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DERIVATIVE INSTRUMENTS | 9 Months Ended
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Sep. 30, 2019
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS | NOTE 12 - DERIVATIVE INSTRUMENTS The following table presents the fair value of our derivative instruments and the classification of each in the Statements of Unaudited Condensed Consolidated Financial Position:
|  | (In Millions)
|  | Derivative Assets |  | Derivative Liabilities
|  | September 30, 2019 |  | December 31, 2018 |  | September 30, 2019 |  | December 31, 2018
Derivative Instrument |  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value |  | Balance Sheet Location |  | Fair Value
Derivatives designated as hedging instruments under ASC 815: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commodity contracts |  |  |  | $ | — |  |  | Derivative assets |  | $ | 0.1 |  |  | Derivative liabilities |  | $ | 2.4 |  |  | Derivative liabilities |  | $ | 3.7 |
Derivatives not designated as hedging instruments under ASC 815: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Customer supply agreement |  | Derivative assets |  | $ | 71.2 |  |  | Derivative assets |  | $ | 89.3 |  |  |  |  | $ | — |  |  |  |  | $ | — |
Provisional pricing arrangements |  | Derivative assets |  | 1.6 |  |  | Derivative assets |  | 2.1 |  |  | Derivative liabilities |  | 30.2 |  |  |  |  | — |
Total derivatives not designated as hedging instruments under ASC 815 |  |  |  | $ | 72.8 |  |  |  |  | $ | 91.4 |  |  |  |  | $ | 30.2 |  |  |  |  | $ | — |
Total derivatives |  |  |  | $ | 72.8 |  |  |  |  | $ | 91.5 |  |  |  |  | $ | 32.6 |  |  |  |  | $ | 3.7 |
Derivatives Designated as Hedging Instruments - Cash Flow Hedges Commodity Contracts The following table presents our outstanding hedge contracts:
| (In Millions)
| September 30, 2019 |  | December 31, 2018
| Notional Amount |  | Unit of Measure |  | Varying Maturity Dates |  | Notional Amount |  | Unit of Measure |  | Varying Maturity Dates
Natural gas | 7.0 |  | MMBtu |  | October 2019 - November 2020 |  | 1.8 |  | MMBtu |  | January 2019 - August 2019
Diesel | 2.4 |  | Gallons |  | October 2019 - December 2019 |  | 11.0 |  | Gallons |  | January 2019 - December 2019
Derivatives Not Designated as Hedging Instruments Customer Supply Agreement A supply agreement with one customer provides for supplemental revenue or refunds to the customer based on the hot-rolled coil steel price at the time the iron ore product is consumed in the customer’s blast furnaces. The supplemental pricing is characterized as a freestanding derivative instrument and is required to be accounted for separately once control transfers to the customer. The derivative instrument, which is finalized based on a future price, is adjusted to fair value through Product revenues each reporting period based upon current market data and forward-looking estimates provided by management until the pellets are consumed and the price is settled. Provisional Pricing Arrangements Certain of our supply agreements specify provisional price calculations, where the pricing mechanisms generally are based on market pricing, with the final revenue rate based on certain market inputs at a specified period in time in the future, per the terms of the supply agreements. Market inputs are tied to indexed price adjustment factors that are integral to the iron ore supply contracts and vary based on the agreement. The pricing mechanisms typically include adjustments based upon changes in the Platts 62% Price, Atlantic Basin pellet premiums, Platts international indexed freight rates and changes in specified PPI, including those for industrial commodities, fuel and steel. The pricing adjustments generally operate in the same manner, with each factor typically comprising a portion of the price adjustment, although the weighting of each factor varies based upon the specific terms of each agreement. The price adjustment factors have been evaluated to determine if they qualify as embedded derivatives. The price adjustment factors share the same economic characteristics and risks as the host sales contract and are integral to the host sales contract as inflation adjustments; accordingly, they have not been separately valued as derivative instruments. Revenue is recognized generally upon delivery to our customers. Revenue is measured at the point that control transfers and represents the amount of consideration we expect to receive in exchange for transferring goods. Changes in the expected revenue rate from the date that control transfers through final settlement of contract terms is recorded in accordance with Topic 815 and is characterized as a derivative instrument and accounted for separately. Subsequently, the derivative instruments are adjusted to fair value through Product revenues each reporting period based upon current market data and forward-looking estimates provided by management until the final revenue rate is determined. The following summarizes the effect of our derivatives that are not designated as hedging instruments in the Statements of Unaudited Condensed Consolidated Operations:
|  |  |  |  | (In Millions)
| Derivatives Not Designated as Hedging Instruments |  | Location of Gain (Loss) Recognized in Income on Derivatives |  | Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2019 |  | 2018 | 2019 |  | 2018
| Customer supply agreements |  | Product revenues |  | $ | 7.6 |  |  | $ | 139.7 |  |  | $ | 82.2 |  |  | $ | 337.1 |
| Provisional pricing arrangements |  | Product revenues |  | (48.5 | ) |  | (3.8 | ) |  | (38.8 | ) |  | (2.7 | )
| Total |  |  |  | $ | (40.9 | ) |  | $ | 135.9 |  |  | $ | 43.4 |  |  | $ | 334.4 |
Refer to NOTE 7 - FAIR VALUE MEASUREMENTS for additional information.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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