XML 123 R23.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Derivative Financial Instruments | 12 Months Ended
--- | ---
Dec. 31, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Financial Instruments | 14. Derivative Financial Instruments We are exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. We enter into financial instruments to manage and reduce the impact of these risks, not for trading or speculative purposes. The counterparties to these financial instruments are major financial institutions. We continually monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. Principal currencies hedged against the U.S. dollar include the Euro, Australian dollar, Canadian dollar, Swedish krona, British pound and Japanese yen. We are subject to credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance by counterparties to financial instrument contracts. Management continues to monitor the status of our counterparties and will take action, as appropriate, to further manage our counterparty credit risk. There are no credit contingency features in our derivative financial instruments. When hedge accounting is applicable, on the date we enter into a derivative, the derivative is designated as a hedge of the identified exposure. We measure the effectiveness of our hedging relationships both at hedge inception and on an ongoing basis. Forward Currency Contracts We enter into forward foreign currency contracts with third parties to reduce the effect of fluctuating foreign currencies, primarily on foreign denominated inventory purchases and intercompany loans. The majority of the Company’s exposure to local currency movements is in Europe (the Euro, the Swedish krona and the British pound), Brazil, Australia, Canada, and Mexico. Forward currency contracts are used to hedge foreign denominated inventory purchases for Europe, Australia, Canada, Japan and New Zealand, and are designated as cash flow hedges. Unrealized gains and losses on these contracts are deferred in Accumulated Other Comprehensive Income ("AOCI") until the contracts are settled and the underlying hedged transactions relating to inventory purchases are recognized, at which time the deferred gains or losses will be reported in the "Cost of products sold" line in the Consolidated Statements of Income. As of December 31, 2019 and 2018, we had cash flow foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $96.7 million and $98.7 million, respectively, which were designated as hedges. Forward currency contracts used to hedge foreign denominated intercompany loans are not designated as hedging instruments. Gains and losses on these derivative instruments are recognized within "Other (income) expense, net" in the Consolidated Statements of Income and are largely offset by the change in the current translated value of the hedged item. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions, and do not extend beyond December 2020. As of December 31, 2019 and 2018, we had foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of $182.6 million and $113.3 million, respectively, which were not designated as hedges. The following table summarizes the fair value of our derivative financial instruments as of December 31, 2019 and 2018:
| Fair Value of Derivative Instruments
| Derivative Assets |  | Derivative Liabilities
(in millions) | Balance Sheet Location |  | December 31, 2019 |  | December 31, 2018 |  | Balance Sheet Location |  | December 31, 2019 |  | December 31, 2018
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Other current assets |  | $ | 0.4 |  |  | $ | 3.3 |  |  | Other current liabilities |  | $ | 0.9 |  |  | $ | 0.1 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts | Other current assets |  | 7.6 |  |  | 0.6 |  |  | Other current liabilities |  | 8.6 |  |  | 1.7 |
Foreign exchange contracts | Other non-current assets |  | — |  |  | 12.7 |  |  | Other non-current liabilities |  | — |  |  | 12.7 |
Total derivatives |  |  | $ | 8.0 |  |  | $ | 16.6 |  |  |  |  | $ | 9.5 |  |  | $ | 14.5 |
The following tables summarize the pre-tax effect of the Company’s derivative financial instruments on the Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017:
| The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements
| Amount of Gain (Loss) Recognized in AOCI (Effective Portion) |  | Location of (Gain) Loss Reclassified from AOCI to Income |  | Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
(in millions) | 2019 |  | 2018 |  | 2017 |  |  |  | 2019 |  | 2018 |  | 2017
Cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts | $ | 1.0 |  |  | $ | 9.1 |  |  | $ | (4.9 | ) |  | Cost of products sold |  | $ | (4.2 | ) |  | $ | (6.4 | ) |  | $ | 1.6 |
| The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Income
| Location of (Gain) Loss Recognized in Income on Derivatives |  | Amount of (Gain) Loss Recognized in Income year ended December 31,
(in millions) |  | 2019 |  | 2018 |  | 2017
Foreign exchange contracts | Other (income) expense, net |  | $ | 0.1 |  |  | $ | 0.7 |  |  | $ | (1.5 | )

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://fasb.org/us-gaap/role/ref/legacyRef -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