Tecumseh Products 2014 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2014 Tecumseh Products annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 84

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84

62
derivative contracts was $6.5 million and $12.6 million at December 31, 2014 and December 31, 2013, respectively. The
notional amount of the interest rate swaps at December 31, 2014, all of which were designated as cash flow hedges, was $8.3
million. We had no interest rate swaps outstanding at December 31, 2013.
We recognized $1.1 million and $5.5 million of losses associated with the derivative contracts that have been de-designated
during the years ended December 31, 2014 and December 31, 2013, respectively. We had gains of $0.1 million in “Other
comprehensive income” at both December 31, 2014 and December 31, 2013, for derivative contracts that have been de-
designated. These gains will be recognized as the forecasted cash flows occur.
The following table presents the fair value of our derivatives designated as hedging instruments in our Consolidated Balance
Sheets as of December 31, 2014 and 2013:
Asset (Liability) Derivatives
December 31, 2014 December 31, 2013
(in millions)
Financial
Position Location Fair Value
Financial
Position Location Fair Value
Commodity derivatives contracts Fair value of derivative
asset $—
Fair value of derivative
asset $ 0.3
Commodity derivatives contracts Fair value of derivative
liability (0.5)Fair value of derivative
liability —
Foreign currency derivatives Fair value of derivative
asset 0.4 Fair value of derivative
asset —
Foreign currency derivatives Fair value of derivative
liability (0.7)Fair value of derivative
liability (1.1)
Total $ (0.8)$
(0.8)
The following table presents the fair value of our derivatives that have been de-designated as hedging instruments in our
Consolidated Balance Sheets as of December 31, 2014 and 2013:
Asset (Liability) Derivatives
December 31, 2014 December 31, 2013
(in millions)
Financial
Position Location
Fair
Valu e
Financial
Position Location
Fair
Valu e
Commodity derivatives contracts
Fair value of derivative
asset $ —
Fair value of derivative
asset $ 0.3
Commodity derivatives contracts
Fair value of derivative
liability (0.2)
Fair value of derivative
liability —
Foreign currency derivatives
Fair value of derivative
liability (0.4)
Fair value of derivative
liability (0.5)
Total $ (0.6)$
(0.2)
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, 2014,
2013 and 2012.
(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,
2014 2013 2012 2014 2013 2012 2014 2013 2012
Commodity $ (0.4) $ 0.3 $ 1.3 Cost of Sales $ 0.4 $ 0.2 $ (2.2)Cost of Sales $—$—$—
Currency 0.3 (1.5) 1.1 Cost of Sales (0.4)(1.0)(11.3)Cost of Sales ———
Total $ (0.1) $ (1.2) $ 2.4 $ — $ (0.8)$
(13.5) $—$—$—
As of December 31, 2014, we estimate that we will reclassify into earnings during the next twelve months approximately $0.7
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, 2014