XML 36 R20.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Note 11 - Derivatives | 12 Months Ended
--- | ---
Dec. 31, 2021
Notes to Financial Statements |
Derivative Instruments and Hedging Activities Disclosure [Text Block] |
| 11. | Derivatives
Hedge Accounting and Hedging Programs We recognize all derivative instruments as either assets or liabilities in our consolidated balance sheets and measure them at fair value. Gains and losses resulting from changes in fair value are accounted for depending on the use of the derivative and whether it is designated and qualifies for hedge accounting. We evaluate hedge effectiveness on our hedges that are designated and qualify for hedge accounting at the inception of the hedge prospectively, as well as retrospectively, and record any ineffective portion of the hedging instruments in net foreign currency transaction loss on our consolidated statements of income. The time value of purchased contracts is recorded in net foreign currency transaction loss in our consolidated statements of income. Our hedging policy establishes maximum limits for each counterparty to mitigate any concentration of risk. Balance Sheet Hedging Hedges of Foreign Currency Assets and Liabilities We hedge our net recognized foreign currency-denominated assets and liabilities with foreign exchange forward contracts to reduce the risk that the value of these assets and liabilities will be adversely affected by changes in exchange rates. These contracts hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value as either assets or liabilities on the consolidated balance sheets with changes in the fair value recorded to net foreign currency transaction losses in our consolidated statements of income. These contracts do not subject us to material balance sheet risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on the assets and liabilities being hedged. At December 31, 2021 and December 31, 2020, the notional amounts of foreign currency forward exchange contracts outstanding not designated as hedging instruments were $45.0 million and $57.3 million, respectively. Cash Flow Hedging Hedges of Forecasted Foreign Currency Transactions In countries outside the U.S., we transact business in U.S. dollars and in various other currencies. We may use foreign exchange option contracts or forward contracts to hedge certain cash flow exposures resulting from changes in these foreign currency exchange rates. These foreign exchange contracts, carried at fair value, have maturities of up to one year. We enter into these foreign exchange contracts to hedge a portion of our forecasted foreign currency-denominated revenue in the normal course of business, and accordingly, they are not speculative in nature. As of December 31, 2021, we have no outstanding foreign currency forward contracts or foreign currency option contracts designated as cash flow hedges. As of December 31, 2020, the notional amount of outstanding foreign currency forward contracts designated as cash flow hedges was $2.7 million, and the notional amount of outstanding foreign currency option contracts designated as cash flow hedges was $8.2 million. Foreign Currency Derivatives We use foreign currency exchange rate derivatives to hedge our exposure to fluctuations in exchange rates for anticipated intercompany cash transactions between the Company and its subsidiaries. We entered into Euro to U.S. dollar foreign exchange cross-currency swaps for all of the anticipated cash flows associated with an intercompany loan from a wholly-owned European subsidiary. We enter into these foreign exchange cross-currency swaps to hedge the foreign currency-denominated cash flows associated with this intercompany loan, and accordingly, they are not speculative in nature. These cross-currency swaps are designated as cash flow hedges. The hedged cash flows as of December 31, 2021 and December 31, 2020 included €152.4 million and €159.6 million of total notional value. As of December 31, 2021, the aggregate scheduled interest payments over the course of the loan and related swaps amounted to €2.4 million. The scheduled maturity and principal payment of the loan and related swaps of €150.0 million are due in April 2022. There were no new cross-currency swaps designated as cash flow hedges as of December 31, 2021. To receive hedge accounting treatment, all hedging relationships are formally documented at the inception of the hedge, and the hedges must be highly effective in offsetting changes to future cash flows on hedged transactions. We record changes in the fair value of these cash flow hedges in accumulated other comprehensive loss in our consolidated balance sheets, until the forecasted transaction occurs. When the forecasted transaction occurs, we reclassify the related gain or loss on the cash flow hedge to net sales. In the event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, we reclassify the gain or loss on the related cash flow hedge from accumulated other comprehensive loss to net foreign currency transaction losses in our consolidated statements of income at that time. If we do not elect hedge accounting, or the contract does not qualify for hedge accounting treatment, the changes in fair value from period to period are recorded in net foreign currency transaction losses in our consolidated statements of income. The fair value of derivative instruments on our consolidated balance sheets as of December 31 consisted of the following:
|  | Derivative Assets |  | Derivative Liabilities |
|  | Balance Sheet Location |  | December 31, 2021 |  |  | December 31, 2020 |  | Balance Sheet Location |  | December 31, 2021 |  |  | December 31, 2020 |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts(a) |  | Other current assets |  | $ | — |  |  | $ | 1.9 |  | Other current liabilities |  | $ | 10.4 |  |  | $ | — |
Foreign currency forward contracts(a) |  | Other assets |  |  | — |  |  |  | — |  | Other liabilities |  |  | — |  |  |  | 24.1 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency forward contracts(a) |  | Other current assets |  |  | 0.3 |  |  |  | 0.4 |  | Other current liabilities |  |  | 0.4 |  |  |  | 0.7 |
| (a) | Contracts that mature within the next 12 months are included in other current assets and other current liabilities for asset derivatives and liabilities derivatives, respectively, on our consolidated balance sheets. Contracts with maturities greater than 12 months are included in other assets and other liabilities for asset derivatives and liability derivatives, respectively, in our consolidated balance sheets. Amounts included in our consolidated balance sheets are recorded net where a right of offset exists with the same derivative counterparty.
As of December 31, 2021, we anticipate reclassifying approximately $0.4 million of gains from accumulated other comprehensive loss to net income during the next 12 months. The following tables include the amounts in the consolidated statements of income in which the effects of cash flow hedges are recorded and the effects of cash flow hedge activity on these line items for the years ended December 31, 2021 and December 31, 2020:
|  | 2021 |  |  | 2020 |
|  | Total |  |  | Amount of Gain (Loss) on Cash Flow Hedge Activity |  |  | Total |  |  | Amount of Gain (Loss) on Cash Flow Hedge Activity |
Net sales |  | $ | 1,090.8 |  |  | $ | (0.4 | ) |  | $ | 1,001.0 |  |  | $ | (0.2 | )
Interest expense, net |  |  | (7.3 | ) |  |  | 2.4 |  |  |  | (17.4 | ) |  |  | 2.7 |
Net foreign currency transaction loss |  |  | (0.7 | ) |  |  | 12.7 |  |  |  | (5.3 | ) |  |  | (15.0 | )
The effect of foreign currency derivative instruments designated as cash flow hedges and foreign currency derivative instruments not designated as hedges in our consolidated statements of income for the three years ended December 31 were as follows:
|  | 2021 |  |  | 2020 |  |  | 2019 |
|  | Foreign Currency Option Contracts |  |  | Foreign Currency Forward Contracts |  |  | Foreign Currency Option Contracts |  |  | Foreign Currency Forward Contracts |  |  | Foreign Currency Option Contracts |  |  | Foreign Currency Forward Contracts |
Derivatives in cash flow hedging relationships: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gain (loss) recognized in other comprehensive (loss) income, net of tax(a) |  | $ | — |  |  | $ | 10.8 |  |  | $ | (0.1 | ) |  | $ | (7.4 | ) |  | $ | (0.3 | ) |  | $ | 8.6 |
Net loss reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net sales |  |  | — |  |  |  | (0.3 | ) |  |  | — |  |  |  | (0.1 | ) |  |  | — |  |  |  | — |
Net gain reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to interest income |  |  | — |  |  |  | 1.9 |  |  |  | — |  |  |  | 2.0 |  |  |  | — |  |  |  | 2.2 |
Net gain (loss) reclassified from accumulated other comprehensive loss into income, net of tax, effective portion to net foreign currency transaction losses |  |  | — |  |  |  | 9.7 |  |  |  | — |  |  |  | (11.6 | ) |  |  | — |  |  |  | 2.6 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net gain (loss) recognized in earnings(b) |  |  | — |  |  |  | 2.5 |  |  |  | — |  |  |  | (5.0 | ) |  |  | — |  |  |  | (1.3 | )
| (a) | Net change in the fair value of the effective portion classified in other comprehensive (loss) income.
| (b) | Classified in net foreign currency transaction losses.

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 40 -Section 50 -Paragraph 5 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=123477628&loc=d3e90205-114008 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

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