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Derivative Financial Instruments and Related Hedging Programs (Tables)
9 Months Ended
Sep. 30, 2011
Derivative Instruments and Hedging Activities Disclosure [Abstract] 
Summary of material derivative positions
The following table summarizes the Company’s material derivative positions at September 30, 2011:
Commodity
 
Maturity Period
Notional Amount of contracts (mmlbs)
Aluminum —
 
 
 
Call option purchase contracts
 
10/11 through 12/11
12.2
Call option sales contracts
 
10/11 through 12/11
12.2
Put option purchase contracts
 
10/11 through 12/11
25.4
Put option sales contracts
 
10/11 through 12/11
12.2
Fixed priced purchase contracts
 
10/11 through 11/13
78.4
Fixed priced sales contracts
 
10/11 through 1/12
6.0
Midwest premium swap contracts1
 
10/11 through 12/12
38.0
Energy
 
Maturity Period
Notional Amount of contracts (mmbtu)
Natural gas —2
 
 
 
Call option purchase contracts
 
10/11 through 12/13
4,740,000

Call option sales contracts
 
10/11 through 12/11
690,000

Put option purchase contracts
 
10/11 through 12/11
690,000

Put option sales contracts
 
10/11 through 12/13
4,740,000

Fixed priced purchase contracts
 
10/11 through 12/13
1,920,000

Electricity
 
Maturity Period
Notional Amount of contracts (Mwh)
Fixed priced purchase contracts
 
1/12 through 12/12
219,600

Foreign Currency
 
Maturity Period
Notional Amount of contracts (as shown)
Euro-
 
 
 
Fixed priced purchase contracts
 
10/11 through 11/11
€
117,500

 
 
 
 

Hedges Relating to the Notes
 
Contract Period
Notional Amount of contracts (Common Shares)
Bifurcated Conversion Feature3
 
3/10 through 3/15
3,621,608

Call Options3
 
3/10 through 3/15
3,621,608

______________________
1 
Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on the Company’s purchases of primary aluminum.
2 
As of September 30, 2011, the Company’s exposure to fluctuations in natural gas prices had been substantially reduced for approximately 96%, 74% and 46% of the expected natural gas purchases for the remainder of 2011, 2012 and 2013, respectively.
3 
The Bifurcated Conversion Feature represents the cash conversion feature of the Notes. To hedge against the potential cash outflows associated with the Bifurcated Conversion Feature, the Company purchased cash-settled Call Options. The Call Options have an exercise price equal to the conversion price of the Notes, subject to anti-dilution adjustments substantially similar to the anti-dilution adjustments for the Notes. The Call Options will expire upon the maturity of the Notes. Although the fair value of the Call Options is derived from a notional number of shares of the Company’s common stock, the Call Options may only be settled in cash.
Summary of realized and unrealized gains (losses)
Realized and Unrealized Gain and Losses. Realized and unrealized gains (losses) associated with all derivative contracts consisted of the following, for each period presented:
 
Quarter Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2011
 
2010
 
2011
 
2010
Realized gains (losses):
 
 
 
 
 
 
 
Aluminum
$
1.6

 
$
(0.9
)
 
$
11.9

 
$
(2.6
)
Natural Gas
(1.1
)
 
(0.3
)
 
(3.5
)
 
(0.6
)
Total realized gains (losses):
$
0.5

 
$
(1.2
)
 
$
8.4

 
$
(3.2
)
Unrealized (losses) gains:
 
 
 
 
 
 
 
Aluminum
$
(14.8
)
 
$
17.1

 
$
(21.4
)
 
$
1.1

Natural Gas
(0.9
)
 
(2.4
)
 
0.6

 
(5.2
)
Electricity
(1.1
)
 
—

 
(1.2
)
 
—

Call Options relating to the Notes
(16.6
)
 
10.3

 
(10.2
)
 
4.7

Cash conversion feature of the Notes
20.7

 
(14.1
)
 
12.4

 
(7.7
)
Total unrealized (losses) gains
$
(12.7
)
 
$
10.9

 
$
(19.8
)
 
$
(7.1
)