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Fair Value Measurements
 3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Fair Value Measurements Fair Value Measurements
We measure certain of our assets and liabilities at fair value. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
In general, reporting entities should apply valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. Observable inputs are developed using market data and reflect assumptions that market participants would use when pricing the asset or liability. Unobservable inputs are developed using the best information available about the assumptions that market participants would use when pricing the asset or liability.
The fair value hierarchy provides transparency regarding the inputs we use to measure fair value. We categorize each fair value measurement in its entirety into the following three levels, based on the lowest level input that is significant to the entire measurement:
•Level 1 Inputs - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date.
•Level 2 Inputs - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
•Level 3 Inputs - significant unobservable inputs for the asset or liability.

Recurring Fair Value Measurements
As of March 31, 2021
Level 1
Level 2
Level 3
Total
ASSETS:
Cash equivalents$13.3 $— $— $13.3 
Trust assets (1)
1.5 — — 1.5 
Derivative instruments— 14.8 0.014.8 
TOTAL$14.8 $14.8 $— $29.6 
LIABILITIES:
Contingent obligation – net$— $— $— $— 
Derivative instruments— 104.8 6.2 111.0 
TOTAL$— $104.8 $6.2 $111.0 


Recurring Fair Value Measurements
As of December 31, 2020
Level 1
Level 2
Level 3
Total
ASSETS:
Cash equivalents$54.2 $— $— $54.2 
Trust assets (1)
— — — — 
Derivative instruments— 12.1 3.0 15.1 
TOTAL$54.2 $12.1 $3.0 $69.3 
LIABILITIES:
Contingent obligation – net$— $— $— $— 
Derivative instruments— 16.7 — 16.7 
TOTAL$— $16.7 $— $16.7 
(1) Trust assets are currently invested in money market funds. These trust assets are held to fund the non-qualified supplemental executive pension benefit obligations for certain of our officers.
The following section describes the valuation techniques and inputs for fair value measurements categorized within Level 2 or Level 3 of the fair value hierarchy:
Level 2 Fair Value Measurements:
Asset / LiabilityValuation TechniquesInputs
LME forward financial sales contractsDiscounted cash flowsQuoted LME forward market
MWP forward financial sales contracts Discounted cash flowsQuoted MWP forward market
Fixed for floating swapsDiscounted cash flowsQuoted LME forward market, quoted MWP forward market
Nord Pool power price swaps Discounted cash flowsQuoted Nord Pool forward market
FX swaps Discounted cash flowsEuro/USD forward exchange rate
When valuing Level 3 assets and liabilities, we use certain significant unobservable inputs. Management incorporates various inputs and assumptions including forward commodity prices, commodity price volatility, and macroeconomic conditions, including interest rates and discount rates. Our estimates of significant unobservable inputs are ultimately based on our estimates of risks that market participants would consider when valuing our assets and liabilities.
The following table presents the inputs for fair value measurements categorized within Level 3 of the fair value hierarchy, along with information regarding significant unobservable inputs used to value Level 3 assets and liabilities:
Level 3 Fair Value Measurements:
Asset / LiabilityFair Value at March 31, 2021Valuation TechniqueObservable InputsSignificant Unobservable InputValue/Range of Unobservable Input
LME forward financial sales contracts$(6.0)Discounted cash flowsQuoted LME forward market
Discount rate net (1)
10.00%
Contingent obligation $— Discounted cash flowsQuoted LME forward market, management's estimate of the LME forward market prices for periods beyond the quoted periods, management's estimates of future level of operations
Management's estimates of the LME forward market price beyond the quoted periods (2)
$2,217/T-$2,321/T
FX swaps$(0.2)Discounted cash flowsEuro/USD forward exchange rate
Discount rate net (1)
10.00%
(1) Represents risk adjusted discount rate.
(2) Represents the range of estimated forward LME prices of primary aluminum through the term of the agreement in December 2028.
The following table presents the fair value reconciliation of Level 3 assets and liabilities measured at fair value on a recurring basis.
Level 3 Liabilities
For the three months ended March 31, 2021
LME forward financial sales contractsFX Swaps
Balance as of January 1, 2021
$2.9 $0.1 
Total realized/unrealized gains (losses)
     Included in net income (loss) (1)
(8.7)— 
Purchases, sales, settlements
     Purchases— — 
     Sales— — 
     Settlements— — 
Transfers into Level 3 (2)
(0.7)(0.2)
Transfers out of Level 3(3)
0.5 (0.1)
Balance as of March 31, 2021
(6.0)$(0.2)
Change in unrealized gains (losses) (1)
$(8.7)$— 
(1) Gains and losses are presented in the Consolidated Statement of Operations within the line item "Net gain (loss) on forward and derivative contracts."
(2) Transfers into Level 3 due to contracts with applied discount rate during the first quarter of 2021.
(3) Transfers out of Level 3 due to period of time remaining in derivative contract.

For the three months ended March 31, 2020
Level 3 AssetsLevel 3 Liabilities
U.S. LME forward financial sales contracts Hawesville L4 Power Price Swaps
Balance as of January 1, 2020$10.6 $(2.9)
Total realized/unrealized gains (losses)
     Included in Net Income (1)
6.7 (1.5)
Purchases, sales, settlements
     Purchases— — 
     Sales— — 
     Settlements— 1.2 
Transfers into Level 3(2)
— — 
Transfers out of Level 3(3)
(9.5)— 
Balance as of March 31, 2020
$7.8 $(3.2)
Change in unrealized gains (losses) (1)
$6.7 $(0.3)
(1) Gains and losses are presented in the Consolidated Statement of Operations within the line item "Net gain (loss) on forward and derivative contracts."
(2) Transfers into Level 3 due to contracts with applied discount rate during the first quarter of 2020.
(3) Transfers out of Level 3 due to period of time remaining in derivative contract.