Derivative and Other Financial Instruments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Derivative and Other Financial Instruments and Fair Value Measurements

Schedule of Derivative Assets Liabilities, Net offset in Balance Sheet

The table below presents gross amounts of recognized derivative assets and liabilities, the amounts offset in the unaudited condensed consolidated balance sheets and the net amounts of derivative assets and liabilities presented therein. As of September 30, 2017 and December 31, 2016, there were no amounts subject to an enforceable master netting arrangement or similar agreement that have not been offset in the unaudited condensed consolidated balance sheets.

		September 30, 2017			December 31, 2016
(In millions)	Asset		Liability		Asset		Liability
Metal	$	0.2	$	—	$	—	$	(0.4)
Natural gas		—		—		0.6		—
Net derivative assets (liabilities) as classified in the condensed consolidated balance sheets	$	0.2	$	—	$	0.6	$	(0.4)

Fair Value of Derivative Financial Instruments

The following table presents details of the balance sheet classification of the fair value of Real Alloy’s derivative financial instruments as of September 30, 2017 and December 31, 2016:

			September 30,	December 31,
(In millions)	Balance Sheet Classification		2017	2016
Derivative assets:
Metal	Prepaid expenses, supplies and other current assets	$	0.2	$	—
Natural Gas	Prepaid expenses, supplies and other current assets		—		0.6
Derivative liabilities:
Metal	Accrued liabilities	$	—	$	(0.4)

Changes in Fair Value of Common Stock Warrant Liability

The following table presents changes in the fair value of the common stock warrant liability during the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2017		2016		2017		2016
Balance, beginning of period	$	2.1	$	6.1	$	4.4	$	6.9
Warrants exercised		—		—		—		(0.1)
Change in fair value of common stock warrant liability		(0.9)		(1.9)		(3.2)		(2.6)
Balance, end of period	$	1.2	$	4.2	$	1.2	$	4.2

Assets and Liabilities Measured at Fair Value on Recurring Basis Based on Fair Value Hierarchy

The following table sets forth financial assets and liabilities that are accounted for at fair value on a recurring basis as of September 30, 2017 and December 31, 2016, and their level in the fair value hierarchy:

		Estimated Fair Value
	Fair Value	September 30,		December 31,
(In millions)	Hierarchy	2017		2016
Derivative assets	Level 2	$	0.2	$	0.6
Derivative liabilities	Level 2		—		(0.4)
Net derivative assets		$	0.2	$	0.2
Common stock warrant liability	Level 3	$	(1.2)	$	(4.4)

Schedule of Losses (Gains) on Derivative Financial Instruments

The following table presents losses (gains) on derivative financial instruments during the three and nine months ended September 30, 2017 and 2016:

	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2017		2016		2017		2016
Realized losses (gains):
Metal	$	0.3	$	0.2	$	1.7	$	0.6
Natural gas		—		—		(0.1)		0.8
Total realized losses		0.3		0.2		1.6		1.4
Unrealized losses (gains):
Metal		(0.4)		0.2		(0.6)		(0.2)
Natural gas		0.1		0.4		0.7		(0.7)
Total unrealized losses (gains)		(0.3)		0.6		0.1		(0.9)
Losses on derivative financial instruments, net	$	—	$	0.8	$	1.7	$	0.5

Carrying Value and Estimated Fair Value of Financial Instruments

The following tables present the carrying values and estimated fair values of other financial instruments as of September 30, 2017 and December 31, 2016:

		September 30, 2017
(In millions)	Fair Value Hierarchy	Carrying Value		Estimated Fair Value
Assets
Cash and cash equivalents	Level 1	$	12.8	$	12.8
Restricted cash and restricted cash equivalents	Level 1		5.6		5.6
Financing receivable	Level 2		28.1		28.1
Loans receivable, net (other noncurrent assets)	Level 3		0.7		0.7
Liabilities
Long-term debt due within one year, net:
Senior Secured Notes	Level 1	$	298.3	$	286.7
ABL Facility	Level 2		85.7		86.5
Redeemable Preferred Stock	Level 3	$	25.6	$	26.6

		December 31, 2016
(In millions)	Fair Value Hierarchy	Carrying Value		Estimated Fair Value
Assets
Cash and cash equivalents	Level 1	$	27.2	$	27.2
Restricted cash and restricted cash equivalents	Level 1		5.5		5.5
Financing receivable	Level 2		28.4		28.4
Loans receivable, net (other noncurrent assets)	Level 3		0.8		0.8
Liabilities
Long-term debt:
Senior Secured Notes	Level 1	$	294.9	$	307.5
Asset-Based Facility	Level 2		55.5		57.0
Term Loan	Level 2		1.5		1.5
Redeemable Preferred Stock	Level 3	$	24.9	$	26.8