Derivative Instruments

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

NOTE 11 – DERIVATIVE INSTRUMENTS:

Certain operations of the Corporation are subject to risk from exchange rate fluctuations in connection with sales in foreign currencies. To minimize this risk, foreign currency sales contracts are entered into which are designated as cash flow or fair value hedges. As of December 31, 2014, approximately $16,126 of anticipated foreign-denominated sales has been hedged which are covered by fair value contracts settling at various dates through April 2016. The fair value of assets held as collateral for the fair value contracts as of December 31, 2014 approximated $800.

Additionally, certain of the divisions of the Air and Liquid Processing segment are subject to risk from increases in the price of commodities (copper and aluminum) used in the production of inventory. To minimize this risk, futures contracts are entered into which are designated as cash flow hedges. At December 31, 2014, approximately 57% or $2,700 of anticipated copper purchases over the next nine months and 38% or $500 of anticipated aluminum purchases over the next six months are hedged.

The Corporation previously entered into foreign currency purchase contracts to manage the volatility associated with euro-denominated progress payments to be made for certain machinery and equipment. As of December 31, 2010, all contracts had been settled and the underlying fixed assets were placed in service.

No portion of the existing cash flow or fair value hedges is considered to be ineffective, including any ineffectiveness arising from the unlikelihood of an anticipated transaction to occur. Additionally, no amounts have been excluded from assessing the effectiveness of a hedge.

At December 31, 2014, the Corporation has purchase commitments covering 32% or $2,691 of anticipated natural gas usage through 2017 for one of its subsidiaries. The commitments qualify as normal purchases and, accordingly, are not reflected on the consolidated balance sheet. Purchases of natural gas under previously existing commitments approximated $2,190, $2,694 and $4,314 for 2014, 2013 and 2012, respectively.

The Corporation does not enter into derivative transactions for speculative purposes and, therefore, holds no derivative instruments for trading purposes.

The following summarizes location and fair value of the foreign currency sales contracts recorded on the consolidated balance sheets as of December 31:

	Location	2014		2013
Cash flow hedge contracts	Other current liabilities	$	6	$	0
Fair value hedge contracts	Other current assets		217		426
	Other noncurrent assets		15		17
	Other current liabilities		399		0
	Other noncurrent liabilities		5		0
Fair value hedged item	Accounts receivable		69		(36	)
	Other current assets		327		0
	Other noncurrent assets		4		0
	Other current liabilities		218		488
	Other noncurrent liabilities		35		40

The change in the fair value of the cash flow contracts is recorded as a component of accumulated other comprehensive loss. Amounts recognized as and reclassified from accumulated other comprehensive loss are recorded as a component of other comprehensive income (loss) and are summarized below. All amounts are after-tax.

For the Year Ended December 31, 2014	Comprehensive Income (Loss) Beginning of the Year			Plus Recognized as Comprehensive Income (Loss)			Less Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss			Comprehensive Income (Loss) End of the Year
Foreign currency sales contracts—cash flow hedges	$	0		$	(21	)	$	(21	)	$	0
Foreign currency purchase contracts		275			0			17			258
Future contracts – copper and aluminum		38			(302	)		(91	)		(173	)
	$	313		$	(323	)	$	(95	)	$	85
For the Year Ended December 31, 2013
Foreign currency sales contracts—cash flow hedges	$	0		$	0		$	0		$	0
Foreign currency purchase contracts		292			0			17			275
Future contracts – copper and aluminum		26			(251	)		(263	)		38
	$	318		$	(251	)	$	(246	)	$	313
For the Year Ended December 31, 2012
Foreign currency sales contracts—cash flow hedges	$	114		$	10		$	124		$	0
Foreign currency purchase contracts		309			0			17			292
Future contracts – copper and aluminum		(314	)		92			(248	)		26
	$	109		$	102		$	(107	)	$	318

The change in fair value reclassified or expected to be reclassified from accumulated other comprehensive loss to earnings is summarized below. All amounts are pre-tax.

	Location of Gain (Loss) in Statements	Estimated to be Reclassified in the Next			Year Ended December 31,
	of Operations	12 Months			2014			2013			2012
Foreign currency sales contracts—cash flow hedges	Net sales	$	0		$	(33	)	$	0		$	197
Foreign currency purchase contracts	Depreciation		27			27			27			27
Futures contracts – copper and aluminum	Costs of products sold (excluding depreciation)		(290	)		(146	)		(419	)		(398	)

(Losses) gains on foreign exchange transactions included in other income (expense) approximated $(488), $(227) and $107 for 2014, 2013 and 2012, respectively.