XML 88 R20.htm IDEA: XBRL DOCUMENT v3.3.0.814
Foreign Exchange Risk Management
9 Months Ended
Sep. 30, 2015
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Foreign Exchange Risk Management

11.

Foreign Exchange Risk Management

In order to minimize earnings and cash flow volatility resulting from currency exchange rate changes, on occasion we enter into derivative instruments, principally forward and option foreign currency contracts. These contracts are designed to hedge anticipated foreign currency transactions and changes in the value of specific assets, liabilities and probable commitments. All of our forward contracts are designated as free-standing derivatives and are designed to minimize foreign currency exposures between the U.S. Dollar and British Pound, the U.S. Dollar and Euro, the U.S. Dollar and Zloty and the Zloty and Euro. We do not enter into currency exchange rate derivative instruments for speculative purposes.  

The free-standing derivative forward contracts are used to offset our exposure to the change in value of specific foreign currency denominated assets and liabilities. These derivatives are not designated as hedges and, therefore, changes in the value of these contracts are recognized in earnings, thereby offsetting the current earnings effect of the related change in functional currency value of foreign currency denominated assets and liabilities.  The gross notional amount of derivative contracts outstanding was $121.5 million and $124.3 million at September 30, 2015 and December 31, 2014, respectively.  The cash flow settlements from these derivative contracts are primarily reported within investing activities in the condensed consolidated statements of cash flows. We recognized $4.1 million and $47.2 million of net gains during the three and nine months ended September 30, 2015, respectively, and $2.0 million of net gains and $2.4 million of net losses in the three and nine months ended September 30, 2014, respectively, which are included within gain (loss) on derivatives in the condensed consolidated statements of operations. 

We entered into several derivative positions related to the Acquisition and subsequent Tender Offer and Squeeze-out. As a result, we recognized a net loss of $0.9 million and a net gain of $44.2 million during the three and nine months ended September 30, 2015, respectively, attributed to the Transactions.