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Derivatives | 12 Months Ended
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Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives From time to time, the Company enters into derivative transactions to hedge its exposures to interest rate, foreign currency rate and commodity price fluctuations. The Company does not enter into derivative transactions for trading purposes. Interest Rate Contracts The Company manages its fixed and floating rate debt mix using interest rate swaps. The Company may use fixed and floating rate swaps to alter its exposure to the impact of changing interest rates on its consolidated results of operations and future cash outflows for interest. Floating rate swaps would be used, depending on market conditions, to convert the fixed rates of long-term debt into short-term variable rates. Fixed rate swaps would be used to reduce the Company’s risk of the possibility of increased interest costs. Interest rate swap contracts are therefore used by the Company to separate interest rate risk management from the debt funding decision. The cash paid and received from the settlement of interest rate swaps is included in interest expense. Fair Value Hedges At December 31, 2019, the Company had approximately $377 million notional amount of interest rate swaps that exchange a fixed rate of interest for variable rate (LIBOR) of interest plus a weighted average spread. These floating rate swaps are designated as fair value hedges against $277 million of principal on the 4.7% senior notes due 2020 and $100 million of principal on the 4.0% senior notes due 2024 for the remaining life of these notes. The effective portion of the fair value gains or losses on these swaps is offset by fair value adjustments in the underlying debt. During 2019, the Company terminated approximately $150 million notional amount of these floating rate swaps and received consideration of $5.6 million, which is included in net cash provided by operating activities in the Consolidated Statement of Cash Flows for 2019. These floating rate swaps that were designated as fair value hedges, were terminated in connection with the extinguishment of a portion of the principal balance of the 2024 Notes pursuant to the Tender Offers (see Footnote 10). The termination of these floating rate swaps resulted in a total gain of $5.7 million, which is included in loss on extinguishment for 2019 in the Consolidated Statements of Operations. Cross-Currency Contracts The Company uses cross-currency swaps to hedge foreign currency risk on certain intercompany financing arrangements with foreign subsidiaries. During 2018, all the Company’s cross-currency interest rate swaps matured. The cross-currency interest rate swaps were intended to eliminate uncertainty in cash flows in U.S. Dollars and British Pounds in connection with the intercompany financing arrangements. Foreign Currency Contracts The Company uses forward foreign currency contracts to mitigate the foreign currency exchange rate exposure on the cash flows related to forecasted inventory purchases and sales and have maturity dates through December 2020. The derivatives used to hedge these forecasted transactions that meet the criteria for hedge accounting are accounted for as cash flow hedges. The effective portion of the gains or losses on these derivatives is deferred as a component of AOCL and is recognized in earnings at the same time that the hedged item affects earnings and is included in the same caption in the statements of operations as the underlying hedged item. At December 31, 2019, the Company had approximately $516 million notional amount outstanding of forward foreign currency contracts that are designated as cash flow hedges of forecasted inventory purchases and sales. The Company also uses foreign currency contracts, primarily forward foreign currency contracts, to mitigate the foreign currency exposure of certain other foreign currency transactions. At December 31, 2019, the Company had approximately $667 million notional amount outstanding of these foreign currency contracts that are not designated as effective hedges for accounting purposes and have maturity dates through December 2020. Fair market value gains or losses are included in the results of operations and are classified in other (income) expense, net in the Company’s Consolidated Statement of Operations. Commodity Contracts From time to time the Company may enter into commodity-based derivatives in order to mitigate the risk that the rising price of these commodities could have on the cost of certain of the Company’s raw materials. These commodity-based derivatives provide the Company with cost certainty. At December 31, 2019, the Company had approximately $0.1 million notional amount outstanding of commodity-based derivatives that are designated as effective hedges for accounting purposes and have maturity dates through January 2020. Fair market value gains or losses are included in the results of operations and are classified in cost of products sold. The following table presents the fair value of derivative financial instruments at December 31, (in millions):
| 2019 |  | 2018
| Asset (a) |  | Liability (a) |  | Asset (a) |  | Liability (a)
Derivatives designated as effective hedges: |  |  |  |  |  |  |
Cash flow hedges: |  |  |  |  |  |  |
Foreign currency contracts | $ | 0.9 |  |  | $ | 12.5 |  |  | $ | 13.3 |  |  | $ | 0.7 |
Commodity contracts | — |  |  | 0.1 |  |  | — |  |  | — |
Fair value hedges: |  |  |  |  |  |  |
Interest rate swaps | 2.1 |  |  | 0.9 |  |  | — |  |  | 11.5 |
Derivatives not designated as effective hedges: |  |  |  |  |  |  |
Foreign currency contracts | 10.1 |  |  | 4.5 |  |  | 12.9 |  |  | 4.2 |
Commodity contracts | — |  |  | — |  |  | — |  |  | 0.9 |
Total | $ | 13.1 |  |  | $ | 18.0 |  |  | $ | 26.2 |  |  | $ | 17.3 |
(a) Consolidated balance sheet location: |  |  |  |  |  |  |
Asset: Prepaid expenses and other, and other non-current assets |  |  |  |  |  |  |
Liability: Other accrued liabilities, and other non-current liabilities |  |  |  |  |  |  |
The Company recognized expense of $11.0 million, $1.8 million and $41.5 million in other (income) expense, net, during 2019 and 2018 and 2017, respectively, related to derivatives that are not designated as hedging instruments. The Company is not a party to any derivatives that require collateral to be posted prior to settlement. Cash Flow Hedges The following table presents pre-tax gain and loss activity for 2019, 2018 and 2017 related to derivative financial instruments designated as effective hedges:
| 2019 |  | 2018 |  | 2017
| Gain/(Loss) |  | Gain/(Loss) |  | Gain/(Loss)
(in millions) | Recognized in OCI (a) |  | Reclassified from AOCL to Income |  | Recognized in OCI (a) |  | Reclassified from AOCL to Income |  | Recognized in OCI (a) |  | Reclassified from AOCL to Income
Interest rate swaps (b) | $ | — |  |  | $ | (8.0 | ) |  | $ | — |  |  | $ | (26.6 | ) |  | $ | — |  |  | $ | (8.2 | )
Foreign currency contracts (c) | (15.5 | ) |  | 15.1 |  |  | 24.1 |  |  | (13.0 | ) |  | (33.1 | ) |  | 6.8 |
Commodity contracts | (0.2 | ) |  | (0.1 | ) |  | — |  |  | — |  |  | — |  |  | — |
Cross-currency swaps (d) | — |  |  | — |  |  | (1.7 | ) |  | (3.1 | ) |  | (5.8 | ) |  | (6.9 | )
Total | $ | (15.7 | ) |  | $ | 7.0 |  |  | $ | 22.4 |  |  | $ | (42.7 | ) |  | $ | (38.9 | ) |  | $ | (8.3 | )
(a) | Represents effective portion recognized in Other Comprehensive Income (“OCI”).
(b) | Portion reclassified from AOCL to income recognized in interest expense.
(c) | Portion reclassified from AOCL to income recognized in sales and cost of products sold.
(d) | Portion reclassified from AOCL to income recognized in other income (expense), net
The ineffectiveness related to cash flow hedges during 2019, 2018 and 2017 was not material. At December 31, 2019, deferred net losses of approximately $8 million within AOCL are expected to be reclassified to earnings over the next twelve months.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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