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

12 Months Ended

Dec. 31, 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 assets and liabilities, the amounts offset in the consolidated balance sheets and the net amounts of assets and liabilities presented as of December 31, 2017 and 2016. As of December 31, 2017 and 2016, there were no amounts subject to enforceable master netting arrangements or similar agreements that have not been offset in the consolidated balance sheets.

	December 31, 2017				December 31, 2016
(In millions)	Asset		Liability		Asset		Liability
Metal	$	—	$	—	$	—	$	(0.4)
Natural gas		—		—		0.6		—
Total		—		—		0.6		(0.4)
Effect of counterparty netting arrangements		—		—		—		—
Net derivative assets (liabilities) as classified in the consolidated balance sheets	$	—	$	—	$	0.6	$	(0.4)

Fair Value of Derivative Financial Instruments

The following table presents details of the fair value of Real Alloy’s derivative financial instruments as of December 31, 2017 and 2016, as recorded in the consolidated balance sheets:

		December 31,
(In millions)	Balance Sheet Classification	2017		2016
Derivative assets:
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 years ended December 31, 2017,  2016 and 2015:

	Year Ended December 31,
(In millions)	2017		2016		2015
Balance, beginning of period	$	4.4	$	6.9	$	5.6
Warrants exercised		—		(0.1)		(0.2)
Change in fair value of common stock warrant liability		(4.4)		(2.4)		1.5
Balance, end of period	$	—	$	4.4	$	6.9

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

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

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

Schedule of Losses (Gains) on Derivative Financial Instruments

The following table presents losses on derivative financial instruments during the years ended December 31, 2017,  2016 and 2015:

	Year Ended December 31,
(In millions)	2017		2016		2015
Realized losses:
Metal	$	1.8	$	0.6	$	2.9
Natural gas		0.1		0.6		0.5
Total realized losses		1.9		1.2		3.4
Unrealized losses (gains):
Metal		(0.4)		0.3		—
Natural gas		0.6		(1.3)		0.8
Total unrealized losses (gains)		0.2		(1.0)		0.8
Losses on derivative financial instruments, net	$	2.1	$	0.2	$	4.2

Summary of Assets Measured at Estimated Fair Value on Nonrecurring Basis Based on Fair Value Hierarchy

The following table presents the Company’s assets measured at estimated fair value on a nonrecurring basis as of December 31, 2017 based on the fair value hierarchy:

		December 31,
(In millions)	Hierarchy	2017		2016
Goodwill - RANA	Level 3	$	—	$	33.6
Property, plant and equipment - RANA	Level 3		141.9		195.0
Identifiable intangible assets - RANA	Level 3		—		12.5
Identifiable intangible assets - Cosmedicine	Level 3		—		—
Inventories - Cosmedicine (Prepaid expenses, supplies and other current assets)	Level 3		—		0.1

Summary of Losses on Assets Recorded at Fair Value on Nonrecurring Basis

The following table summarizes losses on assets recorded at fair value on a nonrecurring basis for the years ended December 31, 2017 and 2016:

	Year Ended December 31,
(In millions)	2017		2016
Goodwill impairment - RANA	$	33.6	$	61.8
Property, plant and equipment - RANA		40.5		—
Identifiable intangible assets impairment - RANA		10.1		—
Identifiable intangible assets impairment - Cosmedicine		—		0.1
Inventories impairment - Cosmedicine		0.1		0.7

Carrying Value and Estimated Fair Value of Financial Instruments

The following tables present the fair value hierarchy, carrying values and fair value estimates of other financial instruments as of December 31, 2017 and 2016:

		December 31, 2017
(In millions)	Fair Value Hierarchy	Carrying Value		Estimated Fair Value
Assets
Cash and cash equivalents	Level 1	$	24.9	$	24.9
Restricted cash and restricted cash equivalents	Level 1		7.9		7.9
Financing receivable	Level 2		16.5		16.5
Loans receivable, net (other noncurrent assets)	Level 3		0.7		0.7
Liabilities
RA DIP Financing:
RA DIP ABL Facility	Level 2	$	66.7	$	67.9
New Money DIP Term Notes	Level 2		37.2		40.0
Liabilities subject to compromise:
Senior Secured Notes	Level 1		135.0		98.9
Roll Up DIP Term Notes	Level 1		170.0		124.5
Redeemable Preferred Stock	Level 3	$	28.5	$	13.1

		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
Revolving Credit Facilities	Level 2		55.5		57.0
Term loan	Level 2		1.5		1.5
Redeemable Preferred Stock	Level 3	$	24.9	$	26.8

Valuation Techniques and Unobservable Inputs Applied to Level Three Fair Value Measurements

The following tables present quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements as of December 31, 2017 and 2016:

	December 31, 2017
(In millions)	Estimated Fair Value		Valuation Technique	Unobservable Input	Input Value
Common stock warrant liability	$	—	Black-Scholes	Volatility		107.6	%
				Expected term		2.4 years
				Equity raise probability		—	%
				Issue price discount to fair value		—	%
Redeemable Preferred Stock	$	13.1	RI Plan	Percentage ownership exchange		31	%
				Percentage ownership of the RI Plan sponsor		49	%

	December 31, 2016
(In millions)	Estimated Fair Value		Valuation Technique	Unobservable Input	Input Value
Common stock warrant liability	$	4.4	Monte Carlo Simulation	Volatility		47.1	%
				Expected term		3.4 years
				Equity raise probability		60	%
				Issue price discount to fair value		25	%
Redeemable Preferred Stock	$	26.8	Discounted cash flow	Credit spread		15	%
				Redemption period		44 months