Fair value measurements (Tables)

9 Months Ended

Sep. 30, 2014

Schedule of valuation methodology for 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 and Disclosures."



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
E.ON ("E.ON") contingent obligation	3	Quoted London Metal Exchange ("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 Century Aluminum of Kentucky, our wholly owned subsidiary ("CAKY")
Primary aluminum sales contract	3	Management’s estimates of future U.S. Midwest premium and risk-adjusted discount rates
Midwest premium contracts	3	Management’s estimates of future U.S. Midwest premium

(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

The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis by the level of input within the ASC 820 fair value hierarchy. As required by generally accepted accounting principles in the United States ("GAAP") for fair value measurements and disclosures, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 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. There were no transfers between Level 1 and 2 during the periods presented. There were no transfers into or out of Level 3 during the periods presented. It is our policy to recognize transfers into and transfers out of Level 3 as of the actual date of the event or change in circumstances that caused the transfer.



Recurring Fair Value Measurements	As of September 30, 2014
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash equivalents	$	125,960	$	—	$	—	$	125,960
Trust assets	8,835		—		—		8,835
Surety bonds	1,987		—		—		1,987
TOTAL	$	136,782	$	—	$	—	$	136,782
LIABILITIES:
E.ON contingent obligation – net (1)	$	—	$	—	$	—	$	—
TOTAL	$	—	$	—	$	—	$	—



Recurring Fair Value Measurements	As of December 31, 2013
	Level 1		Level 2		Level 3		Total
ASSETS:
Cash equivalents	$	49,658	$	—	$	—	$	49,658
Trust assets	11,151		—		—		11,151
Surety bonds	2,002		—		—		2,002
Midwest premium contracts	—		—		140		140
TOTAL	$	62,811	$	—	$	140	$	62,951
LIABILITIES:
E.ON contingent obligation – net (1)	$	—	$	—	$	—	$	—
Primary aluminum sales contract	—		—		140		140
TOTAL	$	—	$	—	$	140	$	140


(1)	See Note 9 Debt for additional information about the E.ON contingent obligation.

Change in level 3 fair value measurements



Change in Level 3 Fair Value Measurements during the three months ended September 30,
	Derivative liabilities - net
	2014			2013
Beginning balance, July 1,	$	—		$	(773	)
Total gain included in earnings	—			365
Ending balance, September 30,	$	—		$	(408	)
Amount of gain included in earnings attributable to the change in unrealized losses relating to assets and liabilities held at September 30,	$	—		$	365

Change in Level 3 Fair Value Measurements during the nine months ended September 30,
	Derivative liabilities - net
	2014			2013
Beginning balance, January 1,	$	—		$	(16,539	)
Total gain (loss) included in earnings	(940		)	16,131
Settlements	940			—
Ending balance, September 30,	$	—		$	(408	)
Amount of gain included in earnings attributable to the change in unrealized losses relating to assets and liabilities held at September 30,	$	—		$	16,131