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Note 7 - Derivative Instruments
 12 Months Ended
Dec. 31, 2017
Notes to Financial Statements  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
7.
    
Derivative Instruments:
 
Metals swaps
 
During
201
7,
2016
and
2015,
the Company entered into nickel swaps indexed to the London Metal Exchange (LME) price of nickel with
third
-party brokers. The nickel swaps are treated as derivatives for accounting purposes and are included in “Other accrued liabilities” and “Prepaid expenses and other” on the Consolidated Balance Sheet at
December 31, 2017
and
2016.
The Company entered into the swaps to mitigate its customers’ risk of volatility in the price of metals. The outstanding nickel swaps have
one
to
twelve
months remaining as of
December 31, 2017.
The swaps are settled with the brokers at maturity. The economic benefit or loss arising from the changes in fair value of the swaps is contractually passed through to the customer. The primary risk associated with the metals swaps is the ability of customers or
third
-party brokers to honor their agreements with the Company related to derivative instruments. If the customer or
third
-party brokers are unable to honor their agreements, the Company’s risk of loss is the fair value of the metals swaps.
 
While these derivatives are intended to help the Company manage risk, they have
not
been designated as hedging instruments. The periodic changes in fair value of the metals and embedded customer derivative instruments are included in “Cost of materials sold” in the Consolidated Statements of Comprehensive Income. The Company recognizes derivative positions with both the customer and the
third
party for the derivatives and classifies cash settlement amounts associated with them as part of “Cost of materials sold” in the Consolidated Statements of Comprehensive Income
. The cumulative change in fair value of the metals swaps that have
not
yet settled as of
December 31, 2017
are included in “Accounts receivable, net”, and the embedded customer derivatives are included in “Other accrued liabilities” on the Consolidated Balance Sheets at
December 31, 2017.
The cumulative change in fair value of the metals swaps that had
not
yet settled as of
December 31, 2016
were included in “Other accrued liabilities”, and the embedded customer derivatives were included in “Accounts receivable, net” on the Consolidated Balance Sheets at
December 31, 2016.
 
In
2014,
the Company entered into
cash flow metals hedges to mitigate its risk of volatility in the price of metals. The cash flow metals hedges were indexed to the NYMEX price of U.S. Midwest Domestic Hot-Rolled Coil Steel with
third
-party brokers. The metals hedges were accounted for as cash flow hedges. The impact of the mark-to-market adjustment on settled hedges is recorded in “Cost of materials sold” in the accompanying Consolidated Statements of Comprehensive Income. The impact for the
twelve
months ended
December 31, 2015
was
$2.4
million of expense. There were
no
cash flow metals hedges outstanding as of
December 31, 2017
or
2016.
 
Interest rate swap
 
CTI entered into an interest rate swap to reduce the impact of changes in interest rates on its IRB. The swap agreement matures in
April 2018,
the same time as the IRB, and is reduced annually by the amount of the optional principal payments on the IRB. The Company is exposed to credit loss in the event of nonperformance by the other parties to the interest rate swap agreement. However, the Company does
not
anticipate nonperformance by the counterparties. The interest rate swap is
not
treated as a hedge for accounting purposes.
 
The periodic changes in fair value of the interest rate swap and cash settlement amounts associated with the interest rate swap are included in “Interest and other expense on debt” in the Consolidated Statements of Comprehensive Income.
 
Fixed rate interest rate hedge
 
In
June 2012,
the Company entered into a forward starting fixed rate interest rate hedge commencing
June 2013
in order to eliminate the variability of cash interest payments on
$53.2
million of the then outstanding LIBOR-based borrowings under the ABL Credit Facility. The hedge, which matured on
June 1, 2016,
fixed the rate at
1.21%
plus a premium ranging from
1.25%
to
1.75%.
The fixed rate interest rate hedge was accounted for as a cash flow hedging instrument for accounting purposes.
 
There was
no
net impact from the nickel swaps or embedded customer derivative agreements to the Company
’s Consolidated Statements of Comprehensive Income for the years ended
December 31, 2017,
2016
and
2015.
The table below shows the total impact to the Company’s Consolidated Statements of Comprehensive Income through “Net income (loss)” of the derivatives for the years ended
December 31, 2017,
2016
and
2015.
 
   
Net Gain (Loss) Recognize
d
  
(in thousands)
  
201
7
    
201
6
    
201
5
  
Interest rate swap (CTI)
   $
(31
 )   $
(66
 )   $
(77
 )
Fixed interest rate swap (ABL)
    
-
      
(98
 )    
(365
 )
Cash flow metals hedges
    
-
      
-
      
(2,400
 )
Metals swaps
    
475
      
68
      
(2,304
 )
Embedded customer derivatives
    
(475
 )    
(68
 )    
2,304
  
Total loss
   $
(31
 )   $
(164
 )   $
(2,842
 )