Derivative Instruments

6 Months Ended

Jun. 30, 2015

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 June 30, 2015 and December 31, 2014 had durations of 1 to 18 months and 1 to 15 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
Foreign Currency: (In millions)	As of June 30, 2015		As of December 31, 2014
Euro	$	1,437.2	$	1,174.6
Canadian dollar	32.1		56.7
British pound sterling	21.9		34.5
Japanese yen	15.5		16.6
Australian dollar	10.3		19.9
Total foreign currency forward contracts	$	1,517.0	$	1,302.3

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 $63.1 million and $72.1 million as of June 30, 2015 and December 31, 2014, respectively. We expect all contracts to be settled over the next 18 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 June 30, 2015 and December 31, 2014, 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 condensed consolidated statements of income:

For the Three Months Ended June 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income (Effective Portion)						Net Gains/(Losses) Recognized into Net Income (Ineffective Portion)
Location	2015		2014			Location	2015		2014
Revenue	$	40.4	$	(5.2	)	Other income (expense)	$	1.2	$	(1.0	)

For the Six Months Ended June 30,
Net Gains/(Losses) Reclassified from AOCI into Operating Income (Effective Portion)						Net Gains/(Losses) Recognized into Net Income (Ineffective Portion)
Location	2015		2014			Location	2015		2014
Revenue	$	75.4	$	(10.0	)	Other income (expense)	$	3.4	$	(1.2	)

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 $472.4 million and $365.2 million as of June 30, 2015 and December 31, 2014, respectively. Net gains of $13.6 million and $3.9 million related to these contracts were recognized as a component of other income (expense), net, for three and six months ended June 30, 2015, respectively, as compared to net losses of $2.4 million and $3.8 million, respectively, in the prior year comparative periods.

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 condensed consolidated balance sheets.

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

(In millions)	Balance Sheet Location	Fair Value As of June 30, 2015
Hedging Instruments:
Asset derivatives	Other current assets	$	92.8
Liability derivatives	Accrued expenses and other	$	9.8
	Other long-term liabilities	$	17.2
Other Derivatives:
Asset derivatives	Other current assets	$	7.7
Liability derivatives	Accrued expenses and other	$	0.7
(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
Other Derivatives:
Asset derivatives	Other current assets	$	1.3
Liability derivatives	Accrued expenses and other	$	5.4