Tecumseh Products 2012 Annual Report Download - page 61

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60
The following table presents the impact of derivatives designated as hedging instruments on our Consolidated Statements of
Operations and AOCI for our derivatives designated as cash flow hedging instruments for the years ended December 31, 2012,
2011 and 2010.
(in millions)
Amount of Gain (Loss)
Recognized in AOCI
(Effective Portion)
Location of
Gain (Loss)
Reclassified
from AOCI
into Income
(Effective
Portion)
Amount of Gain (Loss)
Reclassified from AOCI into
Income (Effective Portion)
Location of
Gain (Loss)
Recognized
in Income
(Ineffective
Portion)
Amount of Gain (Loss)
Recognized in Income
(Ineffective Portion)
Years Ended December 31, Years Ended December 31, Years Ended December 31,
2012 2011 2010 2012 2011 2010 2012 2011 2010
Commodity .... $ 1.3 $ (4.5) $ 10.4 Cost of Sales $ (2.2) $ 5.8 $ 8.8 Cost of Sales $ — $ (1.3)$ —
Currency......... 1.1 (10.9) 6.6 Cost of Sales (11.3) 6.7 7.5 Cost of Sales — (0.7)—
Total ............... $ 2.4 $(15.4) $ 17.0 $(13.5) $ 12.5 $ 16.3 $ — $ (2.0)$ —
As of December 31, 2012, we estimate that we will reclassify into earnings during the next twelve months approximately $0.1
million of losses from the pretax amount recorded in AOCI as the anticipated cash flows occur. In addition, decreases in spot
prices below our hedged prices may require us to post cash collateral with our hedge counterparties. At December 31, 2012
and December 31, 2011, we were required to post $0.6 million and $5.6 million respectively, of cash collateral on our hedges,
which is recorded in “Restricted cash and cash equivalents” in our Consolidated Balance Sheets.
NOTE 15. Commitments and Contingencies
Operating leases
Future minimum lease payments under noncancelable operating leases amounted to $16.3 million at December 31, 2012 as
follows:
Years ending December 31, (in millions)
2013 ....................................................................................................................................................................... $ 3.7
2014 ....................................................................................................................................................................... $ 2.7
2015 ....................................................................................................................................................................... $ 2.5
2016 ....................................................................................................................................................................... $ 1.4
2017 ....................................................................................................................................................................... $ 1.2
Thereafter .............................................................................................................................................................. $ 4.8
Aggregate rental expense for operating leases was $7.9 million, $8.2 million, and $7.3 million for the fiscal years ended
December 31, 2012, 2011, and 2010, respectively.
Purchase Commitments
As of December 31, 2012, 2011 and 2010, we had $24.8 million , $13.7 million and $12.1 million respectively of non-
cancelable purchase commitments with some suppliers for materials and supplies in the normal course of business.
Accounts Receivable
A portion of accounts receivable at our Brazilian subsidiary are sold with limited recourse at a discount, which creates a
contingent liability for the business. Discounted receivables sold with limited recourse were $11.9 million and $10.1 million at
December 31, 2012 and 2011, respectively, and the discount rate was 6.1% and 4.7% at December 31, 2012 and 2011,
respectively. Under our factoring program in Europe, we may discount receivables with recourse; however, at December 31,
2012, there were no receivables sold with recourse.
Letters of credit
We issue letters of credit in the normal course of business as required by some vendor contracts and insurance policies. As of
December 31, 2012 and 2011, we had $3.4 million and $3.5 million, respectively, in outstanding letters of credit in the U.S.
Outside the U.S. we had $8.7 million and $9.5 million outstanding letters of credit at December 31, 2012 and 2011,
respectively.