Fair Value Measurements

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosure. We categorize assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are as follows:

Level 1 Valuation is based upon quoted prices for identical instruments traded in active markets.


Level 2	Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.


Level 3	Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability.

The following is a description of valuation methodologies used for our assets and liabilities recorded at fair value.

Foreign currency and commodity derivative contracts

Derivative instruments recognized on our Consolidated Balance Sheets consist of foreign currency forward exchange contracts and commodity futures contracts. These contracts are recognized at the estimated amount at which they could be settled based on market observable inputs, such as forward market exchange rates and are recorded on our Consolidated Balance Sheets as part of current assets and liabilities under the heading “Fair value of derivatives.” We classify our derivative instruments as Level 2.

The following table presents the amounts recorded on our balance sheet for assets and liabilities measured at fair value on a recurring basis as of December 31, 2013.



(in millions)	Total Fair Value			Level 1		Level 2			Level 3
Assets:
Commodity futures contracts	$	0.6		$	—	$	0.6		$	—
Balance as of December 31, 2013	$	0.6		$	—	$	0.6		$	—
Liabilities:
Foreign currency derivatives	(1.6		)	—		(1.6		)	—
Balance as of December 31, 2013	$	(1.6	)	$	—	$	(1.6	)	$	—

The following table presents the amounts recorded on our balance sheet for assets and liabilities measured at fair value on a recurring basis as of December 31, 2012.



(in millions)	Total Fair Value			Level 1		Level 2			Level 3
Assets:
Commodity futures contracts	$	0.4		$	—	$	0.4		$	—
Foreign currency derivatives	0.3			—		0.3			—
Balance as of December 31, 2012	0.7			—		0.7			—
Liabilities:
Foreign currency derivatives	(0.9		)	$	—	(0.9		)	—
Balance as of December 31, 2012	$	(0.9	)	$	—	$	(0.9	)	$	—