Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2014

Derivative Instruments And Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

(11) Derivatives and Hedging Activities

We report all derivative instruments on our balance sheet at fair value and establish criteria for designation and effectiveness of transactions entered into for hedging purposes. Our derivative and hedging activities include third party and intercompany receivables and payables and intercompany loans.

Foreign Currency Forward Contracts and Interest Rate and Currency Swaps Designated as Cash Flow Hedges

Net unrealized after tax gains (losses) related to these contracts that were included in other comprehensive income (loss) for the three and nine months ended September 30, 2014 and 2013 and any amounts reclassified to the condensed consolidated statements of operations were not material. The unrealized amounts in other comprehensive income (loss) will fluctuate based on changes in the fair value of open contracts during each reporting period.

During August 2014, we entered into $100 million of interest rate and currency swap agreements in connection with the $100 million delayed draw of the term loan A facility.

Foreign Currency Forward Contracts Not Designated as Hedges

The changes in fair value of these contracts are recognized in other income (expense), net, on our condensed consolidated statements of operations and are substantially offset by the remeasurement of the underlying foreign currency denominated items. These contracts predominantly have original maturities of 12 to 18 months.

Interest Rate Swaps Designated as Fair Value Hedges

From time to time, we may use interest rate swaps to manage our mix of fixed and floating interest rates on our outstanding indebtedness.

At September 30, 2014 and December 31, 2013, we had $100 million notional amount of outstanding interest rate swaps, which did not materially impact our condensed consolidated results of operations or financial position. See Note 10 “Debt and Credit Facility” for further details.

Other Derivative Instruments

We may use other derivative instruments from time to time, such as foreign exchange options to manage exposure to foreign exchange rates and interest rate and currency swaps related to access to international financing transactions. These instruments can potentially limit foreign exchange exposure by swapping borrowings denominated in one currency for borrowings denominated in another currency. At September 30, 2014 and December 31, 2013, we had no foreign exchange options. No interest rate and currency swap agreements were outstanding as of December 31, 2013.

See Note 12, “Fair Value Measurements and Other Financial Instruments,” for a discussion of the inputs and valuation techniques used to determine the fair value of our outstanding derivative instruments.

Fair Value of Derivative Instruments

The following table details the fair value of our derivative instruments included on our condensed consolidated balance sheets.

	Fair Value of Asset				Fair Value of (Liability)
	Derivatives (1)				Derivatives (1)
	September 30,		December 31,		September 30,			December 31,
	2014		2013		2014			2013
Derivatives designated as hedging instruments:
Foreign currency forward contracts (cash flow hedges)	$	3.1	$	3.4	$	(0.9	)	$	(1.4	)
Interest rate swaps (fair value hedges)		0.6		—		—			(1.0	)
Interest rate and currency swaps (cash flow hedges)		7.3		—		—			—
Derivatives not designated as hedging instruments:
Foreign currency forward contracts		21.9		7.1		(47.3	)		(49.1	)
Total	$	32.9	$	10.5	$	(48.2	)	$	(51.5	)

⁽¹⁾ Asset derivatives are included in other assets and liability derivatives are included in other liabilities in the condensed consolidated balance sheets.

The following table details the effect of our derivative instruments on our condensed consolidated statements of operations. The gains and losses on foreign currency forward contracts included below were substantially offset by the losses and gains resulting from the remeasurement of the underlying foreign currency denominated items, which are included in other income (expense), net, on the condensed consolidated statement of operations. The underlying foreign currency denominated items include third party and intercompany receivables and payables and intercompany loans.

	Amount of Gain (Loss) Recognized in
	Earnings on Derivatives(1)
	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2013		2014			2013
Derivatives designated as hedging instruments:
Foreign currency forward contracts	$	(1.7	)	$	1.5	$	(0.5	)	$	1.7
Interest rate swaps		0.5			—		1.5			—
Interest rate and currency swaps		(0.8	)		—		(0.8	)		—
Derivatives not designated as hedging instruments:
Foreign currency forward contracts		(7.0	)		11.1		(11.9	)		(5.1	)
Total	$	(9.0	)	$	12.6	$	(11.7	)	$	(3.4	)

⁽¹⁾ Amounts recognized on foreign currency forward contracts were included in other income (expense), net and amounts recognized on interest rate swaps and interest rate and currency swaps were included in interest expense.