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Derivatives, Hedging Programs and Other Financial Instruments (Tables) | 6 Months Ended
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Jun. 30, 2022
Derivative Instruments And Hedging Activities Disclosure [Abstract] |
Summary of Percentages of Expected Variable Priced Purchases of Metals Alloys and Energy | The following table summarizes the percentages as of June 30, 2022 of our expected variable priced purchases of metal alloys and energy for which we have executed derivative and/or physical delivery commitments to reduce price fluctuations for each of the following years:
|  | Remainder of 2022 |  |  | 2023 |  |  | 2024 |  |  | 2025 |  |  | 2026 |
Zinc |  | 66% |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Copper |  | 58% |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Magnesium1 |  | 64% |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Silicon |  | 100% |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Natural Gas |  | 49% |  |  | 48% |  |  | 46% |  |  | 25% |  |  | 20% |
Electricity |  | 77% |  |  | 43% |  |  |  | — |  |  |  | — |  |  |  | — |
| 1 | We have contracts in place to cover the noted percentage of our requirements at a firm or predetermined price. As our largest supplier of magnesium declared force majeure and, during the quarter ended June 30, 2022, stopped all shipments to us, we excluded its contracts from the above table. We have included only qualified magnesium suppliers secured to date in place of the excluded contracted volume.
Summary of Derivative Positions | The following table summarizes our derivative positions at June 30, 2022:
Aluminum |  | Maturity Period (month/year) |  | Notional Amount of Contracts (mmlbs) |
Fixed price purchase contracts |  | July 2022 through December 2023 |  |  | 128.0 |
Fixed price sales contracts |  | July 2022 through December 2022 |  |  | 24.3 |
Midwest premium swap contracts1 |  | July 2022 through December 2023 |  |  | 61.5 |
Alloying Metals |  | Maturity Period (month/year) |  | Notional Amount of Contracts (mmlbs) |
Fixed price purchase contracts |  | July 2022 through December 2022 |  |  | 3.2 |
Natural Gas |  | Maturity Period (month/year) |  | Notional Amount of Contracts (mmbtu) |
Fixed price purchase contracts |  | July 2022 through December 2025 |  |  | 4,320,000 |
Electricity |  | Maturity Period (month/year) |  | Notional Amount of Contracts (Mwh) |
Fixed price purchase contracts |  | July 2022 through December 2022 |  |  | 110,425 |
Euro |  | Maturity Period (month/year) |  | Notional Amount of Contracts (euro) |
Fixed price forward contracts |  | September 2022 through February 2024 |  |  | 1,160,746 |
1 | Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primary aluminum.
Summary of Loss (Gain) Associated with Derivative Contracts | The following table summarizes the amount of loss (gain) included on our Statements of Consolidated Loss associated with all derivative contracts (in millions of dollars):
|  | Quarter Ended June 30, |  |  | Six Months Ended June 30, |  |  | Statements of Consolidated
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  |  | Loss Classification
Total of income and expense line items presented in our Statements of Consolidated Loss in which the effects of hedges are recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash flow hedges |  | $ | 898.4 |  |  | $ | 673.3 |  |  | $ | 1,764.3 |  |  | $ | 935.8 |  |  | Cost of products sold
Loss (gain) recognized in our Statements of Consolidated Loss related to cash flow hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Aluminum |  | $ | 5.9 |  |  | $ | (8.1 | ) |  | $ | (12.8 | ) |  | $ | (11.0 | ) |  | Cost of products sold
Alloying Metals |  |  | — |  |  |  | 0.2 |  |  |  | — |  |  |  | 0.4 |  |  | Cost of products sold
Natural gas |  |  | (1.9 | ) |  |  | (0.1 | ) |  |  | (2.8 | ) |  |  | (0.1 | ) |  | Cost of products sold
Electricity |  |  | (1.1 | ) |  |  | (0.7 | ) |  |  | (1.4 | ) |  |  | (0.7 | ) |  | Cost of products sold
Total loss (gain) recognized in our Statements of Consolidated Loss related to cash flow hedges |  | $ | 2.9 |  |  | $ | (8.7 | ) |  | $ | (17.0 | ) |  | $ | (11.4 | ) |  |
(Gain) loss recognized in our Statements of Consolidated Loss related to non-designated hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alloying Metals – Realized gain |  | $ | (0.5 | ) |  | $ | (1.5 | ) |  | $ | (1.1 | ) |  | $ | (2.6 | ) |  | Cost of products sold
Alloying Metals – Unrealized loss |  |  | 2.9 |  |  |  | 0.4 |  |  |  | 1.9 |  |  |  | 0.1 |  |  | Cost of products sold
Total loss (gain) recognized in our Statements of Consolidated Loss related to non-designated hedges |  | $ | 2.4 |  |  | $ | (1.1 | ) |  | $ | 0.8 |  |  | $ | (2.5 | ) |  |
Schedule of Fair Value of Derivative Financial Instruments | The following table presents the fair value of our derivative financial instruments (in millions of dollars):
|  | As of June 30, 2022 |  |  | As of December 31, 2021 |
|  | Assets |  |  | Liabilities |  |  | Net Amount |  |  | Assets |  |  | Liabilities |  |  | Net Amount |
Cash Flow Hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Aluminum – |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed price purchase contracts |  | $ | 2.8 |  |  | $ | (21.6 | ) |  | $ | (18.8 | ) |  | $ | 12.2 |  |  | $ | (1.1 | ) |  | $ | 11.1 |
Fixed price sales contracts |  |  | 3.2 |  |  |  | — |  |  |  | 3.2 |  |  |  | — |  |  |  | — |  |  |  | — |
Midwest premium swap contracts |  |  | 2.2 |  |  |  | (2.0 | ) |  |  | 0.2 |  |  |  | 5.5 |  |  |  | (0.1 | ) |  |  | 5.4 |
Natural gas – Fixed price purchase contracts |  |  | 8.1 |  |  |  | — |  |  |  | 8.1 |  |  |  | 3.0 |  |  |  | (0.1 | ) |  |  | 2.9 |
Electricity – Fixed price purchase contracts |  |  | 5.1 |  |  |  | — |  |  |  | 5.1 |  |  |  | 4.4 |  |  |  | (0.6 | ) |  |  | 3.8 |
Total cash flow hedges |  |  | 21.4 |  |  |  | (23.6 | ) |  |  | (2.2 | ) |  |  | 25.1 |  |  |  | (1.9 | ) |  |  | 23.2 |
Non-Designated Hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Alloying Metals – |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed price purchase contracts |  |  | 0.2 |  |  |  | (0.6 | ) |  |  | (0.4 | ) |  |  | 1.6 |  |  |  | (0.1 | ) |  |  | 1.5 |
Total non-designated hedges |  |  | 0.2 |  |  |  | (0.6 | ) |  |  | (0.4 | ) |  |  | 1.6 |  |  |  | (0.1 | ) |  |  | 1.5 |
Total |  | $ | 21.6 |  |  | $ | (24.2 | ) |  | $ | (2.6 | ) |  | $ | 26.7 |  |  | $ | (2.0 | ) |  | $ | 24.7 |
The following table presents the total amounts of derivative assets and liabilities on our Consolidated Balance Sheets (in millions of dollars):
|  | As of June 30, 2022 |  |  | As of December 31, 2021 |
Derivative assets: |  |  |  |  |  |  |  |
Prepaid expenses and other current assets |  | $ | 17.5 |  |  | $ | 25.0 |
Other assets |  |  | 4.1 |  |  |  | 1.7 |
Total derivative assets |  | $ | 21.6 |  |  | $ | 26.7 |
Derivative liabilities: |  |  |  |  |  |  |  |
Other accrued liabilities |  | $ | (23.9 | ) |  | $ | (1.9 | )
Long-term liabilities |  |  | (0.3 | ) |  |  | (0.1 | )
Total derivative liabilities |  | $ | (24.2 | ) |  | $ | (2.0 | )

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