Derivative Contracts

We maintain a metal, energy and utility risk-management strategy that uses commodity derivative contracts to minimize significant, unanticipated gains or losses that may arise from the volatility of commodity prices.

We are also exposed to credit risk and market risk. Credit risk is the risk that the counterparty might fail to fulfill its performance obligations under the terms of the derivative contract. Market risk is the risk that the value of a derivative instrument might be adversely affected by a change in commodity price. We manage the market risk associated with derivative contracts by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

We manage credit risk associated with derivative contracts by executing derivative instruments with counterparties that we believe are credit-worthy. The amount of such credit risk is limited to the fair value of the derivative contract plus the unpaid portion of amounts due to us pursuant to terms of the derivative contracts, if any. If the credit-worthiness of these counterparties deteriorates, we believe the exposure is mitigated by provisions in the derivative arrangements which allow for the legal right of offset of amounts due to us from the counterparties, if any, with any amounts payable to the counterparties.

The following tables provide a summary of our outstanding commodity derivative contracts:



	As of
	September 30, 2017		December 31, 2016
(in millions)	Net Notional Amount		Net Notional Amount
Metal	$	4.1	$	6.7
Energy and utilities	4.4		1.2
Total	$	8.5	$	7.9



	As of
(in millions)	September 30, 2017			December 31, 2016
Notional amount - long	$	40.4		$	24.4
Notional amount - (short)	(31.9		)	(16.5		)
Net long / (short)	$	8.5		$	7.9

The fair values of derivative contracts in the consolidated balance sheets include the impact of netting derivative assets and liabilities when a legally enforceable master netting arrangement exists. The following tables summarize the gross amounts of open derivative contracts, the net amounts presented in the unaudited consolidated balance sheets, and the collateral deposited with counterparties:



	As of September 30, 2017
(in millions)	Gross Amounts of Recognized Assets		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Assets Presented in Consolidated Balance Sheet
Metal	$	3.1	$	(1.8	)	$	1.3
Energy and utilities	0.1		(0.1		)	—
Collateral on deposit	2.1		—			2.1
Total	$	5.3	$	(1.9	)	$	3.4
Consolidated balance sheet location:
Prepaid expenses and other current assets						$	3.4



	As of September 30, 2017
(in millions)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Liabilities Presented in Consolidated Balance Sheet
Metal	$	1.8	$	(1.8	)	$	—
Energy and utilities	0.2		(0.1		)	0.1
Total	$	2.0	$	(1.9	)	$	0.1
Consolidated balance sheet location:
Other noncurrent liabilities						$	0.1



	As of December 31, 2016
(in millions)	Gross Amounts of Recognized Assets		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Assets Presented in Consolidated Balance Sheet
Metal	$	3.6	$	(1.4	)	$	2.2
Energy and utilities	0.2		—			0.2
Collateral on deposit	0.4		—			0.4
Total	$	4.2	$	(1.4	)	$	2.8
Consolidated balance sheet location:
Prepaid expenses and other current assets						$	2.8



	As of December 31, 2016
(in millions)	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in Consolidated Balance Sheet			Net Amounts of Liabilities Presented in Consolidated Balance Sheet
Metal	$	1.4	$	(1.4	)	$	—
Energy and utilities	—		—			—
Total	$	1.4	$	(1.4	)	$	—

The following table summarizes the effects of derivative contracts in the consolidated statements of operations:



	Three Months Ended September 30,						Nine Months Ended September 30,
(in millions)	2017			2016			2017			2016
Losses (gains) in cost of sales for:
Metal	$	(2.2	)	$	(0.2	)	$	(2.4	)	$	(2.2	)
Energy and utilities	(0.2		)	—			0.3			0.1
Total	$	(2.4	)	$	(0.2	)	$	(2.1	)	$	(2.1	)