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Derivative Instruments and Hedging Activities
 6 Months Ended
Jun. 30, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities
We are exposed to foreign currency exchange rate risk arising from transactions in the normal course of business, such as sales to foreign customers not denominated in the seller’s functional currency, foreign operations and purchases from foreign suppliers. We actively manage the exposure of our foreign currency exchange rate market risk, market fluctuations in commodity prices and interest rate risk associated with our U.S. variable rate borrowings, by entering into various hedging instruments, authorized under our policies that place controls on these activities, with counterparties that are highly rated financial institutions. We are exposed to credit-related losses in the event of non-performance by these counterparties; however, our exposure is generally limited to the unrealized gains in our contracts should any of the counterparties fail to perform as contracted.
Our hedging activities primarily involve use of foreign currency forward exchange contracts, commodity derivatives contracts and interest rate swap agreements. These contracts are designated as cash flow hedges at the inception of the contract. We use derivative instruments only in an attempt to limit underlying exposure from foreign currency exchange rate fluctuations, commodity price fluctuations and variable interest rate fluctuations to minimize earnings and cash flow volatility associated with these risks. Decisions on whether to use such contracts are made based on the amount of exposure to the currency or commodity involved and an assessment of the near-term market value for each risk. Our policy is not to allow the use of derivatives for trading or speculative purposes. Our primary foreign currency exchange rate exposures are with the Brazilian Real, the Euro and the Indian Rupee each against the U.S. Dollar. Our primary commodity risk is the price risk associated with forecasted purchases of materials used in our manufacturing process. Our primary variable interest rate risk exposure is with the PNC term loan.
We assess our futures and forwards contracts using the dollar offset method and de-designate the derivative if it is determined that the derivative will no longer offset the cash flows of the hedged item. At the time a derivative is de-designated, any losses recorded in "Accumulated other comprehensive income" ("AOCI") are recognized in our Consolidated Statements of Operations while gains remain in AOCI on our Consolidated Balance Sheets until the original forecasted cash flows occur. All subsequent gains and losses related to the de-designated derivatives are recognized in our Consolidated Statements of Operations.
The notional amount outstanding of derivative contracts designated as cash flow hedges was $29.1 million and $23.6 million at June 30, 2015 and December 31, 2014, respectively. The notional amount outstanding of de-designated derivative contracts was immaterial at June 30, 2015 and $6.5 million at December 31, 2014. The notional amount outstanding of the interest rate swaps was $6.8 million and $8.3 million, at June 30, 2015 and December 31, 2014, respectively.
We recognized $1.0 million of losses and $0.2 million of gains associated with the derivative contracts that have been de-designated during the six months ended June 30, 2015 and 2014, respectively. We have no gains in AOCI at June 30, 2015 and gains of $0.1 million at June 30, 2014, for derivative contracts that have been de-designated.
The following table presents the fair value of our derivatives designated as hedging instruments in our Consolidated Balance Sheets: 
 
Asset (Liability) Derivatives
 
June 30, 2015
 
December 31, 2014
(in millions)
Financial
Position Location
 
Fair
Value
 
Financial
Position Location
 
Fair
Value
Commodity derivatives contracts
Fair value of derivative asset
 
$
—

 
Fair value of derivative asset
 
$
—

Commodity derivatives contracts
Fair value of derivative
liability
 
(1.0
)
 
Fair value of derivative
liability
 
(0.5
)
Foreign currency derivatives
Fair value of derivative asset
 
0.3

 
Fair value of derivative asset
 
0.4

Foreign currency derivatives
Fair value of derivative
liability
 
(0.9
)
 
Fair value of derivative
liability
 
(0.7
)
Total
 
 
$
(1.6
)
 
 
 
$
(0.8
)
There were no assets or liabilities associated with de-designated hedging instruments as of June 30, 2015. As of December 31, 2014, there was a liability of $0.2 million related to de-designated commodity contracts and a liability of $0.4 million related to de-designated currency contracts.
 The following table presents the impact of derivatives designated as hedging instruments on our Consolidated Statements of Operations and AOCI for our derivatives designated as cash flow hedging instruments for the three and six months ended: 
(in millions)
Amount of Gain
(Loss) Recognized in
AOCI (Effective
Portion)
 
Location of Gain
(Loss) Reclassified
from AOCI  into
Income (Effective
Portion)
 
Amount of Gain
(Loss) Reclassified
from AOCI into
Income
(Effective Portion)
 
Location of Gain
(Loss) Recognized in
Income  (Ineffective
Portion)
 
Amount of Gain
(Loss)
Recognized in
Income (Ineffective
Portion)
June 30,
 
 
June 30,
 
 
June 30,
Three Months Ended
2015
 
2014
 
 
2015
 
2014
 
 
2015
 
2014
Commodity
$
(0.7
)
 
$
0.3

 
Cost of sales
 
$
(0.9
)
 
$
(0.2
)
 
Cost of sales
 
$
0.3

 
$
0.1

Currency
(1.3
)
 
0.1

 
Cost of sales
 
(3.3
)
 
—

 
Cost of sales
 
—

 
—

Total
$
(2.0
)
 
$
0.4

 
 
 
$
(4.2
)
 
$
(0.2
)
 
 
 
$
0.3

 
$
0.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Six Months Ended
2015
 
2014
 
 
 
2015
 
2014
 
 
 
2015
 
2014
Commodity
$
(1.1
)
 
$
(0.1
)
 
Cost of sales
 
$
(0.6
)
 
$
0.2

 
Cost of sales
 
$
0.2

 
$
0.1

Currency
(3.8
)
 
0.7

 
Cost of sales
 
(3.6
)
 
(0.6
)
 
Cost of sales
 
—

 
—

Total
$
(4.9
)
 
$
0.6

 
 
 
$
(4.2
)
 
$
(0.4
)
 
 
 
$
0.2

 
$
0.1

As of June 30, 2015, we estimate that we will reclassify into earnings during the next 12 months approximately $1.4 million of losses from the pretax amount recorded in AOCI as the anticipated cash flows occur. In addition, decreases in spot prices below our hedged prices may require us to post cash collateral with our hedge counterparties. We were required to post $0.5 million and $0.6 million of cash collateral on our hedges at June 30, 2015 and December 31, 2014, respectively, which is recorded in “Restricted cash and cash equivalents” in our Consolidated Balance Sheets.