DERIVATIVE FINANCIAL INSTRUMENTS

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

Cash Flow Hedges

Derivative financial instruments that we use to hedge forecasted transactions and anticipated cash flows are as follows:

Currency Cash Flow Hedges—The foreign currency hedges manage risk associated with exchange rate volatility of various currencies.

Interest Rate Cash Flow Hedges—We have also occasionally used interest rate cash flow hedges to manage interest rate risks.

The effective changes in fair value of unexpired contracts are recorded in accumulated other comprehensive income and reclassified to income or expense in the period in which earnings are impacted. Cash flows from settled contracts are presented in the category consistent with the nature of the item being hedged. (Settlements associated with the sale or production of product are presented in operating cash flows, and settlements associated with debt issuance are presented in financing cash flows.) 

Fair Value Hedges and Derivatives not Designated as Hedging Instruments

These derivatives typically manage foreign currency risk associated with subsidiaries’ assets and liabilities, and gains or losses are recognized currently in earnings. Cash flows from settled contracts are presented in the category consistent with the nature of the item being hedged.

Expense for Underlying Transactions Probable of Not Occurring

In response to the COVID-19 pandemic, our projected sales have been adversely impacted in the short term and as a result, we believe that the underlying transactions are probable of not occurring. Accordingly, we immediately recognized a loss of $.5, of which $.4 represents the previously deferred losses of our hedge positions that had been recorded in accumulated other comprehensive income (AOCI). These amounts are presented in the same line of the income statement as the expected hedged item (net trade sales).

The following table presents assets and liabilities representing the fair value of our most significant derivative financial instruments. The fair values of the derivatives reflect the change in the market value of the derivative from the date of the trade execution and do not consider the offsetting underlying hedged item.

	Expiring at various dates through:	Total USD Equivalent Notional Amount		As of March 31, 2020
				Assets		Liabilities
				Other Current Assets		Other Current Liabilities		Other Long-Term Liabilities
Derivatives designated as hedging instruments
Cash flow hedges:
Currency hedges:
Future USD sales/purchases of Canadian, Chinese, European, South Korean and UK subsidiaries	Dec 2021	$	174.7	$	.6	$	4.0	$	.4
Future DKK sales of Polish subsidiary	Dec 2021	24.4		—		.9		.2
Future EUR sales of Chinese and UK subsidiaries	Dec 2021	35.5		.2		.2		.1
Future MXN purchases of a USD subsidiary	Dec 2021	11.9		—		1.3		.3
Total cash flow hedges				.8		6.4		1.0
Fair value hedges:
Intercompany and third-party receivables and payables exposed to multiple currencies (DKK, EUR, USD and ZAR) in various countries (CAD, CHF, CNY, GBP, PLN and USD)	Jun 2020	112.3		.3		4.0		—
Derivatives not designated as hedging instruments
Non-deliverable hedges (EUR and USD) exposed to the CNY	Mar 2021	10.1		.1		—		—
USD receivable on a CAD subsidiary	Apr 2020	23.0		.1		—		—
Total derivatives not designated as hedging instruments				.2		—		—
				$	1.3	$	10.4	$	1.0

	Expiring at various dates through:	Total USD Equivalent Notional Amount		As of December 31, 2019
				Assets				Liabilities
				Other Current Assets		Sundry		Other Current Liabilities
Derivatives designated as hedging instruments
Cash flow hedges:
Currency hedges:
Future USD sales/purchases of Canadian, Chinese, European, South Korean, Swiss and UK subsidiaries	Sep 2021	$	138.5	$	1.3	$	.2	$	.7
Future MXN purchases of a USD subsidiary	Jun 2021	9.8		.5		.1		—
Future DKK sales of a Polish subsidiary	Jun 2021	21.1		.3		—		—
Future EUR sales of Chinese and UK subsidiaries	Jun 2021	29.9		.7		—		—
Total cash flow hedges				2.8		.3		.7
Fair value hedges:
Intercompany and third-party receivables and payables exposed to multiple currencies (DKK, EUR, MXN, USD and ZAR) in various countries (CAD, CHF, CNY, GBP, PLN and USD)	May 2020	112.0		.8		—		.1
Derivatives not designated as hedging instruments
Non-deliverable hedges (EUR and USD) exposed to the CNY	Dec 2020	10.1		.1		—		—
Hedge of USD receivable on a CAD subsidiary	Jan 2020	5.0		—		—		.1
Total derivatives not designated as hedging instruments				.1		—		.1
				$	3.7	$	.3	$	.9

The following table sets forth the pretax (gains) losses for our hedging activities for the years presented. This schedule includes reclassifications (including impact of underlying transactions probable of not occurring) from accumulated other comprehensive income (see Note 12) as well as derivative settlements recorded directly to income or expense.

	Caption in Consolidated Condensed Statements of Operations	Amount of (Gain) Loss Recorded in Income Three Months Ended   March 31,
		2020		2019
Derivatives designated as hedging instruments
Interest rate cash flow hedges	Interest expense	$	1.1	$	1.1
Currency cash flow hedges	Net trade sales	.6		.4
Currency cash flow hedges	Cost of goods sold	(.3)		(.3)
Total cash flow hedges		1.4		1.2
Fair value hedges	Other (income) expense, net	5.0		.4
Derivatives not designated as hedging instruments	Other (income) expense, net	(1.3)		(.2)
Total derivative instruments		$	5.1	$	1.4