Total liabilities |  | $ | 29.4 |  |  | $ | 13.5 |
The Company is not a party to any derivatives that require collateral to be posted prior to settlement. Fair Value Hedges The following table presents the pretax effects of derivative instruments designated as fair value hedges on the Company’s Condensed Consolidated Statements of Operations (in millions):
Derivatives in fair value hedging relationships |  | Location of gain (loss) recognized in income |  | Amount of gain (loss) recognized in income
Three Months Ended |  | Six Months Ended
June 30, |  | June 30,
2016 |  | 2015 |  | 2016 |  | 2015
Interest rate swaps |  | Interest expense, net |  | $ | 8.0 |  |  | $ | (12.1 | ) |  | $ | 27.3 |  |  | $ | (0.9 | )
Fixed-rate debt |  | Interest expense, net |  | $ | (8.0 | ) |  | $ | 12.1 |  |  | $ | (27.3 | ) |  | $ | 0.9 |
The Company did not realize any ineffectiveness related to fair value hedges during the three and six months ended June 30, 2016 and 2015. Cash Flow Hedges The following table presents the pretax effects of derivative instruments designated as cash flow hedges on the Company’s Condensed Consolidated Statements of Operations and AOCI (in millions):
Derivatives in cash flow hedging relationships |  | Location of gain (loss) recognized in income |  | Amount of gain (loss) reclassified from AOCI into income
Three Months Ended |  | Six Months Ended
June 30, |  | June 30,
2016 |  | 2015 |  | 2016 |  | 2015
Forward-starting interest rate swaps |  | Interest expense, net |  | $ | (2.4 | ) |  | $ | (0.2 | ) |  | $ | (2.6 | ) |  | $ | (0.4 | )
Cross-currency interest rate swaps on intercompany borrowings |  | Other expense, net |  | (12.7 | ) |  | — |  |  | (24.5 | ) |  | — |
Foreign exchange contracts on inventory-related purchases |  | Cost of products sold |  | (1.5 | ) |  | 4.0 |  |  | 0.2 |  |  | 8.3 |
Foreign exchange contracts on intercompany borrowings |  | Other expense, net |  | 0.3 |  |  | — |  |  | 0.3 |  |  | — |
|  |  |  | $ | (16.3 | ) |  | $ | 3.8 |  |  | $ | (26.6 | ) |  | $ | 7.9 |
Derivatives in cash flow hedging relationships |  | Amount of gain (loss) recognized in AOCI
Three Months Ended |  | Six Months Ended
June 30, |  | June 30,
2016 |  | 2015 |  | 2016 |  | 2015
Forward-starting interest rate swaps |  | $ | — |  |  | $ | — |  |  | $ | (88.1 | ) |  | $ | — |
Cross-currency interest rate swaps on intercompany borrowings |  | (15.5 | ) |  | 3.1 |  |  | (25.6 | ) |  | 3.1 |
Foreign exchange contracts on inventory-related purchases |  | 12.4 |  |  | (1.9 | ) |  | 7.2 |  |  | 3.9 |
Foreign exchange contracts on intercompany borrowings |  | 0.6 |  |  | (0.7 | ) |  | 0.8 |  |  | 1.9 |
|  | $ | (2.5 | ) |  | $ | 0.5 |  |  | $ | (105.7 | ) |  | $ | 8.9 |
During December 2015, the Company entered into forward-starting interest rate swaps for an aggregate $1.0 billion notional amount for the anticipated issuance of notes to finance the Jarden Acquisition (the “2015 Swaps”). During January 2016, the Company entered into additional forward-starting interest rate swaps for an aggregate $1.3 billion notional amount (the “2016 Swaps,” and together with the 2015 Swaps, the “Swaps”). The total notional amount of the Swaps relating to the anticipated issuance of medium-term and long-term notes for the Jarden Acquisition was $2.3 billion. In March 2016, the Company completed the offering and sale of the Notes (see Footnote 9 for additional information) and settled the Swaps. The net pretax loss and net amount paid upon settlement of the Swaps was $91.2 million, which was recorded in AOCI net of tax and is included in cash flows from operating activities in the Condensed Consolidated Statement of Cash Flows for the six months ended June 30, 2016. As the Swaps hedged the benchmark rates associated with the anticipated issuances of the Notes, the losses associated with the Swaps will be reclassified from AOCI to interest expense over the terms of the Notes the Swaps were designated to hedge. The Company recognized expenses of $2.0 million in other (income) expense during the three and six months ended June 30, 2016 related to the ineffectiveness of certain cash flow hedges. The Company did not realize any ineffectiveness related to cash flow hedges during the three and six months ended June 30, 2015. As of June 30, 2016, the Company expects to reclassify net pretax gains of $1.5 million from AOCI into earnings during the next 12 months, which primarily represents foreign currency-related gains offset by $9.7 million of losses related to the Swaps. Net Investment Hedge The Company has designated the €300 million principal balance of the 3.75% senior notes due October 2021, as a Hedging Instrument in certain Euro-functional currency subsidiaries with Euro-denominated net assets. Foreign currency gains and losses on the Hedging Instrument are recorded as an adjustment to AOCI. At June 30, 2016, $6.6 million of pretax deferred gains have been recorded in AOCI to offset the translation impacts of the Euro-denominated net assets. Derivatives Not Designated as Hedging Instruments The following table summarizes the Company’s outstanding derivative instruments that are not designated as hedging instruments and their effects on the Condensed Consolidated Balance Sheets as of June 30, 2016 and December 31, 2015 (in millions):
|  |  |  | Assets |  |  |  | Liabilities
Derivatives not designated as hedging instruments |  | Balance Sheet Location |  | June 30, 2016 |  | December 31, 2015 |  | Balance Sheet Location |  | June 30, 2016 |  | December 31, 2015
Foreign exchange contracts |  | Prepaid expenses and other |  | $ | 28.7 |  |  | $ | — |  |  | Other accrued liabilities |  | $ | 32.3 |  |  | $ | — |
Commodity contracts |  | Prepaid expenses and other |  | — |  |  | — |  |  | Other accrued liabilities |  | 3.6 |  |  | — |
Total assets |  |  |  | $ | 28.7 |  |  | $ | — |  |  | Total liabilities |  | $ | 35.9 |  |  | $ | — |
The Company recognized income of $3.3 million in other (income) expense during the three and six months ended June 30, 2016 related to derivatives that are not designated as hedging instruments. The amounts of gains (losses) from changes in the fair value of derivatives not designated as hedging instruments was not material for the three and six months ended June 30, 2015.

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- 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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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=64837297&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
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