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Financial instruments and concentration of credit risks
12 Months Ended
Dec. 31, 2016
Fair Value Disclosures [Abstract]  
Financial instruments and concentration of credit risks
Financial instruments and concentration of credit risks
Due to its foreign operations, the company is exposed to the effects of foreign currency exchange rate fluctuations on the U.S. dollar, principally related to intercompany account balances. The company uses derivative financial instruments to reduce its exposure to market risks from changes in foreign currency exchange rates on such balances. The company enters into foreign exchange forward contracts, generally having maturities of 3 months or less, which have not been designated as hedging instruments. At December 31, 2016 and 2015, the notional amount of these contracts was $428.9 million and $940.1 million, respectively, and the fair value of such contracts was a net gain of $0.5 million and a net loss of $4.4 million, respectively, of which a gain of $2.4 million and $2.2 million, respectively, has been recognized in “Prepaid expenses and other current assets” and a loss of $1.9 million and $6.6 million, respectively, has been recognized in “Other accrued liabilities.” Changes in the fair value of these instruments was a loss of $29.1 million, a gain of $15.6 million and a gain of $17.3 million, respectively, for years ended December 31, 2016, 2015 and 2014, which has been recognized in earnings in “Other income (expense), net” in the company’s consolidated statements of income. The fair value of these forward contracts is based on quoted prices for similar but not identical financial instruments; as such, the inputs are considered Level 2 inputs.
Financial instruments also include temporary cash investments and customer accounts receivable. Temporary investments are placed with creditworthy financial institutions, primarily in money market funds, time deposits and certificate of deposits which may be withdrawn at any time at the discretion of the company without penalty. At December 31, 2016 and 2015, the company’s cash equivalents principally have maturities of less than one month or can be withdrawn at any time at the discretion of the company without penalty. Due to the short maturities of these instruments, they are carried on the consolidated balance sheets at cost plus accrued interest, which approximates market value. Realized gains or losses during 2016, 2015 and 2014, as well as unrealized gains or losses at December 31, 2016 and 2015, were immaterial. Receivables are due from a large number of customers that are dispersed worldwide across many industries. At December 31, 2016 and 2015, the company had no significant concentrations of credit risk with any one customer. At December 31, 2016 and 2015, the company had approximately $74 million and $99 million, respectively, of receivables due from various U.S. federal governmental agencies. At December 31, 2016 and 2015, the carrying amount of cash and cash equivalents approximated fair value. The fair value of long-term debt is based on market prices (Level 2 inputs). At December 31, 2016 and December 31, 2015, the fair value of the company's Senior Notes due 2017, of which a portion was retired in 2016, was $97.8 million and $213.2 million, respectively. At December 31, 2016, the fair value of the company's Convertible Senior Notes due 2021, which were issued in March and April of 2016, was $379.8 million.