Fair Value Measurements

The Company measures certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. The hierarchy of those valuation approaches is broken down into three levels based on the reliability of inputs as follows:


•	Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

•

Level 2 inputs are inputs, other than quoted prices, that are directly or indirectly observable for the asset or liability. Level 2 inputs include model-generated values that rely on inputs either directly observed or readily-derived from available market data sources, such as Bloomberg or other news and data vendors. They include quoted prices for similar assets or liabilities in active markets, inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates and yield curves observable at commonly quoted intervals or current market) and contractual prices for the underlying financial instrument, as well as other relevant economic factors. Fair values of the Company’s derivative commodity contracts and foreign currency forward contracts are generated using forward prices that are derived from observable futures prices relating to the respective commodity or currency from sources such as the New York Mercantile Exchange (NYMEX) or the London Metal Exchange (LME). In cases where the derivative is an option contract (including caps, floors and collars), the Company’s valuations reflect adjustments made to valuations generated by the derivative’s counterparty. After validating that the counterparty’s assumptions relating to implied volatilities are in line with an independent source for these implied volatilities, the Company discounts these model-generated future values with discount factors designed to reflect the credit quality of the party obligated to pay under the derivative contract. Differing discount rates are applied to different contracts as a function of differing maturities and different counterparties. As of June 30, 2014, a spread over benchmark rates of less than 2.0% was used for derivatives valued as assets and for derivatives valued as liabilities. The Company has estimated the fair value of long-term debt based upon quoted market prices for the same or similar issues or on the current interest rates available to the Company for debt of similar terms and maturities.

•

Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. This level of categorization is not applicable to the Company’s valuations on a normal recurring basis other than for an immaterial portion of its pension assets.

The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis:



	June 30, 2014								December 31, 2013
	Level 1		Level 2			Total			Level 1		Level 2			Total
Assets measured at fair value
Cash and cash equivalents	$	54.8	$	—		$	54.8		$	45.3	$	—		$	45.3
Other current assets:
Foreign exchange contracts	—		0.1			0.1			—		—			—
Commodity hedge contracts	—		3.1			3.1			—		4.9			4.9
Other non-current assets:
Available for sale investments—cash and cash equivalents	11.6		—			11.6			18.6		—			18.6
Commodity hedge contracts	—		0.1			0.1			—		—			—
Assets measured at fair value	$	66.4	$	3.3		$	69.7		$	63.9	$	4.9		$	68.8

Liabilities measured at fair value
Accrued liabilities:
Foreign exchange contracts	$	—	$	—		$	—		$	—	$	(0.7	)	$	(0.7	)
Commodity hedge contracts	—		(25.1		)	(25.1		)	—		(0.4		)	(0.4		)
Other non-current liabilities—commodity hedge contracts	—		(0.5		)	(0.5		)	—		(0.1		)	(0.1		)
Liabilities measured at fair value	$	—	$	(25.6	)	$	(25.6	)	$	—	$	(1.2	)	$	(1.2	)

Liabilities measured at other than fair value
Long-term debt, including current portions:
Fair value	$	—	$	(2,163.5	)	$	(2,163.5	)	$	—	$	(1,659.9	)	$	(1,659.9	)
Carrying amount	—		(1,948.6		)	(1,948.6		)	—		(1,507.0		)	(1,507.0		)

The carrying amounts of the Company’s other financial instruments do not differ materially from their estimated fair values at June 30, 2014 and December 31, 2013.