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Derivatives | 9 Months Ended
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Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives: Objectives and Strategies for Using Derivative Instruments Commodity Price Risk - We utilize a cash flow hedging program to mitigate our exposure to volatility in the prices of metal commodities used in our production processes. Our hedging program includes the use of futures contracts to lock in prices, and as a result, we are subject to derivative losses should the metal commodity prices decrease and gains should the prices increase. We utilize a dollar cost averaging strategy so that a higher percentage of commodity price exposures are hedged near-term and lower percentages hedged at future dates. This strategy allows for protection against near-term price volatility while allowing us to adjust to market price movements over time. Interest Rate Risk - A portion of our debt bears interest at variable rates, and as a result, we are subject to variability in the cash paid for interest. To mitigate a portion of that risk, we may choose to engage in an interest rate swap hedging strategy to eliminate the variability of interest payment cash flows. We are not currently hedged against interest rate risk. Foreign Currency Risk - Foreign currency exchange rate movements create a degree of risk by affecting the U.S. dollar value of assets and liabilities arising in foreign currencies. We seek to mitigate the impact of currency exchange rate movements on certain short-term transactions by periodically entering into foreign currency forward contracts. Cash Flow Hedges We have commodity futures contracts and foreign exchange forward contracts designated as cash flow hedges that are scheduled to mature through February 2019 and December 2018, respectively. Unrealized gains or losses from our cash flow hedges are included in Accumulated other comprehensive loss (“AOCL”) and are expected to be reclassified into earnings within the next 18 months based on the prices of the commodities and foreign currencies at the settlement dates. We recorded the following amounts in AOCL related to our cash flow hedges (in millions):
| As of September 30, 2017 |  | As of December 31, 2016
Unrealized (gains) losses on unsettled contracts | $ | (9.9 | ) |  | $ | (8.9 | )
Income tax expense | 3.6 |  |  | 3.3 |
Gains included in AOCL, net of tax (1) | $ | (6.3 | ) |  | $ | (5.6 | )
(1) Assuming commodity and foreign currency prices remain constant, we expect to reclassify $6.1 million of derivative gains into earnings within the next 12 months. We had the following outstanding commodity futures contracts designated as cash flow hedges (in millions of pounds):
| As of September 30, 2017 |  | As of December 31, 2016
Copper | 18.9 |  |  | 30.4 |
We had the following outstanding foreign exchange forward contracts designated as cash flow hedges (in millions):
| As of September 30, 2017 |  | As of December 31, 2016
Notional Amounts (in local currency): |  |  |
Mexican Peso | 69.8 |  |  | 310.1 |
Canadian Dollar | 83.1 |  |  | 24.9 |
Derivatives not Designated as Cash Flow Hedges For commodity derivatives not designated as cash flow hedges, we follow the same hedging strategy as derivatives designated as cash flow hedges, except that we elect not to designate them as cash flow hedges at the inception of the arrangement. We had the following outstanding commodity futures contracts not designated as cash flow hedges (in millions of pounds):
| As of September 30, 2017 |  | As of December 31, 2016
Copper | 1.8 |  |  | 2.4 |
Aluminum | 1.9 |  |  | 2.6 |
We also had the following outstanding foreign currency forward contracts not designated as cash flow hedges (in millions):
| As of September 30, 2017 |  | As of December 31, 2016
Notional Amounts (in local currency): |  |  |
Chinese Yuan | 52.3 |  |  | 10.5 |
Mexican Peso | 35.7 |  |  | 64.5 |
Euro | 60.7 |  |  | 46.9 |
Canadian Dollar | 31.0 |  |  | — |
British Pound | 4.9 |  |  | 1.3 |
Singapore Dollar | 6.5 |  |  | — |
Australian Dollar | 40.0 |  |  | — |
New Zealand Dollar | 6.5 |  |  | — |
Indian Rupee | 169.4 |  |  | 584.6 |
Information about the Locations and Amounts of Derivative Instruments The following tables provide the locations and amounts of derivative fair values in the Consolidated Balance Sheets and derivative gains and losses in the Consolidated Statements of Operations (in millions):
| Fair Values of Derivative Instruments (1)
| Derivatives Designated as Hedging Instruments |  | Derivatives Not Designated as Hedging Instruments
| As of September 30, 2017 |  | As of December 31, 2016 |  | As of September 30, 2017 |  | As of December 31, 2016
Current Assets: |  |  |  |  |  |  |
Other Assets |  |  |  |  |  |  |
Commodity futures contracts | $ | 9.7 |  |  | $ | 8.7 |  |  | $ | 1.0 |  |  | $ | 0.7 |
Foreign currency forward contracts | 0.4 |  |  | 0.5 |  |  | 0.2 |  |  | 0.2 |
Non-Current Assets: |  |  |  |  |  |  |
Other Assets, net |  |  |  |  |  |  |
Commodity futures contracts | 0.3 |  |  | 1.9 |  |  | — |  |  | 0.2 |
Total Assets | $ | 10.4 |  |  | $ | 11.1 |  |  | $ | 1.2 |  |  | $ | 1.1 |
Current Liabilities: |  |  |  |  |  |  |
Accrued Expenses |  |  |  |  |  |  |
Foreign currency forward contracts | $ | 0.4 |  |  | $ | 0.8 |  |  | $ | 1.5 |  |  | $ | 3.2 |
Total Liabilities | $ | 0.4 |  |  | $ | 0.8 |  |  | $ | 1.5 |  |  | $ | 3.2 |
(1) All derivative instruments are classified as Level 2 within the fair value hierarchy. See Note 15 for more information.
Derivatives Designated as Cash Flow Hedges |  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
Amount of (Gain)/Loss reclassified from AOCL into Income (effective portion) (1) |  | $ | (3.5 | ) |  | $ | 2.4 |  |  | $ | (9.4 | ) |  | $ | 10.6 |
Amount of (Gain)/Loss recognized in Net income (ineffective portion) (2) |  | $ | (0.1 | ) |  | $ | (0.5 | ) |  | $ | 1.1 |  |  | $ | (0.4 | )
Derivatives Not Designated as Hedging Instruments |  | For the Three Months Ended September 30, |  | For the Nine Months Ended September 30,
|  | 2017 |  | 2016 |  | 2017 |  | 2016
Amount of (Gain)/Loss Recognized in Net Income: |  |  |  |  |  |  |  |
Commodity futures contracts (2) |  | $ | (0.2 | ) |  | $ | (0.3 | ) |  | $ | (1.3 | ) |  | $ | (0.2 | )
Foreign currency forward contracts (2) |  | (0.4 | ) |  | 0.4 |  |  | (4.3 | ) |  | 0.3 |
|  | $ | (0.6 | ) |  | $ | 0.1 |  |  | $ | (5.6 | ) |  | $ | 0.1 |
(1) The (gain)/loss was recorded in Cost of goods sold in the accompanying Consolidated Statements of Operations. (2) The (gain)/loss was recorded in Losses and other expenses, net in the accompanying Consolidated Statements of Operations.

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41620-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624163-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579240-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4D -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624177-113959 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80784-113994 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41641-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5579245-113959 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4H -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624258-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35736893&loc=d3e80748-113994 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708775-113959 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4J -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5708773-113959 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5618551-113959 Reference 15: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5580258-113959 Reference 16: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=64837297&loc=SL5624181-113959 Reference 17: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 25 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6886632&loc=d3e76258-113986 Reference 18: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=64837297&loc=d3e41638-113959 Reference 19: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 + Details
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