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FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended
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Dec. 31, 2019
Fair Value Disclosures [Abstract] |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 7 - FAIR VALUE OF FINANCIAL INSTRUMENTS The following represents the assets and liabilities measured at fair value:
| (In Millions)
| December 31, 2019
| Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | — |  |  | $ | 187.6 |  |  | $ | — |  |  | $ | 187.6 |
Derivative assets | — |  |  | — |  |  | 45.8 |  |  | 45.8 |
Total | $ | — |  |  | $ | 187.6 |  |  | $ | 45.8 |  |  | $ | 233.4 |
Liabilities: |  |  |  |  |  |  |
Derivative liabilities | $ | — |  |  | $ | 3.2 |  |  | $ | 1.1 |  |  | $ | 4.3 |
Total | $ | — |  |  | $ | 3.2 |  |  | $ | 1.1 |  |  | $ | 4.3 |
| (In Millions)
| December 31, 2018
| Quoted Prices in Active Markets for Identical Assets/Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 0.8 |  |  | $ | 542.6 |  |  | $ | — |  |  | $ | 543.4 |
Derivative assets | — |  |  | 0.1 |  |  | 91.4 |  |  | 91.5 |
Total | $ | 0.8 |  |  | $ | 542.7 |  |  | $ | 91.4 |  |  | $ | 634.9 |
Liabilities: |  |  |  |  |  |  |
Derivative liabilities | $ | — |  |  | $ | 3.7 |  |  | $ | — |  |  | $ | 3.7 |
Total | $ | — |  |  | $ | 3.7 |  |  | $ | — |  |  | $ | 3.7 |
Financial assets classified in Level 1 included money market funds. The valuation of these instruments is based upon unadjusted quoted prices for identical assets in active markets. The valuation of financial assets and liabilities classified in Level 2 is determined using a market approach based upon quoted prices for similar assets and liabilities in active markets, or other inputs that are observable. Level 2 assets included commercial paper at December 31, 2019 and commercial paper, certificates of deposit and commodity hedge contracts at December 31, 2018. Level 2 liabilities included commodity hedge contracts at December 31, 2019 and 2018. The Level 3 assets and liabilities consist of a freestanding derivative instrument related to a certain supply agreement and derivative assets and liabilities related to certain provisional pricing arrangements with our customers. The supply agreement included in our Level 3 assets contains provisions for supplemental revenue or refunds based on the hot-rolled coil steel price in the year the iron ore product is consumed in the customer’s blast furnaces. We account for these provisions as derivative instruments at the time of sale and adjust the derivative instruments to fair value through Revenues from product sales and services each reporting period until the product is consumed and the amounts are settled. We had assets of $44.5 million and $89.3 million at December 31, 2019 and 2018, respectively, related to this supply agreement. The provisional pricing arrangements included in our Level 3 assets/liabilities specify provisional price calculations, where the pricing mechanisms generally are based on market pricing, with the final revenue rate to be based on market inputs at a specified point in time in the future, per the terms of the supply agreements. The difference between the estimated final revenue rate at the date of sale and the estimated final revenue rate at the measurement date is characterized as a derivative and is required to be accounted for separately once the revenue has been recognized. The derivative instruments are adjusted to fair value through Revenues from product sales and services each reporting period based upon current market data and forward-looking estimates provided by management until the final revenue rates are determined. At December 31, 2019, we had assets of $1.3 million and liabilities of $1.1 million related to provisional pricing arrangements. At December 31, 2018, we had assets of $2.1 million related to provisional pricing arrangements. The following table illustrates information about quantitative inputs and assumptions for the derivative assets and derivative liabilities categorized in Level 3 of the fair value hierarchy:
| Qualitative/Quantitative Information About Level 3 Fair Value Measurements
|  |  | Fair Value at December 31, 2019 (In Millions) |  | Balance Sheet Location |  | Valuation Technique |  | Unobservable Input |  | Point Estimate
| Customer supply agreement |  | $44.5 |  | Derivative assets |  | Market Approach |  | Management's estimate of hot-rolled coil steel price per net ton |  | $650
| Provisional pricing arrangements |  | $1.3 |  | Derivative assets |  | Market Approach |  | Management's estimate of Platts 62% price per dry metric ton |  | $76
| Provisional pricing arrangements |  | $1.1 |  | Other current liabilities |  | Market Approach |  | PPI estimates |  | 197
The significant unobservable input used in the fair value measurement of our customer supply agreement is a forward-looking estimate of the hot-rolled coil steel price determined by management. At December 31, 2019, the significant unobservable inputs used in the fair value measurement of our provisional pricing arrangements were management's estimate of Platts 62% price based upon current market data and index pricing and estimates for PPI data, including those for industrial commodities, fuel and steel. During the year, significant unobservable inputs used in the fair value measurement of our provisional pricing arrangements also included the Atlantic Basin pellet premium based upon current market data and index pricing, of which includes forward-looking estimates determined by management. Refer to NOTE 12 - DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES for further information. The following tables represent a reconciliation of the changes in fair value of financial instruments measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
| (In Millions)
| Derivative Assets (Level 3) |  | Derivative Liabilities (Level 3)
| Year Ended December 31, |  | Year Ended December 31,
| 2019 |  | 2018 |  | 2019 |  | 2018
Beginning balance - January 1 | $ | 91.4 |  |  | $ | 49.5 |  |  | $ | — |  |  | $ | (1.7 | )
Total gains (losses) included in earnings | 78.6 |  |  | 428.7 |  |  | (71.1 | ) |  | (6.1 | )
Settlements | (124.2 | ) |  | (386.8 | ) |  | 70.0 |  |  | 7.8 |
Ending balance - December 31 | $ | 45.8 |  |  | $ | 91.4 |  |  | $ | (1.1 | ) |  | $ | — |
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains (losses) on assets still held at the reporting date | $ | 45.8 |  |  | $ | 91.4 |  |  | $ | (1.1 | ) |  | $ | — |
The carrying values of certain financial instruments (e.g. Accounts receivable, net, Accounts payable and Other current liabilities) approximate fair value and, therefore, have been excluded from the table below. A summary of the carrying value and fair value of other financial instruments were as follows:
|  |  | (In Millions)
|  |  | December 31, 2019 |  | December 31, 2018
| Classification |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value
Long-term debt: |  |  |  |  |  |  |  |  |
Secured Notes: |  |  |  |  |  |  |  |  |
$400 Million 4.875% 2024 Senior Notes | Level 1 |  | $ | 393.6 |  |  | $ | 410.0 |  |  | $ | 392.1 |  |  | $ | 370.2 |
Unsecured Notes: |  |  |  |  |  |  |  |  |
$700 Million 4.875% 2021 Senior Notes | Level 1 |  | — |  |  | — |  |  | 123.8 |  |  | 122.3 |
$316.25 Million 1.50% 2025 Convertible Senior Notes | Level 1 |  | 246.7 |  |  | 385.0 |  |  | 235.2 |  |  | 352.4 |
$1.075 Billion 5.75% 2025 Senior Notes | Level 1 |  | 464.2 |  |  | 473.3 |  |  | 1,048.8 |  |  | 962.0 |
$750 Million 5.875% 2027 Senior Notes | Level 1 |  | 716.4 |  |  | 718.5 |  |  | — |  |  | — |
$800 Million 6.25% 2040 Senior Notes | Level 1 |  | 292.9 |  |  | 250.2 |  |  | 292.8 |  |  | 232.8 |
ABL Facility | Level 2 |  | — |  |  | — |  |  | — |  |  | — |
Fair Value Adjustment to Interest Rate Hedge | Level 2 |  | — |  |  | — |  |  | 0.2 |  |  | 0.2 |
Total long-term debt |  |  | $ | 2,113.8 |  |  | $ | 2,237.0 |  |  | $ | 2,092.9 |  |  | $ | 2,039.9 |
The fair value of long-term debt was determined using quoted market prices.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=117815213&loc=d3e19207-110258 + Details
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