Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2013

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 and are categorized based on the fair value hierarchy described in ASC 820 "Fair Value Measurements."



Overview of Century’s valuation methodology
	Level	Significant inputs
Cash equivalents/money market funds	1	Quoted market prices
Trust assets (1)	1	Quoted market prices
Surety bonds	1	Quoted market prices
E.ON U.S. (“E.ON”) contingent obligation	3	Quoted LME forward market, management’s estimates of the LME forward market prices for periods beyond the quoted periods and management’s estimate of future level of operations at 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. These trust assets are held to fund the non-qualified supplemental executive pension benefit obligations for certain of our officers. 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



Recurring Fair Value Measurements	As of March 31, 2013
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash equivalents	$	182,844	$	—	$	—	$	182,844
Trust assets (1)	13,433		—		—		13,433
Surety bond – workers comp insurance	2,123		—		—		2,123
TOTAL	$	198,400	$	—	$	—	$	198,400
LIABILITIES:
E.ON contingent obligation - net (2)	$	—	$	—	$	—	$	—
Primary aluminum sales contract – premium collar	—		—		1,030		1,030
TOTAL	$	—	$	—	$	1,030	$	1,030


(1)	Trust assets are currently invested in money market funds and excludes the cash surrender value of the life insurance policies in the trust.


(2)	Based on the LME forward market prices for primary aluminum at March 31, 2013 and management's estimate of the LME forward market for periods beyond the quoted periods, we will not have any payment obligations for the E.ON contingent obligation through the term of the agreement which expires in 2028. See Note 9 Debt for additional information about the E.ON contingent obligation fair value.



Recurring Fair Value Measurements	As of December 31, 2012
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash equivalents	$	168,309	$	—	$	—	$	168,309
Trust assets (1)	14,254		—		—		14,254
Surety bonds – workers comp insurance	2,123		—		—		2,123
TOTAL	$	184,686	$	—	$	—	$	184,686
LIABILITIES:
E.ON contingent obligation- net	$	—	$	—	$	15,369	$	15,369
Primary aluminum sales contract – premium collar	—		—		1,170		1,170
TOTAL	$	—	$	—	$	16,539	$	16,539


(1)	Trust assets are currently invested in money market funds and excludes the cash surrender value of the life insurance policies in the trust.

Change in level 3 fair value measurements



Change in Level 3 Fair Value Measurements during the three months ended March 31,
	Derivative liabilities - net
	2013			2012
Beginning balance, January 1,	$	(16,539	)	$	(14,760	)
Total gain (loss) (realized/unrealized) included in earnings	15,509			(613		)
Settlements	—			(53		)
Ending balance, March 31,	$	(1,030	)	$	(15,426	)
Amount of (gain) loss included in earnings attributable to the change in unrealized losses relating to assets and liabilities held at March 31,	$	(15,509	)	$	613

- 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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