The Company utilizes derivative instruments to manage exposures to risks that have been identified and measured and are capable of being controlled. The primary risks managed by the company by using derivative instruments are commodity price risk associated with copper and foreign currency exchange risk associated with a number of currencies, principally the U.S. dollar, the Canadian dollar, the New Zealand dollar, the Euro and British pounds. Swap contracts on copper are used to manage the price risk associated with forecasted purchases of materials used in the Company’s manufacturing processes. Generally, the Company will not hedge cash flow exposures for durations longer than 30 months and the Company has hedged certain volumes of copper through December 2020. The Company enters into foreign currency forward contracts to manage foreign currency risk associated with the Company’s receivable and payable balances in addition to foreign-denominated sales. Generally, the Company enters into master netting arrangements with the counterparties and offsets net derivative positions with the same counterparties. Currently, the Company’s agreements do not require cash collateral.

ASC Topic 815-10, “Derivatives and Hedging,” requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the balance sheet. Derivative instruments’ fair value is determined using significant other observable inputs, or Level 2 in the fair value hierarchy. In accordance with ASC Topic 815-10, the Company designates certain of its commodity swaps as cash flow hedges of forecasted purchases of commodities. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive (loss) income and is reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative instruments representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

For those commodity swaps which are not designated as cash flow hedges, the fair value of the commodity swap is recognized as an asset or liability in the consolidated balance sheet and the related gain or loss on the derivative is reported in current earnings. These amounts are classified in cost of sales in the consolidated statement of operations.

As of December 31, 2018 and December 31, 2017, the Company had outstanding copper swap contracts of the following amounts:

	Units Outstanding (in Pounds)			Net Fair Value - Asset (Liability)
	December 31,			December 31,
	2018		2017	2018			2017
(Amounts in millions)
Cash flow hedges		35.5	37.8	$	(6.8	)	$	25.5
Not designated as hedges		13.3	11.3		(2.4	)		4.5
Total		48.8	49.1	$	(9.2	)	$	30.0

As of December 31, 2018 and December 31, 2017, the fair value of the outstanding copper swap contracts is recorded in the balance sheet as follows:

	December 31,
	2018			2017
(Dollars in millions)
Other current assets	$	0.0		$	21.8
Other assets		0.0			8.2
Accrued liabilities		(9.0	)		0.0
Other long-term liabilities		(0.2	)		0.0
Net (liability) asset on balance sheet	$	(9.2	)	$	30.0
Accumulated other comprehensive (loss) gain, net of tax	$	(5.3	)	$	15.8

In the next twelve months the Company estimates that $4.0 million of unrealized losses, net of tax, related to commodity price hedging will be reclassified from other comprehensive (loss) income into earnings.

See the consolidated statement of comprehensive (loss) income and consolidated statement of shareholders’ equity for amounts recorded in other comprehensive income and for amounts reclassified from accumulated other comprehensive income into net income for the periods specified below. For the years ended December 31, 2018 and 2017, the following amounts were recognized in earnings related to copper swap contracts:

	Year Ended December 31,
	2018			2017
(Dollars in millions)
Gain from ineffectiveness of cash flow hedges	$	0.0		$	5.6
(Loss) gain from contracts not designated as hedges		(6.9	)		3.5
Net	$	(6.9	)	$	9.1

The fair value associated with forward contracts related to foreign currency that are not designated as hedges are immediately charged to earnings. These amounts are classified in cost of sales in the consolidated statement of operations. As of December 31, 2018 and December 31, 2017, the fair value of outstanding foreign currency forward contracts is recorded in the balance sheet as follows:

	December 31,
	2018			2017
(Dollars in millions)
Other current assets	$	0.9		$	0.3
Accrued liabilities		(1.0	)		(0.2	)
Net (liability) asset on balance sheet	$	(0.1	)	$	0.1

	December 31,
	2018		2017
(In millions)
British Pounds		GBP 5.7		GBP 7.0
New Zealand Dollars		NZD 16.0		NZD 15.5
United States Dollars		USD 6.0		USD 12.5
Canadian Dollars		CAD 0.0		CAD 2.5
Euro		EUR 1.2		EUR 0.0