Derivative Instruments

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Foreign Currency Forward Contracts - Hedging Instruments

Due to the global nature of our operations, portions of our revenues are earned in currencies other than the U.S. dollar. The value of revenues measured in U.S. dollars is therefore subject to changes in foreign currency exchange rates. In order to mitigate these changes we use foreign currency forward contracts to lock in exchange rates associated with a portion of our forecasted international revenues.

Foreign currency forward contracts in effect as of December 31, 2014 and 2013, had durations of 1 to 15 months and 1 to 18 months, respectively. These contracts have been designated as cash flow hedges and accordingly, to the extent effective, any unrealized gains or losses on these foreign currency forward contracts are reported in accumulated other comprehensive income (loss) (referred to as AOCI in the tables below). Realized gains and losses for the effective portion of such contracts are recognized in revenue when the sale of product in the currency being hedged is recognized. To the extent ineffective, hedge transaction gains and losses are reported in other income (expense), net.

The notional value of foreign currency forward contracts that were entered into to hedge forecasted revenues is summarized as follows:

	Notional Amount As of December 31,
Foreign Currency: (In millions)	2014		2013
Euro	$	1,174.6	$	636.3
Canadian dollar	56.7		34.0
British pound sterling	34.5		72.3
Australian dollar	19.9		—
Japanese yen	16.6		—
Total foreign currency forward contracts	$	1,302.3	$	742.6

The portion of the fair value of these foreign currency forward contracts that was included in accumulated other comprehensive income (loss) within total equity reflected gains of $72.1 million and losses of $23.6 million and $11.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. We expect all contracts to be settled over the next 15 months and any amounts in accumulated other comprehensive income (loss) to be reported as an adjustment to revenue. We consider the impact of our and our counterparties’ credit risk on the fair value of the contracts as well as the ability of each party to execute its contractual obligations. As of December 31, 2014 and 2013, credit risk did not change the fair value of our foreign currency forward contracts.

The following table summarizes the effect of derivatives designated as hedging instruments on our consolidated statements of income:

For the Years Ended December 31,
Net Gains/(Losses) Reclassified from AOCI into Net Income (Effective Portion)								Net Gains/(Losses) Recognized into Net Income (Ineffective Portion)
Location	2014		2013			2012		Location	2014			2013			2012
Revenue	$	6.8	$	(13.2	)	$	35.1	Other income (expense)	$	(1.5	)	$	(0.2	)	$	4.8

Foreign Currency Forward Contracts - Other Derivatives

We also enter into other foreign currency forward contracts, usually with one month durations, to mitigate the foreign currency risk related to certain balance sheet positions. We have not elected hedge accounting for these transactions.

The aggregate notional amount of these outstanding foreign currency contracts was $365.2 million and $273.3 million as of December 31, 2014 and 2013, respectively. Net losses of $15.5 million and net gains of $5.2 million and $4.2 million related to these contracts were recognized as a component of other income (expense), net, for years ended December 31, 2014, 2013 and 2012, respectively.

Summary of Derivatives

While certain of our derivatives are subject to netting arrangements with our counterparties, we do not offset derivative assets and liabilities within our consolidated balance sheets.

The following table summarizes the fair value and presentation in our consolidated balance sheets for our outstanding derivatives including those designated as hedging instruments:

(In millions)	Balance Sheet Location	Fair Value As of December 31, 2014
Hedging Instruments:
Asset derivatives	Other current assets	$	69.5
	Investments and other assets	$	1.9
Liability derivatives	Accrued expenses and other	$	—
	Other long-term liabilities	$	—
Other Derivatives:
Asset derivatives	Other current assets	$	1.3
Liability derivatives	Accrued expenses and other	$	5.4

(In millions)	Balance Sheet Location	Fair Value As of December 31, 2013
Hedging Instruments:
Asset derivatives	Other current assets	$	0.6
Liability derivatives	Accrued expenses and other	$	23.4
Other Derivatives:
Asset derivatives	Other current assets	$	3.2
Liability derivatives	Accrued expenses and other	$	0.1