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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2015	Apr. 27, 2015
Document Information [Line Items]
Entity Registrant Name	Kaiser Aluminum Corp
Entity Central Index Key	0000811596
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		17,154,172

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 220.9	$ 177.7
Short-term investments	30.0	114.0
Receivables:
Trade receivables – net	149.7	129.3
Other	8.8	10.9
Inventories	218.0	214.7
Prepaid expenses and other current assets	195.8	178.6
Total current assets	823.2	825.2
Property, plant and equipment – net	458.1	454.9
Net assets of Union VEBA	0.0	340.1
Deferred tax assets – net (including deferred tax liability relating to the Union VEBA of $0.0 and $127.0 at March 31, 2015 and December 31, 2014, respectively)	161.7	30.9
Intangible assets – net	31.7	32.1
Goodwill	37.2	37.2
Other assets	23.0	23.3
Total	1,534.9	1,743.7
Current liabilities:
Accounts payable	83.1	81.4
Accrued salaries, wages and related expenses	33.6	39.6
Other accrued liabilities	157.2	132.8
Current portion of long-term debt	175.0	172.5
Short-term capital leases	0.0	0.1
Total current liabilities	448.9	426.4
Net liabilities of Salaried VEBA	16.8	17.2
Deferred tax liabilities	0.8	0.9
Long-term liabilities	89.1	58.3
Long-term debt	225.0	225.0
Total liabilities	780.6	727.8
Commitments and contingencies – Note 7
Stockholders’ equity:
Preferred stock, 5,000,000 shares authorized at both March 31, 2015 and December 31, 2014; no shares were issued and outstanding at March 31, 2015 and December 31, 2014	0.0	0.0
Common stock, par value $0.01, 90,000,000 shares authorized at both March 31, 2015 and at December 31, 2014; 21,265,315 shares issued and 17,270,143 shares outstanding at March 31, 2015; 21,197,164 shares issued and 17,607,251 shares outstanding at December 31, 2014	0.2	0.2
Additional paid in capital	1,029.1	1,028.5
(Accumulated deficit) retained earnings	(18.7)	280.4
Treasury stock, at cost, 3,995,172 shares at March 31, 2015 and 3,589,913 shares at December 31, 2014, respectively	(227.1)	(197.1)
Accumulated other comprehensive loss	(29.2)	(96.1)
Total stockholders’ equity	754.3	1,015.9
Total	$ 1,534.9	$ 1,743.7

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2015	Dec. 31, 2014
Receivables:
Allowance for doubtful receivables	$ 0.8	$ 0.8
Deferred tax liabilities relating to the VEBAs	$ 0.0	$ 127.0
Stockholders' equity:
Preferred Stock, shares authorized	5,000,000	5,000,000
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	90,000,000	90,000,000
Common Stock, shares issued	21,265,315	21,197,164
Common stock, shares outstanding	17,270,143	17,607,251
Treasury stock, shares	3,995,172	3,589,913

Statements of Consolidated Income - USD ($) shares in Thousands, $ in Millions	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net sales	$ 371.7	$ 335.1
Cost of products sold:
Cost of products sold, excluding depreciation and amortization and other items	302.3	282.9
Unrealized losses (gains) on derivative instruments	4.5	(2.0)
Depreciation and amortization	8.0	7.4
Selling, general, administrative, research and development	22.7	20.3
Loss on removal of Union VEBA net assets – Note 5	0.6	(5.6)
Defined Benefit Plan, Curtailments	492.2
Pre-tax loss on settlement of Union VEBA		0.0
Total selling, administrative, research and development, and general	515.5	14.7
Total costs and expenses	830.3	303.0
Operating (loss) income	(458.6)	32.1
Other (expense) income:
Interest expense	(9.8)	(8.8)
Other income, net – Note 13	0.4	1.9
(Loss) income before income taxes	(468.0)	25.2
Income tax benefit (provision)	175.8	(9.4)
Net (loss) income	$ (292.2)	$ 15.8
Net (loss) income per common share:
Basic	$ (16.85)	$ 0.88
Diluted	$ (16.85)	$ 0.85
Weighted-average number of common shares outstanding (in thousands):
Basic	17,344	17,921
Diluted	17,344	18,514

Statements of Consolidated Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ (292.2)	$ 15.8
Reclassification adjustments:
Amortization of net actuarial (gain) loss	0.3	(0.3)
Amortization of prior service cost	0.7	2.8
Other Comprehensive Income (Loss), Finalization of Pension and Other Postretirement Benefit Plan Valuation, before Tax	106.6	0.0
Other comprehensive income relating to VEBAs	107.6	2.5
Available for sale securities:
Unrealized gain on available for sale securities	0.0	0.1
Reclassification adjustments:
Reclassification of unrealized gain upon sale of available for sale securities	0.1	(0.1)
Other comprehensive income (loss) relating to available for sale securities	0.1	0.0
Foreign currency translation adjustment	0.1	0.2
Other comprehensive income, before tax	107.8	2.7
Income tax expense related to items of other comprehensive income	(40.9)	(1.8)
Other comprehensive income, net of tax	66.9	0.9
Comprehensive income	$ (225.3)	$ 16.7

Statement of Consolidated Stockholders' Equity - 3 months ended Mar. 31, 2015 - USD ($) $ in Millions	Total	Common Stock	Additional Paid in Capital	Retained Earnings	Treasury Stock	Accumulated Other Comprehensive Loss
Beginning balance, shares at Dec. 31, 2014	17,607,251	17,607,251
Beginning balance at Dec. 31, 2014	$ 1,015.9	$ 0.2	$ 1,028.5	$ 280.4	$ (197.1)	$ (96.1)
Stockholders' Equity [Roll Forward]
Net income	(292.2)			(292.2)
Other comprehensive income, net of tax	66.9					66.9
Issuance of non-vested shares to employees, shares		51,510
Issuance of common shares to employees upon vesting of restricted stock units and performance shares, shares		50,809
Cancellation of employee non-vested shares		(540)
Cancellation of shares to cover employees’ tax withholdings upon vesting of non-vested shares, shares		(33,628)
Cancellation of shares to cover employees’ tax withholdings upon vesting of non-vested shares	$ (2.5)		(2.5)
Repurchase of common stock, shares	(405,259)	(405,259)
Repurchase of common stock	$ (30.0)				(30.0)
Cash dividends on common stock ($0.40 per share)	(7.1)			(7.1)
Excess tax benefit upon vesting of non-vested shares and dividend payment on unvested shares expected to vest	1.0		1.0
Amortization of unearned equity compensation	2.1		2.1
Restricted Stock Award, Forfeitures, Dividends	$ (0.2)			0.2
Ending balance, shares at Mar. 31, 2015	17,270,143	17,270,143
Ending balance at Mar. 31, 2015	$ 754.3	$ 0.2	$ 1,029.1	$ (18.7)	$ (227.1)	$ (29.2)

Statement of Consolidated Stockholders' Equity Statement of Consolidated Stockholders' Equity (Parenthetical)	3 Months Ended
	Mar. 31, 2015 $ / shares
Retained Earnings
Cash dividend declared per common share	$ 0.40

Statement of Consolidated Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash flows from operating activities:
Net income	$ (292.2)	$ 15.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	7.6	7.0
Amortization of definite-lived intangible assets	0.4	0.4
Amortization of debt discount and debt issuance costs	3.2	2.9
Deferred income taxes – Note 4	(176.7)	8.7
Excess tax benefit upon vesting of non-vested shares and dividend payment on unvested shares expected to vest	(1.0)	(0.7)
Non-cash equity compensation	2.1	2.0
Non-cash unrealized losses (gains) on derivative instruments	4.5	(2.9)
Non-cash net periodic postretirement benefit charges (income) relating to VEBAs1	0.6	(5.6)
Non-cash Loss on Settlement of Union VEBA	446.7	0.0
Other non-cash changes in assets and liabilities	0.3	0.1
Changes in operating assets and liabilities:
Trade and other receivables	(18.3)	(2.2)
Inventories	(3.3)	11.3
Prepaid expenses and other current assets	(2.4)	(2.3)
Accounts payable	0.4	10.4
Accrued liabilities	19.1	(1.4)
Annual variable cash contributions to VEBAs1	(13.7)	(16.0)
Long-term assets and liabilities, net	30.1	(0.4)
Net cash provided by operating activities	7.4	27.1
Cash flows from investing activities:
Capital expenditures	(11.3)	(15.4)
Proceeds from disposition of available for sale securities	84.0	25.0
Net cash provided by investing activities	72.7	9.6
Cash flows from financing activities:
Repayments of Capital Lease Obligations	(0.1)	0.0
Excess tax benefit upon vesting of non-vested shares and dividend payment on unvested shares expected to vest	1.0	0.7
Cancellation of shares to cover employees’ tax withholdings upon vesting of non-vested shares	(2.5)	(2.2)
Repurchase of common stock	(28.2)	(12.7)
Cash dividend paid to stockholders	(7.1)	(6.4)
Net cash used in financing activities	(36.9)	(20.6)
Net increase in cash and cash equivalents during the period	43.2	16.1
Cash and cash equivalents at beginning of period	177.7	169.5
Cash and cash equivalents at end of period	$ 220.9	$ 185.6

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2015
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	Summary of Significant Accounting Policies This Quarterly Report on Form 10-Q (this "Report") should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Unless the context otherwise requires, references in these notes to interim consolidated financial statements - unaudited to "Kaiser Aluminum Corporation," "we," "us," "our," "the Company" and "our Company" refer to Kaiser Aluminum Corporation and its consolidated subsidiaries. Organization and Nature of Operations. Kaiser Aluminum Corporation specializes in the production of semi-fabricated specialty aluminum products, such as aluminum sheet and plate and extruded and drawn products, primarily used in aerospace/high strength, automotive, general engineering and other industrial end market applications. Our business is organized into one operating segment, Fabricated Products. See Note 11 for additional information regarding our reportable segment and business unit. Principles of Consolidation and Basis of Presentation. The accompanying unaudited consolidated financial statements include the accounts of our wholly owned subsidiaries and are prepared in accordance with United States generally accepted accounting principles ("GAAP") and the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods and, therefore, do not include all information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for our interim periods are not necessarily indicative of the results of operations that may be achieved for the entire 2015 fiscal year. The financial information as of December 31, 2014 is derived from our audited consolidated financial statements and footnotes for the year ended December 31, 2014 included in our Annual Report on Form 10-K. Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in accordance with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financial statements are published and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates and assumptions are inherent in the preparation of our consolidated financial statements; accordingly, it is possible that the actual results could differ from these estimates and assumptions, which could have a material effect on the reported amounts of our consolidated financial position and results of operations. Inventories. Inventories are stated at the lower of cost or market value. Finished products, work-in-process and raw material inventories are stated on the last-in, first-out ("LIFO") basis. The excesses of current cost over the stated LIFO value of inventory at March 31, 2015 and December 31, 2014 was $24.7 million and $37.6 million, respectively. Other inventories, principally operating supplies and repair and maintenance parts, are stated at average cost. Inventory costs consist of material, labor and manufacturing overhead, including depreciation. Abnormal costs, such as idle facility expenses, freight, handling costs and spoilage, are accounted for as current period charges. All of our inventories at March 31, 2015 and December 31, 2014 were included in the Fabricated Products segment (see Note 2 for the components of inventories). Property, Plant and Equipment – Net. Property, plant and equipment is recorded at cost (see Note 2). Construction in progress is included within Property, plant and equipment – net on the Consolidated Balance Sheets. Interest related to the construction of qualifying assets is capitalized as part of the construction costs. The aggregate amount of interest capitalized is limited to the interest expense incurred in the period. The amount of interest expense capitalized as construction in progress was $0.3 million and $1.1 million during the quarters ended March 31, 2015 and March 31, 2014, respectively. Depreciation is computed using the straight-line method at rates based on the estimated useful lives of the various classes of assets. Capital lease assets and leasehold improvements are depreciated on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term. Depreciation expense is not included in Cost of products sold, excluding depreciation and amortization and other items, but is included in Depreciation and amortization on the Statements of Consolidated Income. For the quarters ended March 31, 2015 and March 31, 2014, we recorded depreciation expense of $7.5 million and $6.8 million, respectively, relating to our operating facilities in the Fabricated Products segment. An immaterial amount of depreciation expense was also recorded within All Other for all periods presented in this Report. Concentration of Labor Subject to Collective Bargaining Agreements. At March 31, 2015, approximately 63% of our employees were covered by collective bargaining agreements and 2% of our employees were covered by collective bargaining agreements with expiration dates occurring within the remainder of 2015. Dividends. To the extent we expect to be in a capital surplus position by the end of the fiscal year, cash dividends and dividend equivalents paid are charged against (Accumulated deficit) retained earnings; otherwise, dividends and dividend equivalents paid are charged against Additional paid in capital. New Accounting Pronouncements. ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09"), was issued in May 2014. ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the guidance provides that an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, the entity satisfies a performance obligation. We expect to adopt ASU 2014-09 for the fiscal year ending December 31, 2017, unless the adoption date is extended by the Financial Accounting Standard Board, and will continue to assess the impact on our consolidated financial statements. ASU No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period - Consensus of the FASB Emerging Issues Task Force ("ASU 2014-12"), was issued in June 2014. ASU 2014-12 requires an entity to treat a performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The performance target should not be reflected in estimating the grant-date fair value of the award. Additionally, compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved, and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered; if the performance target becomes probable of being achieved before the end of the requisite service period, then the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. Finally, the total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest, and should be adjusted to reflect those awards that ultimately vest. Our adoption of ASU 2014-12 in the first quarter of 2015 did not have a material impact on our consolidated financial statements. ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), was issued in April 2015. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in an entity’s balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts, instead of being presented as a deferred charge in the balance sheet. Significantly, the recognition and measurement guidance for debt issuance costs are not affected by ASU 2015-03. An entity is required to adopt ASU 2015-03 for reporting periods beginning on or after December 15, 2015. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements. ASU No. 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement ("ASU 2015-05"), was issued in April 2015. The ASU requires companies to perform the same assessment that vendors currently perform under ASC 985-605; that is, companies must determine whether an arrangement with its vendor contains a software license element. If so, the related fees paid are accounted for as an internal-use software intangible under ASC 350-40; if not, the arrangement is accounted for as a service contract. As a result of the issuance of this ASU, all software licenses within the scope of Subtopic 350-40 will be accounted for consistent with other licenses of intangible assets. An entity is required to adopt ASU 2015-03 for reporting periods beginning on or after December 15, 2015. We do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.

Supplemental Balance Sheet Information

3 Months Ended

Mar. 31, 2015

Supplemental Balance Sheet Information [Abstract]

Supplemental Balance Sheet Information



	March 31, 2015		December 31, 2014
	(In millions of dollars)
Cash and Cash Equivalents
Cash and money market funds	$	204.9	$	29.5
Commercial paper	16.0		148.2
Total	$	220.9	$	177.7



Trade Receivables – Net
Billed trade receivables	$	149.9		$	128.7
Unbilled trade receivables	0.6			1.4
Trade receivables, gross	150.5			130.1
Allowance for doubtful receivables	(0.8		)	(0.8		)
Trade receivables – net	$	149.7		$	129.3



Inventories
Finished products	$	69.8	$	73.6
Work-in-process	71.5		66.7
Raw materials	55.6		54.2
Operating supplies and repair and maintenance parts	21.1		20.2
Total	$	218.0	$	214.7



Prepaid Expenses and Other Current Assets
Current derivative assets – Notes 8 and 9	$	95.1	$	85.7
Current deferred tax assets	92.2		86.4
Short-term restricted cash	0.3		0.3
Prepaid taxes	3.0		—
Other	5.2		6.2
Total	$	195.8	$	178.6



Property, Plant and Equipment – Net
Land and improvements	$	22.9		$	22.9
Buildings and leasehold improvements	64.2			63.8
Machinery and equipment	518.0			509.8
Construction in progress	27.4			25.2
Property, plant and equipment – gross	632.5			621.7
Accumulated depreciation	(174.4		)	(166.8		)
Property, plant and equipment – net	$	458.1		$	454.9



Other Assets
Restricted cash	$	10.4	$	10.0
Deferred financing costs	5.4		5.9
Deferred compensation plan assets	7.1		7.3
Other	0.1		0.1
Total	$	23.0	$	23.3



Other Accrued Liabilities
Current derivative liabilities – Notes 8 and 9	$	108.1	$	94.9
Uncleared cash disbursements	9.2		9.1
Accrued income taxes and taxes payable	8.2		5.2
Accrued annual contribution to VEBAs	—		13.7
Accrued contingent contribution to Union VEBA - Note 5	15.5		—
Short-term environmental accruals – Note 7	2.2		2.3
Accrued interest	10.3		3.7
Short-term deferred revenue	0.2		0.2
Other	3.5		3.7
Total	$	157.2	$	132.8



Long-Term Liabilities
Derivative liabilities – Notes 8 and 9	$	2.6	$	1.9
Income tax liabilities	2.3		2.4
Workers’ compensation accruals	21.0		21.5
Long-term environmental accruals – Note 7	17.2		17.0
Long-term asset retirement obligations	4.6		4.4
Deferred compensation liabilities	7.6		7.2
Long-term deferred revenue	0.5		0.5
Long-term capital leases	0.1		0.1
Long-term portion of contingent contribution to Union VEBA – Note 5	29.9		—
Other long-term liabilities	3.3		3.3
Total	$	89.1	$	58.3

Long-Term Debt and Credit Facility

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Long-Term Debt

Debt and Credit Facility

Senior Notes

In May 2012, we issued $225.0 million principal amount of 8.25% unsecured senior notes due June 1, 2020 ("Senior Notes") at 100% of the principal amount. Interest expense, including amortization of deferred financing costs, relating to the Senior Notes was $4.8 million for each of the quarters ended March 31, 2015 and March 31, 2014. A portion of the interest relating to the Senior Notes was capitalized as construction in progress. See Note 3 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information regarding the Senior Notes.

Cash Convertible Senior Notes

Convertible Notes. In March 2010, we issued $175.0 million principal amount of 4.50% unsecured Cash Convertible Senior Notes due April 1, 2015 ("Convertible Notes"). The Convertible Notes are not convertible into our common stock or any other securities, but instead are settled in cash. We account for the cash conversion feature of the Convertible Notes as a separate derivative instrument ("Bifurcated Conversion Feature") with the fair value on the issuance date equaling the original issuance discount for purposes of accounting for the debt component of the Convertible Notes. The following tables provide additional information regarding the Convertible Notes (in millions of dollars):



	March 31, 2015		December 31, 2014
Principal amount	$	175.0	$	175.0
Less: unamortized issuance discount	—		(2.5		)
Carrying amount, net of discount	$	175.0	$	172.5



	Quarter Ended March 31,
	2015		2014
Contractual coupon interest	$	2.0	$	2.0
Amortization of discount	2.4		2.1
Amortization of deferred financing costs	0.3		0.3
Total interest expense¹	$	4.7	$	4.4

____________


¹	A portion of the interest relating to the Convertible Notes was capitalized as construction in progress.

An immaterial amount of Convertible Notes was converted during 2014 pursuant to a provision that permitted early conversion. Of the remaining Convertible Notes, all but five were presented for conversion during the quarter ended March 31, 2015. The conversion value of 154.261% of par was determined over the final settlement period of 50 consecutive trading days that ended on March 27, 2015, resulting in a total payment amount to settle the Convertible Notes on April 1, 2015 of $273.8 million, comprised of a final coupon payment of $3.9 million, principal of $175.0 million and conversion premium of $94.9 million.

Convertible Note Hedge Transactions. In connection with the issuance of our Convertible Notes, we entered into privately negotiated transactions whereby we purchased cash-settled call options ("Option Assets") relating to shares of our common stock. In March 2015, we gave notice of exercise to the counterparties of the Option Assets. The aggregate payment amount that was due on April 1, 2015 to us from the counterparties to settle the Option Assets was $94.9 million, which equaled the conversion premium or the aggregate amount of cash that we paid to the holders of the converted Convertible Notes, less the principal amount thereof and interest payable thereon. As the cash received to settle the Option Assets equaled the cash we paid for the conversion premium, the net cash outflow to settle our Convertible Notes and Option Assets on April 1, 2015 was $178.9 million.

Contemporaneous with the issuance of the Convertible Notes and our purchase of the Option Assets in 2010, we sold net-share-settled warrants ("Warrants") relating to approximately 3.7 million notional shares of our common stock. The Warrants will settle ratably over a 120 trading day period beginning on July 1, 2015. As of March 31, 2015, after reflecting cumulative anti-dilution adjustments for payment of quarterly dividends paid in excess of $0.24 per share, the exercise price of the Warrants was $60.57 per share.

See Note 3 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information regarding the Convertible Notes, Bifurcated Conversion Feature, Option Assets and Warrants.

See "Fair Values of Financial Assets and Liabilities - All Other Financial Assets and Liabilities" in Note 9 for information relating to the estimated fair value of the Senior Notes, Convertible Notes, Bifurcated Conversion Feature and Option Assets.

Revolving Credit Facility

Our credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto ("Revolving Credit Facility") provides us with a $300.0 million funding commitment through September 30, 2016. We had $281.7 million of borrowing availability under the Revolving Credit Facility at March 31, 2015, based on the borrowing base determination then in effect. At March 31, 2015, there were no borrowings under the Revolving Credit Facility and $7.6 million was being used to support outstanding letters of credit, leaving $274.1 million of net borrowing availability. The interest rate applicable to any overnight borrowings under the Revolving Credit Facility would have been 4.0% at March 31, 2015.

See Note 3 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information regarding the Revolving Credit Facility.

Income Tax Matters

3 Months Ended

Mar. 31, 2015

Income Tax Disclosure [Abstract]

Income Tax Matters

The (benefit from) provision for incomes taxes, for each period presented, consisted of the following (in millions of dollars):



	Quarter Ended
	March 31,
	2015			2014
Domestic	$	(175.8	)	$	9.1
Foreign	—			0.3
Total	$	(175.8	)	$	9.4

The income tax (benefit) provision for the quarters ended March 31, 2015 and March 31, 2014 was $(175.8) million and $9.4 million, reflecting an effective tax rate of 37.6% and 37.4%, respectively. There was no material difference between the effective tax rate and the projected blended statutory tax rate for the quarters ended March 31, 2015 and March 31, 2014.

The $175.8 million income tax benefit for the quarter ended March 31, 2015 included a $184.4 million tax benefit that was recorded as a result of removing the Union VEBA net assets and related deferred tax liabilities from our consolidated financial statements.

See Note 5 of Notes to Interim Financial Statements included in this Report for disclosure regarding employee benefits.

The audit settlement and advance pricing agreement in 2013 with Canada resulted in a cash tax benefit of $10.7 million in 2013, which represented amounts previously paid against Canadian accrued taxes. As of March 31, 2015, the Company had received $8.3 million, with the remaining $2.4 million expected to be received within the next 12 months.

Our gross unrecognized benefits relating to uncertain tax positions were $2.1 million and $2.2 million at March 31, 2015 and December 31, 2014, respectively, of which, $1.0 million and $1.1 million would go through our income tax provision and thus impact the effective tax rate at March 31, 2015 and December 31, 2014, respectively, if the gross unrecognized tax benefits were to be recognized.

The Company does not expect its gross unrecognized tax benefits to significantly change within the next 12 months.

See Note 5 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information regarding income taxes.

Employee Benefits

3 Months Ended

Mar. 31, 2015

Compensation and Retirement Disclosure [Abstract]

Employee Benefits

Pension and Similar Benefit Plans. We provide contributions to (i) multi-employer pension plans sponsored by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union AFL-CIO, CLC ("USW") and the International Association of Machinists and certain other unions at certain of our production facilities; (ii) defined contribution 401(k) savings plans for hourly bargaining unit employees and salaried and certain hourly non-bargaining unit employees; (iii) a defined benefit plan for salaried employees at our London, Ontario facility; and (iv) a non-qualified, unfunded, unsecured plan of deferred compensation for key employees who would otherwise suffer a loss of benefits under our defined contribution plan. See Notes 6 and 7 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information with respect to our benefit plans.

VEBA Postretirement Medical Obligations. Certain retirees, their surviving spouses and eligible dependents receive medical coverage through participation in a voluntary employees’ beneficiary association ("VEBA") for the benefit of certain union retirees, their surviving spouses and eligible dependents ("Union VEBA") or a VEBA that provides benefits for certain other eligible retirees, their surviving spouses and eligible dependents ("Salaried VEBA" and, together with the Union VEBA, "VEBAs"). We have no claim to the assets of the VEBAs or any obligation to fund their liabilities. The benefits paid by the VEBAs to the plan participants are made at the sole discretion of the respective VEBA trustees and are outside our control. Our only financial obligations to the VEBAs are (i) an annual variable cash contribution (described in more detail below) and (ii) reimbursement of annual administrative expenses of the VEBAs up to $0.3 million in the aggregate. Nevertheless, we have historically accounted for each of the VEBAs, and will continue to account for the Salaried VEBA, as a defined benefit postretirement plan with the maximum benefits payable capped at the aggregate of the current assets of the VEBAs and the estimated future variable contributions from us and earnings thereon.

Under this accounting treatment, the funding status of the VEBAs resulted in a liability or asset position on our Consolidated Balance Sheets, even though such liability or asset has no impact on our cash flow or liquidity. The only impact that the VEBAs have on our cash flow or liquidity is with respect to our obligations to make annual variable cash contributions and to reimburse a portion of the VEBAs’ administrative expenses. The amount of annual variable cash contribution to be made by us is determined as follows: 10% of the first $20.0 million of annual cash flow (as defined; in general terms, the principal elements of cash flow are earnings before interest expense, provision for income taxes and depreciation and amortization less cash payments for, among other things, interest, income taxes and capital expenditures), plus 20% of annual cash flow (as defined) in excess of $20.0 million. Such payments may not exceed $20.0 million annually, and payments are allocated between the Union VEBA and the Salaried VEBA at 85.5% and 14.5%, respectively. Amounts owing by us to the VEBAs are recorded on our Consolidated Balance Sheets at the end of each year in Other accrued liabilities (until paid in cash), with corresponding adjustments reflecting an increase in Net assets of VEBAs, a decrease in Net liabilities of VEBAs, or a combination thereof. As of December 31, 2014, we determined that the total variable contribution for 2014 was $13.7 million (comprised of $11.7 million to the Union VEBA and $2.0 million to the Salaried VEBA). These contributions were made during the first quarter of 2015. The variable cash contribution obligation to the Union VEBA expires in September 2017, while the obligation to the Salaried VEBA has no express termination.

In January 2015, members of the USW at our Newark, Ohio ("Newark") and Spokane, Washington ("Trentwood") facilities ratified a new five-year collective bargaining agreement ("CBA"). The CBA did not extend our obligation to make annual variable contributions to the Union VEBA. As a result of our obligation to make annual variable contributions to the Union VEBA expiring for any period after September 2017, we no longer account for the Union VEBA as a defined benefit plan and have removed the Union VEBA net assets and related deferred tax liabilities from our Consolidated Balance Sheets as of January 1, 2015. In addition, we accrued for the estimated, remaining variable cash contributions through September 2017, which, as of March 31, 2015, was estimated to be $45.4 million in the aggregate and was recorded in Other accrued liabilities and Long-term liabilities (see Note 2). Such amounts will be adjusted quarterly based on our most current cash flow (as previously defined) projections with the changes reflected in our Operating income (loss).

The projected benefit obligation and fair value of the plan assets of the Union VEBA as of December 31, 2014 were $391.5 million and $731.6 million, respectively. As a result of the termination of defined benefit plan accounting for the Union VEBA, the projected benefit obligation and fair value of the plan assets were removed from our consolidated financial statements, resulting in a non-cash loss of $307.8 million, net of a $184.4 million tax benefit, during the quarter ended March 31, 2015.

Components of Net Periodic Postretirement Benefit (Income) Cost. Our results of operations included the following impacts associated with the VEBAs and the Canadian defined benefit plan: (a) charges for service rendered by employees; (b) a charge for accretion of interest; (c) a benefit for the return on plan assets; and (d) amortization of net gains or losses on assets, prior service costs associated with plan amendments and actuarial differences. Net periodic postretirement benefit cost related to the Canadian defined benefit plan was not material for the quarters ended March 31, 2015 and March 31, 2014. The following table presents the components of net periodic postretirement benefit cost (income) for the VEBAs and charges relating to all other employee benefit plans for the quarters ended March 31, 2015 and March 31, 2014 (in millions of dollars):



	Quarter Ended
	March 31,
	2015			2014
VEBAs:
Service cost	$	—		$	0.6
Interest cost	0.7			4.1
Expected return on plan assets	(1.1		)	(12.8		)
Amortization of prior service cost	0.7			2.8
Amortization of net actuarial loss (gain)	0.3			(0.3		)
Total net periodic postretirement benefit cost (income) relating to VEBAs	0.6			(5.6		)
Loss on removal of Union VEBA net assets	492.2			—
Total VEBAs	492.8			(5.6		)
Other employee benefit plans:
Deferred compensation plan	0.4			0.2
Defined contribution plans	4.0			4.0
Multiemployer pension plans	0.9			0.9
Total other employee benefit plans	$	5.3		$	5.1
Total	$	498.1		$	(0.5	)

The following table presents the allocation of the charges (income) detailed above, by reportable segment and business unit (in millions of dollars – see Note 11):



	Quarter Ended
	March 31,
	2015		2014
Fabricated Products	$	4.6	$	4.6
All Other	493.5		(5.1		)
Total	$	498.1	$	(0.5	)

For all periods presented, Net periodic postretirement benefit cost (income) relating to VEBAs is included within All Other. Further, substantially all of the Fabricated Products segment’s employee benefits related charges are in Cost of products sold, excluding depreciation and amortization and other items with the remaining balance in Selling, general, administrative, research and development.

See Note 6 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information on the VEBAs and the key assumptions used with respect to our postretirement plans and computation of the net obligation of each VEBA.

Employee Incentive Plans

3 Months Ended

Mar. 31, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Employee Incentive Plans

Short-Term Incentive Plans ("STI Plans")

We have annual short-term incentive compensation plans for senior management and certain other employees payable at our election in cash, shares of common stock, or a combination of cash and shares of common stock. Amounts earned under the 2014 STI Plan were based on our adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), modified for certain safety, quality, delivery, cost and individual performance factors. The Adjusted EBITDA targets under the 2014 STI Plan were determined based on the economic value added ("EVA") of our Fabricated Products business. Most of our production facilities have similar programs for both hourly and salaried employees. Amounts, if any, that will be earned under the 2015 STI Plan are calculated based on a similar methodology as payouts under the 2014 STI Plan.

Total costs relating to STI Plans were recorded as follows, for each period presented (in millions of dollars):



	Quarter Ended
	March 31,
	2015		2014
Cost of products sold, excluding depreciation and amortization and other items	$	0.8	$	1.1
Selling, general, administrative, research and development	2.5		1.3
Total costs recorded in connection with STI Plans	$	3.3	$	2.4

The following table presents the allocation of the charges detailed above, by segment (in millions of dollars):



	Quarter Ended
	March 31,
	2015		2014
Fabricated Products	$	2.4	$	1.9
All Other	0.9		0.5
Total costs recorded in connection with STI Plans	$	3.3	$	2.4

Long-Term Incentive Programs ("LTI Programs")

General. Executive officers and other key employees of the Company or one or more of its subsidiaries, as well as directors of the Company, are eligible to participate in the Kaiser Aluminum Corporation Amended and Restated 2006 Equity and Performance Incentive Plan (as amended, "Equity Incentive Plan"). Subject to certain adjustments that may be required from time to time to prevent dilution or enlargement of the rights of participants under the Equity Incentive Plan, a total of 2,722,222 common shares have been authorized for issuance under the Equity Incentive Plan. At March 31, 2015, 719,682 common shares were available for additional awards under the Equity Incentive Plan.

Non-vested Common Shares and Restricted Stock Units. We grant non-vested common shares to our non-employee directors, executive officers and other key employees. We also grant restricted stock units to certain employees. The restricted stock units have rights similar to the rights of non-vested common shares and each restricted stock unit that becomes vested entitles the recipient to receive one common share. For both non-vested common shares and restricted stock units, the service period is generally one year for non-employee directors and three years for executive officers and other key employees.

In addition to non-vested common shares and restricted stock units, we grant performance shares to executive officers and other key employees. Each performance share that becomes vested entitles the recipient to receive one common share. Performance shares granted prior to 2014 ("EVA-Based Performance Shares") are subject to performance conditions pertaining to our EVA performance, measured over specified three-year performance periods. The number of EVA-Based Performance Shares that will ultimately vest and result in the issuance of common shares ranges between 0% to 200% of the target number of underlying common shares (constituting approximately one half of the maximum payout) and depends on the average annual EVA achieved for the specified three-year performance period. Performance shares granted after 2013 ("TSR-Based Performance Shares") are subject to performance conditions pertaining to our total shareholder return ("TSR") over specified three-year performance periods compared to the TSR of a specified group of peer companies. The number of TSR-Based Performance Shares that will ultimately vest under both the 2014-2016 and 2015-2017 LTI Programs and result in the issuance of common shares ranges between 0% to 200% of the target number of underlying common shares (constituting approximately one-half of the maximum payout) and depends on the percentile ranking of our TSR compared to the group of peer companies.

During the first quarter of 2015, a portion of the EVA-Based Performance shares granted under the 2012-2014 LTI Program vested (see "Summary of Activity" below). The vesting of performance shares resulting in the issuance and delivery of common shares, if any, under the 2013-2015, 2014-2016 and 2015-2017 LTI Programs will occur in 2016, 2017 and 2018, respectively.

See Note 8 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information with respect to the Equity Incentive Plan and the detailed vesting requirements for the different types of equity awards described above.

Non-Cash Compensation Expense. Compensation expense relating to all awards under the Equity Incentive Plan is included in Selling, general, administrative, research and development. Non-cash compensation expense by type of award under LTI Programs were as follows for each period presented (in millions of dollars):



	Quarter Ended
	March 31,
	2015		2014
Non-vested common shares and restricted stock units	$	1.1	$	1.1
EVA-Based Performance Shares	0.4		0.5
TSR-Based Performance Shares	0.6		0.4
Total non-cash compensation expense	$	2.1	$	2.0

The following table presents the allocation of the charges detailed above, by segment (in millions of dollars):



	Quarter Ended
	March 31,
	2015		2014
Fabricated Products	$	0.7	$	1.0
All Other	1.4		1.0
Total non-cash compensation expense	$	2.1	$	2.0

Unrecognized Gross Compensation Cost Data. The following table presents unrecognized gross compensation cost data by type of award:



	March 31, 2015
	Unrecognized gross compensation costs (in millions of dollars)		Expected period (in years) over which the remaining gross compensation costs will be recognized
Non-vested common shares and restricted stock units	$	8.2	2.5
EVA-Based Performance Shares	$	1.1	1.0
TSR-Based Performance Shares	$	10.9	2.6

Summary of Activity. A summary of the activity with respect to non-vested common shares, restricted stock units, EVA-Based Performance Shares and TSR-Based Performance Shares for the quarter ended March 31, 2015 was as follows:



	Non-Vested Common Shares				Restricted Stock Units				EVA-Based Performance Shares				TSR-Based Performance Shares
	Shares		Weighted-Average Grant-Date Fair Value per Share		Units		Weighted-Average Grant-Date Fair Value per Unit		Shares		Weighted-Average Grant-Date Fair Value per Share		Shares		Weighted-Average Grant-Date Fair Value per Share
Outstanding at December 31, 2014	158,770		$	59.88	5,357		$	59.71	353,576		$	50.35	150,223		$	83.18
Granted¹	51,510		69.83		2,325		69.83		—		—		150,424		95.68
Vested	(41,562	)	47.53		(2,161	)	52.91		(48,648	)	44.48		—		—
Forfeited¹	(540	)	66.80		—		—		(432	)	57.54		(404	)	83.18
Canceled²	—		—		—		—		(146,016	)	44.48		—		—
Outstanding at March 31, 2015	168,178		$	65.95	5,521		$	66.64	158,480		$	57.75	300,243		$	89.44

____________


¹	For EVA-Based Performance Shares and TSR-Based Performance Shares, the number of shares granted and forfeited are presented at their maximum payout.


²	For EVA-Based Performance Shares and TSR-Based Performance Shares, canceled represents the number of shares that did not vest due to EVA or TSR performance results falling below those required for maximum payout.

Stock Options. We have fully-vested stock options that were granted in 2007. There were 16,645 fully-vested options outstanding as of both March 31, 2015 and December 31, 2014, in each case exercisable to purchase common shares at $80.01 per share and having a remaining contractual life of 2.00 years and 2.25 years, respectively. The average grant date fair value of the options was $39.90. No options were granted, exercised or forfeited during the quarter ended March 31, 2015.

Vested Stock. From time to time, we issue common shares to non-employee directors electing to receive common shares in lieu of all or a portion of their annual retainer fees. The fair value of these common shares is based on the fair value of the shares at the date of issuance and is immediately recognized in earnings as a period expense. Such shares are generally issued during the second quarter of each fiscal year.

Under the Equity Incentive Plan, participants may elect to have us withhold common shares to satisfy minimum statutory tax withholding obligations arising in connection with the exercise of stock options and vesting of non-vested shares, restricted stock units and performance shares. We cancel any such shares withheld on the applicable vesting dates or earlier dates when service requirements are satisfied, which correspond to the times at which income to the employee is recognized. When we withhold these common shares, we are required to remit to the appropriate taxing authorities the fair value of the shares withheld as of the vesting date. During the quarters ended March 31, 2015 and March 31, 2014, 33,628 and 30,869 common shares, respectively, were withheld and canceled for this purpose. The withholding of common shares by us could be deemed a purchase of the common shares.

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and Contingencies Commitments. We have a variety of financial commitments, including purchase agreements, forward foreign exchange and forward sales contracts, indebtedness (and related Option Assets and Warrants) and letters of credit (see Note 3 and Note 8). Refer to Note 9 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for information relating to minimum rental commitments under operating leases and purchase obligations. There were no material changes to such scheduled rental commitments as of March 31, 2015. During the quarter ended March 31, 2015, our contractual obligations increased by $14.7 million for 2015 due primarily to raw material purchase obligations. Environmental Contingencies. We are subject to a number of environmental laws and regulations, to potential fines or penalties assessed for alleged breaches of such law and regulations and to potential claims based upon such laws and regulations. We have established procedures for regularly evaluating environmental loss contingencies. Our environmental accruals represent our undiscounted estimate of costs reasonably expected to be incurred based on presently enacted laws and regulations, existing requirements, currently available facts, existing technology and our assessment of the likely remediation actions to be taken. In 2012, we submitted a final feasibility study to the Washington State Department of Ecology ("Washington State Ecology") that included recommendations for remediation alternatives primarily to address the historical use of oils containing polychlorinated biphenyls, ("PCBs") at our Trentwood facility. We also signed an amended work order in 2012 with Washington State Ecology allowing certain remediation activities to begin the initiation of a treatability study in regards to proposed PCB remediation methods. We began implementation of certain approved sections of the work plan in 2013 and throughout 2014, completing a number of these sections in 2014. We continue to work with Washington State Ecology in developing the implementation plans for the remaining remediation activity as well as receiving final approval for the sections of the work plan completed to date. During 2013, at the request of the Ohio Environmental Protection Agency ("OEPA"), we initiated an investigational study of the Newark facility related to historical on-site waste disposal. During 2014, we completed a number of preliminary steps in the preparation of completing the final risk assessment and feasibility study, both of which are subject to review and approval by the OEPA. As this work continues and progresses to a risk assessment and feasibility study, we will establish and update the estimates for probable and estimable remediations, if any. The actual and final cost for remediation will not be fully determinable until a final feasibility study is submitted and accepted by the OEPA and work plans are prepared, which is expected to occur within the next 18 to 24 months. At March 31, 2015, our environmental accrual of $19.4 million represented our estimate of the incremental remediation cost based on (i) proposed alternatives in the final feasibility study related to our Trentwood facility; (ii) currently available facts with respect to our Newark facility; and (iii) facts related to certain other locations owned or formally owned by us. In accordance with approved and proposed remediation action plans, we expect that the implementation and ongoing monitoring could occur over a period of 30 or more years. As additional facts are developed, feasibility studies are completed, draft remediation plans are modified, necessary regulatory approvals for the implementation of remediation are obtained, alternative technologies are developed, and/or other factors change, there may be revisions to management’s estimates and actual costs may exceed the current environmental accruals. We believe at this time that it is reasonably possible that undiscounted costs associated with these environmental matters may exceed current accruals by amounts that could be, in the aggregate, up to an estimated $24.7 million over the remediation period. It is reasonably possible that our recorded estimate may change in the next 12 months. Refer to Note 9 of Notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2014 for information relating to environmental contingencies. Other Contingencies. We are party to various lawsuits, claims, investigations and administrative proceedings that arise in connection with past and current operations. We evaluate such matters on a case-by-case basis, and our policy is to vigorously contest any such claims we believe are without merit. We accrue for a legal liability when it is both probable that a liability has been incurred and the amount of the loss is material and reasonably estimable. Quarterly, in addition to when changes in facts and circumstances require it, we review and adjust these accruals to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular case. While uncertainties are inherent in the final outcome of such matters and it is presently impossible to determine the actual cost that may ultimately be incurred, we believe that we have sufficiently accrued for such matters and that the ultimate resolution of pending matters will not have a material impact on our consolidated financial position, operating results, or liquidity.

Derivative Financial Instruments and Related Hedging Programs

3 Months Ended

Mar. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments and Related Hedging Programs

Overview. In conducting our business, we enter into derivative transactions, including forward contracts and options, to limit our economic (i.e. cash) exposure resulting from (i) metal price risk related to our sale of fabricated aluminum products and the purchase of metal used as raw material for our fabrication operations; (ii) energy price risk relating to fluctuating prices of natural gas and electricity used in our production processes; and (iii) foreign currency requirements with respect to our foreign subsidiaries and cash commitments for equipment purchases denominated in foreign currency. Additionally, in connection with the issuance of the Convertible Notes, we purchased cash-settled Option Assets relating to our common stock to limit our exposure to the cash conversion feature of the Convertible Notes (see Note 3).

Our derivative activities are overseen by a hedging committee ("Hedging Committee"), which is composed of our chief executive officer, chief financial officer, chief accounting officer, vice president of metal risk and other officers and employees selected by the chief executive officer. The Hedging Committee meets regularly to review derivative positions and strategy and reports to our Board of Directors on the scope of its activities.

Hedges of Operational Risks. Our pricing of fabricated aluminum products is generally intended to lock in a conversion margin (representing the value added from the fabrication process(es)) and to pass through metal price fluctuations to our customers. In certain instances, we enter into firm-price arrangements with our customers for stipulated volumes to be delivered in the future. Additionally, for some of our higher value added products sold on a spot basis, the pass through of metal price movements can sometimes lag by as much as several months, with a favorable impact to us when metal prices decline and an adverse impact to us when metal prices increase. Because we generally purchase primary and secondary aluminum on a floating price basis, the volume that we have committed to sell to our customers under a firm-price arrangement and the lag in passing through metal price movements to customers on some of our higher value added products sold on a spot basis create metal price risk for us. We use third-party hedging instruments to limit exposure to metal price risk related to firm-price customer sales contracts and the metal pass through lag on some of our products. See Note 9 for additional information regarding our material derivative positions relating to hedges of operational risk, and their respective fair values.

A majority of our derivative contracts relating to hedges of operational risks contain liquidity based thresholds that could require us to provide additional collateral in the event our liquidity were to fall below specified levels. To minimize the exposure to additional collateral requirements related to our liability hedge positions, we allocate hedging transactions among our counterparties, use options as part of our hedging activities, or both. The aggregate fair value of our derivative instruments that were in a net liability position was $13.7 million and $11.4 million at March 31, 2015 and December 31, 2014, respectively.

We regularly review the creditworthiness of our derivative counterparties and do not expect to incur significant loss from the failure of any counterparties to perform under any agreements.

During the quarters ended March 31, 2015 and March 31, 2014, total fabricated products shipments that contained firm-price terms were (in millions of pounds) 41.1 and 34.4, respectively. At March 31, 2015, the Fabricated Products segment held contracts for the delivery of fabricated aluminum products that had the effect of creating price risk on anticipated purchases of aluminum for the remainder of 2015 and 2016, totaling approximately (in millions of pounds) 96.3 and 1.9, respectively.

Hedges Relating to the Convertible Notes. As described in Note 3, we issued $175.0 million principal amount of Convertible Notes due on April 1, 2015, which could only be settled in cash. The conversion feature of the Convertible Notes was required to be bifurcated from the Convertible Notes and treated as a separate derivative instrument. In order to offset the cash flow risk associated with the Bifurcated Conversion Feature, we purchased Option Assets that settled on April 1, 2015. The Option Assets were accounted for as derivative instruments. The cash we received on April 1, 2015 from the settlement of the Option Assets equaled and offset the cash that we paid to the holders of any converted Convertible Notes in excess of the principal amount thereof and interest payable thereon on April 1, 2015. See Note 9 for additional information regarding the fair values of the Bifurcated Conversion Feature and the Option Assets.

Realized and Unrealized Gains and Losses. Realized and unrealized (losses) gains associated with all derivative contracts consisted of the following, for each period presented (in millions of dollars):



	Quarter Ended
	March 31,
	2015			2014
Realized (losses) gains¹:
Aluminum	$	(2.7	)	$	0.8
Natural Gas	(1.3		)	0.7
Electricity	(0.7		)	0.5
Total realized (losses) gains	$	(4.7	)	$	2.0
Unrealized (losses) gains²:
Hedges of operational risk:
Aluminum	$	(4.2	)	$	1.7
Natural Gas	(0.7		)	0.8
Electricity	0.4			(0.5		)
Total hedges of operational risk	(4.5		)	2.0
Option Assets relating to the Convertible Notes³	10.2			4.4
Bifurcated Conversion Feature of the Convertible Notes³	(10.2		)	(3.5		)
Total unrealized (losses) gains	$	(4.5	)	$	2.9

______________________


¹	Realized (losses) gains on hedges of operational risk are recorded within Cost of products sold, excluding depreciation, amortization and other items in the Statements of Consolidated Income.


²	Unrealized (losses) gains on hedges of operational risk are recorded within Unrealized losses (gains) on derivative instruments in the Statements of Consolidated Income.


³	Unrealized (losses) gains on financial derivatives are recorded within Other income, net in the Statements of Consolidated Income.

The following table summarizes our material derivative positions at March 31, 2015:



Aluminum	Maturity Period (month/year)	Notional Amount of contracts (mmlbs)
Fixed price purchase contracts	4/15 through 12/16	82.5
Fixed price sales contracts	5/15	0.2
Midwest premium swap contracts¹	4/15 through 12/16	82.1



Natural Gas²	Maturity Period (month/year)	Notional Amount of contracts (mmbtu)
Fixed price purchase contracts	4/15 through 12/17	6,700,000



Electricity³	Maturity Period (month/year)	Notional Amount of contracts (Mwh)
Fixed price purchase contracts	4/15 through 12/15	132,020



Hedges Relating to the Convertible Notes⁴	Contract Period (month/year)	Notional Amount of contracts (Common Shares)
Bifurcated Conversion Feature	3/10 through 4/15	3,668,449
Option Assets	3/10 through 4/15	3,668,449

______________________


¹	Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primary aluminum.


²	As of March 31, 2015, we had Henry Hub NYMEX-based hedge positions in place to cover exposure to fluctuations in prices for approximately 79%, 77% and 29% of the expected natural gas purchases for the remainder of 2015, 2016 and 2017, respectively.


³	As of March 31, 2015, we had Mid-C International Commodity Exchange-based hedge positions in place to cover exposure to fluctuations in prices for approximately 55%, 54% and 27% of the expected electricity purchases for the remainder of 2015, 2016 and 2017, respectively.

⁴

The Bifurcated Conversion Feature represents the cash conversion feature of the Convertible Notes. The Option Assets expire on the maturity or earlier conversion of the Convertible Notes and have an exercise price equal to the conversion price of the Convertible Notes. Although the fair value of the Option Assets is derived from a notional number of shares of our common stock, the Option Assets may only be settled in cash (see Note 3).

We enter into derivative contracts with counterparties, some of which are subject to enforceable master netting arrangements and some of which are not. We reflect the fair value of our derivative contracts on a gross basis on the Consolidated Balance Sheets (see Note 2).

The following tables present offsetting information regarding our derivatives by type of counterparty as of March 31, 2015 (in millions of dollars):



Derivative Assets and Collateral Held by Counterparty
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Counterparty (with netting agreements)	$	0.1	$	—	$	0.1	$	0.1	$	—	$	—
Counterparty (without netting agreements)¹	94.9		—		94.9		—		—		94.9
Counterparty (with partial netting agreements)	0.1		—		0.1		0.1		—		—
Total	$	95.1	$	—	$	95.1	$	0.2	$	—	$	94.9



Derivative Liabilities and Collateral Held by Counterparty
									Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Financial Instruments			Cash Collateral Pledged		Net Amount
Counterparty (with netting agreements)	$	(8.4	)	$	—	$	(8.4	)	$	(0.1	)	$	—	$	(8.3	)
Counterparty (without netting agreements)¹	(96.9		)	—		(96.9		)	—			—		(96.9		)
Counterparty (with partial netting agreements)	(5.4		)	—		(5.4		)	(0.1		)	—		(5.3		)
Total	$	(110.7	)	$	—	$	(110.7	)	$	(0.2	)	$	—	$	(110.5	)

_________________


¹	Such amounts include the fair value of the Bifurcated Conversion Feature and Option Assets at March 31, 2015 (see Note 9).

The following tables present offsetting information regarding our derivatives by type of counterparty as of December 31, 2014 (in millions of dollars):



Derivative Assets and Collateral Held by Counterparty
							Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Assets Presented in the Consolidated Balance Sheets		Financial Instruments		Cash Collateral Received		Net Amount
Counterparty (with netting agreements)	$	0.9	$	—	$	0.9	$	0.8	$	—	$	0.1
Counterparty (without netting agreements)¹	84.8		—		84.8		—		—		84.8
Total	$	85.7	$	—	$	85.7	$	0.8	$	—	$	84.9



Derivative Liabilities and Collateral Held by Counterparty
									Gross Amounts Not Offset in the Consolidated Balance Sheets
	Gross Amounts of Recognized Liabilities			Gross Amounts Offset in the Consolidated Balance Sheets		Net Amounts of Liabilities Presented in the Consolidated Balance Sheets			Financial Instruments			Cash Collateral Pledged		Net Amount
Counterparty (with netting agreements)	$	(8.0	)	$	—	$	(8.0	)	$	(0.8	)	$	—	$	(7.2	)
Counterparty (without netting agreements)¹	(85.0		)	—		(85.0		)	—			—		(85.0		)
Counterparty (with partial netting agreements)	(3.8		)	—		(3.8		)	—			—		(3.8		)
Total	$	(96.8	)	$	—	$	(96.8	)	$	(0.8	)	$	—	$	(96.0	)

_________________


¹	Such amounts include the fair value of the Bifurcated Conversion Feature and Option Assets at December 31, 2014 (see Note 9).

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579240-113959

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
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-Publisher FASB
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-Topic 815
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=56946850&loc=SL5579245-113959

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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-Publisher FASB
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-Name Accounting Standards Codification
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+ Details

Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurement

Fair Value Measurements

Overview

We apply the fair value hierarchy established by GAAP for the recognition and measurement of assets and liabilities. An asset or liability’s fair value classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value, we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, and consider counterparty risk in our assessment of fair value.

The fair values of financial assets and liabilities are evaluated and measured on a recurring basis. As part of that evaluation process, we review the underlying inputs that are significant to the fair value measurement of financial instruments to determine if a transfer among hierarchy levels is appropriate. Other than the transfer of the Bifurcated Conversion Feature and Call Options from Level 2 to Level 1 discussed below in "Fair Values of Financial Assets and Liabilities," we historically have not had significant transfers into or out of each hierarchy level.

Financial assets and liabilities that we measure at fair value as required by GAAP include: (i) our derivative instruments; (ii) the plan assets of the VEBAs and our Canadian defined benefit pension plan measured annually at December 31; and (iii) available for sale securities, consisting of debt investment securities and investments related to our deferred compensation plan (see Note 5). We record certain other financial assets and liabilities at carrying value (see the tables below for the fair value disclosure of those assets and liabilities).

The majority of our non-financial assets and liabilities, which include goodwill, intangible assets, inventories and property, plant and equipment, are not required to be measured at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill), an evaluation of a non-financial asset or liability is required, potentially resulting in an adjustment to the carrying amount of such asset or liability.

Fair Values of Financial Assets and Liabilities

Derivative Assets and Liabilities. Our derivative contracts are valued at fair value using significant observable and unobservable inputs.

Commodity, Energy and Foreign Currency Derivatives - The fair values of a majority of these derivative contracts are based upon trades in liquid markets. Valuation model inputs can generally be verified, and valuation techniques do not involve significant judgment. The fair values of such financial instruments are generally classified within Level 2 of the fair value hierarchy. We, however, have some derivative contracts that do not have observable market quotes. For these financial instruments, management uses significant unobservable inputs (e.g., information concerning regional premiums for swaps). Where appropriate, valuations are adjusted for various factors, such as bid/offer spreads. The fair value of these financial instruments is classified as Level 3 in the fair value hierarchy.

Bifurcated Conversion Feature and Option Assets - At December 31, 2014, the fair value of the Bifurcated Conversion Feature was classified as Level 2 in the fair value hierarchy and measured as the difference in the estimated fair value of the Convertible Notes (based on the trading price of the Convertible Notes) and the estimated fair value of the Convertible Notes without the cash conversion feature (present value of the series of the remaining fixed income cash flows under the Convertible Notes, with a maturity of April 1, 2015). Due to the short duration before maturity, we concluded that the fair value of the Option Assets should equal the fair value of the Bifurcated Conversion Feature as of December 31, 2014.

As discussed in Note 3 and Note 16, on April 1, 2015, we paid to holders of the Convertible Notes $273.8 million, comprised of a final coupon payment of $3.9 million, principal of $175.0 million and conversion premium of $94.9 million. Additionally, the aggregate payment amount that was due on April 1, 2015 to us from the counterparties to settle the Option Assets was $94.9 million. We concluded that the fair value of the Option Assets and the Bifurcated Conversion Feature as of March 31, 2015 should equal the cash settlement amounts that were paid on April 1, 2015 and as such, transferred the classification of these financial instruments to Level 1 in the fair value hierarchy.

As of March 31, 2015 and December 31, 2014, the Bifurcated Conversion Feature and Option Assets were recorded as current liabilities and assets, respectively, and were included in the Consolidated Balance Sheet as a portion of Other accrued liabilities and Prepaid expenses and other current assets, respectively.

The aggregate fair value of our derivatives, recorded on the Consolidated Balance Sheets at March 31, 2015 and December 31, 2014, was a net liability of $15.6 million and $11.1 million, respectively. The decrease in net liability position during the quarter ended March 31, 2015 was due primarily to changes in the underlying commodity and energy prices, as well as settlements of asset positions during such period. Changes in the fair value of our derivative contracts relating to operational hedging activities are reflected in Operating (loss) income (see Note 8).

VEBA and Canadian Pension Plan Assets. The fair value of the plan assets of the VEBAs and our Canadian pension plan is measured annually on December 31 and is reflected in our Consolidated Balance Sheets at fair value. In determining the fair value of the plan assets at each annual period end, we utilize primarily the results of valuations supplied by the investment advisors responsible for managing the assets of each plan, which we independently review for reasonableness. With respect to the VEBAs, the investment advisors providing the valuations are engaged by the VEBA trustees. See Note 11 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2014 for additional information with respect to the fair value of the plan assets of the VEBAs and our Canadian pension plan. As previously discussed, in January 2015, members of the USW at our Newark and Trentwood facilities ratified a new five-year CBA, which did not did not extend our obligation to make annual variable contributions to the Union VEBA for any period after September 2017. As a result of the expiration of our obligation to make annual variable contributions to the Union VEBA, we removed the assets of the Union VEBA from our Consolidated Balance Sheets as of March 31, 2015 based on the valuation at December 31, 2014 (See Note 5).

Available for Sale Securities. We hold debt investment securities. The fair value of the debt investment securities, which consist of commercial paper and corporate bonds, is determined based on valuation models that use observable market data. At March 31, 2015, the remaining maturity period with respect to short-term investments ranged from approximately 11 to 13 months. We review our debt investment portfolio for other-than-temporary impairment at least quarterly or when there are changes in credit risk or other potential valuation concerns exists. At March 31, 2015 and March 31, 2014, the total unrealized loss, net of tax, included in accumulated other comprehensive income was immaterial and was not other-than-temporarily impaired. We believe that it is probable that the principal and interest will be collected in accordance with the contractual terms, and that the unrealized losses on these securities were due to changes in normal market fluctuations, and were not due to increased credit risk or other valuation concerns. In addition to debt investment securities, we also hold assets in various investment funds at certain registered investment companies in connection with our deferred compensation program (see Note 5). Such assets are accounted for as available for sale securities and are measured and recorded at fair value based on the net asset value of the investment funds on a recurring basis. The fair value input of the available for sale securities is considered either a Level 1 or Level 2 input depending on whether the debt security or investment fund is traded on a public exchange. The amortized cost for available for sale securities approximates their fair value.

All Other Financial Assets and Liabilities. We believe that the fair value of our cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their respective carrying values due to their short maturities and nominal credit risk.

The fair value of the Convertible Notes in periods presented prior to March 31, 2015 and Senior Notes is based on their trading prices and is considered a Level 1 input in the fair value hierarchy (see Note 3 for the carrying values of the Convertible Notes and the Senior Notes). At March 31, 2015, the fair value of the Convertible Notes equaled the settlement amount to be paid on April 1, 2015.

The following table presents our financial instruments, classified under the appropriate level of the fair value hierarchy, as of the period presented (in millions of dollars):



	March 31, 2015
	Level 1			Level 2			Level 3			Total
FINANCIAL ASSETS:
Derivative Instruments:
Aluminum -
Fixed price purchase contracts	$	—		$	0.1		$	—		$	0.1
Midwest premium swap contracts	—			—			0.1			0.1
Hedges Relating to the Convertible Notes - Option Assets	94.9			—			—			94.9

All Other Financial Assets:
Cash and cash equivalents	204.9			16.0			—			220.9
Short-term investments	—			30.0			—			30.0
Deferred compensation plan asset	—			7.1			—			7.1
Total assets	$	299.8		$	53.2		$	0.1		$	353.1

FINANCIAL LIABILITIES:
Derivative Instruments:
Aluminum -
Fixed price purchase contracts	$	—		$	(3.8	)	$	—		$	(3.8	)
Midwest premium swap contracts	—			—			(3.7		)	(3.7		)
Natural Gas - Fixed price purchase contracts	—			(7.0		)	—			(7.0		)
Electricity - Fixed price purchase contracts	—			(1.3		)	—			(1.3		)
Hedges Relating to the Convertible Notes - Bifurcated Conversion Feature	(94.9		)	—			—			(94.9		)

All Other Financial Liabilities:
Senior Notes	(245.4		)	—			—			(245.4		)
Convertible Notes, including Bifurcated Conversion Feature	(273.8		)	—			—			(273.8		)
Total liabilities	$	(614.1	)	$	(12.1	)	$	(3.7	)	$	(629.9	)

The following table presents our financial instruments, classified under the appropriate level of the fair value hierarchy, as of the period presented (in millions of dollars):



	December 31, 2014
	Level 1		Level 2		Level 3		Total
FINANCIAL ASSETS:
Derivative Instruments:
Aluminum - Midwest premium swap contracts	$	—	$	—	$	1.0	$	1.0
Hedges Relating to the Convertible Notes - Option Assets	—		84.7		—		84.7

All Other Financial Assets:
Cash and cash equivalents	29.5		148.2		—		177.7
Short-term investments	—		114.0		—		114.0
Deferred compensation plan asset