Derivative Instruments

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 14 — DERIVATIVE INSTRUMENTS

When translating results from foreign operations into U.S. dollars, we are subject to foreign exchange related risks in our operating results. We are also exposed to foreign exchange risk arising from intercompany lending transactions denominated in various foreign currencies that are subject to foreign exchange rate movement over the term of the loans. To mitigate these risks, we enter into forward contracts. The counterparties to these instruments are financial institutions with strong credit ratings. PolyOne maintains control over the size of positions entered into with any one counterparty and regularly monitors the credit ratings of these institutions.

Derivative financial instruments are accounted for at fair value and recognized as assets or liabilities in the Condensed Consolidated Balance Sheets. These instruments are not designated as a hedge, and therefore, any gain or loss is immediately recognized in income.

The fair value of derivative financial instruments recorded in the Condensed Consolidated Balance Sheets are as follows:

	September 30, 2014
(In millions)	Notional		Other current assets
Foreign currency forwards	$	12.1	$	0.1

	December 31, 2013
(In millions)	Notional		Other current assets
Foreign currency forwards	$	12.8	$	—

The effects of derivative instruments on our Condensed Consolidated Statements of Income are as follows:

	Three Months Ended September 30,
(In millions)	2014		2013			Location
Foreign currency options - (losses)	$	—	$	(0.2	)	Selling and administrative expense
Foreign currency forwards - gains (losses)	0.9		(0.5		)	Other expense, net

	Nine Months Ended September 30,
(In millions)	2014		2013			Location
Foreign currency options - (losses)	$	—	$	(0.4	)	Selling and administrative expense
Foreign currency forwards - gains	0.8		0.1			Other expense, net