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Fair Value Measurements | 9 Months Ended
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Sep. 30, 2022
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 12. Fair Value Measurements The Company applies the provisions of FASB ASC Topic 820, Fair Value Measurements and Disclosures, or ASC 820, for its financial and non-financial assets and liabilities. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy, which prioritizes the inputs used in measuring fair value into three broad levels as follows: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 inputs are unobservable inputs for the asset or liability. The Company measures certain assets and liabilities at fair value as discussed throughout the notes to its condensed consolidated financial statements. Foreign exchange currency contracts and interest rate swaps are valued using standard calculations and models. Foreign exchange currency contracts are valued primarily based on inputs such as observable forward rates, spot rates, and foreign currency exchange rates at the reporting period ended date. Interest rate swaps are valued primarily based on inputs such as LIBOR and swap yield curves at the reporting period ended date. The Company’s derivative assets and liabilities are measured at fair value and consisted of Level 2 inputs and their amounts are shown below at their gross values as of September 30, 2022 and December 31, 2021:
|  | Significant Other Observable Inputs (Level 2) Fair Value as of September 30, 2022 |  |  | Significant Other Observable Inputs (Level 2) Fair Value as of December 31, 2021 |  |  | Balance Sheet Location
|  | (in millions) |  |  |
ASSETS: |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges |  | $ | 1.8 |  |  | $ | 0.3 |  |  | Prepaid expenses and other current assets
Interest rate swaps |  |  | 0.4 |  |  |  | — |  |  | Prepaid expenses and other current assets
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange currency contracts |  |  | 12.1 |  |  |  | 6.6 |  |  | Prepaid expenses and other current assets
|  | $ | 14.3 |  |  | $ | 6.9 |  |  |
LIABILITIES: |  |  |  |  |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange currency contracts relating to inventory and intercompany management fee hedges |  | $ | 6.4 |  |  | $ | 1.7 |  |  | Other current liabilities
Interest rate swaps |  |  | — |  |  |  | 0.1 |  |  | Other current liabilities
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |
Foreign exchange currency contracts |  |  | 7.4 |  |  |  | 3.4 |  |  | Other current liabilities
|  | $ | 13.8 |  |  | $ | 5.2 |  |  |
The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents are comprised of money market funds and foreign and domestic bank accounts. These cash and cash equivalents are valued based on Level 1 inputs which consist of quoted prices in active markets. To reduce its credit risk, the Company monitors the credit standing of the financial institutions that hold the Company’s cash and cash equivalents. The Company’s deferred compensation plan assets consist of Company-owned life insurance policies. As these policies are recorded at their cash surrender value, they are not required to be included in the fair value table above. See Note 6, Employee Compensation Plans, to the Consolidated Financial Statements included in the 2021 10-K for a further description of the Company’s deferred compensation plan assets. The following tables summarize the offsetting of the fair values of the Company’s derivative assets and derivative liabilities for presentation in the Company’s condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021:
|  | Offsetting of Derivative Assets |
|  | Gross Amounts of Recognized Assets |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of Assets Presented in the Balance Sheet |
|  | (in millions) |
September 30, 2022 |  |  |  |  |  |  |  |  |
Foreign exchange currency contracts |  | $ | 13.9 |  |  | $ | (7.1 | ) |  | $ | 6.8 |
Interest rate swaps |  |  | 0.4 |  |  |  | — |  |  |  | 0.4 |
Total |  | $ | 14.3 |  |  | $ | (7.1 | ) |  | $ | 7.2 |
December 31, 2021 |  |  |  |  |  |  |  |  |
Foreign exchange currency contracts |  | $ | 6.9 |  |  | $ | (2.2 | ) |  | $ | 4.7 |
Total |  | $ | 6.9 |  |  | $ | (2.2 | ) |  | $ | 4.7 |
|  | Offsetting of Derivative Liabilities |
|  | Gross Amounts of Recognized Liabilities |  |  | Gross Amounts Offset in the Balance Sheet |  |  | Net Amounts of Liabilities Presented in the Balance Sheet |
|  | (in millions) |
September 30, 2022 |  |  |  |  |  |  |  |  |
Foreign exchange currency contracts |  | $ | 13.8 |  |  | $ | (7.1 | ) |  | $ | 6.7 |
Total |  | $ | 13.8 |  |  | $ | (7.1 | ) |  | $ | 6.7 |
December 31, 2021 |  |  |  |  |  |  |  |  |
Foreign exchange currency contracts |  | $ | 5.1 |  |  | $ | (2.2 | ) |  | $ | 2.9 |
Interest rate swaps |  |  | 0.1 |  |  |  | — |  |  |  | 0.1 |
Total |  | $ | 5.2 |  |  | $ | (2.2 | ) |  | $ | 3.0 |
The Company offsets all of its derivative assets and derivative liabilities in its condensed consolidated balance sheets to the extent it maintains master netting arrangements with related financial institutions. As of September 30, 2022 and December 31, 2021, all of the Company’s derivatives were subject to master netting arrangements and no collateralization was required for the Company’s derivative assets and derivative liabilities.

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI https://asc.fasb.org/topic&trid=2155941 + Details
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