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FAIR VALUE MEASUREMENTS | 9 Months Ended
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Sep. 30, 2018
Fair Value Disclosures [Abstract] |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties or the amount that would be paid to transfer a liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity. Assets and liabilities recorded at fair value in the condensed balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, defined by ASC 820 “Fair Value Measurements and Disclosures” (ASC 820) are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows: Level 1 — Inputs were unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. Level 2 — Inputs (other than quoted prices included in Level 1) were either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. Level 3 — Inputs reflected management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration was given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. We are required to separately disclose assets and liabilities measured at fair value on a recurring basis, from those measured at fair value on a nonrecurring basis. Nonfinancial assets measured at fair value on a nonrecurring basis are intangible assets and goodwill, which are reviewed for impairment annually in the fourth quarter and/or when circumstances or other events indicate that impairment may have occurred. Determining which hierarchical level an asset or liability falls within requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table summarizes the assets and liabilities measured at fair value in the condensed balance sheets:
| Fair Value Measurements
Balance at September 30, 2018 | Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets | ($ in millions)
Interest rate swaps | $ | — |  |  | $ | 9.2 |  |  | $ | — |  |  | $ | 9.2 |
Commodity contracts | — |  |  | 2.2 |  |  | — |  |  | 2.2 |
Foreign exchange contracts | — |  |  | 0.2 |  |  | — |  |  | 0.2 |
Liabilities |  |  |  |  |  |  |
Interest rate swaps | $ | — |  |  | $ | 47.8 |  |  | $ | — |  |  | $ | 47.8 |
Commodity contracts | — |  |  | 1.5 |  |  | — |  |  | 1.5 |
Foreign exchange contracts | — |  |  | 2.2 |  |  | — |  |  | 2.2 |
Balance at December 31, 2017 |  |  |  |  |  |  |
Assets |
Interest rate swaps | $ | — |  |  | $ | 10.5 |  |  | $ | — |  |  | $ | 10.5 |
Commodity contracts | — |  |  | 11.3 |  |  | — |  |  | 11.3 |
Foreign exchange contracts | — |  |  | 1.0 |  |  | — |  |  | 1.0 |
Liabilities |  |  |  |  |  |  |
Interest rate swaps | $ | — |  |  | $ | 28.1 |  |  | $ | — |  |  | $ | 28.1 |
Commodity contracts | — |  |  | 3.8 |  |  | — |  |  | 3.8 |
Balance at September 30, 2017 |  |  |  |  |  |  |
Assets |
Interest rate swaps | $ | — |  |  | $ | 8.7 |  |  | $ | — |  |  | $ | 8.7 |
Commodity contracts | — |  |  | 7.4 |  |  | — |  |  | 7.4 |
Foreign exchange contracts | — |  |  | 0.2 |  |  | — |  |  | 0.2 |
Liabilities |  |  |  |  |  |  |
Interest rate swaps | $ | — |  |  | $ | 23.9 |  |  | $ | — |  |  | $ | 23.9 |
Commodity contracts | — |  |  | 2.6 |  |  | — |  |  | 2.6 |
Foreign exchange contracts | — |  |  | 0.1 |  |  | — |  |  | 0.1 |
For the nine months ended September 30, 2018, there were no transfers into or out of Level 1, Level 2 or Level 3. Interest Rate Swaps Interest rate swap financial instruments were valued using the “income approach” valuation technique. This method used valuation techniques to convert future amounts to a single present amount. The measurement was based on the value indicated by current market expectations about those future amounts. We use interest rate swaps as a means of managing interest expense and floating interest rate exposure to optimal levels. Commodity Forward Contracts Commodity contract financial instruments were valued primarily based on prices and other relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for commodities. We use commodity derivative contracts for certain raw materials and energy costs such as copper, zinc, lead, electricity and natural gas to provide a measure of stability in managing our exposure to price fluctuations. Foreign Currency Contracts Foreign currency contract financial instruments were valued primarily based on relevant information observable in market transactions involving identical or comparable assets or liabilities including both forward and spot prices for currencies. We enter into forward sales and purchase contracts to manage currency risk resulting from purchase and sale commitments denominated in foreign currencies. Financial Instruments The carrying values of cash and cash equivalents, accounts receivable and accounts payable approximated fair values due to the short-term maturities of these instruments. The fair value of our long-term debt was determined based on current market rates for debt of similar risk and maturities. The following table summarizes the fair value measurements of debt and the actual debt recorded on our condensed balance sheets:
| Fair Value Measurements |  | Amount recorded on balance sheets
| Level 1 |  | Level 2 |  | Level 3 |  | Total |
| ($ in millions)
Balance at September 30, 2018 | $ | — |  |  | $ | 3,331.9 |  |  | $ | 153.0 |  |  | $ | 3,484.9 |  |  | $ | 3,337.3 |
Balance at December 31, 2017 | — |  |  | 3,758.0 |  |  | 153.0 |  |  | 3,911.0 |  |  | 3,612.0 |
Balance at September 30, 2017 | — |  |  | 3,920.5 |  |  | 153.0 |  |  | 4,073.5 |  |  | 3,745.2 |
Nonrecurring Fair Value Measurements In addition to assets and liabilities that are recorded at fair value on a recurring basis, we record assets and liabilities at fair value on a nonrecurring basis as required by ASC 820. There were no assets measured at fair value on a nonrecurring basis as of September 30, 2018, December 31, 2017 and September 30, 2017.

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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