Derivatives and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

The fair value of derivatives reflected in the accompanying condensed consolidated balance sheets are set forth in the table below.


	September 30, 2021				December 31, 2020 (1)
	Asset Derivative		Liability Derivative		Asset Derivative		Liability Derivative
	(Dollars in millions)
Foreign currency option contracts	$	1.1	$	—	$	10.3	$	—
Derivative contracts related to forecasted sales	113.0		(385.2)		16.7		(24.7)
Financial trading contracts	1.5		—		0.4		—
Total derivatives	115.6		(385.2)		27.4		(24.7)
Effect of counterparty netting	(113.0)		113.0		(16.2)		16.2
Variation margin (received) posted	(1.5)		215.8		(0.3)		6.8
Net derivatives and variation margin as classified in the balance sheets	$	1.1	$	(56.4)	$	10.9	$	(1.7)

(1) Certain comparative amounts have been reclassified to conform with the 2021 presentation. The reclassifications do not impact the prior year presentation of the accompanying condensed consolidated balance sheets.

Derivative Instruments, Gain (Loss)

The tables below show the amounts of pre-tax gains and losses related to the Company’s derivatives and their classification within the accompanying unaudited condensed consolidated statements of operations.


		Three Months Ended September 30, 2021
		Total (loss) gain recognized in income		(Loss) gain realized in income on derivatives		Unrealized gain (loss) recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	(1.0)	$	(1.6)	$	0.6
Derivative contracts related to forecasted sales	Revenues	(251.5)		(13.1)		(238.4)
Financial trading contracts	Revenues	0.7		0.7		—
Total		$	(251.8)	$	(14.0)	$	(237.8)

		Three Months Ended September 30, 2020 (1)
		Total gain (loss) recognized in income		Gain (loss) realized in income on derivatives		Unrealized gain (loss) recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	3.9	$	3.2	$	0.7
Derivative contracts related to forecasted sales	Revenues	(3.3)		12.8		(16.1)
Financial trading contracts	Revenues	(0.2)		(0.2)		—
Total		$	0.4	$	15.8	$	(15.4)


		Nine Months Ended September 30, 2021
		Total (loss) gain recognized in income		Gain (loss) realized in income on derivatives		Unrealized (loss) gain recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	(5.3)	$	3.0	$	(8.3)
Derivative contracts related to forecasted sales	Revenues	(292.1)		(28.1)		(264.0)
Financial trading contracts	Revenues	1.4		0.6		0.8
Total		$	(296.0)	$	(24.5)	$	(271.5)

		Nine Months Ended September 30, 2020 (1)
		Total gain (loss) recognized in income		Gain realized in income on derivatives		Unrealized gain (loss) recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	5.2	$	1.6	$	3.6
Derivative contracts related to forecasted sales	Revenues	19.6		30.9		(11.3)
Financial trading contracts	Revenues	(0.5)		1.9		(2.4)
Total		$	24.3	$	34.4	$	(10.1)

(1) 2020 ‘gain/(loss) realized in income on derivatives’ has been revised to exclude revenues arising from coal deliveries earned by the Company’s trading and brokerage function of ($13.0) million and ($32.1) million for the three and nine month periods ending September 30, 2020, respectively, to be comparable to the presentation of the 2021 amounts.

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following tables set forth the hierarchy of the Company’s net (liability) asset positions for which fair value is measured on a recurring basis. As noted below, variation margin cash associated with the derivative balances is excluded from this table.


	September 30, 2021
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	1.1	$	—	$	1.1
Derivative contracts related to forecasted sales	—		(272.2)		—		(272.2)
Financial trading contracts	—		1.5		—		1.5
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(269.6)	$	4.0	$	(265.6)

	December 31, 2020 (1)
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	10.3	$	—	$	10.3
Derivative contracts related to forecasted sales	—		(7.9)		—		(7.9)
Financial trading contracts	—		0.4		—		0.4
Equity securities	—		—		4.0		4.0
Total net assets	$	—	$	2.8	$	4.0	$	6.8

(1) December 31, 2020 ‘total net assets’ has been revised to exclude $6.5 million variation margin cash for comparability to 2021 presentation. Variation margin cash was $214.3 million as of September 30, 2021.

Carrying Amounts And Estimated Fair Values Of Companys Debt

The fair value of debt, shown below, is principally based on reported market values and estimates based on interest rates, maturities, credit risk, underlying collateral and completed market transactions.


	September 30, 2021		December 31, 2020
	(Dollars in millions)
Total debt at par value	$	1,373.8	$	1,591.3
Less: Unamortized debt issuance costs and original issue discount	(45.6)		(43.5)
Net carrying amount	$	1,328.2	$	1,547.8

Estimated fair value	$	1,236.3	$	987.6