XML 105 R41.htm IDEA: XBRL DOCUMENT v2.4.0.6
Derivative Financial Instruments and Related Hedging Programs (Tables)
 12 Months Ended
Dec. 31, 2012
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of material derivative positions
The following table summarizes the Company's material derivative positions at December 31, 2012:

 
 
 
 
Notional
Amount of
Contracts
Commodity
 
Maturity Period
 
(mmlbs)
Aluminum —
 
 
 
 
Fixed priced purchase contracts
 
1/13 through 12/15
 
59.5

Fixed priced sales contracts
 
4/13 through 11/13
 
1.0

Midwest premium swap contracts1
 
1/13 through 12/13
 
54.5


 
 
 
 
Notional
Amount
of Contracts
Energy
 
Maturity Period
 
(mmbtu)
Natural gas —2
 
 
 
 
Call option purchase contracts
 
1/13 through 12/13
 
930,000

Put option sales contracts
 
1/13 through 12/13
 
930,000

Fixed priced purchase contracts
 
1/13 through 12/15
 
7,550,000


 
 
 
 
Notional
Amount
of Contracts
Electricity
 
Maturity Period
 
(Mwh)
Fixed priced purchase contracts
 
1/13 through 12/14
 
394,200


 
 
 
 
Notional Amount of contracts
Currency
 
Maturity Period
 
 (as shown)
Canadian Dollar —
 
 
 
 
Fixed priced purchase contracts
 
1/13 through 1/13
 
C$
604,839

Swiss Franc —
 
 
 
 
Fixed priced purchase contracts
 
1/13 through 1/13
 
Fr.
172,123


 
 
 
 
Notional
Amount
of Contracts
Hedges Relating to the Convertible Notes
 
Contract Period
 
(Common Shares)
Bifurcated Conversion Feature3
 
3/10 through 3/15
 
3,624,449

Call Options3
 
3/10 through 3/15
 
3,624,449

_________________________
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 December 31, 2012, the Company's exposure to fluctuations in natural gas prices had been substantially reduced for approximately 82%, 75% and 46% of the expected natural gas purchases for 2013, 2014 and 2015, 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 adjustment provisions substantially similar to the Convertible Notes, which may cause the exercise price to decrease and the notional amount of shares relating thereto to increase. 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 (losses) associated with all derivative contracts consisted of the following, for each period presented:

 
 
Year Ended December 31,
 
 
2012
 
2011
 
2010
Realized (losses) gains:
 
 
 
 
 
 
Aluminum
 
$
(9.0
)
 
$
9.6

 
$
(0.6
)
Natural Gas
 
(6.7
)
 
(5.2
)
 
(1.3
)
Electricity
 
(3.4
)
 
—

 
—

Total realized (losses) gains:
 
$
(19.1
)
 
$
4.4

 
$
(1.9
)
Unrealized gains (losses):
 
 
 
 
 
 
Aluminum
 
$
10.1

 
$
(26.5
)
 
$
3.6

Natural Gas
 
4.3

 
(1.6
)
 
(4.4
)
Electricity
 
0.8

 
(1.8
)
 
—

Foreign Currency
 
—

 
—

 
0.1

Call Options
 
9.0

 
(2.1
)
 
17.0

Bifurcated Conversion Feature
 
(8.2
)
 
6.1

 
(21.9
)
Total unrealized gains (losses)
 
$
16.0

 
$
(25.9
)
 
$
(5.6
)