FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 22. FAIR VALUE MEASUREMENTS

Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Assets and liabilities recorded at fair value in the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, defined by ASC 820 “Fair Value Measurements and Disclosures” (ASC 820) are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows:

Level 1 — Inputs were unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date.

Level 2 — Inputs (other than quoted prices included in Level 1) were either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life.

Level 3 — Inputs reflected management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration was given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

We are required to separately disclose assets and liabilities measured at fair value on a recurring basis, from those measured at fair value on a nonrecurring basis. Nonfinancial assets measured at fair value on a nonrecurring basis are intangible assets and goodwill, which are reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred.

Determining which hierarchical level an asset or liability falls within requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table summarizes the assets and liabilities measured at fair value in the condensed balance sheets:

	Fair Value Measurements
Balance at September 30, 2019	Level 1		Level 2		Level 3		Total
Assets	($ in millions)
Commodity contracts	$	—	$	0.1	$	—	$	0.1
Foreign exchange contracts	—		0.8		—		0.8
Total assets	$	—	$	0.9	$	—	$	0.9
Liabilities
Commodity contracts	$	—	$	21.0	$	—	$	21.0
Foreign exchange contracts	—		0.9		—		0.9
Total liabilities	$	—	$	21.9	$	—	$	21.9
Balance at December 31, 2018
Assets
Interest rate swaps	$	—	$	5.3	$	—	$	5.3
Commodity contracts	—		0.7		—		0.7
Foreign exchange contracts	—		0.4		—		0.4
Total assets	$	—	$	6.4	$	—	$	6.4
Liabilities
Interest rate swaps	$	—	$	33.7	$	—	$	33.7
Commodity contracts	—		3.4		—		3.4
Foreign exchange contracts	—		0.5		—		0.5
Total liabilities	$	—	$	37.6	$	—	$	37.6
Balance at September 30, 2018
Assets
Interest rate swaps	$	—	$	9.2	$	—	$	9.2
Commodity contracts	—		2.2		—		2.2
Foreign exchange contracts	—		0.2		—		0.2
Total assets	$	—	$	11.6	$	—	$	11.6
Liabilities
Interest rate swaps	$	—	$	47.8	$	—	$	47.8
Commodity contracts	—		1.5		—		1.5
Foreign exchange contracts	—		2.2		—		2.2
Total liabilities	$	—	$	51.5	$	—	$	51.5

Interest Rate Swaps

Interest rate swap financial instruments were valued using the “income approach” valuation technique. This method used valuation techniques to convert future amounts to a single present amount. The measurement was based on the value indicated by current market expectations about those future amounts. We use interest rate swaps as a means of managing interest expense and floating interest rate exposure to optimal levels.

Commodity Forward Contracts

Commodity contract financial instruments were valued primarily based on prices and other relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for commodities. We use commodity derivative contracts for certain raw materials and energy costs such as copper, zinc, lead, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations.

Foreign Currency Contracts

Foreign currency contract financial instruments were valued primarily based on relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for currencies. We enter into forward sales and purchase contracts to manage currency risk resulting from purchase and sale commitments denominated in foreign currencies.

Financial Instruments

The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated fair values due to the short-term maturities of these instruments. The fair value of our long-term debt was determined based on current market rates for debt of similar risk and maturities. The following table summarizes the fair value measurements of debt and the actual debt recorded on our condensed balance sheets:

	Fair Value Measurements								Amount recorded on balance sheets
	Level 1		Level 2		Level 3		Total
	($ in millions)
Balance at September 30, 2019	$	—	$	3,399.6	$	153.0	$	3,552.6	$	3,340.1
Balance at December 31, 2018	—		3,137.2		153.0		3,290.2		3,230.3
Balance at September 30, 2018	—		3,331.9		153.0		3,484.9		3,337.3

Nonrecurring Fair Value Measurements

In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by ASC 820. There were no assets measured at fair value on a nonrecurring basis as of September 30, 2019, December 31, 2018 and September 30, 2018.