Derivative Instruments and Hedging Activities

Our risk management and derivative accounting policies are presented in Notes 1 and 17 of the Notes included in our Annual Report and did not significantly change during the first quarter of 2015. As noted in Note 17 of the Notes included in our Annual Report, due to the nature of our counterparty agreements, and the fact that we are not subject to master netting arrangements, we are not able to net positions with the same counterparty, and therefore, present our derivative positions gross in our unaudited condensed consolidated balance sheets. Our significant derivative positions have not changed significantly since year-end, except as noted below.

Interest Rate Swaps

In the first quarter of 2015, we entered into interest rate swaps with an aggregate notional of $300 million to economically convert our fixed rate $300 million notes to floating rate debt. We will receive fixed interest payments semi-annually at a rate of 2% per annum on our $300 million hedges and pay a rate to our counterparties based on a credit spread plus the three month LIBOR rate, thereby effectively exchanging a fixed interest obligation for a floating interest obligation.

We entered into these interest rate swap agreements to minimize exposure to changes in the fair value of our $300 million notes that results from fluctuations in the benchmark interest rate, specifically LIBOR, and have designated these swaps as fair value hedges and determined that there is zero ineffectiveness, consistent with our $500 million interest rate hedges that we entered into in 2014. The changes in fair value of derivatives designated as fair value hedges and the offsetting changes in fair value of the hedged item are recognized in earnings. For the three months ended March 31, 2015, the changes in fair value of the $500 million and $300 million interest rate swaps resulted in unrealized gains of $8.4 million and $0.6 million, respectively, which were recorded in interest expense in our unaudited condensed consolidated statement of operations and were fully offset by changes in fair value of the $500 million notes and the $300 million notes attributable to the benchmark interest rate. Accordingly, as of March 31, 2015, and December 31, 2014, such cumulative adjustments had increased the carrying value of our $500 million notes by $19.2 million and $10.8 million, respectively, and as of March 31, 2015, such cumulative adjustments had increased the carrying value of our $300 million notes by $0.6 million. See Note 11, "Debt" for additional details.

Cross Currency Swap

In the first quarter of 2015, we entered into a cross currency swap agreement having a total notional of EUR 265 million ($300 million upon execution) in order to hedge a portion of the foreign currency translational impacts of our European investment. We will receive floating interest payments quarterly based on a credit spread plus the three month LIBOR (USD coupon) and pay a floating rate to our counterparty based on a credit spread plus EURIBOR (EUR coupon). As a result of this cross currency swap and the above mentioned interest rate swaps, we have economically converted the $300 million notes and associated interest to a floating rate EUR denomination. We have designated this cross currency swap as a net investment hedge and accordingly, record changes in fair value due to fluctuations in the spot rate to AOCI. The changes in fair value of the derivative attributable to changes other than those due to fluctuations in the spot rate are excluded from the assessment of hedge effectiveness and recorded to interest expense.

Forward Starting Interest Rate Swaps

As of March 31, 2015, we had entered into forward starting interest rate swap agreements having a total notional of CAD 480 million and a weighted-average fixed interest rate of 2.66%. We intend to enter into multiple additional forward starting interest rate swaps up to the date of the forecasted issuance. These swaps are designated as cash flow hedges.

Derivative Fair Value Measurements

We utilize market approaches to estimate the fair value of our derivative instruments by discounting anticipated future cash flows derived from the derivative's contractual terms and observable market interest, foreign exchange and commodity rates. The fair values of our derivatives also include credit risk adjustments to account for our counterparties' credit risk, as well as our own non-performance risk. The table below summarizes our derivative assets and liabilities that were measured at fair value as of March 31, 2015, and December 31, 2014.



				Fair value measurements as of March 31, 2015
	Total at March 31, 2015			Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
	(In millions)
Cross currency swap	$	15.9		$	—	$	15.9		$	—
Interest rate swaps	(7.1		)	—		(7.1		)	—
Foreign currency forwards	49.7			—		49.7			—
Commodity swaps	(8.2		)	—		(8.2		)	—
Total	$	50.3		$	—	$	50.3		$	—



				Fair value measurements as of December 31, 2014
	Total at December 31, 2014			Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)			Significant unobservable inputs (Level 3)
	(In millions)
Interest rate swaps	$	(2.2	)	$	—	$	(2.2	)	$	—
Foreign currency forwards	31.6			—		31.6			—
Commodity swaps	(8.9		)	—		(8.9		)	—
Total	$	20.5		$	—	$	20.5		$	—

As of March 31, 2015, we had no significant transfers between Level 1 and Level 2. New derivative contracts transacted during the three months ended March 31, 2015, were all included in Level 2.

Results of Period Derivative Activity

The tables below include the year-to-date results of our derivative activity in the unaudited condensed consolidated balance sheets as of March 31, 2015, and December 31, 2014, and the unaudited condensed consolidated statements of operations for the three months ended March 31, 2015, and March 31, 2014.

Fair Value of Derivative Instruments in the Condensed Consolidated Balance Sheet (in millions)



	March 31, 2015
			Asset derivatives			Liability derivatives
	Notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
Derivatives designated as hedging instruments:
Cross currency swap	$	284.5	Other non-current assets	$	15.9	Other liabilities	$	—
Interest rate swaps	$	1,178.4	Other current assets	—		Accounts payable and other current liabilities	(26.9		)
			Other non-current assets	19.8		Other liabilities	—
Foreign currency forwards	$	344.2	Other current assets	29.7		Accounts payable and other current liabilities	—
			Other non-current assets	19.0		Other liabilities	(0.2		)
Total derivatives designated as hedging instruments				$	84.4		$	(27.1	)
Derivatives not designated as hedging instruments:
Commodity swaps	$	120.9	Other current assets	$	1.0	Accounts payable and other current liabilities	$	(5.3	)
			Other non-current assets	1.1		Other liabilities	(5.0		)
Foreign currency forwards	$	28.6	Other current assets	1.2		Accounts payable and other current liabilities	—
Total derivatives not designated as hedging instruments				$	3.3		$	(10.3	)



	December 31, 2014
			Asset derivatives			Liability derivatives
	Notional amount		Balance sheet location	Fair value		Balance sheet location	Fair value
Derivatives designated as hedging instruments:
Interest rate swaps	$	844.2	Other current assets	$	—	Accounts payable and other current liabilities	$	(13.0	)
			Other non-current assets	10.8		Other liabilities	—
Foreign currency forwards	$	343.4	Other current assets	19.5		Accounts payable and other current liabilities	—
			Other non-current assets	12.1		Other liabilities	—
Total derivatives designated as hedging instruments				$	42.4		$	(13.0	)
Derivatives not designated as hedging instruments:
Commodity swaps	$	111.1	Other current assets	$	0.2	Accounts payable and other current liabilities	$	(4.9	)
			Other non-current assets	0.4		Other liabilities	(4.6		)
Total derivatives not designated as hedging instruments				$	0.6		$	(9.5	)

The Pretax Effect of Derivative Instruments on the Condensed Consolidated Statement of Operations (in millions)



For the Three Months Ended March 31, 2015
Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative (effective portion)			Location of gain (loss) reclassified from AOCI into income (effective portion)	Amount of gain (loss) recognized from AOCI on derivative (effective portion)			Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Forward starting interest rate swaps	$	(15.7	)	Interest expense, net	$	(0.3	)	Interest expense, net	$	—
Foreign currency forwards	21.5			Other income (expense), net	(2.4		)	Other income (expense), net	—
				Cost of goods sold	4.7			Cost of goods sold	—
Total	$	5.8			$	2.0			$	—



For the Three Months Ended March 31, 2015
Derivatives and non-derivative financial instruments in net investment hedge relationships	Amount of gain (loss) recognized in OCI (effective portion)		Location of gain (loss) reclassified from AOCI into income (effective portion)	Amount of gain (loss) recognized from AOCI (effective portion)		Location of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)
Cross currency swap	$	15.5	Interest expense, net	$	—	Interest expense, net	$	0.4
Total	$	15.5		$	—		$	0.4



For the Three Months Ended March 31, 2014
Derivatives in cash flow hedge relationships	Amount of gain (loss) recognized in OCI on derivative (effective portion)		Location of gain (loss) reclassified from AOCI into income (effective portion)	Amount of gain (loss) recognized from AOCI on derivative (effective portion)			Location of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income on derivative (ineffective portion and amount excluded from effectiveness testing)
Forward starting interest rate swaps	$	—	Interest expense, net	$	(0.4	)	Interest expense, net	$	—
Foreign currency forwards	14.7		Other income (expense), net	1.6			Other income (expense), net	—
			Cost of goods sold	3.3			Cost of goods sold	—
Commodity swaps	0.3		Cost of goods sold	0.2			Cost of goods sold	—
Total	$	15.0		$	4.7			$	—



For the Three Months Ended March 31, 2014
Derivatives and non-derivative financial instruments in net investment hedge relationships	Amount of gain (loss) recognized in OCI (effective portion)		Location of gain (loss) reclassified from AOCI into income (effective portion)	Amount of gain (loss) recognized from AOCI (effective portion)		Location of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)	Amount of gain (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)
Cross currency swap	$	6.5	Other income (expense), net	$	—	Other income (expense), net	$	—
Total	$	6.5		$	—		$	—

We expect net gains of approximately $28 million (pretax) recorded in AOCI at March 31, 2015, will be reclassified into earnings within the next 12 months. For derivatives designated in cash flow hedge relationships, the maximum length of time over which forecasted transactions are hedged at March 31, 2015, is three years.

Other Derivatives (in millions)



For the Three Months Ended March 31, 2015
Derivatives not in hedging relationships	Location of gain (loss) recognized in income on derivative	Amount of gain (loss) recognized in income on derivative
Commodity swaps	Cost of goods sold	$	(0.6	)
Foreign currency forwards	Other income (expense), net	1.2
Total		$	0.6



For the Three Months Ended March 31, 2014
Derivatives not in hedging relationships	Location of gain (loss) recognized in income on derivative	Amount of gain (loss) recognized in income on derivative
Commodity Swaps	Cost of goods sold	$	(1.3	)
Total		$	(1.3	)

For the Three Months Ended March 31, 2015

Derivatives in fair value hedge relationships

Amount of gain (loss) recognized in income on derivative

Location of gain (loss)recognized in income

Interest rate swaps

Interest expense, net