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Derivative Instruments | 6 Months Ended
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Jun. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivative Instruments | Derivative Instruments We use derivative instruments as part of our overall foreign currency and commodity risk management strategies to manage the risk of exchange rate movements that would reduce the value of our foreign cash flows and to minimize commodity price volatility. Foreign currency exchange rate movements create a degree of risk by affecting the value of sales made and costs incurred in currencies other than the U.S. dollar. Certain of our derivative contracts contain provisions that require us to provide collateral. Since the counterparties to these financial instruments are large commercial banks and similar financial institutions, we do not believe that we are exposed to material counterparty credit risk. We do not anticipate nonperformance by any of the counterparties to our instruments. Our derivative assets and liabilities are included within "Other long-term assets", "Prepaid expenses and other current assets", "Long-term liabilities" and "Other current liabilities" on the Condensed Consolidated Balance Sheets and effects of these derivatives are recorded in "Other comprehensive income", "Cost of sales" and "Other income (expense)" on the Condensed Consolidated Statements of Operations. Foreign currency derivatives We enter into foreign currency derivatives from time to time to attempt to manage exposure to changes in currency exchange rates. These foreign currency instruments, which include, but are not limited to, forward exchange contracts and purchased currency options, attempt to hedge global currency exposures such as foreign currency denominated debt, sales, receivables, payables, and purchases. We had no foreign currency cashflow hedges outstanding as of June 30, 2019 and December 31, 2018 and therefore, no unrealized gains or losses reported under accumulated other comprehensive income (loss). As of June 30, 2019, we had outstanding Mexican peso, euro, Swiss franc, South African rand, and Japanese yen currency contracts with an aggregate notional amount of $70.1 million. These foreign currency derivatives outstanding as of June 30, 2019 have maturities through December 31, 2019. As of December 31, 2018, we had outstanding Mexican peso, South African rand, euro, Swiss franc and Japanese yen currency contracts, with an aggregate notional amount of $19.6 million. Commodity derivative contracts We have entered into commodity derivative contracts for refined oil products. These contracts are entered into to protect against the risk that eventual cash flows related to these products will be adversely affected by future changes in prices. We had outstanding commodity derivative contracts as of June 30, 2019 with notional amount of $122.4 million with maturities from July 2019 to June 2022. The outstanding commodity derivative contracts represented a pre-tax net unrealized gain within "Other Comprehensive Income" of $14.2 million as of June 30, 2019. We had outstanding commodity derivative contracts as of December 31, 2018 with notional amount of $142.1 million representing a pre-tax net unrealized loss of $10.7 million. Net Investment Hedges We use certain intercompany debt to hedge a portion of our net investment in our foreign operations against currency exposure (net investment hedge). Intercompany debt denominated in foreign currency and designated as a non-derivative net investment hedging instrument was $9.7 million as of June 30, 2019 and $9.5 million as of December 31, 2018. Within the currency translation adjustment portion of "Other Comprehensive Income", we recorded a $0.2 million loss for the three and six months ended June 30, 2019 and gains of $2.1 million and $1.4 million in the three and six months ended June 30, 2018. The fair value of all derivatives is recorded as assets or liabilities on a gross basis in our Condensed Consolidated Balance Sheets. As of June 30, 2019 and December 31, 2018, the fair value of our derivatives and their respective balance sheet locations are presented in the following table:
| Asset Derivatives |  | Liability Derivatives
| Location |  | Fair Value |  | Location |  | Fair Value
As of June 30, 2019 | (Dollars in thousands)
Derivatives designated as cash flow hedges: |  |  |  |  |  |
Commodity derivative contracts | Prepaid and other current assets |  | $ | 4,812 |  |  | Other accrued liabilities |  | $ | — |
| Other long-term assets |  | 9,428 |  |  | Other long-term obligations |  | 43 |
Total fair value |  |  | $ | 14,240 |  |  |  |  | $ | 43 |
As of December 31, 2018 |
Derivatives designated as cash flow hedges: |  |  |  |  |  |
Commodity derivative contracts | Prepaid and other current assets |  | $ | 90 |  |  | Other accrued liabilities |  | $ | 4,630 |
| Other long-term assets |  | 260 |  |  | Other long-term obligations |  | 6,393 |
Total fair value |  |  | $ | 350 |  |  |  |  | $ | 11,023 |
| Asset Derivatives |  | Liability Derivatives
| Location |  | Fair Value |  | Location |  | Fair Value
As of June 30, 2019 | (Dollars in Thousands)
Derivatives not designated as hedges: |  |  |  |  |  |
Foreign currency derivatives | Prepaid and other current assets |  | $ | 369 |  |  | Other current liabilities |  | $ | 88 |
As of December 31, 2018 |  |  |  |  |  |  |
Derivatives not designated as hedges: |  |  |  |  |  |
Foreign currency derivatives | Prepaid and other current assets |  | $ | — |  |  | Other current liabilities |  | $ | 43 |
The realized (gains) losses resulting from the settlement of commodity derivative contracts remain in Accumulated Other Comprehensive Income until they are recognized in the Statement of Operations when the hedged item impacts earnings, which is when the finished product is sold. As of June 30, 2019 and June 30, 2018, net realized pre-tax gains of $9.6 million and $2.8 million, respectively, were reported under AOCI and will be and were, respectively, released to earnings within the following 12 months. See table below for amounts recognized in the Statement of Operations. The amount of pre-tax realized (gains) losses on commodity derivatives and on undesignated foreign currency derivatives recognized in the Statement of Operations are as follows for the period ended June 30, 2019 and June 30, 2018:
|  |  |  | Amount of (Gain)/Loss Recognized
|  | Location of (Gain)/Loss Recognized in the Consolidated Statement of Operations |  | For the Three Months Ended June 30,
|  |  | 2019 |  | 2018
Derivatives designated as cash flow hedges: |  |  |  | (Dollars in thousands)
Commodity contract hedges |  | Cost of sales |  | $ | 2,000 |  |  | — |
Derivatives not designated as hedges: |  |  |  |  |  |
Foreign currency derivatives |  | Cost of sales, Other (income)/expense |  | $ | 144 |  |  | 558 |
|  |  |  | Amount of (Gain)/Loss Recognized
|  | Location of (Gain)/Loss Recognized in the Consolidated Statement of Operations |  | For the Six Months Ended June 30,
|  |  | 2019 |  | 2018
Derivatives designated as cash flow hedges: |  |  |  | (Dollars in thousands)
Commodity contract hedges |  | Cost of sales |  | $ | 3,848 |  |  | — |
Derivatives not designated as hedges: |  |  |  |  |  |
Foreign currency derivatives |  | Cost of sales, Other (income)/expense |  | $ | 821 |  |  | (296 | )

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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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