Note 17:

Derivative Instruments

The Company uses derivative financial instruments from time to time as a tool to manage certain financial risks. The Company’s policy prohibits the use of leveraged derivatives. Accounting for derivatives and hedging activities requires derivative financial instruments to be measured at fair value and recognized as assets or liabilities in the consolidated balance sheets. Accounting for the gain or loss resulting from the change in fair value of the derivative financial instruments depends on whether it has been designated as a hedge, and, if so, on the nature of the hedging activity.

Commodity derivatives: The Company periodically enters into over-the-counter forward contracts related to forecasted purchases of aluminum and copper. The Company’s strategy in entering into these contracts is to reduce its exposure to changing market prices of these commodities. In fiscal 2018, the Company designated certain commodity forward contracts as cash flow hedges for accounting purposes. Accordingly, for these designated hedges, the Company records unrealized gains and losses related to the change in the fair value of the contracts in other comprehensive income (loss) within shareholders’ equity and subsequently recognizes the gains and losses within cost of sales as the underlying inventory is sold. The Company did not designate commodity contracts entered into in fiscal 2017 or 2016 for hedge accounting. Accordingly, unrealized gains and losses on these contracts have been recorded within cost of sales.

Foreign exchange contracts: The Company’s foreign exchange risk management strategy uses derivative financial instruments to mitigate foreign currency exchange risk. The Company periodically enters into foreign currency forward contracts to hedge specific foreign currency-denominated assets and liabilities as well as forecasted transactions. In fiscal 2018, the Company designated certain hedges of forecasted transactions as cash flow hedges for accounting purposes. Accordingly, for these designated hedges, the Company records unrealized gains and losses related to the change in the fair value of the contracts in other comprehensive income (loss) within shareholders’ equity and subsequently recognizes the gains and losses as a component of earnings at the same time and in the same financial statement line that the underlying transactions impact earnings. The Company has not designated forward contracts related to foreign currency-denominated assets and liabilities as hedges. Accordingly, for these non-designated contracts, the Company records unrealized gains and losses related to changes in fair value in other income and expense. Gains and losses on these foreign currency contracts are offset by foreign currency gains and losses associated with the related assets and liabilities.

The fair value of the Company’s derivative financial instruments recorded in the consolidated balance sheets were as follows:

	Balance Sheet Location	March 31, 2018		March 31, 2017
Derivatives designated as hedges:
Commodity derivatives	Other current assets	$	0.1	$	-
Foreign exchange contracts	Other current assets		0.1		-

Derivatives not designated as hedges:
Commodity derivatives	Other current assets	$	-	$	0.7
Commodity derivatives	Other current liabilities		0.2		-
Foreign exchange contracts	Other current assets		0.2		0.2
Foreign exchange contracts	Other current liabilities		0.6		-

The amounts recorded during fiscal 2018 in the consolidated financial statements resulting from gains or losses on the Company’s designated derivative financial instruments were not material. In fiscal 2018, the Company recorded gains for designated commodity and foreign exchange contracts totaling $0.2 million and $0.1 million, respectively, in other comprehensive income (loss). The Company subsequently reclassified $0.1 million of gains from foreign exchange contracts to net sales in the consolidated statement of operations.

The amounts recorded in the consolidated statements of operations for the Company’s non-designated derivative financial instruments were as follows:

		Years ended March 31,
	Statement of Operations Location	2018			2017		2016
Commodity derivatives	Cost of sales	$	0.4		$	0.5	$	(0.7	)
Foreign exchange contracts	Net sales		(0.1	)		-		-
Foreign exchange contracts	Other income (expense) - net		(0.5	)		1.3		0.6
Total gains (losses)		$	(0.2	)	$	1.8	$	(0.1	)