Derivatives and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2022

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


	June 30, 2022				December 31, 2021
	Asset Derivative		Liability Derivative		Asset Derivative		Liability Derivative
	(Dollars in millions)
Foreign currency option contracts	$	1.6	$	—	$	1.4	$	—
Derivative contracts related to forecasted sales	167.6		(656.9)		59.5		(184.2)
Financial trading contracts	12.7		—		3.4		—
Total derivatives	181.9		(656.9)		64.3		(184.2)
Effect of counterparty netting	(167.6)		167.6		(59.5)		59.5
Variation margin (received) posted	(12.7)		440.1		(3.4)		95.2
Net derivatives and variation margin as classified in the balance sheets	$	1.6	$	(49.2)	$	1.4	$	(29.5)

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 June 30, 2022
		Total (loss) gain recognized in income		(Loss) gain realized in income on derivatives		Unrealized loss recognized in income on derivatives
Derivative Instrument	Classification
		(Dollars in millions)
Foreign currency option contracts	Operating costs and expenses	$	(7.5)	$	(1.2)	$	(6.3)
Derivative contracts related to forecasted sales	Revenue	(147.1)		(122.6)		(24.5)
Financial trading contracts	Revenue	0.3		0.9		(0.6)
Total		$	(154.3)	$	(122.9)	$	(31.4)

		Three Months Ended June 30, 2021 (1)
		Total (loss) gain recognized in income		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	$	(1.2)	$	—	$	(1.2)
Derivative contracts related to forecasted sales	Revenue	(30.8)		(7.1)		(23.7)
Financial trading contracts	Revenue	1.4		(2.4)		3.8
Total		$	(30.6)	$	(9.5)	$	(21.1)


		Six Months Ended June 30, 2022
		Total (loss) gain recognized in income		(Loss) gain 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	$	(5.2)	$	(2.2)	$	(3.0)
Derivative contracts related to forecasted sales	Revenue	(516.1)		(190.6)		(325.5)
Financial trading contracts	Revenue	10.4		0.2		10.2
Total		$	(510.9)	$	(192.6)	$	(318.3)

		Six Months Ended June 30, 2021 (1)
		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	$	(4.2)	$	4.6	$	(8.8)
Derivative contracts related to forecasted sales	Revenue	(40.6)		(15.0)		(25.6)
Financial trading contracts	Revenue	0.7		(0.1)		0.8
Total		$	(44.1)	$	(10.5)	$	(33.6)

(1) ‘Results realized in income on derivatives’ has been revised to exclude revenue from the physical sale of coal by the Company’s trading and brokerage function of $23.2 million and $41.1 million for the three and six months ended June 30, 2021, respectively, to be comparable to the presentation of the 2022 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. Variation margin cash associated with the derivative balances is excluded from this table.


	June 30, 2022
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	1.6	$	—	$	1.6
Derivative contracts related to forecasted sales	—		(489.3)		—		(489.3)
Financial trading contracts	—		12.7		—		12.7
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(475.0)	$	4.0	$	(471.0)

	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(Dollars in millions)
Foreign currency option contracts	$	—	$	1.4	$	—	$	1.4
Derivative contracts related to forecasted sales	—		(124.7)		—		(124.7)
Financial trading contracts	—		3.4		—		3.4
Equity securities	—		—		4.0		4.0
Total net (liabilities) assets	$	—	$	(119.9)	$	4.0	$	(115.9)

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.


	June 30, 2022		December 31, 2021
	(Dollars in millions)
Total debt at par value	$	1,075.4	$	1,173.2
Less: Unamortized debt issuance costs and original issue discount	(28.5)		(35.4)
Net carrying amount	$	1,046.9	$	1,137.8

Estimated fair value	$	1,189.9	$	1,136.5