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Derivative Financial Instruments and Related Hedging Programs (Tables)
 9 Months Ended
Sep. 30, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of material derivative positions
The following table summarizes the Company’s material derivative positions at September 30, 2012:
Commodity
 
Maturity Period
Notional Amount of contracts (mmlbs)
Aluminum —
 
 
 
Fixed priced purchase contracts
 
10/12 through 12/15
57.0
Fixed priced sales contracts
 
11/12 through 12/12
1.8
Midwest premium swap contracts1
 
10/12 through 12/13
50.2
Energy
 
Maturity Period
Notional Amount of contracts (mmbtu)
Natural gas —2
 
 
 
Call option purchase contracts
 
10/12 through 12/13
1,710,000

Put option sales contracts
 
10/12 through 12/13
1,710,000

Fixed priced purchase contracts
 
10/12 through 12/14
3,920,000

Electricity
 
Maturity Period
Notional Amount of contracts (Mwh)
Fixed priced purchase contracts
 
10/12 through 12/13
274,225

Hedges Relating to the Convertible Notes
 
Contract Period
Notional Amount of contracts (Common Shares)
Bifurcated Conversion Feature3
 
3/10 through 3/15
3,623,830

Call Options3
 
3/10 through 3/15
3,623,830

______________________
1 
Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on the Company’s purchases of primary aluminum.
2 
As of September 30, 2012, the Company’s exposure to fluctuations in natural gas prices had been substantially reduced for approximately 91%, 74% and 42% of the expected natural gas purchases for the remainder of 2012, 2013 and 2014, respectively.
3 
The Bifurcated Conversion Feature represents the cash conversion feature of the Convertible Notes. To hedge against the potential cash outflows associated with the Bifurcated Conversion Feature, the Company purchased cash-settled Call Options. The Call Options have an exercise price equal to the conversion price of the Convertible Notes, subject to anti-dilution adjustments substantially similar to the anti-dilution adjustments for the Convertible Notes. The Call Options will expire upon the maturity of the Convertible Notes. Although the fair value of the Call Options is derived from a notional number of shares of the Company’s common stock, the Call Options may only be settled in cash.
Summary of realized and unrealized gains and losses
Realized and Unrealized Gains and Losses. Realized and unrealized gains (losses) associated with all derivative contracts consisted of the following, for each period presented:
 
Quarter Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2012
 
2011
 
2012
 
2011
Realized (losses) gains:
 
 
 
 
 
 
 
Aluminum
$
(3.3
)
 
$
1.6

 
$
(7.7
)
 
$
11.9

Natural Gas
(1.6
)
 
(1.1
)
 
(5.5
)
 
(3.5
)
Electricity
(0.8
)
 
—

 
(3.0
)
 
—

Total realized (losses) gains:
$
(5.7
)
 
$
0.5

 
$
(16.2
)
 
$
8.4

Unrealized gains (losses):
 
 
 
 
 
 
 
Aluminum
$
8.3

 
$
(14.8
)
 
$
8.8

 
$
(21.4
)
Natural Gas
3.0

 
(0.9
)
 
4.7

 
0.6

Electricity
1.0

 
(1.1
)
 
1.8

 
(1.2
)
Call Options relating to the Convertible Notes
10.2

 
(16.6
)
 
5.8

 
(10.2
)
Cash conversion feature of the Convertible Notes
(10.3
)
 
20.7

 
(4.7
)
 
12.4

Total unrealized gains (losses)
$
12.2

 
$
(12.7
)
 
$
16.4

 
$
(19.8
)