Derivatives and Fair Value Measurements (Tables)
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9 Months Ended |
Sep. 30, 2019 |
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| Investments All Other Investments [Abstract] |
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| Location and Fair Value Amount of Derivative Instruments |
The following table summarizes the location and fair value amount of our derivative instruments reported in our Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018:
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Asset Derivatives |
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Liability Derivatives |
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Balance Sheet Location |
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September 30, 2019 |
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December 31, 2018 |
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Balance Sheet Location |
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September 30, 2019 |
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December 31, 2018 |
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Derivatives not designated as hedging instruments under ASC 815 |
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(In millions) |
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Metal commodity contracts |
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Prepaid expenses and
other current assets |
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$ |
2.3 |
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$ |
1.6 |
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Other accrued
liabilities |
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$ |
14.6 |
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(a) |
$ |
5.4 |
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Crude oil contracts |
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Prepaid expenses and
other current assets |
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0.5 |
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|
— |
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Other accrued
liabilities |
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— |
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— |
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Foreign exchange contracts |
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Prepaid expenses and
other current assets |
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— |
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0.2 |
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Other accrued
liabilities |
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— |
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— |
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Derivatives designated as hedging instruments under ASC 815 |
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Interest rate swaps |
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Deferred charges and other assets |
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0.1 |
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1.5 |
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Other noncurrent liabilities |
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0.5 |
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— |
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Total derivatives |
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$ |
2.9 |
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$ |
3.3 |
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$ |
15.1 |
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(a) |
$ |
5.4 |
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(a) The offsetting cash collateral balance of $4.3 million held by the derivative counterparty brings the net metal commodity contract liability to $10.3 million and the net total derivative liability balance to $10.8 million. |
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| Volume of Company 's Activity in Derivative Instruments |
The following table presents the volume of the Company’s activity in derivative instruments as of September 30, 2019 and December 31, 2018:
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Notional Amount |
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Derivative Instruments |
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At September 30, 2019 |
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At December 31, 2018 |
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Unit of Measurement |
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Iron ore swap contracts |
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600,000 |
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|
— |
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Tons |
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Crude oil swap contracts |
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133,000 |
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— |
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Barrels |
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Aluminum swap contracts |
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22,112 |
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42,419 |
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Tons |
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Hot roll coil swap contracts |
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26,998 |
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36,365 |
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Tons |
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Nickel swap contracts |
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2,347 |
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1,541 |
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Tons |
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Foreign currency exchange contracts |
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2.2 million |
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4.5 million |
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U.S. dollars |
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Interest rate swaps |
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210 million |
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150 million |
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U.S. dollars |
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| Location and Amount of Gains and Losses on Derivatives Not Designated as Hedging Instruments Reported in Condensed Consolidated Statements of Comprehensive Income |
The following table summarizes the location and amount of gains and losses on derivatives not designated as hedging instruments reported in our Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018:
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Amount of Gain/(Loss) Recognized in Income on Derivatives |
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Derivatives not designated as
hedging instruments |
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Location of Gain/(Loss)
Recognized in Income |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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under ASC 815 |
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on Derivatives |
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2019 |
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2018 |
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2019 |
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2018 |
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Metal commodity contracts |
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Cost of materials sold |
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$ |
(4.9 |
) |
|
$ |
(1.4 |
) |
|
$ |
(12.9 |
) |
|
$ |
(0.1 |
) |
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Crude oil contracts |
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Warehousing, delivery, selling, general, and administrative |
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— |
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— |
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0.7 |
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— |
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Foreign exchange contracts |
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Other income and (expense), net |
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— |
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(0.1 |
) |
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(0.1 |
) |
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— |
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Total |
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$ |
(4.9 |
) |
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$ |
(1.5 |
) |
|
$ |
(12.3 |
) |
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$ |
(0.1 |
) |
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| Location and Amount of Gains and Losses on Derivatives Designated as Hedging Instruments Reported in Condensed Consolidated Statements of Comprehensive Income |
The following table summarizes the location and amount of gains and losses on derivatives designated as hedging instruments reported in our Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2019 and 2018:
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Amount of Gain/(Loss) Reclassified from Accumulated Other Comprehensive Income into Income |
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Derivatives designated as
hedging instruments |
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Location of Gain/(Loss)
Recognized in Income |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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under ASC 815 |
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on Derivatives |
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2019 |
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2018 |
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2019 |
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2018 |
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(In millions) |
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Interest rate swaps |
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Interest and other expense on debt |
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$ |
0.3 |
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$ |
0.1 |
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$ |
0.9 |
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$ |
0.2 |
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| Assets and Liabilities Measured and Recorded at Fair Value |
The following table presents assets and liabilities measured and recorded at fair value on our Condensed Consolidated Balance Sheet on a recurring basis and their level within the fair value hierarchy as of September 30, 2019:
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At September 30, 2019 |
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Level 1 |
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Level 2 |
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Level 3 |
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(In millions) |
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Assets |
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Derivatives: |
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Derivatives not designated as hedging instruments under ASC 815: |
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Metal commodity contracts |
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$ |
— |
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$ |
2.3 |
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$ |
— |
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Crude oil contracts |
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— |
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0.5 |
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— |
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Derivatives designated as hedging instruments under ASC 815: |
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— |
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Interest rate swaps |
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— |
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0.1 |
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— |
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Total derivatives |
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$ |
— |
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$ |
2.9 |
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$ |
— |
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Liabilities |
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Derivatives: |
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Derivatives not designated as hedging instruments under ASC 815: |
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Metal commodity contracts |
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$ |
— |
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$ |
14.6 |
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(a) |
$ |
— |
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Interest rate swaps |
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— |
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0.5 |
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— |
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Total derivatives |
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$ |
— |
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$ |
15.1 |
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(a) |
$ |
— |
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(a) The offsetting cash collateral balance of $4.3 million held by the derivative counterparty brings the net metal commodity contract liability to $10.3 million and the net total derivative liability balance to $10.8 million. |
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The following table presents assets and liabilities measured and recorded at fair value on our Condensed Consolidated Balance Sheet on a recurring basis and their level within the fair value hierarchy as of December 31, 2018:
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At December 31, 2018 |
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Level 1 |
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Level 2 |
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Level 3 |
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(In millions) |
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Assets |
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Derivatives: |
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Derivatives not designated as hedging instruments under ASC 815: |
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Metal commodity contracts |
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$ |
— |
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$ |
1.6 |
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$ |
— |
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Foreign exchange contracts |
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— |
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0.2 |
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|
— |
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Derivatives designated as hedging instruments under ASC 815: |
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Interest rate swaps |
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— |
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1.5 |
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|
— |
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Total derivatives |
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$ |
— |
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$ |
3.3 |
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$ |
— |
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Liabilities |
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Derivatives: |
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Derivatives not designated as hedging instruments under ASC 815: |
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Metal commodity contracts |
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$ |
— |
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$ |
5.4 |
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|
$ |
— |
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| Carrying and Estimated Fair Values of Financial Instruments |
The carrying and estimated fair values of our financial instruments at September 30, 2019 and December 31, 2018 were as follows:
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At September 30, 2019 |
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At December 31, 2018 |
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Carrying Amount |
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Fair Value |
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Carrying Amount |
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Fair Value |
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(In millions) |
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Cash and cash equivalents |
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$ |
21.8 |
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$ |
21.8 |
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$ |
23.2 |
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$ |
23.2 |
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Restricted cash |
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1.1 |
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1.1 |
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1.1 |
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1.1 |
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Receivables less provisions |
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506.6 |
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506.6 |
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521.0 |
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521.0 |
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Accounts payable |
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400.4 |
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400.4 |
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390.2 |
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390.2 |
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Long-term debt, including current portion |
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1,038.6 |
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1,073.9 |
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1,153.3 |
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1,158.5 |
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