Fair Value Measurements

12 Months Ended

Dec. 31, 2014

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.

Except for derivative instruments, pension liabilities and pension plan assets, the Company has no financial assets and liabilities that are carried at fair value at December 31, 2014 and 2013. The carrying amounts of financial instruments comprising cash and cash equivalents, and accounts receivable approximate their fair values due to their short-term nature. The carrying value of the Company’s long-term debt approximates its fair value because interest charged on the loan balance is variable. See Note 8, “Debt”, for a description of Company’s debt and corresponding rates of interest. See Note 5, “Pension and Other Postretirement Benefit Plans”, regarding the fair value of pension liabilities and pension plan assets. See Note 14, “Derivative Instruments and Hedging Activities”, regarding the fair value of derivative instruments and hedging activities.

Certain Company assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value may not be recoverable. As of December 31, 2014 and 2013, the Company did not have any assets at fair value on a non-recurring basis.

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, commodity futures contracts and interest rate swaps. 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, 2014.



(in millions)	Total Fair Value			Level 1		Level 2			Level 3
Assets:
Foreign currency derivatives	0.4			—		0.4			—
Balance as of December 31, 2014	$	0.4		$	—	$	0.4		$	—
Liabilities:
Commodity futures contracts	(0.7		)	—		(0.7		)	—
Foreign currency derivatives	(1.1		)	—		(1.1		)	—
Balance as of December 31, 2014	$	(1.8	)	$	—	$	(1.8	)	$	—

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	)	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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