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Derivatives, Hedging Programs and Other Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Summary of Derivative Positions

The following table summarizes our derivative positions at June 30, 2023:

 

Aluminum

 

Maturity Period

 

Notional Amount of Contracts (mmlbs)

 

Fixed price purchase contracts

 

July 2023 through October 2024

 

 

91.9

 

Fixed price sale contracts

 

July 2023 through October 2023

 

 

21.6

 

Midwest premium purchase contracts1

 

July 2023 through October 2024

 

 

82.8

 

Midwest premium sale contracts1

 

July 2023 through October 2023

 

 

41.9

 

 

Alloying Metals

 

Maturity Period

 

Notional Amount of Contracts (mmlbs)

 

Fixed price purchase contracts

 

July 2023 through December 2024

 

 

1.7

 

 

Natural Gas

 

Maturity Period

 

Notional Amount of Contracts (mmbtu)

 

Fixed price purchase contracts

 

July 2023 through December 2026

 

 

3,360,000

 

 

Euro

 

Maturity Period

 

Notional Amount of Contracts (EUR)

 

Fixed price forward contracts

 

July 2023 through June 2024

 

 

5,857,416

 

 

British Pounds

 

Maturity Period

 

Notional Amount of Contracts (GBP)

 

Fixed price forward purchase contract

 

August 2023 through September 2023

 

 

77,742

 

Fixed price forward sale contract

 

August 2023 through September 2023

 

 

77,742

 

 

1
Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primary aluminum.
Summary of Loss (Gain) Associated with Derivative Contracts

The following table summarizes the amount of loss (gain) on derivative contracts recorded within our Statements of Consolidated Income (Loss) in Cost of products sold (in millions of dollars):

 

 

 

Quarter Ended June 30,

 

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Total of income and expense line items presented in our Statements of Consolidated Income (Loss) in which the effects of hedges are recorded:

 

 

 

 

 

 

 

Cash flow hedges

 

$

718.4

 

 

$

898.4

 

 

$

1,449.5

 

 

$

1,764.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) recognized in our Statements of Consolidated Income (Loss) related to cash flow hedges:

 

 

 

 

 

 

 

 

 

 

 

 

Aluminum

 

$

5.2

 

 

$

5.9

 

 

$

5.7

 

 

$

(12.8

)

Natural gas

 

 

0.3

 

 

 

(1.9

)

 

 

—

 

 

 

(2.8

)

Electricity

 

 

—

 

 

 

(1.1

)

 

 

—

 

 

 

(1.4

)

Total loss (gain) recognized in our Statements of Consolidated Income (Loss) related to cash flow hedges

 

$

5.5

 

 

$

2.9

 

 

$

5.7

 

 

$

(17.0

)

 

 

 

 

 

 

 

 

 

 

 

 

Loss (gain) recognized in our Statements of Consolidated Income (Loss) related to non-designated hedges:

 

 

 

 

 

 

 

 

 

 

 

 

Alloying Metals – Realized loss (gain)

 

$

—

 

 

$

(0.5

)

 

$

—

 

 

$

(1.1

)

Alloying Metals – Unrealized loss

 

 

0.2

 

 

 

2.9

 

 

 

0.1

 

 

 

1.9

 

Total loss recognized in our Statements of Consolidated Income (Loss) related to non-designated hedges

 

$

0.2

 

 

$

2.4

 

 

$

0.1

 

 

$

0.8

 
Schedule of Fair Value of Derivative Financial Instruments The following table presents the fair value of our derivative financial instruments (in millions of dollars):

 

 

 

As of June 30, 2023

 

 

As of December 31, 2022

 

 

 

Assets

 

 

Liabilities

 

 

Net Amount

 

 

Assets

 

 

Liabilities

 

 

Net Amount

 

Cash Flow Hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Aluminum –

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed price purchase contracts

 

$

—

 

 

$

(7.1

)

 

$

(7.1

)

 

$

0.7

 

 

$

(3.9

)

 

$

(3.2

)

Fixed price sale contracts

 

 

0.6

 

 

 

—

 

 

 

0.6

 

 

 

—

 

 

 

—

 

 

 

—

 

Midwest premium purchase contracts

 

 

0.1

 

 

 

(1.1

)

 

 

(1.0

)

 

 

0.5

 

 

 

(1.4

)

 

 

(0.9

)

Midwest premium sale contracts

 

 

0.7

 

 

 

—

 

 

 

0.7

 

 

 

—

 

 

 

—

 

 

 

—

 

Natural gas – Fixed price purchase contracts

 

 

1.4

 

 

 

(0.2

)

 

 

1.2

 

 

 

4.7

 

 

 

—

 

 

 

4.7

 

Foreign currency – Fixed price forward contracts

 

 

0.1

 

 

 

—

 

 

 

0.1

 

 

 

—

 

 

 

—

 

 

 

—

 

Total cash flow hedges

 

 

2.9

 

 

 

(8.4

)

 

 

(5.5

)

 

 

5.9

 

 

 

(5.3

)

 

 

0.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Designated Hedges:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Alloying Metals – Fixed price purchase contracts

 

 

—

 

 

 

(0.1

)

 

 

(0.1

)

 

 

—

 

 

 

—

 

 

 

—

 

Total non-designated hedges

 

 

—

 

 

 

(0.1

)

 

 

(0.1

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$

2.9

 

 

$

(8.5

)

 

$

(5.6

)

 

$

5.9

 

 

$

(5.3

)

 

$

0.6

 

 

The following table presents the total amounts of derivative assets and liabilities on our Consolidated Balance Sheets (in millions of dollars):

 

 

 

As of June 30, 2023

 

 

As of December 31, 2022

 

Derivative assets:

 

 

 

 

 

 

Prepaid expenses and other current assets

 

$

2.1

 

 

$

3.6

 

Other assets

 

 

0.8

 

 

 

2.3

 

Total derivative assets

 

$

2.9

 

 

$

5.9

 

Derivative liabilities:

 

 

 

 

 

 

Other accrued liabilities

 

$

(8.1

)

 

$

(5.3

)

Long-term liabilities

 

 

(0.4

)

 

 

—

 

Total derivative liabilities

 

$

(8.5

)

 

$

(5.3

)