Delaware
(State or other Jurisdiction of Incorporation or Organization)
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13-3070826
(IRS Employer Identification No.)
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2511 Garden Road
Building A, Suite 200
Monterey, California
(Address of principal executive offices)
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93940
(Zip Code)
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Large Accelerated Filer
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o
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Accelerated Filer
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x
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Non-Accelerated Filer
(Do not check if a smaller reporting company)
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o
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Smaller Reporting Company
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o
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Page
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PART I - FINANCIAL INFORMATION
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1
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4-30
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32-38
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39-40
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41
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PART II - OTHER INFORMATION
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42
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42
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42
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44
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CENTURY ALUMINUM COMPANY
|
||||||||
CONSOLIDATED BALANCE SHEETS
|
||||||||
(Dollars in thousands, except share data)
|
||||||||
(Unaudited)
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||||||||
June 30, 2011
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December 31, 2010
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|||||||
ASSETS
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||||||||
Cash and cash equivalents
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$ | 232,401 | $ | 304,296 | ||||
Restricted cash
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— | 3,673 | ||||||
Accounts receivable — net
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54,838 | 43,903 | ||||||
Due from affiliates
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37,264 | 51,006 | ||||||
Inventories
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187,388 | 155,908 | ||||||
Prepaid and other current assets
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46,151 | 18,292 | ||||||
Total current assets
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558,042 | 577,078 | ||||||
Property, plant and equipment — net
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1,238,651 | 1,256,970 | ||||||
Due from affiliates – less current portion
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3,094 | 6,054 | ||||||
Other assets
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100,055 | 82,954 | ||||||
TOTAL
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$ | 1,899,842 | $ | 1,923,056 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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||||||||
LIABILITIES:
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||||||||
Accounts payable, trade
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$ | 87,595 | $ | 88,004 | ||||
Due to affiliates
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39,548 | 45,381 | ||||||
Accrued and other current liabilities
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49,225 | 41,495 | ||||||
Accrued employee benefits costs — current portion
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15,909 | 26,682 | ||||||
Convertible senior notes
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— | 45,483 | ||||||
Industrial revenue bonds
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7,815 | 7,815 | ||||||
Total current liabilities
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200,092 | 254,860 | ||||||
Senior notes payable
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249,011 | 248,530 | ||||||
Accrued pension benefits costs — less current portion
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38,518 | 37,795 | ||||||
Accrued postretirement benefits costs — less current portion
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106,718 | 103,744 | ||||||
Other liabilities
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41,662 | 37,612 | ||||||
Deferred taxes
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86,019 | 85,999 | ||||||
Total noncurrent liabilities
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521,928 | 513,680 | ||||||
COMMITMENTS AND CONTINGENCIES (NOTE 9)
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||||||||
SHAREHOLDERS’ EQUITY:
|
||||||||
Series A Preferred stock (one cent par value, 5,000,000 shares authorized; 80,785 and 82,515 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively)
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1 | 1 | ||||||
Common stock (one cent par value, 195,000,000 shares authorized; 93,214,667 and 92,771,864 shares issued and outstanding at June 30, 2011 and December 31, 2010, respectively)
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932 | 928 | ||||||
Additional paid-in capital
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2,506,435 | 2,503,907 | ||||||
Accumulated other comprehensive loss
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(78,234 | ) | (49,976 | ) | ||||
Accumulated deficit
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(1,251,312 | ) | (1,300,344 | ) | ||||
Total shareholders’ equity
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1,177,822 | 1,154,516 | ||||||
TOTAL
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$ | 1,899,842 | $ | 1,923,056 |
CENTURY ALUMINUM COMPANY
|
||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
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||||||||
(Dollars in thousands)
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||||||||
(Unaudited)
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||||||||
Six months ended June 30,
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||||||||
2011
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2010
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net income
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$ | 49,032 | $ | 11,478 | ||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
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||||||||
Unrealized net (gain) loss on forward contracts
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6,170 | (7,568 | ) | |||||
Realized benefit on contractual receivable
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— | 32,193 | ||||||
Accrued and other plant curtailment costs – net
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(16,592 | ) | (2,576 | ) | ||||
Lower of cost or market inventory adjustment
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(16 | ) | 6,999 | |||||
Depreciation and amortization
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31,064 | 31,505 | ||||||
Debt discount amortization
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1,355 | 1,548 | ||||||
Deferred income taxes
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— | 9,217 | ||||||
Pension and other postretirement benefits
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(28,608 | ) | 8,218 | |||||
Stock-based compensation
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2,501 | 2,163 | ||||||
Non-cash loss on early extinguishment of debt
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763 | — | ||||||
Undistributed earnings of joint ventures
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(1,679 | ) | (1,582 | ) | ||||
Changes in operating assets and liabilities:
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||||||||
Accounts receivable – net
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(10,935 | ) | 1,013 | |||||
Due from affiliates
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11,265 | (16,671 | ) | |||||
Inventories
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(31,464 | ) | (11,162 | ) | ||||
Prepaid and other current assets
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(28,991 | ) | 20,423 | |||||
Accounts payable, trade
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(1,202 | ) | (6,725 | ) | ||||
Due to affiliates
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(5,834 | ) | 621 | |||||
Accrued and other current liabilities
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7,575 | (2,189 | ) | |||||
Other – net
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(539 | ) | (4,773 | ) | ||||
Net cash provided by (used in) operating activities
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(16,135 | ) | 72,132 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES:
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||||||||
Purchase of property, plant and equipment
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(7,353 | ) | (3,012 | ) | ||||
Nordural expansion
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(7,968 | ) | (10,113 | ) | ||||
Investments in and advances to joint ventures
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— | (17 | ) | |||||
Proceeds from the sale of property, plant and equipment
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56 | — | ||||||
Payments received on advances to joint ventures
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3,056 | — | ||||||
Restricted and other cash deposits
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3,673 | (983 | ) | |||||
Net cash used in investing activities
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(8,536 | ) | (14,125 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
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||||||||
Repayment of debt
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(47,067 | ) | — | |||||
Repayment of contingent obligation
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(189 | ) | — | |||||
Issuance of common stock – net
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32 | 23 | ||||||
Net cash provided by (used in) financing activities
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(47,224 | ) | 23 | |||||
CHANGE IN CASH AND CASH EQUIVALENTS
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(71,895 | ) | 58,030 | |||||
Cash and cash equivalents, beginning of the period
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304,296 | 198,234 | ||||||
Cash and cash equivalents, end of the period
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$ | 232,401 | $ | 256,264 |
1.
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2.
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Fair value measurements
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(1)
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Trust assets are currently invested in money market funds. The trust has sole authority to invest the funds in secure interest producing investments consisting of short-term securities issued or guaranteed by the United States government or cash and cash equivalents.
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Recurring Fair Value Measurements
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As of June 30, 2011
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|||||||||||||||
Level 1
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Level 2
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Level 3
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Total
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|||||||||||||
ASSETS:
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||||||||||||||||
Cash equivalents
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$ | 224,433 | $ | — | $ | — | $ | 224,433 | ||||||||
Trust assets
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16,525 | — | — | 16,525 | ||||||||||||
Surety bond
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2,391 | — | — | 2,391 | ||||||||||||
Primary aluminum put option contracts
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— | 2,961 | — | 2,961 | ||||||||||||
Natural gas forward financial contracts
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— | 3 | — | 3 | ||||||||||||
Power contract
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— | — | 111 | 111 | ||||||||||||
TOTAL
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$ | 243,349 | $ | 2,964 | $ | 111 | $ | 246,424 | ||||||||
LIABILITIES:
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||||||||||||||||
E.ON contingent obligation – net
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$ | — | $ | — | $ | 13,256 | $ | 13,256 | ||||||||
Primary aluminum sales contract – premium collar
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— | — | 1,391 | 1,391 | ||||||||||||
TOTAL
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$ | — | $ | — | $ | 14,647 | $ | 14,647 |
Recurring Fair Value Measurements
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As of December 31, 2010
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|||||||||||||||
Level 1
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Level 2
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Level 3
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Total
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|||||||||||||
ASSETS:
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||||||||||||||||
Cash equivalents
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$ | 294,269 | $ | — | $ | — | $ | 294,269 | ||||||||
Primary aluminum put option contracts
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— | 4,691 | — | 4,691 | ||||||||||||
Natural gas forward financial contracts
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— | 79 | — | 79 | ||||||||||||
Power contract
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— | — | 72 | 72 | ||||||||||||
TOTAL
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$ | 294,269 | $ | 4,770 | $ | 72 | $ | 299,111 | ||||||||
LIABILITIES:
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||||||||||||||||
E.ON contingent obligation – net
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$ | — | $ | — | $ | 13,091 | $ | 13,091 | ||||||||
Primary aluminum sales contract – premium collar
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— | — | 783 | 783 | ||||||||||||
TOTAL
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$ | — | $ | — | $ | 13,874 | $ | 13,874 |
Change in Level 3 Fair Value Measurements during the six months ended June 30,
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||||||||
Derivative liabilities - net
|
||||||||
2011
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2010
|
|||||||
Beginning balance, January 1,
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$ | (13,802 | ) | $ | (1,632 | ) | ||
Total gain (realized/unrealized) included in earnings
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(1,231 | ) | (179 | ) | ||||
Settlements
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497 | 967 | ||||||
Ending balance, June 30,
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$ | (14,536 | ) | $ | (844 | ) | ||
Amount of total loss included in earnings attributable to the change in unrealized losses (gains) relating to assets and liabilities held at June 30,
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$ | (1,231 | ) | $ | (179 | ) |
3.
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Derivative and hedging instruments
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Three months ended June 30, 2010
|
|||||||
Amount of loss recognized in OCI on derivatives, net of tax (effective portion)
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Loss reclassified from OCI to income on derivatives (effective portion)
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Loss recognized in income on derivatives (ineffective portion)
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|||||
Amount
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Location
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Amount
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Location
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Amount
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|||
Natural gas forward financial contracts
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$(42)
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Cost of goods sold
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—
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—
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—
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June 30, 2011
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December 31, 2010
|
|||||||
Natural gas forward financial contracts (in MMBTU)
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210,000 | 250,000 |
Primary Aluminum option contracts outstanding as of December 31, 2010 (in metric tons):
|
||||||||
Glencore
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Other counterparties
|
|||||||
Put option contracts, settle monthly in 2011
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46,800 | 61,800 |
June 30, 2011
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December 31, 2010
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|||||||
Power contracts (in megawatt hours) (1)
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7,841 | 4,379 | ||||||
Primary aluminum sales contract premium (in metric tons) (2)
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54,400 | 62,252 | ||||||
Primary aluminum put option contracts (in metric tons)
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87,000 | 108,600 |
(1)
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We mark the Ravenswood power contract to market based on our expected usage during the remaining term of the contract. In June 2011, the West Virginia Public Service Commission (the “PSC”) extended the term of this contract through June 2012.
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(2)
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Represents the remaining physical deliveries under our Glencore Metal Agreement.
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4.
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Earnings per share
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For the three months ended June 30,
|
||||||||||||||||||||||||
2011
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2010
|
|||||||||||||||||||||||
Income
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Shares (000)
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Per-Share
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Income
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Shares (000)
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Per-Share
|
|||||||||||||||||||
Net income
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$ | 23,986 | $ | 5,146 | ||||||||||||||||||||
Amount allocated to common shareholders
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91.97 | % | 91.79 | % | ||||||||||||||||||||
Basic EPS:
|
||||||||||||||||||||||||
Income allocable to common shareholders
|
22,061 | 93,105 | $ | 0.24 | 4,723 | 92,672 | $ | 0.05 | ||||||||||||||||
Effect of Dilutive Securities:
Plus:
|
||||||||||||||||||||||||
Options
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— | 119 | — | 40 | ||||||||||||||||||||
Service-based stock awards
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— | 343 | — | 620 | ||||||||||||||||||||
Diluted EPS:
|
||||||||||||||||||||||||
Income applicable to common shareholders with assumed conversion
|
$ | 22,061 | 93,567 | $ | 0.24 | $ | 4,723 | 93,332 | $ | 0.05 |
For the six months ended June 30,
|
||||||||||||||||||||||||
2011
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2010
|
|||||||||||||||||||||||
Income
|
Shares (000)
|
Per-Share
|
Income
|
Shares (000)
|
Per-Share
|
|||||||||||||||||||
Net income
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$ | 49,032 | $ | 11,478 | ||||||||||||||||||||
Amount allocated to common shareholders
|
91.91 | % | 91.76 | % | ||||||||||||||||||||
Basic EPS:
|
||||||||||||||||||||||||
Income allocable to common shareholders
|
45,066 | 93,036 | $ | 0.48 | 10,532 | 92,611 | $ | 0.11 | ||||||||||||||||
Effect of Dilutive Securities:
Plus:
|
||||||||||||||||||||||||
Options
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— | 116 | — | 46 | ||||||||||||||||||||
Service-based stock awards
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— | 280 | — | 561 | ||||||||||||||||||||
Diluted EPS:
|
||||||||||||||||||||||||
Income applicable to common shareholders with assumed conversion
|
$ | 45,066 | 93,432 | $ | 0.48 | $ | 10,532 | 93,218 | $ | 0.11 |
Three months ended June 30, 2011
|
Three months ended June 30, 2010
|
|||||||||||||||
Weighted average shares outstanding
|
Undistributed earnings
|
Weighted average shares outstanding
|
Undistributed earnings
|
|||||||||||||
Common stock (in thousands)
|
93,105 | $ | 22,061 | 92,672 | $ | 4,723 | ||||||||||
Preferred stock (in thousands) (1)
|
8,125 | 1,925 | 8,294 | 423 | ||||||||||||
Total
|
101,230 | $ | 23,986 | 100,966 | $ | 5,146 |
Six months ended June 30, 2011
|
Six months ended June 30, 2010
|
|||||||||||||||
Weighted average shares outstanding
|
Undistributed earnings
|
Weighted average shares outstanding
|
Undistributed earnings
|
|||||||||||||
Common stock (in thousands)
|
93,036 | $ | 45,066 | 92,611 | $ | 10,532 | ||||||||||
Preferred stock (in thousands) (1)
|
8,187 | 3,966 | 8,319 | 946 | ||||||||||||
Total
|
101,223 | $ | 49,032 | 100,930 | $ | 11,478 |
(1)
|
Represents the weighted-average participation rights of our preferred shareholder as if it held the number of common shares into which its shares of preferred stock are convertible as of the record date.
|
5.
|
Shareholders’ equity
|
Series A Convertible Preferred Stock:
|
2011
|
|||
Shares outstanding at December 31, 2010
|
82,515 | |||
Automatic conversions during the six months ended June 30, 2011
|
(1,730 | ) | ||
Shares outstanding at June 30, 2011
|
80,785 |
6.
|
Income taxes
|
7.
|
Inventories
|
June 30, 2011
|
December 31, 2010
|
|||||||
Raw materials
|
$ | 66,057 | $ | 49,098 | ||||
Work-in-process
|
16,564 | 13,979 | ||||||
Finished goods
|
7,638 | 7,901 | ||||||
Operating and other supplies
|
97,129 | 84,930 | ||||||
Inventories
|
$ | 187,388 | $ | 155,908 |
8.
|
Debt
|
June 30, 2011
|
December 31, 2010
|
|||||||
Debt classified as current liabilities:
|
||||||||
1.75% convertible senior notes due 2024 (the “1.75% Notes”), net of debt discount of $1,584 at December 31, 2010, interest payable semiannually (1)
|
$ | — | $ | 45,483 | ||||
Hancock County industrial revenue bonds due 2028, interest payable quarterly (variable interest rates (not to exceed 12%))(1)
|
7,815 | 7,815 | ||||||
Debt classified as non-current liabilities:
|
||||||||
8.0% senior secured notes payable due May 15, 2014, net of debt discount of $3,196 and $3,677, respectively, interest payable semiannually
|
246,408 | 245,927 | ||||||
7.5% senior unsecured notes payable due August 15, 2014, interest payable semiannually
|
2,603 | 2,603 | ||||||
E.ON contingent obligation –principal and interest payments, contingently payable monthly, annual interest rate of 10.94% (2)
|
13,256 | 13,091 | ||||||
Total debt
|
$ | 270,082 | $ | 314,919 |
(1)
|
The 1.75% Notes, which were redeemed in May 2011, were classified as current because they were convertible at any time by the holder. The Hancock County industrial revenue bonds due 2028 (the “IRBs”) are classified as current liabilities because they are remarketed weekly and could be required to be repaid upon demand if there is a failed remarketing. The IRBs interest rate at June 30, 2011 was 0.39%.
|
(2)
|
E.ON contingent obligation principal and interest payments are payable based on CAKY’s operating level and the LME price for primary aluminum. When both conditions are satisfied, and for so long as those conditions continue to be met, we are obligated to pay principal and interest, in up to 72 monthly payments, to
E.ON
. Interest accrues monthly at an annual rate of 10.94%. The E.ON contingent obligation amount is included in other liabilities on our consolidated balance sheets.
|
9.
|
Commitments and contingencies
|
10.
|
Forward delivery contracts and financial instruments
|
Contract
|
Customer
|
Volume
|
Term
|
Pricing
|
Glencore Metal Agreement (1)
|
Glencore
|
20,400 mtpy
|
Through December 31, 2013
|
Variable, based on U.S. Midwest market
|
Glencore Sweep Agreement (2)
|
Glencore
|
Surplus metal produced in the United States
|
Through December 31, 2011
|
Variable, based on U.S. Midwest market
|
Glencore Nordural Metal Agreement
|
Glencore
|
7,800 metric tons
|
Through December 31, 2011
|
Variable, based on LME
|
Southwire Metal Agreement (3)
|
Southwire
|
220 to 240 million pounds per year (high conductivity molten aluminum)
|
April 1, 2011 through December 31, 2013
|
Variable, based on U.S. Midwest market
|
(1)
|
We account for the Glencore Metal Agreement as a derivative instrument under ASC 815. Under the Glencore Metal Agreement, pricing is based on then-current Midwest market prices, adjusted by a negotiated U.S. Midwest premium with a cap and a floor as applied to the current U.S. Midwest premium.
|
(2)
|
The Glencore Sweep Agreement is for all metal produced in the U.S. in 2011, less existing sales agreements and high-purity metal sales. The term of the contract may be extended for one year upon mutual agreement.
|
(3)
|
Volume under the Southwire Metal Agreement, effective April 1, 2011, will be 165 million to 180 million pounds in 2011, and then 220 to 240 million pounds for 2012 and 2013.
|
Contract
|
Customer
|
Volume
|
Term
|
Pricing
|
Billiton Tolling Agreement (1)
|
BHP Billiton
|
130,000 mtpy
|
Through December 31, 2013
|
LME-based
|
Glencore Toll Agreement (1)
|
Glencore
|
90,000 mtpy
|
Through July 31, 2016
|
LME-based
|
Glencore Toll Agreement (1)
|
Glencore
|
40,000 mtpy
|
Through December 31, 2014
|
LME-based
|
(1)
|
Grundartangi’s tolling revenues include a premium based on the European Union (“EU”) import duty for primary aluminum.
|
11.
|
Supplemental cash flow information
|
Six months ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Cash paid for:
|
||||||||
Interest
|
$ | 11,148 | $ | 9,292 | ||||
Income taxes (1)
|
27,685 | 1,881 | ||||||
Cash received for:
|
||||||||
Interest
|
199 | 214 | ||||||
Income tax refunds
|
— | 18,171 |
(1)
|
We paid withholding taxes in Iceland of $26,900 in the first quarter of 2011.
|
12.
|
Asset retirement obligations (“ARO”)
|
Six months ended June 30, 2011
|
Year ended December 31, 2010
|
|||||||
Beginning balance, ARO liability
|
$ | 14,274 | $ | 15,233 | ||||
Additional ARO liability incurred
|
555 | 1,057 | ||||||
ARO liabilities settled
|
(658 | ) | (1,162 | ) | ||||
Accretion expense
|
551 | 1,040 | ||||||
Adjustments (1)
|
— | (1,894 | ) | |||||
Ending balance, ARO liability
|
$ | 14,722 | $ | 14,274 |
(1)
|
We adjusted our ARO liability in the first quarter of 2010 for changes in the estimated amounts and timing of costs associated with the disposal of spent potliner.
|
13.
|
Comprehensive income and accumulated other comprehensive loss
|
Comprehensive income:
|
||||||||
Six months ended June 30,
|
||||||||
2011
|
2010
|
|||||||
Net income
|
$ | 49,032 | $ | 11,478 | ||||
Other comprehensive income (loss):
|
||||||||
Net unrealized loss on financial instruments, net of $0 tax
|
(33 | ) | (42 | ) | ||||
Net gain on cash flow hedges reclassified to income, net of $0 tax
|
(50 | ) | — | |||||
Net gain on foreign currency cash flow hedges reclassified to income, net of tax of $17 and $17, respectively
|
(76 | ) | (76 | ) | ||||
Defined benefit pension and other postemployment benefit plans:
|
||||||||
Net loss arising during the period, net of $0 tax
|
(5,769 | ) | (4,939 | ) | ||||
Amortization of prior service cost during the period, net of $(8,811) and $173 tax, respectively
|
(39,431 | ) | (318 | ) | ||||
Amortization of net loss during the period, net of $3,821 and $(859) tax, respectively
|
17,101 | 1,573 | ||||||
Other comprehensive loss
|
(28,258 | ) | (3,802 | ) | ||||
Comprehensive income
|
$ | 20,774 | $ | 7,676 |
(1)
|
The amount includes our equity in the other comprehensive income of Mt. Holly Aluminum Company.
|
14.
|
Components of net periodic benefit cost
|
Pension Benefits
|
||||||||||||||||
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service cost
|
$ | 709 | $ | 749 | $ | 1,566 | $ | 1,489 | ||||||||
Interest cost
|
1,808 | 1,611 | 3,488 | 3,204 | ||||||||||||
Expected return on plan assets
|
(1,776 | ) | (1,465 | ) | (3,315 | ) | (2,688 | ) | ||||||||
Amortization of prior service cost
|
34 | 34 | 69 | 69 | ||||||||||||
Amortization of net loss
|
449 | 407 | 931 | 830 | ||||||||||||
Net periodic benefit cost
|
$ | 1,224 | $ | 1,336 | $ | 2,739 | $ | 2,904 |
Other Postretirement Benefits
|
||||||||||||||||
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Service cost
|
$ | 475 | $ | 738 | $ | 834 | $ | 1,760 | ||||||||
Interest cost
|
1,478 | 2,747 | 2,864 | 5,497 | ||||||||||||
Expected return on plan assets
|
— | — | — | — | ||||||||||||
Amortization of prior service cost (1)
|
(15,534 | ) | (300 | ) | (30,689 | ) | (560 | ) | ||||||||
Amortization of net loss
|
6,546 | 844 | 12,349 | 1,602 | ||||||||||||
Net periodic benefit cost
|
$ | (7,035 | ) | $ | 4,029 | $ | (14,642 | ) | $ | 8,299 |
(1)
|
OPEB plan amendments in November 2010 resulted in the immediate recognition of any unamortized prior service cost benefits that were accrued in accumulated other comprehensive loss as of the date of the amendments. In addition, the November 2010 plan amendments resulted in a reduction in OPEB liability and a credit to accumulated other comprehensive loss. The resulting prior service benefit and actuarial losses were amortized ratably into income over the period November 1, 2010 to June 30, 2011 at which time the CAWV OPEB plan terminated.
|
15.
|
Recently issued accounting standards
|
16.
|
Condensed consolidating financial information
|
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As of June 30, 2011
|
||||||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications and Eliminations
|
Consolidated
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 573 | $ | 193,658 | $ | 38,170 | $ | — | $ | 232,401 | ||||||||||
Accounts receivable — net
|
37,934 | 16,904 | — | — | 54,838 | |||||||||||||||
Due from affiliates
|
629,572 | 9,721 | 2,529,095 | (3,131,124 | ) | 37,264 | ||||||||||||||
Inventories
|
121,632 | 65,756 | — | — | 187,388 | |||||||||||||||
Prepaid and other current assets
|
5,790 | 48,936 | 3,925 | (12,500 | ) | 46,151 | ||||||||||||||
Total current assets
|
795,501 | 334,975 | 2,571,190 | (3,143,624 | ) | 558,042 | ||||||||||||||
Investment in subsidiaries
|
35,783 | — | (910,471 | ) | 874,688 | — | ||||||||||||||
Property, plant and equipment — net
|
351,745 | 885,708 | 1,418 | (220 | ) | 1,238,651 | ||||||||||||||
Due from affiliates — less current portion
|
— | 3,094 | — | — | 3,094 | |||||||||||||||
Other assets
|
22,132 | 38,430 | 39,493 | — | 100,055 | |||||||||||||||
Total
|
$ | 1,205,161 | $ | 1,262,207 | $ | 1,701,630 | $ | (2,269,156 | ) | $ | 1,899,842 | |||||||||
Liabilities and shareholders’ equity:
|
||||||||||||||||||||
Accounts payable, trade
|
$ | 38,030 | $ | 49,167 | $ | 398 | $ | — | $ | 87,595 | ||||||||||
Due to affiliates
|
2,108,927 | 74,172 | 226,818 | (2,370,369 | ) | 39,548 | ||||||||||||||
Accrued and other current liabilities
|
10,361 | 40,943 | 10,421 | (12,500 | ) | 49,225 | ||||||||||||||
Accrued employee benefits costs — current portion
|
13,088 | — | 2,821 | — | 15,909 | |||||||||||||||
Industrial revenue bonds
|
7,815 | — | — | — | 7,815 | |||||||||||||||
Total current liabilities
|
2,178,221 | 164,282 | 240,458 | (2,382,869 | ) | 200,092 | ||||||||||||||
Senior notes payable
|
— | — | 249,011 | — | 249,011 | |||||||||||||||
Accrued pension benefits costs — less current portion
|
16,238 | — | 22,280 | — | 38,518 | |||||||||||||||
Accrued postretirement benefits costs — less current portion
|
102,315 | — | 4,403 | — | 106,718 | |||||||||||||||
Other liabilities/intercompany loan
|
62,001 | 732,979 | 7,656 | (760,974 | ) | 41,662 | ||||||||||||||
Deferred taxes
|
— | 86,019 | — | — | 86,019 | |||||||||||||||
Total noncurrent liabilities
|
180,554 | 818,998 | 283,350 | (760,974 | ) | 521,928 | ||||||||||||||
Shareholders’ equity:
|
||||||||||||||||||||
Preferred stock
|
— | — | 1 | — | 1 | |||||||||||||||
Common stock
|
60 | 12 | 932 | (72 | ) | 932 | ||||||||||||||
Additional paid-in capital
|
297,300 | 144,383 | 2,506,435 | (441,683 | ) | 2,506,435 | ||||||||||||||
Accumulated other comprehensive income (loss)
|
(85,349 | ) | (1,297 | ) | (78,234 | ) | 86,646 | (78,234 | ) | |||||||||||
Retained earnings (accumulated deficit)
|
(1,365,625 | ) | 135,829 | (1,251,312 | ) | 1,229,796 | (1,251,312 | ) | ||||||||||||
Total shareholders’ equity
|
(1,153,614 | ) | 278,927 | 1,177,822 | 874,687 | 1,177,822 | ||||||||||||||
Total
|
$ | 1,205,161 | $ | 1,262,207 | $ | 1,701,630 | $ | (2,269,156 | ) | $ | 1,899,842 |
CONDENSED CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As of December 31, 2010
|
||||||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications and Eliminations
|
Consolidated
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | — | $ | 214,923 | $ | 89,373 | $ | — | $ | 304,296 | ||||||||||
Restricted cash
|
3,673 | — | — | — | 3,673 | |||||||||||||||
Accounts receivable — net
|
31,779 | 12,124 | — | — | 43,903 | |||||||||||||||
Due from affiliates
|
636,511 | 7,148 | 2,537,945 | (3,130,598 | ) | 51,006 | ||||||||||||||
Inventories
|
97,422 | 58,486 | — | — | 155,908 | |||||||||||||||
Prepaid and other current assets
|
3,687 | 39,453 | 2,152 | (27,000 | ) | 18,292 | ||||||||||||||
Total current assets
|
773,072 | 332,134 | 2,629,470 | (3,157,598 | ) | 577,078 | ||||||||||||||
Investment in subsidiaries
|
33,186 | — | (934,307 | ) | 901,121 | — | ||||||||||||||
Property, plant and equipment — net
|
364,760 | 890,924 | 1,451 | (165 | ) | 1,256,970 | ||||||||||||||
Due from affiliates — less current portion
|
— | 6,054 | — | — | 6,054 | |||||||||||||||
Other assets
|
22,197 | 36,735 | 24,022 | — | 82,954 | |||||||||||||||
Total
|
$ | 1,193,215 | $ | 1,265,847 | $ | 1,720,636 | $ | (2,256,642 | ) | $ | 1,923,056 | |||||||||
Liabilities and shareholders’ equity:
|
||||||||||||||||||||
Accounts payable, trade
|
$ | 43,072 | $ | 44,629 | $ | 303 | $ | — | $ | 88,004 | ||||||||||
Due to affiliates
|
2,094,293 | 70,580 | 222,245 | (2,341,737 | ) | 45,381 | ||||||||||||||
Accrued and other current liabilities
|
9,187 | 44,932 | 14,376 | (27,000 | ) | 41,495 | ||||||||||||||
Accrued employee benefits costs — current portion
|
23,592 | — | 3,090 | — | 26,682 | |||||||||||||||
Convertible senior notes
|
— | — | 45,483 | — | 45,483 | |||||||||||||||
Industrial revenue bonds
|
7,815 | — | — | — | 7,815 | |||||||||||||||
Total current liabilities
|
2,177,959 | 160,141 | 285,497 | (2,368,737 | ) | 254,860 | ||||||||||||||
Senior notes payable
|
— | — | 248,530 | — | 248,530 | |||||||||||||||
Accrued pension benefits costs — less current portion
|
14,096 | — | 23,699 | — | 37,795 | |||||||||||||||
Accrued postretirement benefits costs — less current portion
|
99,469 | — | 4,275 | — | 103,744 | |||||||||||||||
Other liabilities/intercompany loan
|
61,488 | 756,208 | 4,119 | (784,203 | ) | 37,612 | ||||||||||||||
Deferred taxes — less current portion
|
— | 90,822 | — | (4,823 | ) | 85,999 | ||||||||||||||
Total noncurrent liabilities
|
175,053 | 847,030 | 280,623 | (789,026 | ) | 513,680 | ||||||||||||||
Shareholders’ equity:
|
||||||||||||||||||||
Preferred stock
|
— | — | 1 | — | 1 | |||||||||||||||
Common stock
|
60 | 12 | 928 | (72 | ) | 928 | ||||||||||||||
Additional paid-in capital
|
297,300 | 144,383 | 2,503,907 | (441,683 | ) | 2,503,907 | ||||||||||||||
Accumulated other comprehensive income (loss)
|
(60,220 | ) | (1,220 | ) | (49,976 | ) | 61,440 | (49,976 | ) | |||||||||||
Retained earnings (accumulated deficit)
|
(1,396,937 | ) | 115,501 | (1,300,344 | ) | 1,281,436 | (1,300,344 | ) | ||||||||||||
Total shareholders’ equity
|
(1,159,797 | ) | 258,676 | 1,154,516 | 901,121 | 1,154,516 | ||||||||||||||
Total
|
$ | 1,193,215 | $ | 1,265,847 | $ | 1,720,636 | $ | (2,256,642 | ) | $ | 1,923,056 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||
For the three months ended June 30, 2011
|
||||||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications and Eliminations
|
Consolidated
|
||||||||||||||||
Net sales:
|
||||||||||||||||||||
Third-party customers
|
$ | 143,052 | $ | 64,039 | $ | — | $ | — | $ | 207,091 | ||||||||||
Related parties
|
83,751 | 75,435 | — | — | 159,186 | |||||||||||||||
226,803 | 139,474 | — | — | 366,277 | ||||||||||||||||
Cost of goods sold
|
212,685 | 104,078 | — | — | 316,763 | |||||||||||||||
Gross profit
|
14,118 | 35,396 | — | — | 49,514 | |||||||||||||||
Other operating income - net
|
(5,205 | ) | — | — | — | (5,205 | ) | |||||||||||||
Selling, general and admin expenses
|
16,614 | 1,943 | — | — | 18,557 | |||||||||||||||
Operating income
|
2,709 | 33,453 | — | — | 36,162 | |||||||||||||||
Interest expense – third party
|
(6,386 | ) | — | — | — | (6,386 | ) | |||||||||||||
Interest expense – affiliates
|
17,442 | (17,442 | ) | — | — | — | ||||||||||||||
Interest income – third party
|
13 | 52 | — | — | 65 | |||||||||||||||
Interest income – affiliates
|
— | 70 | — | — | 70 | |||||||||||||||
Net loss on forward contracts
|
(1,617 | ) | — | — | — | (1,617 | ) | |||||||||||||
Other expense - net
|
(900 | ) | (232 | ) | — | — | (1,132 | ) | ||||||||||||
Income before taxes and equity in earnings of subsidiaries and joint ventures
|
11,261 | 15,901 | — | — | 27,162 | |||||||||||||||
Income tax benefit (expense)
|
1,769 | (5,405 | ) | — | — | (3,636 | ) | |||||||||||||
Income before equity in earnings of subsidiaries and joint ventures
|
13,030 | 10,496 | — | — | 23,526 | |||||||||||||||
Equity earnings of subsidiaries and joint ventures
|
1,406 | 460 | 23,986 | (25,392 | ) | 460 | ||||||||||||||
Net income (loss)
|
$ | 14,436 | $ | 10,956 | $ | 23,986 | $ | (25,392 | ) | $ | 23,986 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||
For the three months ended June 30, 2010
|
||||||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications and Eliminations
|
Consolidated
|
||||||||||||||||
Net sales:
|
||||||||||||||||||||
Third-party customers
|
$ | 109,433 | $ | 73,612 | $ | — | $ | — | $ | 183,045 | ||||||||||
Related parties
|
65,438 | 39,370 | — | — | 104,808 | |||||||||||||||
174,871 | 112,982 | — | — | 287,853 | ||||||||||||||||
Cost of goods sold
|
183,249 | 83,088 | — | — | 266,337 | |||||||||||||||
Gross profit (loss)
|
(8,378 | ) | 29,894 | — | — | 21,516 | ||||||||||||||
Other operating expenses
|
4,644 | — | — | — | 4,644 | |||||||||||||||
Selling, general and admin expenses
|
9,772 | 1,192 | — | — | 10,964 | |||||||||||||||
Operating income (loss)
|
(22,794 | ) | 28,702 | — | — | 5,908 | ||||||||||||||
Interest expense – third party
|
(6,357 | ) | — | — | — | (6,357 | ) | |||||||||||||
Interest expense – affiliates
|
16,408 | (16,408 | ) | — | — | — | ||||||||||||||
Interest income
|
37 | 65 | — | — | 102 | |||||||||||||||
Interest income – affiliates
|
— | 111 | — | — | 111 | |||||||||||||||
Net gain on forward contracts
|
9,294 | — | — | — | 9,294 | |||||||||||||||
Other income - net
|
14 | 216 | — | — | 230 | |||||||||||||||
Income (loss) before taxes and equity in earnings (loss) of subsidiaries and joint ventures
|
(3,398 | ) | 12,686 | — | — | 9,288 | ||||||||||||||
Income tax expense
|
261 | (4,880 | ) | — | — | (4,619 | ) | |||||||||||||
Income (loss) before equity in earnings (loss) of subsidiaries and joint ventures
|
(3,137 | ) | 7,806 | — | 4,669 | |||||||||||||||
Equity earnings of subsidiaries and joint ventures
|
1,061 | 477 | 5,146 | (6,207 | ) | 477 | ||||||||||||||
Net income (loss)
|
$ | (2,076 | ) | $ | 8,283 | $ | 5,146 | $ | (6,207 | ) | $ | 5,146 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||
For the six months ended June 30, 2011
|
||||||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications and Eliminations
|
Consolidated
|
||||||||||||||||
Net sales:
|
||||||||||||||||||||
Third-party customers
|
$ | 273,539 | $ | 121,864 | $ | — | $ | — | $ | 395,403 | ||||||||||
Related parties
|
151,063 | 146,148 | — | — | 297,211 | |||||||||||||||
424,602 | 268,012 | — | — | 692,614 | ||||||||||||||||
Cost of goods sold
|
399,705 | 201,079 | — | — | 600,784 | |||||||||||||||
Gross profit
|
24,897 | 66,933 | — | — | 91,830 | |||||||||||||||
Other operating income - net
|
(11,089 | ) | — | — | — | (11,089 | ) | |||||||||||||
Selling, general and admin expenses
|
25,714 | 3,452 | — | — | 29,166 | |||||||||||||||
Operating income
|
10,272 | 63,481 | — | — | 73,753 | |||||||||||||||
Interest expense – third party
|
(13,163 | ) | — | — | — | (13,163 | ) | |||||||||||||
Interest expense – affiliates
|
34,672 | (34,672 | ) | — | — | — | ||||||||||||||
Interest income – third party
|
43 | 177 | — | — | 220 | |||||||||||||||
Interest income – affiliates
|
— | 183 | — | — | 183 | |||||||||||||||
Net loss on forward contracts
|
(6,426 | ) | — | — | — | (6,426 | ) | |||||||||||||
Other expense - net
|
(284 | ) | (171 | ) | — | — | (455 | ) | ||||||||||||
Income before taxes and equity in earnings of subsidiaries and joint ventures
|
25,114 | 28,998 | — | — | 54,112 | |||||||||||||||
Income tax benefit (expense)
|
3,590 | (10,349 | ) | — | — | (6,759 | ) | |||||||||||||
Income before equity in earnings of subsidiaries and joint ventures
|
28,704 | 18,649 | — | — | 47,353 | |||||||||||||||
Equity earnings of subsidiaries and joint ventures
|
2,608 | 1,679 | 49,032 | (51,640 | ) | 1,679 | ||||||||||||||
Net income (loss)
|
$ | 31,312 | $ | 20,328 | $ | 49,032 | $ | (51,640 | ) | $ | 49,032 |
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
|
||||||||||||||||||||
For the six months ended June 30, 2010
|
||||||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications and Eliminations
|
Consolidated
|
||||||||||||||||
Net sales:
|
||||||||||||||||||||
Third-party customers
|
$ | 227,511 | $ | 148,466 | $ | — | $ | — | $ | 375,977 | ||||||||||
Related parties
|
122,419 | 74,846 | — | — | 197,265 | |||||||||||||||
349,930 | 223,312 | — | — | 573,242 | ||||||||||||||||
Cost of goods sold
|
351,698 | 166,052 | — | — | 517,750 | |||||||||||||||
Gross profit (loss)
|
(1,768 | ) | 57,260 | — | — | 55,492 | ||||||||||||||
Other operating expenses – net
|
9,109 | — | — | — | 9,109 | |||||||||||||||
Selling, general and admin expenses
|
21,060 | 2,155 | — | — | 23,215 | |||||||||||||||
Operating income (loss)
|
(31,937 | ) | 55,105 | — | — | 23,168 | ||||||||||||||
Interest expense – third party
|
(12,755 | ) | — | — | — | (12,755 | ) | |||||||||||||
Interest expense – affiliates
|
32,362 | (32,362 | ) | — | — | — | ||||||||||||||
Interest income – third party
|
59 | 144 | — | — | 203 | |||||||||||||||
Interest income – affiliates
|
— | 220 | — | — | 220 | |||||||||||||||
Net gain on forward contracts
|
7,322 | — | — | — | 7,322 | |||||||||||||||
Other income - net
|
291 | 347 | — | — | 638 | |||||||||||||||
Income (loss) before taxes and equity in earnings (loss) of subsidiaries and joint ventures
|
(4,658 | ) | 23,454 | — | — | 18,796 | ||||||||||||||
Income tax benefit (expense)
|
236 | (9,136 | ) | — | — | (8,900 | ) | |||||||||||||
Income (loss) before equity in earnings (loss) of subsidiaries and joint ventures
|
(4,422 | ) | 14,318 | — | — | 9,896 | ||||||||||||||
Equity earnings of subsidiaries and joint ventures
|
2,040 | 1,582 | 11,478 | (13,518 | ) | 1,582 | ||||||||||||||
Net income (loss)
|
$ | (2,382 | ) | $ | 15,900 | $ | 11,478 | $ | (13,518 | ) | $ | 11,478 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||
For the six months ended June 30, 2011
|
||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Consolidated
|
|||||||||||||
Net cash provided by (used in) operating activities
|
$ | (20,260 | ) | $ | 4,125 | $ | — | $ | (16,135 | ) | ||||||
Investing activities:
|
||||||||||||||||
Purchase of property, plant and equipment
|
(2,860 | ) | (4,164 | ) | (329 | ) | (7,353 | ) | ||||||||
Nordural expansion
|
— | (7,968 | ) | — | (7,968 | ) | ||||||||||
Proceeds from the sale of property, plant and equipment
|
— | 56 | — | 56 | ||||||||||||
Payments received on advances to joint ventures
|
— | — | 3,056 | 3,056 | ||||||||||||
Restricted and other cash deposits
|
3,673 | — | — | 3,673 | ||||||||||||
Net cash provided by (used in) investing activities
|
813 | (12,076 | ) | 2,727 | (8,536 | ) | ||||||||||
Financing activities:
|
||||||||||||||||
Repayment of debt
|
— | — | (47,067 | ) | (47,067 | ) | ||||||||||
Repayment of contingent obligation
|
(189 | ) | — | — | (189 | ) | ||||||||||
Intercompany transactions
|
20,209 | (13,314 | ) | (6,895 | ) | — | ||||||||||
Issuance of common stock – net
|
— | — | 32 | 32 | ||||||||||||
Net cash provided by (used in) financing activities
|
20,020 | (13,314 | ) | (53,930 | ) | (47,224 | ) | |||||||||
Net change in cash and cash equivalents
|
573 | (21,265 | ) | (51,203 | ) | (71,895 | ) | |||||||||
Cash and cash equivalents, beginning of the period
|
— | 214,923 | 89,373 | 304,296 | ||||||||||||
Cash and cash equivalents, end of the period
|
$ | 573 | $ | 193,658 | $ | 38,170 | $ | 232,401 |
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
|
||||||||||||||||
For the six months ended June 30, 2010
|
||||||||||||||||
Combined Guarantor Subsidiaries
|
Combined Non-Guarantor Subsidiaries
|
The Company
|
Consolidated
|
|||||||||||||
Net cash provided by operating activities
|
$ | 54,042 | $ | 18,090 | $ | — | $ | 72,132 | ||||||||
Investing activities:
|
||||||||||||||||
Purchase of property, plant and equipment
|
(1,262 | ) | (1,743 | ) | (7 | ) | (3,012 | ) | ||||||||
Nordural expansion
|
— | (10,113 | ) | — | (10,113 | ) | ||||||||||
Investments in and advances to joint ventures
|
— | — | (17 | ) | (17 | ) | ||||||||||
Restricted and other cash deposits
|
(983 | ) | — | — | (983 | ) | ||||||||||
Net cash used in investing activities
|
(2,245 | ) | (11,856 | ) | (24 | ) | (14,125 | ) | ||||||||
Financing activities:
|
||||||||||||||||
Intercompany transactions
|
(51,797 | ) | 56,466 | (4,669 | ) | — | ||||||||||
Issuance of common stock – net
|
— | — | 23 | 23 | ||||||||||||
Net cash provided by (used in) financing activities
|
(51,797 | ) | 56,466 | (4,646 | ) | 23 | ||||||||||
Net change in cash and cash equivalents
|
— | 62,700 | (4,670 | ) | 58,030 | |||||||||||
Cash and cash equivalents, beginning of the period
|
— | 109,798 | 88,436 | 198,234 | ||||||||||||
Cash and cash equivalents, end of the period
|
$ | — | $ | 172,498 | $ | 83,766 | $ | 256,264 |
17.
|
Subsequent events
|
·
|
Our business objectives, strategies and initiatives, the growth of our business and our competitive position and prospects;
|
·
|
Our assessment of significant economic, financial, political and other factors and developments that may affect our results, including currency risks;
|
·
|
Our assessment of the aluminum market, aluminum prices, aluminum financing, inventories and warehousing arrangements and other similar matters;
|
·
|
Aluminum prices and their effect on our financial position and results of operations;
|
·
|
Future construction investment and development of our facility in Helguvik, Iceland, including future capital expenditures, the costs of completion or cancellation, production capacity and the sources of funding for the facility;
|
·
|
Our hedging and other strategies to mitigate risk and their potential effects;
|
·
|
Estimates relating to the costs and time necessary to restore our facility in Hawesville, KY to full stable operations following the restart of its previously curtailed potline;
|
·
|
Our curtailed operations, including the potential restart of curtailed operations, and potential curtailment of other domestic assets;
|
·
|
Our procurement of electricity, alumina and other raw materials and our assessment of pricing and other terms relating thereto;
|
·
|
Estimates of our pension and other postemployment liabilities and future payments, deferred income tax assets and property plant and equipment impairment, environmental liabilities and other contingent liabilities and contractual commitments;
|
·
|
Changes in, or the elimination of, the retiree medical benefit plans and programs of certain of our subsidiaries and their effect on our financial position and results of operation;
|
·
|
Critical accounting policies and estimates, the impact or anticipated impact of recent accounting pronouncements or change in accounting principle and future recognition of impairments for the fair value of assets;
|
·
|
Our anticipated tax liabilities, benefits or refunds;
|
·
|
Negotiations with our unionized workforce, including potential renegotiation of wage terms with the Grundartangi labor unions;
|
·
|
Our assessment of the ultimate outcome of outstanding litigation and environmental matters and liabilities relating thereto;
|
·
|
Compliance with laws and regulations;
|
·
|
The costs and effects and our evaluation of and strategies with respect to legal and regulatory actions, investigations and similar matters;
|
·
|
Our capital resources, projected financing sources and projected uses of capital;
|
·
|
The effect of future laws and regulations; and
|
·
|
Our debt levels and intentions to incur or repay debt in the future.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
(In thousands, except per share data)
|
||||||||||||||||
Net sales:
|
||||||||||||||||
Third-party customers
|
$ | 207,091 | $ | 183,045 | $ | 395,403 | $ | 375,977 | ||||||||
Related party customers
|
159,186 | 104,808 | 297,211 | 197,265 | ||||||||||||
Total
|
$ | 366,277 | $ | 287,853 | $ | 692,614 | $ | 573,242 | ||||||||
Gross profit
|
$ | 49,514 | $ | 21,516 | $ | 91,830 | $ | 55,492 | ||||||||
Net income
|
$ | 23,986 | $ | 5,146 | $ | 49,032 | $ | 11,478 | ||||||||
Income per common share:
|
||||||||||||||||
Basic and Diluted
|
$ | 0.24 | $ | 0.05 | $ | 0.48 | $ | 0.11 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Shipments – primary aluminum (metric tons):
|
||||||||||||||||
Direct
|
84,509 | 76,521 | 164,988 | 153,174 | ||||||||||||
Toll
|
66,974 | 68,058 | 130,673 | 136,082 | ||||||||||||
Total
|
151,483 | 144,579 | 295,661 | 289,256 |
Net sales (in millions)
|
2011
|
2010
|
$ Difference
|
% Difference
|
||||||||||||
Three months ended June 30,
|
$ | 366.3 | $ | 287.9 | $ | 78.4 | 27.2 | % | ||||||||
Six months ended June 30,
|
$ | 692.6 | $ | 573.2 | $ | 119.4 | 20.8 | % |
Gross profit (in millions)
|
2011
|
2010
|
$ Difference
|
% Difference
|
||||||||||||
Three months ended June 30,
|
$ | 49.5 | $ | 21.5 | $ | 28.0 | 130.2 | % | ||||||||
Six months ended June 30,
|
$ | 91.8 | $ | 55.5 | $ | 36.3 | 65.4 | % |
Other operating income (expenses) - net (in millions)
|
2011
|
2010
|
$ Difference
|
% Difference
|
||||||||||||
Three months ended June 30,
|
$ | 5.2 | $ | (4.6 | ) | $ | 9.8 | 213.0 | % | |||||||
Six months ended June 30,
|
$ | 11.1 | $ | (9.1 | ) | $ | 20.2 | 222.0 | % |
Selling, general and administrative expenses (in millions)
|
2011
|
2010
|
$ Difference
|
% Difference
|
||||||||||||
Three months ended June 30,
|
$ | 18.6 | $ | 11.0 | $ | 7.6 | 69.1 | % | ||||||||
Six months ended June 30,
|
$ | 29.2 | $ | 23.2 | $ | 6.0 | 25.9 | % |
Net gain (loss) on forward contracts (in millions)
|
2011
|
2010
|
$ Difference
|
% Difference
|
||||||||||||
Three months ended June 30,
|
$ | (1.6 | ) | $ | 9.3 | $ | (10.9 | ) | 117.2 | % | ||||||
Six months ended June 30,
|
$ | (6.4 | ) | $ | 7.3 | $ | (13.7 | ) | 187.7 | % |
Income tax expense (in millions)
|
2011
|
2010
|
$ Difference
|
% Difference
|
||||||||||||
Three months ended June 30,
|
$ | 3.6 | $ | 4.6 | $ | (1.0 | ) | 21.7 | % | |||||||
Six months ended June 30,
|
$ | 6.8 | $ | 8.9 | $ | (2.1 | ) | 23.6 | % |
Six months ended June 30,
|
||||||||
2011
|
2010
|
|||||||
(dollars in thousands)
|
||||||||
Net cash provided by (used in) operating activities
|
$ | (16,135 | ) | $ | 72,132 | |||
Net cash used in investing activities
|
(8,536 | ) | (14,125 | ) | ||||
Net cash provided by (used in) financing activities
|
(47,224 | ) | 23 | |||||
Net change in cash and cash equivalents
|
$ | (71,895 | ) | $ | 58,030 |
June 30, 2011
|
||||
Natural gas forward financial contracts (in MMBTU)
|
210,000 |
Exhibit Number
|
Description of Exhibit
|
Incorporated by Reference
|
Filed Herewith
|
||
Form
|
File No.
|
Filing Date
|
|||
10.1
|
Amended and Restated Employment Agreement, dated as of June 2, 2011 by and between Century Aluminum Company and Logan W. Kruger*
|
X
|
|||
10.2
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 2, 2011 by and between Century Aluminum Company and Logan W. Kruger*
|
X
|
|||
10.3
|
Amended and Restated Employment Agreement, dated as of June 3, 2011 by and between Century Aluminum Company and Michael A. Bless*
|
X
|
|||
10.4
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 3, 2011 by and between Century Aluminum Company and Michael A. Bless*
|
X
|
|||
10.5
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 2, 2011 by and between Century Aluminum Company and William J. Leatherberry*
|
X
|
|||
10.6
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 6, 2011 by and between Century Aluminum Company and Steve Schneider*
|
X
|
|||
10.7
|
Separation Agreement and General Release, dated May 11, 2011, by and among Century Aluminum Company and Wayne R. Hale*
|
8-K
|
001-34474
|
May 12, 2011
|
|
10.8
|
Consultant Agreement, dated May 11, 2011, by and among Century Aluminum Company and Wayne R. Hale*
|
8-K
|
001-34474
|
May 12, 2011
|
|
10.9
|
Form of Amendment No. 1 to the Stock Option Agreement – Employee*
|
X
|
Century Aluminum Company
|
||||
Date:
|
August 9, 2011
|
By:
|
/s/ Logan W. Kruger
|
|
Logan W. Kruger
|
||||
President and Chief Executive Officer
|
||||
Date:
|
August 9, 2011
|
By:
|
/s/ Michael A. Bless
|
|
Michael A. Bless
|
||||
Executive Vice-President and Chief Financial Officer
|
Exhibit Number
|
Description of Exhibit
|
Incorporated by Reference
|
Filed Herewith
|
||
Form
|
File No.
|
Filing Date
|
|||
10.1
|
Amended and Restated Employment Agreement, dated as of June 2, 2011 by and between Century Aluminum Company and Logan W. Kruger*
|
X
|
|||
10.2
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 2, 2011 by and between Century Aluminum Company and Logan W. Kruger*
|
X
|
|||
10.3
|
Amended and Restated Employment Agreement, dated as of June 3, 2011 by and between Century Aluminum Company and Michael A. Bless*
|
X
|
|||
10.4
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 3, 2011 by and between Century Aluminum Company and Michael A. Bless*
|
X
|
|||
10.5
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 2, 2011 by and between Century Aluminum Company and William J. Leatherberry*
|
X
|
|||
10.6
|
2
nd
Amended and Restated Severance Protection Agreement dated as of June 6, 2011 by and between Century Aluminum Company and Steve Schneider*
|
X
|
|||
10.7
|
Separation Agreement and General Release, dated May 11, 2011, by and among Century Aluminum Company and Wayne R. Hale*
|
8-K
|
001-34474
|
May 12, 2011
|
|
10.8
|
Consultant Agreement, dated May 11, 2011, by and among Century Aluminum Company and Wayne R. Hale*
|
8-K
|
001-34474
|
May 12, 2011
|
|
10.9
|
Form of Amendment No. 1 to the Stock Option Agreement – Employee*
|
X
|
|||
10.10
|
Amendment No. 1 to the Century Aluminum Company Long-Term Incentive Plan (Adopted Effective January 1, 2008)
|
X
|
|||
10.11
|
Amendment No. 1 to the Century Aluminum Company 2009-2011 Long-Term Transformational Incentive Plan (Adopted Effective January 1, 2009)
|
X
|
|||
10.12
|
Amendment No. 2 to the Loan and Security Agreement, dated as of April 26, 2011, among Century Aluminum Company, Berkeley Aluminum, Inc., Century Aluminum of West Virginia, Inc., Century Aluminum of Kentucky General Partnership and NSA General Partnership, as borrowers, and Wells Fargo Capital Finance, LLC, as agent and lender
|
X
|
CENTURY ALUMINUM COMPANY
|
|
/s/ William J. Leatherberry
|
|
By: William J. Leatherberry
|
|
Title: Executive Vice President and Secretary
|
|
EXECUTIVE:
|
|
/s/ Logan W. Kruger
|
|
Logan W. Kruger
|
CENTURY ALUMINUM COMPANY
|
|
/s/ William J. Leatherberry
|
|
By: William J. Leatherberry
|
|
Title: Executive Vice President and Secretary
|
|
EXECUTIVE:
|
|
/s/ Logan W. Kruger
|
|
Logan W. Kruger
|
CENTURY ALUMINUM COMPANY
|
|
/s/ William J. Leatherberry
|
|
By: William J. Leatherberry
|
|
Title: Executive Vice President and Secretary
|
|
EXECUTIVE:
|
|
/s/ Michael A. Bless
|
|
Michael A. Bless
|
CENTURY ALUMINUM COMPANY
|
|
/s/ William J. Leatherberry
|
|
By: William J. Leatherberry
|
|
Title: Executive Vice President and Secretary
|
|
EXECUTIVE:
|
|
/s/ Michael A. Bless
|
|
Michael A. Bless
|
CENTURY ALUMINUM COMPANY
|
|
/s/ Logan W. Kruger
|
|
By: Logan W. Kruger
|
|
Title: President and Chief Executive Officer
|
|
EXECUTIVE:
|
|
/s/ William J. Leatherberry
|
|
William J. Leatherberry
|
CENTURY ALUMINUM COMPANY
|
|
/s/ William J. Leatherberry
|
|
By: William J. Leatherberry
|
|
Title: Executive Vice President and Secretary
|
|
EXECUTIVE:
|
|
/s/ Steve Schneider
|
|
Steve Schneider
|
CENTURY ALUMINUM COMPANY
|
PARTICIPANT:
|
|
By: William J. Leatherberry
|
||
Its: Executive Vice President, General Counsel and Secretary
|
CENTURY ALUMINUM COMPANY COMPENSATION COMMITTEE
|
|
/s/ Peter Jones
|
|
By: Peter Jones
|
|
Title: Committee Chairperson
|
CENTURY ALUMINUM COMPANY COMPENSATION COMMITTEE
|
|
/s/ Peter Jones
|
|
By: Peter Jones
|
|
Title: Committee Chairperson
|
BORROWERS:
|
||
CENTURY ALUMINUM COMPANY
|
||
By:
|
/s/ Michelle Lair
|
|
Name:
|
Michelle Lair
|
|
Title:
|
Vice President
|
|
BERKELEY ALUMINUM, INC.
|
||
By:
|
/s/ Michelle Lair
|
|
Name:
|
Michelle Lair
|
|
Title:
|
Vice President
|
|
CENTURY ALUMINUM OF WEST VIRGINIA, INC.
|
||
By:
|
/s/ Michelle Lair
|
|
Name:
|
Michelle Lair
|
|
Title:
|
Vice President
|
|
CENTURY ALUMINUM OF KENTUCKY GENERAL PARTNERSHIP
|
||
By: METALSCO LLC, its Managing Partner
|
||
By:
|
/s/ Michelle Lair
|
|
Name:
|
Michelle Lair
|
|
Title:
|
Vice President
|
|
NSA GENERAL PARTNERSHIP
|
||
By: CENTURY KENTUCKY, INC., its Managing Partner
|
||
By:
|
/s/ Michelle Lair
|
|
Name:
|
Michelle Lair
|
|
Title:
|
Vice President
|
AGENT AND LENDERS:
|
||
WELLS FARGO CAPITAL FINANCE, LLC,
as Agent and as a Lender
|
||
By:
|
/s/ Amelie Yehros
|
|
Name:
|
Amelie Yehros
|
|
Title:
|
Senior Vice President
|
|
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH
, as a Lender
|
||
By:
|
/s/ Mikhail Faybusovich
|
|
Name:
|
Mikhail Faybusovich
|
|
Title:
|
Director
|
|
By:
|
/s/ Rahul Parmar
|
|
Name:
|
Rahul Parmar
|
|
Title:
|
Associate
|
Legal Name
|
Type of Entity
|
Organizational Number
|
State of Incorporation/Organization/Formation
|
Century Aluminum Company
|
Corporation
|
0908570
|
Delaware
|
Berkeley Aluminum, Inc.
|
Corporation
|
2144753
|
Delaware
|
Century Aluminum of West Virginia, Inc.
|
Corporation
|
2151380
|
Delaware
|
NSA General Partnership
|
General Partnership
|
0770017
|
Kentucky
|
Century Aluminum of Kentucky General Partnership
|
General Partnership
|
0770018
|
Kentucky
|
1.
|
Other legal, fictitious or trade names used within five years immediately preceding the Closing Date:
|
|
·
|
Century Aluminum Company: None.
|
|
·
|
Berkeley Aluminum, Inc.: None.
|
|
·
|
Century Aluminum of West Virginia, Inc.: None.
|
|
·
|
NSA General Partnership: None.
|
|
·
|
Century Aluminum of Kentucky General Partnership: NSA, Ltd.
|
2.
|
Mergers, consolidations and acquisitions within five years immediately preceding the Closing Date:
|
|
·
|
None.
|
|
1)
|
I have reviewed this quarterly report on Form 10-Q of Century Aluminum Company;
|
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report the Company’s conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5)
|
The registrant's other certifying officer and I have disclosed, based on the Company’s most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 9, 2011
|
|
/s/ LOGAN W. KRUGER
|
|
Name: Logan W. Kruger
|
|
Title: President and Chief Executive Officer
|
|
1)
|
I have reviewed this quarterly report on Form 10-Q of Century Aluminum Company;
|
|
2)
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4)
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report the Company’s conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|
5)
|
The registrant's other certifying officer and I have disclosed, based on the Company’s most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date: August 9, 2011
|
|
/s/ MICHAEL A. BLESS
|
|
Name: Michael A. Bless
|
|
Title: Executive Vice President and Chief Financial Officer
|
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(18 U.S.C. 1350)
|
|
1.
|
This Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
The information contained in this Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ LOGAN W. KRUGER
|
/s/ MICHAEL A. BLESS
|
|||
By:
|
Logan W. Kruger
|
By:
|
Michael A. Bless
|
|
Title:
|
Chief Executive Officer
|
Title:
|
Chief Financial Officer
|
|
Date:
|
August 9, 2011
|
Date:
|
August 9, 2011
|