Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2012

Schedule of valuation methodology used to measure assets and liabilities at fair value

The following section describes the valuation methodology used to measure our financial assets and liabilities that were accounted for at fair value.



Overview of Century’s valuation methodology
	Level	Significant inputs
Cash equivalents	1	Quoted market prices
Trust assets (1)	1	Quoted market prices
Surety bonds	1	Quoted market prices
Primary aluminum put option contracts	2	Quoted London Metal Exchange (“LME”) forward market prices, historical volatility measurements and risk-adjusted discount rates
Natural gas forward financial contracts	2	Quoted natural gas forward market prices for primary aluminum and risk-adjusted discount rates
Power contract	3	Quoted LME forward market prices, power tariff prices, management’s estimate of future power usage and risk-adjusted discount rates
E.ON U.S. (“E.ON”) contingent obligation	3	Quoted LME forward market prices for primary aluminum, management’s estimates of the LME forward market prices for primary aluminum for periods beyond the quoted periods and management’s estimate of future level of operations at Century Aluminum of Kentucky, our wholly owned subsidiary (“CAKY”)
Primary aluminum sales premium contracts	3	Management’s estimates of future U.S. Midwest premium and risk-adjusted discount rates


(1)	Trust assets are currently invested in money market funds. The trust has sole authority to invest the funds in secure interest producing investments consisting of short-term securities issued or guaranteed by the United States government or cash and cash equivalents.

Financial assets and liabilities at fair value on a recurring basis

Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and the placement within the fair value hierarchy levels.



Recurring Fair Value Measurements	As of March 31, 2012
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash equivalents	$	175,321	$	—	$	—	$	175,321
Trust assets	15,572		—		—		15,572
Surety bond – workers comp insurance	2,391		—		—		2,391
Primary aluminum put option contracts	—		2,981		—		2,981
Power contract	—		—		53		53
TOTAL	$	193,284	$	2,981	$	53	$	196,318
LIABILITIES:
Natural gas forward financial purchase contracts	$	—	$	236	$	—	$	236
E.ON contingent obligation – net	—		—		14,310		14,310
Primary aluminum sales contract – premium collar	—		—		1,169		1,169
TOTAL	$	—	$	236	$	15,479	$	15,715



Recurring Fair Value Measurements	As of December 31, 2011
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash equivalents	$	176,284	$	—	$	—	$	176,284
Trust assets	15,889		—		—		15,889
Surety bonds – workers comp insurance	2,391		—		—		2,391
Primary aluminum put option contracts	—		9,331		—		9,331
Power contract	—		—		106		106
TOTAL	$	194,564	$	9,331	$	106	$	204,001
LIABILITIES:
Natural gas forward financial purchase contracts	$	—	$	281	$	—	$	281
E.ON contingent obligation – net	—		—		13,958		13,958
Primary aluminum sales contract – premium collar	—		—		908		908
TOTAL	$	—	$	281	$	14,866	$	15,147

Change in level 3 fair value measurements



Change in Level 3 Fair Value Measurements during the three months ended March 31,
	Derivative liabilities - net
	2012			2011
Beginning balance, January 1,	$	(14,760	)	$	(13,802	)
Total loss (realized/unrealized) included in earnings	(613		)	(473		)
Settlements	(53		)	(36		)
Ending balance, March 31,	$	(15,426	)	$	(14,311	)
Amount of total loss included in earnings attributable to the change in unrealized losses (gains) relating to assets and liabilities held at March 31,	$	613		$	473

- Definition

Tabular disclosure of liabilities, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3). Where the quoted price in an active market for the identical liability is not available, the Level 1 input is the quoted price of an identical liability when traded as an asset.

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