XML 77 R33.htm IDEA: XBRL DOCUMENT v2.4.0.8
Derivative Financial Instruments and Related Hedging Programs (Tables)
 9 Months Ended
Sep. 30, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of realized and unrealized gains and losses
Realized and unrealized (losses) gains associated with all derivative contracts consisted of the following, for each period presented:
 
Quarter Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2013
 
2012
 
2013
 
2012
Realized (losses) gains:
 
 
 
 
 
 
 
Aluminum
$
(2.0
)
 
$
(3.3
)
 
$
(3.6
)
 
$
(7.7
)
Natural Gas
(0.5
)
 
(1.6
)
 
(1.3
)
 
(5.5
)
Electricity
0.3

 
(0.8
)
 
0.2

 
(3.0
)
Foreign Currency
(0.1
)
 
—

 
(0.1
)
 
—

Total realized losses
$
(2.3
)
 
$
(5.7
)
 
$
(4.8
)
 
$
(16.2
)
Unrealized gains (losses):
 
 
 
 
 
 
 
Aluminum
$
1.7

 
$
8.3

 
$
(4.5
)
 
$
8.8

Natural Gas
—

 
3.0

 
0.8

 
4.7

Electricity
(0.3
)
 
1.0

 
0.3

 
1.8

Foreign Currency
0.1

 
—

 
—

 
—

Call Options relating to the Convertible Notes
31.0

 
10.2

 
27.9

 
5.8

Bifurcated Conversion Feature of the Convertible Notes
(29.4
)
 
(10.3
)
 
(26.8
)
 
(4.7
)
Total unrealized gains (losses)
$
3.1

 
$
12.2

 
$
(2.3
)
 
$
16.4
Summary of material derivative positions
The following table summarizes the Company’s material derivative positions at September 30, 2013:
Commodity
 
Maturity Period (month/year)
Notional Amount of contracts (mmlbs)
Aluminum —
 
 
 
Fixed priced purchase contracts
 
10/13 through 12/15
48.7

Fixed priced sales contracts
 
10/13 through 12/13
1.2

Midwest premium swap contracts1
 
10/13 through 12/15
47.0

Energy
 
Maturity Period (month/year)
Notional Amount of contracts (mmbtu)
Natural gas —2
 
 
 
Call option purchase contracts
 
10/13 through 12/13
240,000

Put option sales contracts
 
10/13 through 12/13
240,000

Fixed priced purchase contracts
 
10/13 through 12/15
6,330,000

Electricity
 
Maturity Period (month/year)
Notional Amount of contracts (Mwh)
Fixed priced purchase contracts
 
10/13 through 12/15
405,625

Foreign Currency
 
Maturity Period (month/year)
Notional Amount of contracts (as shown)
Euro —
 
 
 
Fixed priced purchase contracts
 
11/13 through 1/14
€
1,486,965

GBP —
 
 
 
Fixed priced purchase contracts
 
1/14 through 5/14
£
44,106

Hedges Relating to the Convertible Notes
 
Contract Period (month/year)
Notional Amount of contracts (Common Shares)
Bifurcated Conversion Feature3
 
3/10 through 3/15
3,634,995

Call Options3
 
3/10 through 3/15
3,634,995

______________________
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, 2013, the Company’s exposure to fluctuations in natural gas prices had been substantially reduced for approximately 78%, 82% and 58% of the expected natural gas purchases for the remainder of 2013, 2014 and 2015, respectively.
3 
The Bifurcated Conversion Feature represents the cash conversion feature of the Convertible Notes. The Call Options expire on the maturity or earlier conversion of the Convertible Notes and 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. 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 offsetting derivative instruments by counterparty
The following tables present offsetting information regarding the Company’s derivatives by type of counterparty as of September 30, 2013:
Derivative Assets and Collateral Held by Counterparty
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Received
 
Net Amount
Counterparty (with Netting Agreements)
$
0.7

 
$
—

 
$
0.7

 
$
0.6

 
$
—

 
$
0.1

Counterparty (without Netting Agreements)1
83.3

 
—

 
83.3

 
—

 
—

 
83.3

Counterparty (with partial Netting Agreements)
0.3

 
—

 
0.3

 
0.3

 
—

 
—

Total
$
84.3

 
$
—

 
$
84.3

 
$
0.9

 
$
—

 
$
83.4

Derivative Liabilities and Collateral Held by Counterparty
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Counterparty (with Netting Agreements)
$
(2.8
)
 
$
—

 
$
(2.8
)
 
$
(0.6
)
 
$
—

 
$
(2.2
)
Counterparty (without Netting Agreements)1
(90.3
)
 
—

 
(90.3
)
 
—

 
—

 
(90.3
)
Counterparty (with partial Netting Agreements)
(1.7
)
 
—

 
(1.7
)
 
(0.3
)
 
—

 
(1.4
)
Total
$
(94.8
)
 
$
—

 
$
(94.8
)
 
$
(0.9
)
 
$
—

 
$
(93.9
)
_________________
1 
Such amounts include the fair value of the Bifurcated Conversion Feature and Call Options at September 30, 2013 (see Note 10).
The following tables present offsetting information regarding the Company’s derivatives by type of counterparty as of December 31, 2012:
Derivative Assets and Collateral Held by Counterparty
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Assets
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts of Assets Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Received
 
Net Amount
Counterparty (with Netting Agreements)
$
2.3

 
$
—

 
$
2.3

 
$
1.0

 
$
—

 
$
1.3

Counterparty (without Netting Agreements)1
55.9

 
—

 
55.9

 
—

 
—

 
55.9

Counterparty (with partial Netting Agreements)
0.3

 
—

 
0.3

 
0.2

 
—

 
0.1

Total
$
58.5

 
$
—

 
$
58.5

 
$
1.2

 
$
—

 
$
57.3

Derivative Liabilities and Collateral Held by Counterparty
 
 
 
 
 
 
 
Gross Amounts Not Offset in the Consolidated Balance Sheets
 
 
 
Gross Amounts of Recognized Liabilities
 
Gross Amounts Offset in the Consolidated Balance Sheets
 
Net Amounts of Liabilities Presented in the Consolidated Balance Sheets
 
Financial Instruments
 
Cash Collateral Pledged
 
Net Amount
Counterparty (with Netting Agreements)
$
(1.7
)
 
$
—

 
$
(1.7
)
 
$
(1.0
)
 
$
—

 
$
(0.7
)
Counterparty (without Netting Agreements)1
(63.8
)
 
—

 
(63.8
)
 
—

 
—

 
(63.8
)
Counterparty (with partial Netting Agreements)
(1.2
)
 
—

 
(1.2
)
 
(0.2
)
 
—

 
(1.0
)
Total
$
(66.7
)
 
$
—

 
$
(66.7
)
 
$
(1.2
)
 
$
—

 
$
(65.5
)
_________________
1 
Such amounts include the fair value of the Bifurcated Conversion Feature and Call Options at December 31, 2012 (see Note 10).