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Fair Value Measurements (Tables) | 12 Months Ended
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Dec. 31, 2012
Fair Value Disclosures [Abstract] |
Assumptions used in determining fair value of the Call Option | The inputs to the model at December 31, 2012 were as follows:
Stock price at December 31, 2012 | $ | 61.69 |
Quarterly dividend yield (per share)1 | $ | 0.24 |
Risk-free interest rate 2 | 0.28 | %
Credit spread (basis points)3 | 246 |
Expected volatility rate 4 | 20.4 | %
____________
1 | Quarterly dividends during 2012 were $0.25 per share, but the model assumes a discrete $0.24 per share quarterly dividend as was paid at the inception of the Call Options. Quarterly dividends in excess of $0.24 per share do not affect the Call Options' value due to anti-dilution adjustments.
2 | The risk-free rate was based on the two-year Constant Maturity Treasury rate and three-year Constant Maturity
Treasury rate on December 31, 2012, compounded semi-annually.
3 | The credit spread is based on the Company's long-term credit rating of BB- issued by Standard & Poor’s and a senior
unsecured credit rating of Ba3 issued by Moody’s.
4 | The volatility rate was based on both observed volatility, which is based on the Company’s historical stock price, and
implied volatility from the Company’s traded options. Such volatility was further adjusted to take into consideration market participant risk tolerance.
Summary of assets and liabilities measured and recognized at fair value on a recurring basis | The following table presents the Company's financial instruments, classified under the appropriate level of the fair value hierarchy, as of December 31, 2012:
| Level 1 |  | Level 2 |  | Level 3 |  | Total
FINANCIAL ASSETS: |  |  |  |  |  |  |
Derivative Instruments |  |  |  |  |  |  |
Aluminum - |  |  |  |  |  |  |
Fixed priced purchase contracts | $ | — |  |  | $ | 2.6 |  |  | $ | — |  |  | $ | 2.6 |
Midwest premium swap contracts | — |  |  | — |  |  | 0.4 |  |  | 0.4 |
Natural Gas - |  |  |  |  |  |  |
Fixed priced purchase contracts | — |  |  | 0.2 |  |  | — |  |  | 0.2 |
Hedges Relating to the Convertible Notes - |  |  |  |  |  |  |
Call Options | — |  |  | 55.3 |  |  | — |  |  | 55.3 |
VEBAs and Canadian Pension Plan |  |  |  |  |  |  |
Fixed income investment funds in registered investment companies 1 | 192.3 |  |  | 235.4 |  |  | — |  |  | 427.7 |
Mortgage backed securities | — |  |  | 31.5 |  |  | — |  |  | 31.5 |
Corporate debt securities 2 | — |  |  | 40.4 |  |  | — |  |  | 40.4 |
Equity investment funds in registered investment companies 3 | 114.1 |  |  | 58.8 |  |  | — |  |  | 172.9 |
United States Treasuries | — |  |  | 13.6 |  |  | — |  |  | 13.6 |
Municipal debt securities | — |  |  | 3.9 |  |  | — |  |  | 3.9 |
Cash and money market investments 4 | 16.4 |  |  | — |  |  | — |  |  | 16.4 |
Asset backed securities | — |  |  | 3.2 |  |  | — |  |  | 3.2 |
Diversified investment funds in registered investment companies 5 | 6.4 |  |  | 5.7 |  |  | — |  |  | 12.1 |
Equity securities | 8.7 |  |  | — |  |  | — |  |  | 8.7 |
All Other Financial Assets |  |  |  |  |  |  |
Cash and cash equivalents 6 | 107.9 |  |  | 165.5 |  |  | — |  |  | 273.4 |
Short-term investments | — |  |  | 85.0 |  |  | — |  |  | 85.0 |
Available for sale securities | — |  |  | 5.6 |  |  | — |  |  | 5.6 |
Total | $ | 445.8 |  |  | $ | 706.7 |  |  | $ | 0.4 |  |  | $ | 1,152.9 |
FINANCIAL LIABILITIES: |  |  |  |  |  |  |
Derivative Instruments |  |  |  |  |  |  |
Aluminum - |  |  |  |  |  |  |
Fixed priced purchase contracts | $ | — |  |  | $ | (0.5 | ) |  | $ | — |  |  | $ | (0.5 | )
Natural Gas - |  |  |  |  |  |  |
Put option sales contracts | — |  |  | (0.5 | ) |  | — |  |  | (0.5 | )
Fixed priced purchase contracts | — |  |  | (2.6 | ) |  | — |  |  | (2.6 | )
Electricity - |  |  |  |  |  |  |
Fixed priced purchase contracts | — |  |  | (1.0 | ) |  | — |  |  | (1.0 | )
Hedges Relating to the Convertible Notes - |  |  |  |  |  |  |
Bifurcated Conversion Feature | — |  |  | (62.1 | ) |  | — |  |  | (62.1 | )
All Other Financial Liabilities |  |  |  |  |  |  |
Senior Notes | (250.0 | ) |  | — |  |  | — |  |  | (250.0 | )
Convertible Notes | (240.1 | ) |  | — |  |  | — |  |  | (240.1 | )
Total | $ | (490.1 | ) |  | $ | (66.7 | ) |  | $ | — |  |  | $ | (556.8 | )
The following table presents the Company's financial instruments classified under the appropriate level of the fair value hierarchy as of December 31, 2011:
| Level 1 |  | Level 2 |  | Level 3 |  | Total
FINANCIAL ASSETS: |  |  |  |  |  |  |
Derivative Instruments |  |  |  |  |  |  |
Aluminum - |  |  |  |  |  |  |
Fixed priced purchase contracts | $ | — |  |  | $ | 0.3 |  |  | $ | — |  |  | $ | 0.3 |
Midwest premium swap contracts | — |  |  | — |  |  | 0.1 |  |  | 0.1 |
Hedges Relating to the Convertible Notes - |  |  |  |  |  |  |  |  |
Call Options | — |  |  | 46.3 |  |  | — |  |  | 46.3 |
VEBAs and Canadian Pension Plan |  |  |  |  |  |  |
Fixed income investment funds in registered investment companies 1, 7 | 183.5 |  |  | 229.8 |  |  | — |  |  | 413.3 |
Mortgage backed securities | — |  |  | 33.9 |  |  | — |  |  | 33.9 |
Corporate debt securities 2 | — |  |  | 39.1 |  |  | — |  |  | 39.1 |
Equity investment funds in registered investment companies 3, 7 | 29.8 |  |  | 22.5 |  |  | — |  |  | 52.3 |
United States Treasuries | — |  |  | 1.6 |  |  | — |  |  | 1.6 |
Municipal debt securities | — |  |  | 6.3 |  |  | — |  |  | 6.3 |
Cash and money market investments 4 | 12.1 |  |  | — |  |  | — |  |  | 12.1 |
Asset backed securities | — |  |  | 5.0 |  |  | — |  |  | 5.0 |
Diversified investment funds in registered investment companies 5, 7 | 7.4 |  |  | 4.9 |  |  | — |  |  | 12.3 |
All Other Financial Assets |  |  |  |  |  |  |
Cash and cash equivalents 6 | 49.8 |  |  | — |  |  | — |  |  | 49.8 |
Available for sale securities | — |  |  | 4.9 |  |  | — |  |  | 4.9 |
Total | $ | 282.6 |  |  | $ | 394.6 |  |  | $ | 0.1 |  |  | $ | 677.3 |
FINANCIAL LIABILITIES: |  |  |  |  |  |  |
Derivative Instruments |  |  |  |  |  |  |
Aluminum - |  |  |  |  |  |  |
Fixed priced purchase contracts | $ | — |  |  | $ | (7.8 | ) |  | $ | — |  |  | $ | (7.8 | )
Midwest premium swap contracts | — |  |  | — |  |  | (0.1 | ) |  | (0.1 | )
Natural Gas - |  |  |  |  |  |  |  |  |  |
Put option sales contracts | — |  |  | (5.6 | ) |  | — |  |  | (5.6 | )
Fixed priced purchase contracts | — |  |  | (1.3 | ) |  | — |  |  | (1.3 | )
Electricity - |  |  |  |  |  |  |
Fixed priced purchase contracts | — |  |  | (1.8 | ) |  | — |  |  | (1.8 | )
Hedges Relating to the Convertible Notes - |  |  |  |  |  |  |  |  |  |
Bifurcated Conversion Feature | — |  |  | (53.9 | ) |  | — |  |  | (53.9 | )
All Other Financial Liabilities |  |  |  |  |  |  |
Nichols Promissory Note | — |  |  | (4.7 | ) |  | — |  |  | (4.7 | )
Convertible Notes | (203.0 | ) |  | — |  |  | — |  |  | (203.0 | )
Total | $ | (203.0 | ) |  | $ | (75.1 | ) |  | $ | (0.1 | ) |  | $ | (278.2 | )
_________________________
1. | This category represents investments in various fixed income funds with multiple registered investment companies. Such funds invest in diversified portfolios, including (a) marketable fixed income securities such as (i) U.S. Treasury and other government and agency securities, (ii) municipal bonds, (iii) mortgage-backed securities, (iv) asset-backed securities, (v) corporate bonds, notes and debentures in various sectors, (vi) preferred and common stock, (vii) investments in affiliated and other investment companies, (viii) short-term investments and other net assets and (vii) repurchase agreements and reverse repurchase agreements, (b) other commingled investments, (c) investment grade debt, and (d) fixed income instruments which may be represented by options, future contracts or swap agreements. The fair value of assets in this category is estimated using the net asset value per share of the investments.
2. | This category represents investments in fixed income corporate securities in various sectors. Investments in the industrial, financial and utilities sectors in 2012 represented approximately 61%, 33% and 6% of the total portfolio in this category, respectively. Investments in the industrial, financial and utilities sectors in 2011 represented approximately 53%, 38% and 9% of the total portfolio in this category, respectively. The fair value of assets in this category is estimated using the net asset value per share of the investments.
3. | This category represents investments in equity funds that invest in portfolios comprised of (i) equity securities of U.S. companies across all market capitalization, (ii) American Depositary Receipts, or ADRs, for securities of non-U.S. issuers, (iii) securities whose principal market is outside of U.S, and (iv) other short term investments. The fair value of assets in this category is determined by using quoted prices in active markets for investments considered Level 1 inputs and estimated using the net asset value per share of the investments for investments considered Level 2 inputs.
4. | This category represents cash and investments in various money market funds.
5. | The plan assets are invested in investment funds that hold a diversified portfolio of U.S and international equity securities and fixed income securities such as corporate bonds, government bonds, mortgage and asset-backed securities. The fair value of assets in this category is estimated using the net asset value per share of the investments.
6. | See Note 2 for components of cash and cash equivalents.
7. | The Company considers the fair value of publicly traded registered investment funds to be a Level 1 input within the fair value hierarchy. In the above tables, the Company has revised the previous classification of publicly traded registered investment funds ($220.7 as of December 31, 2011) from Level 2 to Level 1.
Reconciliation of activity for financial instruments classified as Level 3 | The following table presents a reconciliation of activity for such derivative contracts on a net basis:
| Level 3
Balance at December 31, 2011 | $ | — |
Total realized/unrealized gains included in: |
Cost of goods sold excluding depreciation and amortization and Unrealized (gains) losses on derivative instruments | 2.3 |
Transactions involving Level 3 derivative contracts: |
Purchases | 0.4 |
Sales | — |
Issuances | — |
Settlements | (2.3 | )
Transactions involving Level 3 derivatives - net | (1.9 | )
Transfers in and (or) out of Level 3 valuation hierarchy | — |
Balance at December 31, 2012 | $ | 0.4 |
Total gains included in Unrealized (gains) losses on derivative instruments, attributable to the change in unrealized gains/losses relating to derivative contracts held at December 31, 2012: | $ | — |
Summary of activities relating to the Company's CARO liabilities | The following table summarizes the activity relating to the Company's CARO liabilities:
|  | Year Ended December 31,
|  | 2012 |  | 2011 |  | 2010
Beginning balance |  | $ | 4.0 |  |  | $ | 3.8 |  |  | $ | 3.5 |
Liabilities incurred during the period |  | — |  |  | — |  |  | — |
Liabilities settled during the period |  | (0.5 | ) |  | (0.1 | ) |  | — |
Accretion expense |  | 0.3 |  |  | 0.3 |  |  | 0.3 |
Adjustment to accretion expense due to revisions to estimated cash flow and timing of expenditure 1 |  | 0.3 |  |  | — |  |  | (1.1 | )
Adjustment to CARO asset due to revisions to estimated cash flow |  | — |  |  | — |  |  | 1.1 |
Ending balance |  | $ | 4.1 |  |  | $ | 4.0 |  |  | $ | 3.8 |
__________________________________________
1 | The adjustment in 2012 decreased both basic and diluted earnings per share for 2012 by approximately $0.02 per share. The adjustment in 2010 increased both basic and diluted earnings per share for 2010 by approximately $0.05 per share.

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- Definition Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19279-110258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 32 -Subparagraph c -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19279-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19190-110258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 33 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 32 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 10 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 6 -Footnote 4 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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