þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 | ||
OR | ||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
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13-3070826 | |
(State or other jurisdiction of
Incorporation or organization) |
(IRS Employer
Identification No.) |
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2511 Garden Road
Building A, Suite 200 Monterey, California (Address of registrants principal offices) |
93940
(Zip Code) |
Title of each class |
Common Stock, $0.01 par value per share
|
2
| Our high level of indebtedness reduces cash available for other purposes and limits our ability to incur additional debt and pursue our growth strategy; | |
| The cyclical nature of the aluminum industry causes variability in our earnings and cash flows; | |
| The loss of a customer to whom we deliver molten aluminum would increase our production costs; | |
| Glencore International AG owns a large percentage of our common stock and has the ability to influence matters requiring shareholder approval; | |
| We could suffer losses due to a temporary or prolonged interruption of the supply of electrical power to one or more of our facilities, which can be caused by unusually high demand, blackouts, equipment failure, natural disasters or other catastrophic events; | |
| Due to volatile prices for alumina and electricity, the principal cost components of primary aluminum production, our production costs could be materially impacted if we experience changes to or disruptions in our current alumina or power supply arrangements, production costs at our alumina refining operation increase significantly, or if we are unable to obtain economic replacement contracts for our alumina supply or power for those portions of our power requirements that are currently unpriced; | |
| By expanding our geographic presence and diversifying our operations through the acquisition of bauxite mining, alumina refining and additional aluminum reduction assets, we are exposed to new risks and uncertainties that could adversely affect the overall profitability of our business; | |
| Changes in the relative cost of certain raw materials and energy compared to the price of primary aluminum could affect our margins; | |
| Most of our employees are unionized and any labor dispute or failure to successfully renegotiate an existing labor agreement could materially impair our ability to conduct our production operations at our unionized facilities; | |
| We are subject to a variety of existing environmental laws that could result in unanticipated costs or liabilities; | |
| We may not realize the expected benefits of our growth strategy if we are unable to successfully integrate the businesses we acquire; and | |
| We cannot guarantee that our subsidiary Nordural will be able to complete its expansion in the time forecast or without significant cost overruns or that we will be able to realize the expected benefits of the expansion. |
3
Item 1. | Business |
Current Primary Aluminum Facilities: |
Ownership | ||||||||||||||
Facility | Location | Operational | Capacity | Percent | ||||||||||
(metric tons per year) | ||||||||||||||
Nordural(1)
|
Grundartangi, Iceland | 1998 | 90,000 | 100 | % | |||||||||
Hawesville
|
Hawesville, Kentucky, USA | 1970 | 244,000 | 100 | % | |||||||||
Ravenswood
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Ravenswood, West Virginia, USA | 1957 | 170,000 | 100 | % | |||||||||
Mt. Holly(2)
|
Mount Holly, South Carolina, USA | 1980 | 227,000 | 49.7 | % |
(1) | Nordurals rated production capacity is scheduled to increase to 220,000 metric tons per year by the fourth quarter of 2006. Further expansion to 260,000 metric tons per year is projected for late 2008. |
(2) | Alcoa holds the remaining 50.3% ownership interest. Centurys share of Mt. Hollys capacity is approximately 113,000 metric tons per year. |
4
Bauxite and Alumina: |
Our Ownership | ||||||||||||||
Facility | Location | Type | Capacity | Percent | ||||||||||
Gramercy
|
Gramercy, Louisiana, USA | Alumina Refinery | 1.25 million metric tons per year | 50 | % | |||||||||
St. Ann Limited(1)
|
St. Ann, Jamaica | Bauxite | 4.5 million dry metric tons per year | 50 | % |
(1) | St. Ann Bauxite Limited (SABL) is entitled to mine 4.5 million dry metric tons (DMT) of bauxite on specified lands annually through September 30, 2030. The government of Jamaica is required to provide additional land if the land covered by the mining rights does not contain sufficient levels of commercially exploitable bauxite. SABL is responsible for reclamation of the land that it mines. |
| acquiring an additional 23% interest in the Mt. Holly facility (Mt. Holly) in April 2000; | |
| acquiring an 80% interest in the Hawesville facility (Hawesville) in April 2001; | |
| acquiring the remaining 20% interest in Hawesville in April 2003; | |
| acquiring the Nordural facility (Nordural) in April 2004; | |
| acquiring through a joint venture the Gramercy facility (Gramercy), our first alumina refining facility, together with related bauxite mining assets in October 2004, and; | |
| an expansion of Nordurals production capacity to 220,000 metric tons of primary aluminum, which is expected to be completed in the fourth quarter of 2006. |
Recent Developments |
5
Industry Overview |
Competition |
6
Customer Base |
Year Ended December 31, | ||||||||||||||||||||||||
2005 | 2004 | 2003 | ||||||||||||||||||||||
$(000) | % | $(000) | % | $(000) | % | |||||||||||||||||||
Alcan
|
356,347 | 31.5 | 301,033 | 28.4 | 198,448 | 25.4 | ||||||||||||||||||
Southwire
|
294,468 | 26.0 | 258,320 | 24.4 | 199,067 | 25.4 | ||||||||||||||||||
Glencore
|
171,027 | 15.1 | 163,209 | 15.4 | 121,886 | 15.6 | ||||||||||||||||||
BHP Billiton
|
137,736 | 12.2 | 85,518 | 8.1 | | | ||||||||||||||||||
All other customers
|
172,784 | 15.2 | 252,667 | 23.7 | 263,078 | 33.6 | ||||||||||||||||||
Total
|
1,132,362 | 100.0 | 1,060,747 | 100.0 | 782,479 | 100.0 | ||||||||||||||||||
Financial Information about Segments and Geographic Areas |
Energy, Key Supplies and Raw Materials |
electricity
alumina labor aluminum fluoride |
carbon
cathode blocks liquid pitch natural gas |
silicon carbide
caustic soda calcined petroleum coke |
Pricing |
7
Nordural |
8
Hawesville |
9
Ravenswood |
Mt. Holly |
10
Gramercy Alumina LLC |
11
St. Ann Bauxite Limited |
12
Item 1A. | Risk Factors |
The cyclical nature of the aluminum industry causes variability in our earnings and cash flows. |
13
We reduce our casting and shipping costs by selling molten aluminum to the major customers of our Ravenswood and Hawesville facilities; the loss of one of these major customers would increase our production costs at those facilities. |
A material change in our relationship with Glencore could affect how we purchase raw materials, sell our products and hedge our exposure to metal price risk. |
Losses caused by disruptions in the supply of power would reduce the profitability of our operations. |
Changes or disruptions to our current alumina supply arrangements could increase our raw material costs. |
14
The cost of alumina used at Hawesville may be higher than under our LME-based alumina contracts. |
Changes in the relative cost of certain raw materials and energy compared to the price of primary aluminum could affect our operating results. |
We are subject to the risk of union disputes. |
15
We are subject to a variety of environmental laws that could result in costs or liabilities. |
Acquisitions may present difficulties. |
| it may be challenging for us to manage our existing business as we integrate acquired operations; | |
| we may not achieve the anticipated reductions in average unit production costs as a result of our acquisitions; and | |
| management of acquisitions will require continued development of financial controls and information systems, which may prove to be expensive, time-consuming, and difficult to maintain. |
We may not realize the expected benefits of the planned expansion of Nordural. |
Operating in foreign countries exposes us to political, regulatory, currency and other related risks. |
16
Our historical financial information may not be comparable to our results for future periods. |
| our acquisition of the remaining 20% interest in Hawesville prior to April 1, 2003; | |
| our acquisition of Nordural prior to April 27, 2004; and | |
| the equity earnings of the joint venture purchases of the Gramercy assets prior to October 1, 2004. |
Our high level of indebtedness requires significant cash flow to meet our debt service requirements, which reduces cash available for other purposes, such as the payment of dividends, and limits our ability to pursue our growth strategy. |
| limiting cash flow available for capital expenditures, acquisitions, dividends, working capital and other general corporate purposes because a substantial portion of our cash flow from operations must be dedicated to servicing our debt; | |
| increasing our vulnerability to adverse economic and industry conditions; | |
| limiting our flexibility in planning for, or reacting to, competitive and other changes in our business and the industry in which we operate; | |
| placing us at a disadvantage compared to our competitors who may have less debt and greater operating and financing flexibility than we do; and | |
| limiting our ability to borrow additional funds, which may prevent us from pursuing favorable acquisition opportunities when they arise. |
17
Restrictive covenants in our credit facilities and the indenture governing our senior notes limit our ability to incur additional debt and pursue our growth strategy. |
We depend upon dividends from our subsidiaries to meet our debt service obligations. |
The price of our common stock may fluctuate significantly. |
18
Provisions in our charter documents and state law may make it difficult for others to obtain control of Century Aluminum, even though some stockholders may consider it to be beneficial. |
| give authority to our board of directors to issue preferred stock and to determine the price, rights, preferences, privileges and restrictions of those shares without any stockholder vote; | |
| provide, under our charter documents, for a board of directors consisting of three classes, each of which serves for a different three-year term; | |
| require stockholders to give advance notice prior to submitting proposals for consideration at stockholders meetings or to nominate persons for election as directors; and | |
| restrict, under our charter documents, certain business combinations between us and any person who beneficially owns 10% or more of our outstanding voting stock. |
Item 1B. | Unresolved Staff Comments |
Item 2. | Properties |
Item 3. | Legal Proceedings |
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Item 4. | Submission of Matters to a Vote of Security Holders |
Item 5. | Market for Registrants Common Equity, Related Stockholder Matters and Issuer Repurchase of Equity Securities |
Market Information |
2004 | 2005 | |||||||||||||||||||||||||||||||
Year Quarter | First | Second | Third | Fourth | First | Second | Third | Fourth | ||||||||||||||||||||||||
High sales price
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$ | 29.70 | $ | 29.40 | $ | 28.00 | $ | 29.10 | $ | 34.70 | $ | 32.18 | $ | 27.60 | $ | 26.79 | ||||||||||||||||
Low sales price
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$ | 19.15 | $ | 18.64 | $ | 21.70 | $ | 22.42 | $ | 23.69 | $ | 20.16 | $ | 20.00 | $ | 17.82 | ||||||||||||||||
Closing sales price
|
$ | 28.23 | $ | 24.79 | $ | 27.73 | $ | 26.26 | $ | 30.26 | $ | 20.40 | $ | 22.48 | $ | 26.21 |
Holders |
Dividend Information |
Item 6. | Selected Consolidated Financial Data |
| the results of operations from the 80% interest in Hawesville since we acquired it in April 2001; | |
| the results of operations from the 20% interest in Hawesville since we acquired it in April 2003; |
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| the results of operations from Nordural since we acquired it in April 2004; and | |
| our equity in the earnings of our joint venture investments in Gramercy Alumina LLC and St. Ann Bauxite Ltd. since we acquired an interest in those companies in October 2004. |
Year Ended December 31, | ||||||||||||||||||||||
2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
2005(1) | Restated(2,3) | Restated(3,4) | Restated(3) | Restated(3) | ||||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||||
Net sales revenue
|
$ | 1,132,362 | $ | 1,060,747 | $ | 782,479 | $ | 711,338 | $ | 654,922 | ||||||||||||
Gross profit
|
161,677 | 185,287 | 43,370 | 20,360 | 19,129 | |||||||||||||||||
Operating income
|
126,904 | 160,371 | 22,537 | 4,577 | 531 | |||||||||||||||||
Income (loss) before cumulative effect of change in accounting
principle
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(116,255 | ) | 33,482 | 3,922 | (18,443 | ) | (14,685 | ) | ||||||||||||||
Net income (loss)
|
(116,255 | ) | 33,482 | (1,956 | ) | (18,443 | ) | (14,685 | ) | |||||||||||||
Earnings (loss) per share:
|
||||||||||||||||||||||
Basic and Diluted:
|
||||||||||||||||||||||
Income (loss) before cumulative effect of change in accounting
principle
|
$ | (3.62 | ) | $ | 1.14 | $ | 0.09 | $ | (0.99 | ) | $ | (0.79 | ) | |||||||||
Cumulative effect of change in accounting principle
|
| | (0.28 | ) | | | ||||||||||||||||
Net income (loss) per share Basic
|
$ | (3.62 | ) | $ | 1.14 | $ | (0.19 | ) | $ | (0.99 | ) | $ | (0.79 | ) | ||||||||
Dividends per common share
|
$ | 0.00 | $ | 0.00 | $ | 0.00 | $ | 0.15 | $ | 0.20 | ||||||||||||
Total assets
|
$ | 1,677,431 | $ | 1,332,553 | $ | 804,242 | $ | 763,751 | $ | 774,991 | ||||||||||||
Total debt(5)
|
671,901 | 524,108 | 344,125 | 329,667 | 329,261 | |||||||||||||||||
Long-term debt obligations(6)
|
488,505 | 330,711 | 336,310 | 321,852 | 321,446 | |||||||||||||||||
Other information:
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||||||||||||||||||||||
Shipments Primary aluminum:
|
||||||||||||||||||||||
Direct shipment pounds (000)
|
1,153,731 | 1,179,824 | 1,126,542 | 1,049,295 | 918,443 | |||||||||||||||||
Toll shipment pounds (000)(7)
|
203,966 | 138,239 | | | | |||||||||||||||||
Average LME per pound
|
$ | 0.861 | $ | 0.778 | $ | 0.649 | $ | 0.612 | $ | 0.655 | ||||||||||||
Average Midwest premium per pound
|
$ | 0.056 | $ | 0.068 | $ | 0.037 | $ | 0.041 | $ | 0.038 | ||||||||||||
Average realized price per pound:
|
||||||||||||||||||||||
Direct shipments
|
$ | 0.86 | $ | 0.83 | $ | 0.69 | $ | 0.68 | $ | 0.71 | ||||||||||||
Toll shipments
|
$ | 0.67 | $ | 0.62 | | | |
(1) | Income (loss) before cumulative effect of change in accounting principle and Net income (loss) include an after-tax charge of $198.2 million, or $6.17 per diluted share for mark-to -market losses on forward contracts, which will settle during the period 2006-2015, that do not qualify for cash flow hedge accounting. |
21
(2) | Income (loss) before cumulative effect of change in accounting principle and Net income (loss) include an after-tax charge of $30.4 million, or $1.06 per diluted share for a loss on early extinguishment of debt, see Note 6 in the Consolidated Financial Statements included herein. |
(3) | During the second quarter of 2005, we changed our method of inventory costing from last-in -first-out (LIFO) to first-in -first-out (FIFO). We retroactively restated the financial information for the periods prior to 2005 to reflect this change in accounting principle. |
(4) | We adopted SFAS No. 143, Accounting for Asset Retirement Obligations on January 1, 2003. As a result, we recorded a one-time, non-cash charge of $5,878, for the cumulative effect of a change in accounting principle. |
(5) | Total debt includes all long-term debt obligations and any debt classified as short-term obligations, including, IRBs and the 1.75% Convertible senior notes, excluding preferred stock. |
(6) | Long-term debt obligations are all payment obligations under long-term borrowing arrangements, excluding the current portion of long-term debt. |
(7) | Nordural began the start-up of its expansion capacity in February 2006. We expect the tolling shipments to increase to 386 million pounds (175,000 metric tons) in 2006 as a result of this increased capacity. |
Item 7. | Managements Discussion and Analysis of Financial Condition and Results of Operations |
| the remaining 20% interest in Hawesville until acquired in April 2003; | |
| our ownership of Nordural until acquired in late April 2004, and; | |
| our ownership interest in the Gramercy assets until acquired in October 2004. |
| Our selling price is based on the LME price of primary aluminum and fixed price sales contracts. | |
| Our facilities operate at or near capacity, and fluctuations in volume, other than through acquisitions, generally are small. | |
| The principal components of cost of goods sold are alumina, power and labor, which in aggregate were in excess of 70% of the 2005 cost of goods sold. Many of these costs are covered by long-term contracts, as described below. |
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Alumina Supply Contract with Trafigura |
Hawesville Electrical Power Supply Agreements |
The Nordural Expansion |
23
Icelandic Greenfield Joint Action Plan |
$100 Million Revolving Credit Facility |
New Directors and Officers |
Primary Aluminum Sales Contracts |
Contract | Customer | Volume | Term | Pricing | ||||
Alcan Metal Agreement(1)
|
Alcan | 276 to 324 million pounds per year | Through July 31, 2007 | Variable, based on U.S. Midwest market | ||||
Glencore Metal Agreement I(2)
|
Glencore | 50,000 metric tons per year | January 2005 through December 31, 2009 | Variable, LME-based | ||||
Glencore Metal Agreement II(3)
|
Glencore | 20,000 metric tons per year | January 2004 through December 31, 2013 | Variable, based on U.S. Midwest market | ||||
Southwire Metal Agreement(4)
|
Southwire | 240 million pounds per year (high purity molten aluminum) | Through March 31, 2011 | Variable, based on U.S. Midwest market | ||||
60 million pounds per year (standard-grade molten aluminum) | Through December 31, 2010 | Variable, based on U.S. Midwest market |
(1) | Alcan has the right, upon 12 months notice, to reduce its purchase obligations by 50% under this contract. |
(2) | We account for the Glencore Metal Agreement I as a derivative instrument under SFAS No. 133. We have not designated the Glencore Metal Agreement I as normal because it replaced and substituted for a significant portion of a sales contract which did not qualify for this designation. Because the Glencore |
24
Metal Agreement I is variably priced, we do not expect significant variability in its fair value, other than changes that might result from the absence of the U.S. Midwest premium. |
(3) | We account for the Glencore Metal Agreement II as a derivative instrument under SFAS No. 133. Under the Glencore Metal Agreement II, pricing is based on then-current 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. |
(4) | The Southwire Metal Agreement will automatically renew for additional five-year terms, unless either party provides 12 months notice that it has elected not to renew. |
Tolling Contracts |
Contract | Customer | Volume | Term | Pricing | ||||
Billiton Tolling Agreement(1)(2)
|
BHP Billiton |
130,000 mtpy
|
Through December 2013
|
LME-based
|
||||
Glencore Tolling Agreement(3)(4)
|
Glencore |
90,000 mtpy
|
Through July 2016
|
LME-based
|
(1) | Substantially all of Nordurals existing sales consist of tolling revenues earned under a long-term Alumina Supply, Toll Conversion and Aluminum Metal Supply Agreement (the Billiton Tolling Agreement) between Nordural and a subsidiary of BHP Billiton Ltd (together with its subsidiaries, BHP Billiton). Under the Billiton Tolling Agreement, Nordural receives an LME-based fee for the conversion of alumina, supplied by BHP Billiton, into primary aluminum. |
(2) | In September 2005, Nordural and BHP Billiton amended the Billiton Tolling Agreement to increase the tolling arrangement from 90,000 metric tons to 130,000 metric tons of the per annum production capacity at Nordural effective upon the completion of the expansion. |
(3) | Nordural entered into a 10-year LME-based alumina tolling agreement with Glencore for 90,000 metric tons of the expansion capacity at Nordural. The term of the agreement is expected to begin July 2006. |
(4) | In December 2005, Glencore assigned to Hydro 50% of its tolling rights under this agreement for the period 2007 to 2010. Nordural consented to the assignment. |
Key Long-Term Supply Agreements |
Alumina Supply Agreements |
Facility | Supplier | Term | Pricing | |||
Ravenswood
|
Glencore
|
Through December 31, 2006
|
Variable, LME-based
|
|||
Mt. Holly
|
Glencore
|
Through December 31, 2006 (54% of requirement)
|
Variable, LME-based
|
|||
Mt. Holly
|
Glencore
|
Through January 31, 2008
|
Variable, LME-based
|
|||
(46% of requirement)
|
||||||
Hawesville(1)
|
Gramercy Alumina
|
Through December 31, 2010
|
Variable, Cost-based
|
|||
Undesignated(2)
|
Trafigura
|
January 1, 2007 through
|
Variable, LME-based
|
|||
December 31, 2013
|
25
(1) | The alumina supply agreement with Gramercy Alumina LLC, which was entered into on November 2, 2004, replaced our alumina supply agreement with Kaiser. |
(2) | The alumina supply contract with Trafigura will supply Century with 125,000 metric tons in 2007 and 220,000 metric tons beginning in 2008 through 2013. |
Electrical Power Supply Agreements |
Facility | Supplier | Term | Pricing | |||
Ravenswood(1)
|
Appalachian Power Company | Continuous | Fixed price | |||
Mt. Holly
|
South Carolina Public Service Authority | Through December 31, 2015 | Fixed price, with fuel cost adjustment clause through 2010; subject to a new fixed price schedule after 2010 | |||
Hawesville
|
Kenergy | Through December 31, 2010 | Fixed price through 2006, 27% (or 130 MW) unpriced 2007 though 2010 | |||
Nordural(2)
|
Landsvirkjun | Through 2019 | Variable rate based on the LME price for primary aluminum |
(1) | On February 18, 2005, Century of West Virginia signed an agreement with Appalachian Power Company for the supply of electricity to Ravenswood beginning January 1, 2006. The agreement is continuous; however after an initial term of two years Century may give 12 months notice of cancellation. Power under the new agreement is priced under an Appalachian Power tariff. Appalachian Power Company filed a rate case on September 26, 2005, seeking increases in its tariff rates. It has advised Century it expects those rates to become effective July 1, 2006. We intend to contest the rate increase. |
(2) | In connection with the expansion of Nordural, Nordural entered into contracts with Hitaveita Sudurnesja hf. and Orkuveita Reykjavíkur for the supply of the power required for 130,000 metric tons of the expansion capacity. Nordural may purchase additional electrical power under one of those contracts to support the further expansion of the facility. The rate for the power supplied under both contracts is LME-based. |
Labor Agreements |
Facility | Organization | Term | ||
Hawesville
|
USWA | Through March 31, 2006 | ||
Ravenswood
|
USWA | Through May 31, 2006 | ||
Mt. Holly
|
Not unionized | Not Applicable | ||
Nordural(1)
|
Icelandic labor unions | Through December 31, 2009 | ||
Gramercy
|
USWA | Through September 30, 2010 | ||
St. Ann(2)
|
Jamaican labor unions | Through December 31, 2007 |
26
(1) | The Nordural union employees approved the current labor contract in April 2005. The contracts provisions, including wage increases and increases in pension payments, were retroactive to January 1, 2005. |
(2) | St. Ann has two labor unions, the University and Allied Workers Union (the UAWU) and a smaller union covering certain salaried employees. St. Ann renegotiated the UAWU labor contracts in 2005 and the labor agreement will expire on April 30, 2007. On February 14, 2006, the salaried employees labor union agreed to a labor contract that will expire on December 31, 2007. |
Pension and Other Postemployment Benefit Liabilities |
Discount Rate Selection |
27
One | One | |||||||
Percentage | Percentage | |||||||
Point Increase | Point Decrease | |||||||
(In thousands) | ||||||||
Effect on total of service and interest cost components
|
$ | 1,381 | $ | (1,275 | ) | |||
Effect on accumulated postretirement benefit obligation
|
$ | 32,915 | $ | (26,115 | ) |
Forward Delivery Contracts and Financial Instruments |
28
Percentage of Net Sales | ||||||||||||
2005 | 2004 | 2003 | ||||||||||
Restated | Restated | |||||||||||
Net sales
|
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Cost of goods sold
|
(85.7 | ) | (82.5 | ) | (94.5 | ) | ||||||
Gross profit
|
14.3 | 17.5 | 5.5 | |||||||||
Selling, general and administrative expenses
|
(3.1 | ) | (2.4 | ) | (2.6 | ) | ||||||
Operating income
|
11.2 | 15.1 | 2.9 | |||||||||
Interest expense
|
(2.3 | ) | (3.8 | ) | (5.5 | ) | ||||||
Interest income
|
0.1 | 0.1 | | |||||||||
Loss on early extinguishment of debt
|
(0.1 | ) | (4.5 | ) | | |||||||
Other expense
|
| (0.1 | ) | (0.1 | ) | |||||||
Net gain (loss) on forward contracts
|
(27.2 | ) | (2.0 | ) | 3.3 | |||||||
Income (loss) before income taxes, minority interest, equity in
earnings of joint venture and cumulative effect of change in
accounting principle
|
(18.3 | ) | 4.8 | 0.6 | ||||||||
Income tax benefit (expense)
|
7.1 | (1.7 | ) | (0.1 | ) | |||||||
Income (loss) before minority interest, equity in earnings of
joint venture and cumulative effect of accounting change
|
(11.2 | ) | 3.1 | 0.5 | ||||||||
Minority interest
|
| | 0.1 | |||||||||
Equity in earnings of joint venture
|
0.9 | 0.1 | | |||||||||
Income (loss) before cumulative effect of change in accounting
principle
|
(10.3 | ) | 3.2 | 0.6 | ||||||||
Cumulative effect of change in accounting principle
|
| | (0.8 | ) | ||||||||
Net income (loss)
|
(10.3 | )% | 3.2 | % | (0.2 | )% | ||||||
29
Primary Aluminum | ||||||||||||||||||||||||||
Direct | Toll | |||||||||||||||||||||||||
Metric Tons | Pounds (000) | $/Pound | Metric Tons | Pounds (000) | $/Pound | |||||||||||||||||||||
2005
|
||||||||||||||||||||||||||
Fourth Quarter
|
132,712 | 292,581 | $ | 0.88 | 23,302 | 51,372 | $ | 0.69 | ||||||||||||||||||
Third Quarter
|
129,555 | 285,619 | 0.83 | 23,435 | 51,665 | 0.64 | ||||||||||||||||||||
Second Quarter
|
130,974 | 288,748 | 0.86 | 23,025 | 50,761 | 0.67 | ||||||||||||||||||||
First Quarter
|
130,083 | 286,783 | 0.88 | 22,756 | 50,168 | 0.67 | ||||||||||||||||||||
Total
|
523,324 | 1,153,731 | $ | 0.86 | 92,518 | 203,966 | $ | 0.67 | ||||||||||||||||||
2004
|
||||||||||||||||||||||||||
Fourth Quarter
|
133,940 | 295,287 | $ | 0.87 | 23,324 | 51,421 | $ | 0.64 | ||||||||||||||||||
Third Quarter
|
132,893 | 292,978 | 0.83 | 23,232 | 51,218 | 0.61 | ||||||||||||||||||||
Second Quarter(2)
|
133,726 | 294,816 | 0.82 | 16,148 | 35,600 | 0.60 | ||||||||||||||||||||
First Quarter
|
134,601 | 296,743 | 0.78 | | | | ||||||||||||||||||||
Total
|
535,160 | 1,179,824 | $ | 0.83 | 62,704 | 138,239 | $ | 0.62 | ||||||||||||||||||
2003
|
||||||||||||||||||||||||||
First Quarter
|
116,592 | 257,040 | $ | 0.70 | | | $ | | ||||||||||||||||||
Second Quarter(1)
|
131,552 | 290,023 | 0.68 | | | | ||||||||||||||||||||
Third Quarter
|
132,706 | 292,567 | 0.69 | | | | ||||||||||||||||||||
Fourth Quarter
|
130,141 | 286,912 | 0.72 | | | | ||||||||||||||||||||
Total
|
510,991 | 1,126,542 | $ | 0.69 | | | $ | | ||||||||||||||||||
(1) | The table includes the results from our additional 20% interest in Hawesville since its acquisition in April 2003. |
(2) | The table includes the results from our purchase of Nordural since its acquisition in April 2004. |
Year Ended December 31, 2005 Compared to Year Ended December 31, 2004 |
30
Year Ended December 31, 2004 Compared to Year Ended December 31, 2003 |
31
Adjusted Working Capital |
2005 | 2004 | ||||||||
Restated | |||||||||
(Dollars in thousands) | |||||||||
Current assets
|
$ | 294,493 | $ | 285,774 | |||||
Current liabilities
|
(467,045 | ) | (387,458 | ) | |||||
Working capital
|
(172,552 | ) | (101,684 | ) | |||||
Adjustments(1):
|
|||||||||
Convertible senior notes
|
175,000 | 175,000 | |||||||
Industrial revenue bonds
|
7,815 | 7,815 | |||||||
Adjusted working capital
|
$ | 10,263 | $ | 81,131 | |||||
(1) | The convertible senior notes mature in 2024. The industrial revenue bonds mature in 2028. Due to certain features of these debt instruments, they are classified as current liabilities. For example, the convertible senior notes are classified as current because they may be converted by the holder at any time. |
32
Capital Resources |
Historical |
2005 | 2004 | 2003 | ||||||||||
(Dollars in thousands) | ||||||||||||
Net cash provided by operating activities
|
$ | 134,936 | $ | 105,828 | $ | 87,379 | ||||||
Net cash used in investing activities
|
(305,339 | ) | (275,286 | ) | (78,695 | ) | ||||||
Net cash (used in) provided by financing activities
|
143,987 | 185,422 | (25,572 | ) | ||||||||
Increase (decrease) in cash and cash equivalents
|
$ | (26,416 | ) | $ | 15,964 | $ | (16,888 | ) | ||||
33
Payments Due by Period | ||||||||||||||||||||||||||||
Total | 2006 | 2007 | 2008 | 2009 | 2010 | Thereafter | ||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||||||
Long-term debt(1)
|
$ | 671.9 | $ | 0.6 | $ | 30.1 | $ | 28.6 | $ | 28.7 | $ | 145.3 | $ | 438.6 | ||||||||||||||
Estimated interest payments(2)
|
272.1 | 37.9 | 37.0 | 35.2 | 34.3 | 25.7 | 102.0 | |||||||||||||||||||||
Purchase obligations(3)
|
1,565.8 | 427.1 | 298.8 | 220.1 | 214.7 | 213.0 | 192.1 | |||||||||||||||||||||
OPEB obligations(4)
|
76.9 | 5.0 | 5.6 | 6.2 | 6.9 | 7.6 | 45.6 | |||||||||||||||||||||
Other long-term liabilities(5)
|
189.3 | 7.1 | 6.5 | 10.4 | 6.3 | 6.3 | 152.7 | |||||||||||||||||||||
Total
|
$ | 2,776.0 | $ | 477.7 | $ | 378.0 | $ | 300.5 | $ | 290.9 | $ | 397.9 | $ | 931.0 | ||||||||||||||
(1) | Debt includes principal repayments on the 7.5% senior notes, 1.75% convertible senior notes, the IRBs, borrowing on our revolving credit facility, and the Nordural debt. |
(2) | Estimated interest payments on our long-term debt are based on several assumptions, including the borrowing under the term loan facility for the Nordural expansion project and assumptions for the interest rates for our variable rate debt. Our variable rate debt is based primarily on the Eurodollar rate plus an applicable margin. We assume that the Eurodollar rate will be 4.50% in 2006 increasing to 5.00% in 2009 and remaining steady thereafter. The IRBs interest rate is variable and our estimated future payments based on a rate of 3.30%. In addition, we assume the 7.5% senior notes due 2014 and 1.75% convertible senior notes due in 2024 will remain outstanding until their respective due dates. The borrowings on our revolving credit facility are assumed to remain outstanding through 2010 (the term of the credit facility) and the interest rate is assumed to be 7.0%. |
34
(3) | Purchase obligations include long-term alumina, electrical power contracts, anode contracts and the Nordural expansion project commitments. Nordurals power contracts and our domestic alumina contracts, except for our Gramercy alumina contract, are priced as a percentage of the LME price of primary aluminum. We assumed an LME price of $1,900 per metric ton for 2006, $1,800 per metric ton for 2007, $1,650 per metric ton for 2008 and $1,550 per metric ton thereafter for purposes of calculating expected future cash flows for these contracts. Our Gramercy long-term alumina contract has variable cost-based pricing. We used GAL cost forecasts to calculate the expected future cash flows for this contract. The Nordural anode contract and some Nordural expansion contract commitments are denominated in euros. We assumed a $1.20/ Euro conversion rate to estimate the obligations under these contracts. |
(4) | Includes the estimated benefit payments for our OPEB obligations through 2015, which are unfunded. |
(5) | Other long-term liabilities include our expected pension contributions, SERB benefit payments, workers compensation benefit payments, estimated tax payments and asset retirement obligations. Expected benefit payments for the SERB plans, which are unfunded, are included for 2006 through 2015. Our estimated contributions to the pension plans are included for 2006. Estimated contributions for 2007 and beyond are not included in the table because these estimates would be heavily dependent upon assumptions about future events, including, among other things, future regulatory changes, changes to tax laws, future interest rates levels and future return on plan assets. Asset retirement obligations consist primarily of disposal costs for spent potliner. The amount and timing of these costs are estimated based on the number of operating pots and their expected pot life. |
35
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk |
36
Forward Priced Sales as of December 31, 2005 |
2006(1)(2) | 2007(2) | 2008(2) | 2009(2) | 2010(2) | 2011-2015(2) | ||||||||||||||||||||
Base Volume:
|
|||||||||||||||||||||||||
Pounds (000)
|
437,381 | 374,565 | 240,745 | 231,485 | 231,485 | 826,733 | |||||||||||||||||||
Metric tons
|
198,393 | 169,900 | 109,200 | 105,000 | 105,000 | 375,000 | |||||||||||||||||||
Percent of capacity
|
28 | % | 22 | % | 14 | % | 14 | % | 14 | % | 10 | % | |||||||||||||
Potential additional volume(2):
|
|||||||||||||||||||||||||
Pounds (000)
|
55,556 | 111,113 | 220,903 | 231,485 | 231,485 | 826,733 | |||||||||||||||||||
Metric tons
|
25,200 | 50,400 | 100,200 | 105,000 | 105,000 | 375,000 | |||||||||||||||||||
Percent of capacity
|
4 | % | 7 | % | 13 | % | 14 | % | 14 | % | 10 | % |
(1) | The forward priced sales in 2006 exclude January 2006 shipments to customers that are priced based upon the prior months market price. |
(2) | Certain financial contracts included in the forward priced sales base volume for the period 2006 through 2015 contain clauses that trigger potential additional sales volume when the market price for a contract month is above the base contract ceiling price. These contacts will be settled monthly and, if the market price exceeds the ceiling price for all contract months through 2015, the potential sales volume would be equivalent to the amounts shown above. |
Financial Sales Agreements |
37
December 31, 2005
December 31, 2004
Cash Flow
Cash Flow
Hedges
Derivatives
Total
Hedges
Derivatives
Total
(Metric Tons)
193,083
193,083
142,750
51,000
193,750
142,750
25,200
167,950
119,500
50,400
169,900
119,500
50,400
169,900
9,000
100,200
109,200
9,000
75,000
84,000
105,000
105,000
75,000
75,000
105,000
105,000
75,000
75,000
375,000
375,000
271,250
786,600
1,057,850
464,333
300,600
764,933
December 31, | ||||||||
2005 | 2004 | |||||||
(Thousands of DTH) | ||||||||
2005
|
| 2,880 | ||||||
2006
|
1,680 | 480 | ||||||
2007
|
780 | 480 | ||||||
2008
|
480 | 480 | ||||||
Total
|
2,940 | 4,320 | ||||||
38
39
Item 8. | Financial Statements and Supplementary Data |
Page | ||||
41 | ||||
42-44 | ||||
45 | ||||
46 | ||||
47 | ||||
48 | ||||
49-84 |
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
Pittsburgh, Pennsylvania
March 14, 2006
Year Ended December 31,
2005
2004
2003
Restated
Restated
(In thousands, except per share amounts)
$
961,335
$
897,538
$
660,593
171,027
163,209
121,886
1,132,362
1,060,747
782,479
970,685
875,460
739,109
161,677
185,287
43,370
34,773
24,916
20,833
126,904
160,371
22,537
(25,668
)
(39,946
)
(41,269
)
(380
)
(2,579
)
1,367
1,086
339
(309,698
)
(21,521
)
25,691
(835
)
(47,448
)
275
(1,305
)
(688
)
(207,655
)
50,857
4,031
80,697
(18,196
)
(1,095
)
(126,958
)
32,661
2,936
986
10,703
821
(116,255
)
33,482
3,922
(5,878
)
(116,255
)
33,482
(1,956
)
(769
)
(2,000
)
$
(116,255
)
$
32,713
$
(3,956
)
$
(3.62
)
$
1.14
$
0.09
(0.28
)
$
(3.62
)
$
1.14
$
(0.19
)
Accumulated
Convertible
Additional
Other
Retained
Total
Comprehensive
Preferred
Common
Paid-In
Comprehensive
Earnings
Shareholders
Income (Loss)
Stock
Stock
Capital
Income (Loss)
(Deficit)
Equity
(Dollars in thousands)
$
25,000
$
211
$
172,133
$
1,173
$
(7,291
)
$
191,226
$
(1,956
)
(1,956
)
(1,956
)
(3,940
)
(6,262
)
3,807
(6,395
)
(6,395
)
(6,395
)
$
(8,351
)
(11
)
(11
)
1,005
1,005
$
25,000
$
211
$
173,138
$
(5,222
)
$
(9,258
)
$
183,869
$
$
33,482
33,482
33,482
(51,554
)
3,950
640
(46,964
)
(46,964
)
(46,964
)
$
(13,482
)
(42
)
(42
)
(3,269
)
(3,269
)
(25,000
)
14
24,986
90
208,121
208,211
5
9,208
9,213
$
$
320
$
415,453
$
(52,186
)
$
20,913
$
384,500
$
(116,255
)
(116,255
)
(116,255
)
(64,710
)
25,365
(113
)
(39,232
)
(39,232
)
(39,232
)
$
(155,487
)
(16
)
(16
)
2
3,556
3,558
$
$
322
$
419,009
$
(91,418
)
$
(95,358
)
$
232,555
Year Ended December 31,
2005
2004
2003
Restated
Restated
(Dollars in thousands)
$
(116,255
)
$
33,482
$
(1,956
)
306,756
2,405
6,325
56,533
50,254
51,264
(59,834
)
11,818
387
12,381
8,040
10,986
(1,572
)
820
1,426
(32
)
761
1,040
253
9,659
(986
)
9,308
(3,440
)
(19,440
)
(5,130
)
(4,267
)
(3,623
)
(2,155
)
(152
)
(16,023
)
(5,616
)
(10,092
)
(3,590
)
(261
)
8,528
2,602
(2,928
)
920
16,179
3,660
(32,664
)
13,614
8,970
(22,127
)
(1,130
)
13,045
134,936
105,828
87,379
(18,027
)
(15,240
)
(18,858
)
(280,086
)
(59,784
)
(7,000
)
(198,584
)
(59,837
)
(350
)
(1,678
)
124
(305,339
)
(275,286
)
(78,695
)
222,937
425,883
(83,279
)
(425,881
)
(14,000
)
(26,000
)
8,069
(5,132
)
(13,062
)
(297
)
1,408
215,793
736
(16
)
(3,311
)
(11
)
143,987
185,422
(25,572
)
(26,416
)
15,964
(16,888
)
44,168
28,204
45,092
$
17,752
$
44,168
$
28,204
1.
Summary of Significant Accounting Policies
14 to 45 years
5 to 22 years
For the Year Ending December 31,
2006
2007
2008
2009
2010
$
13,048
$
13,991
$
15,076
$
16,149
$
16,379
2005
2004
2003
Restated
Restated
As Reported
$
(116,255
)
$
32,713
$
(3,956
)
2,840
1,767
1,441
(3,570
)
(2,148
)
(2,106
)
$
(116,985
)
$
32,332
$
(4,621
)
As Reported
$
(3.62
)
$
1.14
$
(0.19
)
Pro Forma
$
(3.64
)
$
1.13
$
(0.22
)
As Reported
$
(3.62
)
$
1.14
$
(0.19
)
Pro Forma
$
(3.64
)
$
1.12
$
(0.22
)
2005
2004
2003
$
15.19
$
14.12
$
7.78
$
0.00
$
0.00
$
0.00
4.29
%
3.54
%
3.11
%
67
%
70
%
75
%
5.5
5
5
2.
Acquisitions
The Gramercy Acquisition
Nordural Acquisition
Allocation of Purchase Price:
$
41,322
276,597
94,844
(25,848
)
(177,898
)
(13,671
)
$
195,346
Year Ended December 31,
2004
2003
(Unaudited)
$
1,099,122
$
883,418
40,298
18,040
40,298
12,162
39,529
10,162
$
1.25
$
0.34
$
1.25
$
0.34
The Acquisition of Glencore interest in Hawesville
3.
Change in Accounting Principle
Year Ended
December 31,
2004
2003
$
27,202
$
(1,034
)
5,511
(2,922
)
$
32,713
$
(3,956
)
$
0.95
$
(0.05
)
0.19
(0.14
)
$
1.14
$
(0.19
)
4.
Inventories
2005
2004
Restated
$
47,352
$
48,631
11,461
10,215
5,446
8,954
47,177
43,484
$
111,436
$
111,284
5.
Property, Plant and Equipment
2005
2004
$
13,652
$
13,412
122,356
116,695
856,577
849,815
358,674
68,718
1,351,259
1,048,640
(281,101
)
(242,390
)
$
1,070,158
$
806,250
6.
Debt
December 31,
2005
2004
$
175,000
$
175,000
7,815
7,815
581
10,582
250,000
250,000
222,000
68,494
8,436
12,217
8,069
$
671,901
$
524,108
(1)
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 convertible notes are
classified as current because they are convertible at any time
by the holder. The IRB interest rate at December 31, 2005
was 3.81%.
(2)
The convertible notes are convertible at any time by the holder
at an initial conversion rate of 32.7430 shares of Century
common stock per one thousand dollars of principal amount of
convertible notes, subject to adjustments for certain events.
The initial conversion rate is equivalent to a conversion price
of approximately $30.5409 per share of Century common
stock. Upon conversion of a convertible note, the holder of such
convertible note shall receive cash equal to the principal
amount of the convertible note and, at our election, either cash
or Century common stock, or a combination thereof, for the
convertible notes conversion value in excess of such principal
amount, if any.
(3)
In April 2005, we exercised our right to call the remaining
$9,945 of 11.75% senior secured first mortgage notes due
2008 that remained outstanding at 105.875% of the principal
balance, plus accrued and unpaid interest. The
11.75% senior secured first mortgage notes, less
unamortized discounts on the notes of $67, were classified as a
current liability at December 31, 2004 based on our
intention to call the notes.
(4)
All outstanding principal must be repaid at final maturity on
February 28, 2010.
(5)
The obligations of Century pursuant to the notes are
unconditionally guaranteed, jointly and severally, on a senior
unsecured basis by all of our existing domestic restricted
subsidiaries.
(6)
Nordurals obligations under the term loan facility are
secured by a pledge of all of Nordurals shares pursuant to
a share pledge agreement with the lenders. In addition,
substantially all of Nordurals assets are pledged as
security under the loan facility.
(7)
The indentures governing these obligations contain customary
covenants, including limitations on our ability to incur
additional indebtedness, pay dividends, sell assets or stock of
certain subsidiaries and purchase or redeem capital stock.
(8)
Senior term loan interest rate at December 31, 2005 was
5.93%. Nordurals $365.0 million loan facility
contains customary covenants, including limitations on
additional indebtedness, investments, capital expenditures
(other than related to the expansion project), dividends, and
hedging agreements. Nordural is also subject to various
financial covenants, including a net worth covenant and certain
maintenance covenants, including minimum interest coverage and
debt service coverage beginning as of December 31, 2006.
Nordural is required to make the following minimum repayments of
principal on the facility: $15.5 million on
February 28, 2007 and $14.0 million on each of
August 31, 2007, February 29, 2008, August 31,
2008, February 28, 2009, August 31, 2009, and all
remaining outstanding principal amount on February 28, 2010.
(9)
On or after August 15, 2009, we may redeem any of the
senior notes, in whole or in part, at an initial redemption
price equal to 103.75% of the principal amount, plus accrued and
unpaid interest. The redemption price will decline each year
after 2009 and will be 100% of the principle amount, plus
accrued and unpaid interest, beginning on August 15, 2012.
Refinanced Secured First Mortgage Notes
2005
2004
$
582
$
30,516
6,301
190
7,373
63
2,286
972
$
835
$
47,448
Principal Payments on Long Term Debt
Total
2006
2007
2008
2009
2010
Thereafter
$
250,000
$
$
$
$
$
$
250,000
230,436
30,105
28,631
28,658
137,186
5,856
8,069
8,069
$
488,505
$
$
30,105
$
28,631
$
28,658
$
145,255
$
255,856
7.
Accumulated Other Comprehensive Loss at December 31
2005
2004
$
(88,458
)
$
(49,113
)
(2,960
)
(3,073
)
$
(91,418
)
$
(52,186
)
8.
Pension and Other Postretirement Benefits
Pension Benefits
Other Postretirement Benefits (OPEB)
Pension
OPEB
2005
2004
2005
2004
$
80,293
$
67,249
$
147,936
$
117,525
4,015
3,369
5,032
4,082
4,676
4,261
8,878
7,336
1,893
114
(4,717
)
3,612
8,379
21,828
28,467
(3,281
)
(3,079
)
(5,224
)
(4,757
)
$
91,208
$
80,293
$
178,450
$
147,936
$
67,190
$
53,095
$
$
3,492
7,321
10,341
9,853
5,224
4,757
(3,281
)
(3,079
)
(5,224
)
(4,757
)
$
77,742
$
67,190
$
$
$
(13,466
)
$
(13,103
)
$
(178,450
)
$
(147,936
)
18,237
12,852
81,363
63,248
60
3,540
4,549
(4,544
)
(5,422
)
$
8,311
$
4,358
$
(101,631
)
$
(90,110
)
Pension
OPEB
2005
2004
2005
2004
$
19,130
$
15,043
$
$
(11,543
)
(10,685
)
(101,631
)
(90,110
)
724
$
8,311
$
4,358
$
(101,631
)
$
(90,110
)
Projected Benefit
Accumulated Benefit
Fair Value of
Obligation
Obligation
Plan assets
2005
2004
2005
2004
2005
2004
$
46,227
$
43,941
$
45,768
$
43,512
48,464
$
44,606
32,140
27,300
26,609
22,579
29,278
22,584
12,841
9,052
11,544
9,052
Year Ended December 31,
Pension
OPEB
2005
2004
2003
2005
2004
2003
$
4,015
$
3,369
$
3,339
$
5,032
$
4,082
$
3,757
4,676
4,261
3,761
8,878
7,336
6,823
(5,899
)
(4,750
)
(3,454
)
3,596
1,167
2,055
2,836
1,493
1,148
$
6,388
$
4,047
$
5,701
$
16,746
$
12,911
$
11,728
Pension
Benefits
OPEB
2005
2004
2005
2004
5.50
%
5.75
%
5.50
%
5.75
%
4.00
%
4.00
%
4.00
%
4.00
%
Pension
OPEB
2005
2004
2003
2005
2004
2003
12/31/2004
12/31/2003
12/31/2002
12/31/2004
12/31/2003
12/31/2002
12/31/2005
12/31/2004
12/31/2003
12/31/2005
12/31/2004
12/31/2003
5.75
%
6.25
%
6.50
%
5.75
%
6.25
%
6.50
%
4.00
%
4.00
%
4.00
%
4.00
%
4.00
%
4.00
%
9.00
%
9.00
%
9.00
%
Effect of Medicare Part D
Year Ended
December 31, 2005
Included
Excluded
$
5,032
$
5,650
8,878
9,999
2,836
3,968
$
16,746
$
19,617
One Percent
One Percent
Increase
Decrease
$
1,381
$
(1,275
)
$
32,915
$
(26,115
)
Plan Assets
Pension Plan
Assets At
December 31,
2005
2004
65
%
65
%
35
%
35
%
100
%
100
%
Pension and OPEB Cash Flows
Pension Benefits
OPEB Benefits
$
4,938
$
4,969
5,118
5,584
5,348
6,177
5,658
6,882
5,741
7,572
30,151
45,577
9.
Shareholders Equity
10.
Stock Based Compensation
2005
2004
2003
Weighted
Weighted
Weighted
Average
Average
Average
Exercise
Exercise
Exercise
Options
Shares
Price
Shares
Price
Shares
Price
321,430
$
16.15
677,020
$
12.94
691,200
$
12.58
221,850
24.79
90,750
23.54
161,750
14.06
(86,952
)
13.07
(445,840
)
12.73
(60,630
)
12.48
(2,667
)
22.14
(500
)
7.98
(115,300
)
12.70
453,661
$
20.93
321,430
$
16.15
677,020
$
12.94
Options Outstanding
Options Exercisable
Number
Weighted Avg.
Number
Weighted
Outstanding at
Remaining
Weighted Avg.
Exercisable at
Avg. Exercise
Range of Exercise Prices
12/31/05
Contractual Life
Exercise Price
12/31/05
Price
307,269
9.5 years
$
24.45
108,063
$
24.41
98,890
4.4 years
$
15.83
98,890
$
15.83
47,502
5.7 years
$
8.81
47,502
$
8.81
453,661
254,455
11.
Earnings (Loss) Per Share
For the fiscal Year Ended December 31,
2004
2003
2005
Restated
Restated
Income
Shares
Per-Share
Income
Shares
Per-Share
Income
Shares
Per-Share
$
(116,255
)
$
33,482
$
3,922
(769
)
(2,000
)
(116,255
)
32,136
$
(3.62
)
32,713
28,668
$
1.14
1,922
21,073
$
0.09
107
26
$
(116,255
)
32,136
$
(3.62
)
$
32,713
28,775
$
1.14
$
1,922
21,099
$
0.09
12.
Income Taxes
Year Ended December 31,
2005
2004
2003
$
18,136
$
(6,378
)
$
2,727
(708
)
20,863
(6,378
)
(708
)
61,325
(8,748
)
(310
)
(10,348
)
(2,084
)
8,857
(986
)
(77
)
59,834
(11,818
)
(387
)
$
80,697
$
(18,196
)
$
(1,095
)
2005
2004
2003
35
%
35
%
35
%
(19
)
4
1
11
(7
)
5
2
39
%
36
%
27
%
2005
2004
$
32,393
$
17,721
9,359
9,930
5,425
2,998
5,925
114,939
16,459
11,359
(11,359
)
(11,359
)
51,442
29,739
1,304
217,535
68,740
(109,545
)
(107,825
)
(8,449
)
(3,500
)
(10,566
)
(12,107
)
(1,046
)
$
76,868
$
(43,631
)
13.
Contingencies and Commitments
14.
Forward Delivery Contracts and Financial Instruments
Contract
Customer
Volume
Term
Pricing
Alcan
276 to 324 million pounds per year
Through July 31, 2007
Based on U.S. Midwest market
Glencore
50,000 metric tons per year (mtpy)
Through December 31, 2009
LME-based
Glencore
20,000 mtpy
Through December 31, 2013
Based on U.S. Midwest market
Southwire
240 million pounds per year (high purity molten aluminum)
Through March 31, 2011
Based on U.S. Midwest market
60 million pounds per year (standard-grade molten aluminum)
Through December 31, 2010
Based on U.S. Midwest market
(1)
Alcan has the right, upon 12 months notice, to reduce its
purchase obligations by 50% under this contract.
(2)
We account for the Glencore Metal Agreement I as a derivative
instrument under SFAS No. 133. We have not designated
the Glencore Metal Agreement I as normal because it
replaced and substituted for a significant portion of a sales
contract which did not qualify for this designation. Because the
Glencore Metal Agreement I is variably priced, we do not expect
significant variability in its fair value, other than changes
that might result from the absence of the U.S. Midwest
premium.
(3)
We account for the Glencore Metal Agreement II as a
derivative instrument under SFAS No. 133. Under the
Glencore Metal Agreement II, pricing is based on
then-current 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.
(4)
The Southwire Metal Agreement will automatically renew for
additional five-year terms, unless either party provides
12 months notice that it has elected not to renew.
Contract
Customer
Volume
Term
Pricing
BHP Billiton
130,000 mtpy
Through December 31, 2013
LME-based
Glencore
90,000 mtpy
Through July 2016
LME-based
(1)
Substantially all of Nordurals existing sales consist of
tolling revenues earned under a long-term Alumina Supply, Toll
Conversion and Aluminum Metal Supply Agreement (the
Billiton Tolling Agreement) between Nordural and a
subsidiary of BHP Billiton Ltd (together with its subsidiaries,
BHP Billiton). Under the Billiton Tolling Agreement,
Nordural receives an LME-based fee for the conversion of
alumina, supplied by BHP Billiton, into primary aluminum.
(2)
In September 2005, Nordural and BHP Billiton amended the
Billiton Tolling Agreement to increase the tolling arrangement
from 90,000 metric tons to 130,000 metric tons of the per annum
production capacity at Nordural effective upon the completion of
the expansion.
(3)
Nordural entered into a
10-year
LME-based
alumina tolling agreement with Glencore for 90,000 metric tons
of the expansion capacity at Nordural. The term of the agreement
is expected to begin in July 2006.
(4)
In December 2005, Glencore assigned 50% of its tolling rights
under this agreement to Hydro Aluminum AS (Hydro)
for the period 2007 to 2010.
December 31, 2005
December 31, 2004
Cash Flow
Cash Flow
Hedges
Derivatives
Total
Hedges
Derivatives
Total
(Metric Tons)
193,083
193,083
142,750
51,000
193,750
142,750
25,200
167,950
119,500
50,400
169,900
119,500
50,400
169,900
9,000
100,200
109,200
9,000
75,000
84,000
105,000
105,000
75,000
75,000
105,000
105,000
75,000
75,000
375,000
375,000
271,250
786,600
1,057,850
464,333
300,600
764,933
December 31,
2005
2004
(Thousands
of DTH)
2,880
1,680
480
780
480
480
480
2,940
4,320
15.
Asset Retirement Obligations
For the Year Ended
December 31,
2005
2004
$
17,232
$
16,495
1,849
1,383
(3,330
)
(3,379
)
1,370
2,733
(5,313
)
$
11,808
$
17,232
16.
Related Party Transactions
2005
2004
2003
$
171,027
$
163,209
$
121,886
129,757
131,427
99,185
121
138,022
26,680
17.
Supplemental Cash Flow Information
Year Ended December 31,
2005
2004
2003
$
30,358
$
37,587
$
40,289
12,649
248
257
1,388
1,088
341
80
9,489
6,170
5,591
18.
Business Segments
Segment Assets(1)
2005
2004
2003
$
1,648,351
$
1,307,168
$
787,017
29,080
25,385
17,225
$
1,677,431
$
1,332,553
$
804,242
(1)
Segment assets include accounts receivable, due from affiliates,
inventory, intangible assets, and property, plant and
equipment-net; the remaining assets are unallocated corporate
assets, and deferred tax assets.
2005
2004
2003
$
992,442
$
974,481
$
779,229
139,920
86,266
3,250
$
604,411
$
615,618
$
622,921
722,474
431,161
Year Ended December 31,
2005
2004
2003
$
%
$
%
$
%
356,347
31.5
301,033
28.4
198,448
25.4
294,468
26.0
258,320
24.4
199,067
25.4
171,027
15.1
163,209
15.4
121,886
15.6
137,736
12.2
19.
Quarterly Information (Unaudited)
Net Income
Net Income
(Loss) Per
Net Sales
Gross Profit
(Loss)
Share
$
292,874
$
34,704
$
(148,658
)
$
(4.62
)
270,836
30,058
(20,071
)
(0.62
)
283,256
45,348
40,744
1.27
285,396
51,567
11,730
0.37
$
290,603
$
56,773
$
24,643
$
0.77
274,317
43,482
(15,973
)
(0.50
)
263,733
46,679
19,219
0.63
232,094
38,353
5,593
0.24
(1)
The third quarter 2004 net income includes a charge of
$30,367, net of tax, for a loss on the early extinguishment of
debt.
(2)
The fourth quarter of 2005 net income includes a charge of
$164,620, net of tax, for loss on forward contracts.
(3)
The third quarter of 2005 net income includes a charge of
$34,228, net of tax, for loss on forward contracts.
20.
Condensed Consolidating Financial Information
Combined
Combined
Reclassifications
Guarantor
Non-Guarantor
The
and
Subsidiaries
Subsidiaries
Company
Eliminations
Consolidated
$
$
19,005
$
(1,253
)
$
$
17,752
2,028
2,028
73,540
9,476
83,016
60,246
703,995
(745,603
)
18,638
96,347
15,372
(283
)
111,436
7,693
8,627
7,598
23,918
46,339
(8,634
)
37,705
286,193
52,480
710,340
(754,520
)
294,493
15,205
146,166
(161,371
)
458,618
613,368
308
(2,136
)
1,070,158
74,643
74,643
94,844
94,844
54,049
8,951
156,242
(75,949
)
143,293
$
888,708
$
769,643
$
1,013,056
$
(993,976
)
$
1,677,431
$
36,670
$
25,249
$
$
$
61,919
138,615
52,208
15,485
(47,626
)
158,682
7,815
7,815
19,994
3,357
31,514
(1,150
)
53,715
581
581
8,139
1,194
9,333
8,634
(8,634
)
175,000
175,000
211,233
81,395
231,827
(57,410
)
467,045
250,000
250,000
230,436
230,436
8,069
8,069
10,350
10,350
95,731
929
96,660
397,778
327,073
(696,841
)
28,010
58,090
279,326
337,416
83,019
12,225
(78,354
)
16,890
634,618
569,734
548,674
(775,195
)
977,831
60
12
322
(72
)
322
259,148
85,190
419,009
(344,338
)
419,009
(90,953
)
(91,418
)
90,953
(91,418
)
(125,398
)
33,312
(95,358
)
92,086
(95,358
)
42,857
118,514
232,555
(161,371
)
232,555
$
888,708
$
769,643
$
1,013,056
$
(993,976
)
$
1,677,431
Combined
Combined
Reclassifications
Guarantor
Non-Guarantor
The
and
Subsidiaries
Subsidiaries
Company
Eliminations
Consolidated
$
185
$
1,759
$
42,224
$
$
44,168
1,174
504
1,678
71,051
8,449
76
79,576
168,328
8,142
684,458
(846,557
)
14,371
72,264
39,020
111,284
1,514
4,299
4,242
10,055
24,349
293
24,642
338,865
62,466
731,000
(846,557
)
285,774
66,393
270,178
(336,571
)
464,418
341,692
140
806,250
86,809
86,809
95,610
95,610
20,391
16,792
20,927
58,110
$
890,067
$
603,369
$
1,022,245
$
(1,183,128
)
$
1,332,553
Liabilities and Shareholders Equity:
$
12,000
$
35,479
$
$
$
47,479
83,819
1,911
162,150
(163,065
)
84,815
7,815
7,815
15,545
10,023
27,741
53,309
704
9,878
10,582
6,507
1,951
8,458
175,000
175,000
125,686
50,068
374,769
(163,065
)
387,458
250,000
250,000
80,711
80,711
10,685
10,685
56,947
27,812
790
85,549
479,213
239,124
(683,376
)
34,961
30,416
30,416
47,509
19,379
1,501
(116
)
68,273
614,085
367,026
262,976
(683,492
)
560,595
59
13
320
(72
)
320
188,424
242,818
415,453
(431,242
)
415,453
(51,665
)
(521
)
(52,186
)
52,186
(52,186
)
13,478
(56,035
)
20,913
42,557
20,913
150,296
186,275
384,500
(336,571
)
384,500
$
890,067
$
603,369
$
1,022,245
$
(1,183,128
)
$
1,332,553
Combined
Combined
Reclassifications
Guarantor
Non-Guarantor
The
and
Subsidiaries
Subsidiaries
Company
Eliminations
Consolidated
$
824,072
$
137,263
$
$
$
961,335
171,027
171,027
995,099
137,263
1,132,362
884,241
95,820
(9,376
)
970,685
110,858
41,443
9,376
161,677
34,314
459
34,773
76,544
40,984
9,376
126,904
(24,832
)
(836
)
(25,668
)
24,451
(24,451
)
1,011
356
1,367
(309,698
)
(309,698
)
(835
)
(835
)
(428
)
703
275
(233,787
)
16,756
9,376
(207,655
)
81,803
2,298
(3,404
)
80,697
(151,984
)
19,054
5,972
(126,958
)
8,847
4,932
(116,255
)
113,179
10,703
$
(143,137
)
$
23,986
$
(116,255
)
$
119,151
$
(116,255
)
Combined
Combined
Reclassifications
Guarantor
Non-Guarantor
The
and
Subsidiaries
Subsidiaries
Company
Eliminations
Consolidated
$
811,705
$
85,833
$
$
$
897,538
163,209
163,209
974,914
85,833
1,060,747
805,267
407,650
(337,457
)
875,460
(337,738
)
337,738
169,647
15,921
(281
)
185,287
24,916
24,916
144,731
15,921
(281
)
160,371
(36,281
)
(3,665
)
(39,946
)
(380
)
(9,078
)
9,078
(380
)
9,872
172
(8,958
)
1,086
(21,521
)
(21,521
)
(47,448
)
(47,448
)
(1,380
)
43
32
(1,305
)
47,593
3,393
(129
)
50,857
(17,218
)
(5,709
)
4,731
(18,196
)
30,375
(2,316
)
4,602
32,661
(7,642
)
821
33,482
(25,840
)
821
$
22,733
$
(1,495
)
$
33,482
$
(21,238
)
$
33,482
Combined
Reclassifications
Guarantor
Non-Guarantor
The
and
Subsidiaries
Subsidiary
Company
Eliminations
Consolidated
$
660,593
$
$
$
$
660,593
121,886
121,886
782,479
782,479
720,484
334,020
(315,395
)
739,109
(315,519
)
315,519
61,995
(18,501
)
(124
)
43,370
20,833
20,833
41,162
(18,501
)
(124
)
22,537
(41,248
)
(124
)
103
(41,269
)
(2,579
)
(2,579
)
339
339
25,691
25,691
(653
)
(56
)
21
(688
)
22,712
(18,681
)
4,031
(7,818
)
6,723
(1,095
)
14,894
(18,681
)
6,723
2,936
986
986
14,894
(18,681
)
7,709
3,922
(5,878
)
(5,878
)
(10,972
)
(1,956
)
12,928
$
(1,956
)
$
(18,681
)
$
(1,956
)
$
20,637
$
(1,956
)
Combined
Combined
Guarantor
Non-Guarantor
The
Subsidiaries
Subsidiaries
Company
Consolidated
$
103,122
$
31,814
$
$
134,936
(15,515
)
(2,176
)
(336
)
(18,027
)
(280,086
)
(280,086
)
(7,000
)
(7,000
)
6
118
124
(350
)
(350
)
(15,859
)
(282,144
)
(7,336
)
(305,339
)
222,937
222,937
(73,334
)
(9,945
)
(83,279
)
8,069
8,069
(4,307
)
(825
)
(5,132
)
(16
)
(16
)
(87,448
)
122,280
(34,832
)
1,408
1,408
(87,448
)
267,576
(36,141
)
143,987
(185
)
17,246
(43,477
)
(26,416
)
185
1,759
42,224
44,168
$
$
19,005
$
(1,253
)
$
17,752
Combined
Combined
Guarantor
Non-Guarantor
The
Subsidiaries
Subsidiaries
Company
Consolidated
$
14,071
$
91,757
$
$
105,828
(6,814
)
(8,426
)
(15,240
)
(59,784
)
(59,784
)
(198,584
)
(198,584
)
(1,174
)
(504
)
(1,678
)
(7,988
)
(68,714
)
(198,584
)
(275,286
)
883
425,000
425,883
(110,826
)
(315,055
)
(425,881
)
(14,000
)
(14,000
)
(13,062
)
(13,062
)
(3,311
)
(3,311
)
(6,002
)
88,659
(82,657
)
215,793
215,793
(6,002
)
(21,284
)
212,708
185,422
81
1,759
14,124
15,964
104
28,100
28,204
$
185
$
1,759
$
42,224
$
44,168
Combined
Guarantor
Non-Guarantor
The
Subsidiaries
Subsidiary
Company
Consolidated
$
72,825
$
14,554
$
$
87,379
(15,809
)
(3,049
)
(18,858
)
(59,837
)
(59,837
)
(15,809
)
(3,049
)
(59,837
)
(78,695
)
(26,000
)
(26,000
)
(297
)
(297
)
(11
)
(11
)
(57,657
)
(11,505
)
69,162
736
736
(57,657
)
(11,505
)
43,590
(25,572
)
(641
)
(16,247
)
(16,888
)
745
44,347
45,092
$
104
$
$
28,100
$
28,204
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. | Controls and Procedures |
Changes in Internal Control over Financial Reporting |
| Nordural ehf converted information systems to SAP from Concord. | |
| Century Aluminum of West Virginia converted information systems to SAP from Oracle. | |
| We changed our payroll processing service to SAP from ADP. |
Item 9B. | Other Information |
85
Item 10. | Directors and Executive Officers of the Registrant |
Name | Age | Position and Duration | ||||
Logan W. Kruger
|
55 | President and Chief Executive Officer since December 2005. | ||||
Gerald J. Kitchen
|
65 | Executive Vice President, General Counsel, Chief Administrative Officer and Secretary for more than five years. | ||||
David W. Beckley
|
61 | Executive Vice President and Chief Financial Officer for more than five years. | ||||
Michael A. Bless
|
40 | Executive Vice President and Chief Financial Officer of the Company since January 2006. | ||||
E. Jack Gates
|
64 | Executive Vice President and Chief Operating Officer since October 2003; Vice President, Reduction Operations, of the Company since December 2000. | ||||
Daniel J. Krofcheck
|
52 | Vice President and Treasurer of the Company for more than five years. | ||||
Giulio Casello
|
46 | Vice President of Bauxite and Alumina Operations since December 2005. | ||||
Steve Schneider
|
50 | Vice President and Corporate Controller since April 2002; Corporate Controller since April 2001. | ||||
Peter C. McGuire
|
58 | Vice President and Associate General Counsel since April 2002; Associate General Counsel for more than five years. |
86
Director | ||||||||
Name and Age | Business Experience; Other Directorships | Since | ||||||
Logan W. Kruger
|
55 | President and Chief Executive Officer since December 2005. | 2005 | |||||
Willy R. Strothotte
|
61 | Chairman of the Board of Glencore International AG since 1994 and Chief Executive Officer from 1993 to December 2001; Chairman of the Board of Xstrata AG (formerly Südelektra Holding AG) since 1990. Mr. Strothotte was designated to serve as a director by Glencore International AG. | 1996 | |||||
Jarl Berntzen
|
39 | Managing Director Mergers and Acquisitions, ThinkEquity Partners LLC since March 2006. Senior Vice President, Barrington Associates, LLC from April 2005 to February 2006; Founder of Berntzen Capital Management, LLC from March 2003 to April 2005; Managing Director of Providence Capital, Inc. from September 2002 to March 2003; Vice President, Mergers & Acquisitions of Goldman, Sachs & Co. from July 1998 to December 2001. | 2006 | |||||
Stuart M. Schreiber
|
52 | Founder and Managing Director of Integis, Inc. since 1997; partner of Heidrick & Struggles from 1988 to 1997. | 1999 | |||||
Roman A. Bninski
|
59 | Partner, law firm of Curtis, Mallet-Prevost, Colt & Mosle LLP, since 1984. | 1996 |
Director | ||||||||
Name and Age | Business Experience; Other Directorships | Since | ||||||
John C. Fontaine
|
74 | Of Counsel, law firm of Hughes Hubbard & Reed LLP since January 2000 and partner from July 1997 to December 1999; President of Knight-Ridder, Inc. from July 1995 to July 1997; Chairman of the Samuel H. Kress Foundation; Trustee of the National Gallery of Art. | 1996 |
87
Director
Name and Age
Business Experience; Other Directorships
Since
64
Managing Director of Inglewood Associates Inc. since 1990;
Chairman of Allied Construction Products since March 1993;
Director of Oglebay Norton Company since April 2003; Director of
International Total Services, Inc. from August 1999 to January
2003; Director of American Italian Pasta Company from March 1997
to November 2002; Chairman and CEO of Jeffrey Mining Products
L.P. from October 1995 to June 1999.
2000
Director
Name and Age
Business Experience; Other Directorships
Since
65
Chairman of the Board since August 1995; Chief Executive Officer
from August 1995 to December 2002 and from October 2003 to
December 13, 2005; Director of Glencore International AG
since December 1993 and Executive of Glencore from September
1990 to June 1996.
1995
54
Executive Vice President of Calpine Corporation since 2001;
President of PB Power, Inc. from 1998 to 2001 and Senior Vice
President from 1991 to 1998.
2002
56
Director of Stillwater Mining Co. since 2002; Director of Phelps
Dodge Corp. since 2003; Director of Tidewater Inc. since 2005;
Vice Chairman of Barrick Gold Corporation from December 2001 to
April 2005; Chairman of the Board and Chief Executive Officer of
Homestake Mining Company from 1998 to 2001, and Chairman,
President and Chief Executive Officer from 1998 to 1999; serves
on the advisory board of Resource Capital Funds III, LLP
2005
Independent Directors |
Board Committees and Meetings |
88
Governance & | ||||||||||||
Name | Audit | Compensation | Nominating | |||||||||
Robert E. Fishman
|
X | |||||||||||
John C. Fontaine
|
X | X | X | |||||||||
John P. OBrien
|
X | X | X | |||||||||
Jack E. Thompson
|
X | X | X | |||||||||
Total meetings in fiscal 2005
|
4 | 8 | 23 | |||||||||
| overseeing the financial reporting process for which management is responsible; | |
| approving the engagement of the independent auditors; | |
| monitoring the independence of the independent auditors and reviews; | |
| approving all audit and non-audit services and fees to the independent auditors; | |
| reviewing the scope and results of the audit with the independent auditors; | |
| reviewing the scope and results of internal audit procedures with our internal auditors; | |
| evaluating and discussing with the independent auditors and management the effectiveness of our system of internal accounting controls; | |
| approving transactions with Glencore International AG and its subsidiaries (collectively, Glencore); and | |
| making inquiries into other matters within the scope of its duties. |
Directors Compensation |
89
Changes to Nominating Procedures |
Code of Ethics |
Corporate Secretary
Century Aluminum Company 2511 Garden Road, Bldg. A, Suite 200 Monterey, California 93940 |
90
Item 11. | Executive Compensation |
Summary Compensation Table |
Annual Compensation | Long-Term | ||||||||||||||||||||||||
Compensation | |||||||||||||||||||||||||
Other | Awards/Payouts | ||||||||||||||||||||||||
Annual | |||||||||||||||||||||||||
Name and | Compensation | LTIP | All Other | ||||||||||||||||||||||
Principal Position | Year | Salary ($) | Bonus ($) | ($)(1) | Payouts ($)(2) | Compensation ($)(3) | |||||||||||||||||||
Logan W. Kruger(4)
|
2005 | $ | 62,500 | $ | 475,000 | | | | |||||||||||||||||
Chief Executive Officer
|
2004 | | | | | | |||||||||||||||||||
and President
|
2003 | | | | | | |||||||||||||||||||
Craig A. Davis(4)
|
2005 | $ | 876,562 | $ | 3,658,750 | | $ | 1,360,578 | $ | 7,650 | |||||||||||||||
Chairman and Chief
|
2004 | $ | 809,167 | $ | 1,810,000 | | $ | 1,233,515 | $ | 9,600 | |||||||||||||||
Executive Officer
|
2003 | $ | 558,333 | $ | 525,000 | | $ | 1,092,036 | $ | 8,400 | |||||||||||||||
Gerald J. Kitchen
|
2005 | $ | 298,167 | $ | 215,000 | | $ | 562,983 | $ | 12,074 | |||||||||||||||
Executive Vice President,
|
2004 | $ | 281,292 | $ | 497,775 | | $ | 339,591 | $ | 24,848 | |||||||||||||||
General Counsel,
|
2003 | $ | 269,333 | $ | 130,000 | | $ | 292,917 | $ | 27,179 | |||||||||||||||
Chief Administrative | |||||||||||||||||||||||||
Officer and Secretary | |||||||||||||||||||||||||
David W. Beckley(5)
|
2005 | $ | 295,667 | $ | 337,500 | | $ | 557,162 | $ | 11,365 | |||||||||||||||
Executive Vice President
|
2004 | $ | 279,083 | $ | 431,200 | | $ | 335,971 | $ | 13,065 | |||||||||||||||
and Chief Financial | 2003 | $ | 266,896 | $ | 129,000 | | $ | 289,929 | $ | 10,845 | |||||||||||||||
Officer | |||||||||||||||||||||||||
E. Jack Gates(6)
|
2005 | $ | 332,292 | $ | 225,000 | | $ | 476,207 | $ | 11,681 | |||||||||||||||
Executive Vice President
|
2004 | $ | 310,417 | $ | 511,250 | | $ | 207,019 | $ | 14,249 | |||||||||||||||
and Chief Operating | 2003 | $ | 235,842 | $ | 125,000 | | $ | 165,539 | $ | 13,114 | |||||||||||||||
Officer | |||||||||||||||||||||||||
Daniel J. Krofcheck
|
2005 | $ | 206,375 | $ | 100,000 | | $ | 302,655 | $ | 10,845 | |||||||||||||||
Vice President and
|
2004 | $ | 195,292 | $ | 341,700 | | $ | 173,164 | $ | 13,202 | |||||||||||||||
Treasurer | 2003 | $ | 187,135 | $ | 86,000 | $ | 5,795 | $ | 159,340 | $ | 14,456 |
(1) | Represents reimbursement of interest on funds borrowed to pay estimated taxes due upon the vesting of performance share grants. |
(2) | On March 7, 2006, our compensation committee awarded performance share units to the Named Executive Officers based on our attainment of certain award targets for the three-year period from 2003 through 2005. LTIP Payouts for 2005 represent the value realized by the Named Executive Officers for performance share units that vested based on our achievement of award targets for the three-year period from 2003 through 2005. The value of the vested performance share units was calculated using a per share price of $36.27, the average of the high and low sales price of our common stock on the NASDAQ National Market on March 7, 2006, the date of vesting. See Long-Term Incentive Plan Awards Table. LTIP Payouts for 2004 represent the value realized by the Named Executive Officers for performance share units that vested based on our achievement of award targets for the three-year period from 2002 through 2004. The value of the vested performance share units was calculated using a per share price of $33.37, the average of the high and low sales price of our common stock on the NASDAQ National Market on March 21, 2005, the date of vesting. Also includes accrued dividend equivalents paid to Messrs. Davis, Kitchen, Beckley, Gates and Krofcheck upon the vesting of the performance share units in the amounts of $5,744, $1,520, $1,503, $926 and $775, respectively. LTIP Payouts for 2003 represent the |
91
value realized by the Named Executive Officers for performance share units that vested based on our achievement of award targets for the three-year period from 2001 through 2003. The value of the vested performance share units was calculated using a per share price of $24.35, the average of the high and low sales price of our common stock on the NASDAQ National Market on April 13, 2004, the date of vesting. Also includes accrued dividend equivalents paid to Messrs. Davis, Kitchen, Beckley, Gates and Krofcheck upon the vesting of the performance share units in the amounts of $15,474, $4,151, $4,108, $2,346 and $2,258, respectively. | |
(3) | All other compensation is comprised of matching contributions under our Defined Contribution Retirement Plan for each of the Named Executive Officers. In 2005, those contributions were $7,650, $7,967, $7,900, $7,560, and $7,430 for each of Messrs. Davis, Kitchen, Beckley, Gates and Mr. Krofcheck, respectively. All other compensation also includes Company-paid life insurance premiums in 2005 in the amounts of, $3,465, $2,445, $4,055 and $3,415 for Messrs. Kitchen, Beckley, Gates and Krofcheck, respectively |
(4) | Mr. Davis served as our Chief Executive Officer from August 1995 to December 2002 and from October 2003 through his retirement on December 13, 2005, when he was succeeded by Logan W. Kruger. Mr. Davis will continue to serve as Chairman of the Board, a position he has held since August 1995. |
(5) | Mr. Beckley retired as our Executive Vice President and Chief Financial Officer effective January 23, 2006. |
(6) | Mr. Gates was elected Executive Vice President effective April 1, 2003. |
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Value Table |
Number of Shares | ||||||||||||||||||||||||
Underlying | Value of | |||||||||||||||||||||||
Unexercised Options | Unexercised Options | |||||||||||||||||||||||
Shares | at December 31, 2005 (#) | at December 31, 2005 ($)(2) | ||||||||||||||||||||||
Acquired On | Value Realized | |||||||||||||||||||||||
Name | Exercise (#) | ($)(1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Logan W. Kruger
|
| | | 100,000 | | $ | 223,000 | |||||||||||||||||
Craig A. Davis
|
23,000 | $ | 324,150 | | | | | |||||||||||||||||
Gerald J. Kitchen
|
| | | | | | ||||||||||||||||||
David W. Beckley
|
| | | | | | ||||||||||||||||||
E. Jack Gates
|
10,000 | $ | 134,900 | | | | | |||||||||||||||||
Daniel J. Krofcheck
|
| | 10,000 | | $ | 99,600 | |
(1) | The value realized represents the difference between the exercise price of the options and the last reported sale price of the Companys common stock on the NASDAQ National Market on the respective dates the options were exercised. |
92
Long-Term Incentive Plan Awards Table |
Performance or | ||||||||||||||||||||
Other Period | Estimated Future Common Stock Payouts | |||||||||||||||||||
Until | Under Non-Stock Price-Based Plans | |||||||||||||||||||
Performance | Maturation or | |||||||||||||||||||
Name | Shares (#)(1) | Payout | Threshold (#) | Target (#)(2) | Maximum (#)(3) | |||||||||||||||
Logan W. Kruger
|
| 2005-2007 | -0- | | | |||||||||||||||
Craig A. Davis
|
29,778 | 2005-2007 | -0- | 29,778 | 44,667 | |||||||||||||||
Gerald J. Kitchen
|
8,600 | 2005-2007 | -0- | 8,600 | 12,900 | |||||||||||||||
David W. Beckley
|
8,526 | 2005-2007 | -0- | 8,526 | 12,789 | |||||||||||||||
E. Jack Gates
|
9,588 | 2005-2007 | -0- | 9,588 | 14,382 | |||||||||||||||
Daniel J. Krofcheck
|
4,469 | 2005-2007 | -0- | 4,469 | 6,704 |
(1) | Performance shares represent shares of our common stock that, upon vesting, are issued to the award recipient. Except as described herein, performance shares are forfeited if the award recipient is not employed full-time by us at the end of the award cycle period. Upon death, disability or retirement, the award recipient will receive a pro rata award based upon the number of weeks employed during the award cycle period. As a result, Messrs. Davis and Beckley will continue to participate in the 2004-2006 and 2005-2007 awards, while retired. To the extent dividends are paid on our common stock, dividend equivalents accrue on performance shares and are paid upon vesting. |
(2) | Target payouts represent the target number of shares that will vest if we achieve specified performance targets ( Award Targets ) in their entirety for the period. Award Targets are based upon guidelines adopted under the 1996 Plan. Our Compensation Committee has retained full discretion to modify awards under the guidelines. If Award Targets are not achieved in their entirety, awards may be adjusted downward or eliminated in their entirety. In addition, regardless of performance against Award Targets, the committees discretion includes the right to determine that, should circumstances warrant, no award would be payable. |
(3) | Maximum payouts represent the maximum number of shares that the Compensation Committee is authorized to award if we exceed all of its Award Targets. In cases where the target is exceeded, the number of shares vested in excess of the target number of shares is calculated by converting the excess award into cash and reconverting the excess award into shares at the greater of (i) the share price at the time of the award, or (ii) the average share price for the month preceding the month in which the shares vest. |
Pension Plan Table |
93
Years of Credited Service | ||||||||||||||||||||||||||||||||
Remuneration | 5 | 10 | 15 | 20 | 25 | 30 | 35 | 40 | ||||||||||||||||||||||||
$100,000
|
$ | 7,500 | $ | 15,000 | $ | 22,500 | $ | 30,000 | $ | 37,500 | $ | 45,000 | $ | 52,500 | $ | 60,000 | ||||||||||||||||
$200,000
|
$ | 15,000 | $ | 30,000 | $ | 45,000 | $ | 60,000 | $ | 75,000 | $ | 90,000 | $ | 105,000 | $ | 120,000 | ||||||||||||||||
$300,000
|
$ | 22,500 | $ | 45,000 | $ | 67,500 | $ | 90,000 | $ | 112,500 | $ | 135,000 | $ | 157,500 | $ | 180,000 | ||||||||||||||||
$400,000
|
$ | 30,000 | $ | 60,000 | $ | 90,000 | $ | 120,000 | $ | 150,000 | $ | 180,000 | $ | 210,000 | $ | 240,000 | ||||||||||||||||
$500,000
|
$ | 37,500 | $ | 75,000 | $ | 112,500 | $ | 150,000 | $ | 187,500 | $ | 225,000 | $ | 262,500 | $ | 300,000 | ||||||||||||||||
$600,000
|
$ | 45,000 | $ | 90,000 | $ | 135,000 | $ | 180,000 | $ | 225,000 | $ | 270,000 | $ | 315,000 | $ | 360,000 | ||||||||||||||||
$700,000
|
$ | 52,500 | $ | 105,000 | $ | 157,500 | $ | 210,000 | $ | 262,500 | $ | 315,000 | $ | 367,500 | $ | 420,000 | ||||||||||||||||
$800,000
|
$ | 60,000 | $ | 120,000 | $ | 180,000 | $ | 240,000 | $ | 300,000 | $ | 360,000 | $ | 420,000 | $ | 480,000 | ||||||||||||||||
$900,000
|
$ | 67,500 | $ | 135,000 | $ | 202,500 | $ | 270,000 | $ | 337,500 | $ | 405,000 | $ | 472,500 | $ | 540,000 | ||||||||||||||||
$1,000,000
|
$ | 75,000 | $ | 150,000 | $ | 225,000 | $ | 300,000 | $ | 375,000 | $ | 450,000 | $ | 525,000 | $ | 600,000 | ||||||||||||||||
$1,100,000
|
$ | 82,500 | $ | 165,000 | $ | 247,500 | $ | 330,000 | $ | 412,500 | $ | 495,000 | $ | 577,500 | $ | 660,000 | ||||||||||||||||
$1,200,000
|
$ | 90,000 | $ | 180,000 | $ | 270,000 | $ | 360,000 | $ | 450,000 | $ | 540,000 | $ | 630,000 | $ | 720,000 | ||||||||||||||||
$1,600,000
|
$ | 120,000 | $ | 240,000 | $ | 360,000 | $ | 480,000 | $ | 600,000 | $ | 720,000 | $ | 840,000 | $ | 960,000 | ||||||||||||||||
$2,000,000
|
$ | 150,000 | $ | 300,000 | $ | 450,000 | $ | 600,000 | $ | 750,000 | $ | 900,000 | $ | 1,050,000 | $ | 1,200,000 | ||||||||||||||||
$2,400,000
|
$ | 180,000 | $ | 360,000 | $ | 540,000 | $ | 720,000 | $ | 900,000 | $ | 1,080,000 | $ | 1,260,000 | $ | 1,440,000 | ||||||||||||||||
$2,800,000
|
$ | 210,000 | $ | 420,000 | $ | 630,000 | $ | 840,000 | $ | 1,050,000 | $ | 1,260,000 | $ | 1,470,000 | $ | 1,680,000 | ||||||||||||||||
$3,200,000
|
$ | 240,000 | $ | 480,000 | $ | 720,000 | $ | 960,000 | $ | 1,200,000 | $ | 1,440,000 | $ | 1,680,000 | $ | 1,920,000 |
Supplemental Retirement Income Benefit Plan |
94
95
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
96
Amount and Nature of | ||||||||
Name of Beneficial Owner | Beneficial Ownership(1) | Percentage of Class | ||||||
Glencore International AG
|
9,320,089 | (2) | 28.8 | |||||
Wellington Management Company, LLP
|
2,936,240 | (3) | 9.1 | |||||
Credit Suisse
|
1,797,986 | (4) | 5.6 | |||||
David W. Beckley
|
41,576 | * | ||||||
Jarl Berntzen
|
3,333 | (5) | * | |||||
Michael A. Bless
|
10,000 | (6) | * | |||||
Roman A. Bninski
|
18,000 | (7) | * | |||||
Craig A. Davis
|
147,467 | (8) | * | |||||
Robert E. Fishman
|
| * | ||||||
John C. Fontaine
|
11,750 | (9) | * | |||||
E. Jack Gates
|
19,596 | * | ||||||
Gerald J. Kitchen
|
28,944 | * | ||||||
Daniel J. Krofcheck
|
4,669 | * | ||||||
Logan W. Kruger
|
| * | ||||||
John P. OBrien
|
14,500 | (10) | * | |||||
Stuart M. Schreiber
|
4,500 | (11) | * | |||||
Willy R. Strothotte
|
18,000 | (12) | * | |||||
Jack E. Thompson
|
10,166 | (13) | * | |||||
All directors and executive officers as a group (18 persons)
|
354,892 | (14) | 1.1 |
* | Less than one percent. |
(1) | Each individual or entity has sole voting and investment power, except as otherwise indicated. | |
(2) | Based upon information set forth in a Schedule 13D filing dated May 25, 2004, Glencore International AG beneficially owns such shares through its subsidiary, Glencore AG. The principal business address of each of Glencore International AG and Glencore AG is Baarermattstrasse 3, P.O. Box 555, CH 6341, Baar, Switzerland. | |
(3) | Based upon information set forth in a Schedule 13G filing dated February 14, 2006, Wellington Management Company, LLP beneficially owns such shares in its capacity as an investment advisor. The business address of Wellington Management Company, LLP is 75 State Street, Boston, Massachusetts 02109. | |
(4) | Based upon information set forth in a Schedule 13G filed on February 14, 2005 by Credit Suisse on behalf of its Investment Banking division, such shares are beneficially owned through Credit Suisse subsidiaries to the extent they constitute the Investment Banking division. The principal business address of Credit Suisse in the United States is Eleven Madison Avenue, New York, New York 10010 | |
(5) | Includes 3,333 shares which are presently exercisable options. | |
(6) | Includes 10,000 shares which are presently exercisable options. | |
(7) | Includes 18,000 shares which are presently exercisable options. | |
(8) | Excludes 9,320,089 shares beneficially owned by Glencore International AG, of which Mr. Davis is a director. | |
(9) | Includes 11,500 shares which are subject to presently exercisable options. Also includes 250 shares that Mr. Fontaine owns jointly with his wife. |
97
(10) | Includes 9,500 shares which are subject to presently exercisable options. |
(11) | Includes 4,500 shares which are subject to presently exercisable options. |
(12) | Includes 18,000 shares which are subject to presently exercisable options. Excludes 9,320,089 shares beneficially owned by Glencore International AG, of which Mr. Strothotte serves as Chairman. |
(13) | Includes 8,166 shares which are subject to presently exercisable options |
(14) | Includes 91,332 shares which are subject to presently exercisable options. Excludes 9,320,089 shares beneficially owned by Glencore International AG. |
Number of Shares Remaining | ||||||||||||
Weighted | Available for Future Issuance | |||||||||||
Number of Shares to be | Average | Under Equity Compensation | ||||||||||
Issued Upon Exercise of | Exercise | Plans, Excluding | ||||||||||
Plan Category | Outstanding Options | Price | Outstanding Options(2) | |||||||||
Equity compensation plans approved by security holders
|
453,661 | $ | 20.93 | 3,633,651 | ||||||||
Total
|
453,661 | $ | 20.93 | 3,633,651 | ||||||||
(1) | All equity compensation plan information presented in this table relates to the following plans approved by the Companys shareholders: |
1996 Plan | |
Non-Employee Directors Stock Option Plan |
Effective August 10, 2005, the 1996 Plan replaced our Non-Employee Directors Stock Option Plan as the plan by which we award equity to our non-employee directors. |
(2) | Includes 517,655 unvested performance shares to be awarded pursuant to the 1996 Plan upon attainment of certain performance objectives. The performance shares vest and are issued in accordance with the guidelines accompanying the 1996 Plan, as implemented by our Board of Directors. |
98
Nordural Tolling Agreement |
Letter of Credit for Industrial Revenue Bonds |
99
Item 14. | Principal Accountant Fees and Services |
2005 | 2004 | |||||||
Audit Fees
|
$ | 1,857,000 | $ | 2,264,000 | ||||
Audit-Related Fees
|
99,000 | 90,000 | ||||||
Tax Fees
|
371,000 | 275,000 | ||||||
All Other Fees
|
| | ||||||
Total All Fees
|
$ | 2,327,000 | $ | 2,629,000 | ||||
100
Item 15. | Exhibits, Financial Statement Schedules |
Report of Independent Registered Public Accounting Firm.
|
||||
Consolidated Balance Sheets at December 31, 2005 and 2004.
|
||||
Consolidated Statements of Operations for the years ended
December 31, 2005, 2004 and 2003.
|
||||
Consolidated Statements of Shareholders Equity for the
years ended December 31, 2005, 2004 and 2003.
|
||||
Consolidated Statements of Cash Flows for the years ended
December 31, 2005, 2004 and 2003.
|
||||
Notes to the Consolidated Financial Statements.
|
Report of Independent Registered Public Accounting Firm.
|
||||
Schedule II Valuation and Qualifying Accounts
for the years ended December 31, 2005, 2004 and 2003.
|
Incorporated by Reference | ||||||||||||||||||||
Exhibit | Filed | |||||||||||||||||||
Number | Description of Exhibit | Form | File No. | Filing Date | Herewith | |||||||||||||||
3.1 | Restated Certificate of Incorporation of Century Aluminum Company, as amended | 8-K | 000-27918 | August 16, 2005 | ||||||||||||||||
3.2 | Amended and Restated Bylaws of Century Aluminum Company | 8-K | 000-27918 | August 16, 2005 | ||||||||||||||||
4.1 | Form of Stock Certificate | S-1 | 33-95486 | August 8, 1995 | ||||||||||||||||
4.2 | Purchase Agreement for Century Aluminum Companys 7.5% Senior Notes, dated August 10, 2004, among Century Aluminum Company, as issuer, the guarantors party thereto and Credit Suisse First Boston LLC, as representative of the several purchasers | 10-Q | 000-27918 | November 9, 2004 | ||||||||||||||||
4.3 | Registration Rights Agreement for Century Aluminum Companys 7.5% Senior Notes, dated as of August 26, 2004, among Century Aluminum Company, the guarantors party thereto and Credit Suisse First Boston LLC, as Representative of the Initial Purchasers | 8-K | 000-27918 | September 1, 2004 |
101
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
4.4
Indenture for Century Aluminum Companys 7.5% Senior
Notes, dated as of August 26, 2004, among Century Aluminum
Company, as issuer, the guarantors party thereto and Wilmington
Trust Company, as trustee
8-K
000-27918
September 1, 2004
4.5
Supplemental Indenture No. 1 for Century Aluminum
Companys 7.5% Senior Notes, dated as of July 27,
2005, among Century Aluminum Company, as issuer, Century
Kentucky, LLC, as a guarantor, and Wilmington Trust Company, as
trustee
10-Q
000-27918
August 9, 2005
4.6
Supplemental Indenture No. 2 for Century Aluminum
Companys 7.5% Senior Notes dated as of December 29,
2005, among Century Aluminum Company, NSA General Partnership,
as a Guarantor and Wilmington Trust Company, as Trustee
X
4.7
Purchase Agreement for Century Aluminum Companys
1.75% Convertible Senior Notes, dated as of July 30,
2004, between Century Aluminum Company and Credit Suisse First
Boston LLC, as representative of the several purchasers
10-Q
000-27918
November 9, 2004
4.8
Registration Rights Agreement for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
August 9, 2004, between Century Aluminum Company and Credit
Suisse First Boston LLC, as representative of the initial
purchasers set forth therein
S-1
333-121255
December 14, 2004
4.9
Indenture for Century Aluminum Companys
1.75% Convertible Senior Notes, dated as of August 9,
2004, between Century Aluminum Company, as issuer, and
Wilmington Trust Company, as trustee
8-K
000-27918
November 1, 2004
4.10
Supplemental Indenture No. 1 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
October 26, 2004, among Century Aluminum Company, as
issuer, and Wilmington Trust Company, as trustee
8-K
000-27918
November 1, 2004
4.11
Supplemental Indenture No. 2 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
October 26, 2004, among Century Aluminum Company, as
issuer, the guarantors party thereto and Wilmington Trust
Company, as trustee
8-K
000-27918
November 1, 2004
102
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
4.12
Supplemental Indenture No. 3 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
July 27, 2005, among Century Aluminum Company, as issuer,
Century Kentucky, LLC, as a guarantor, and Wilmington Trust
Company, as trustee
10-Q
000-27918
August 9, 2005
4.13
Supplemental Indenture No. 4 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
December 29, 2005, among Century Aluminum Company, NSA
General Partnership, as a Guarantor and Wilmington Trust
Company, as Trustee
X
10.1
Agreement, dated June 12, 1992, by and between Ravenswood
Aluminum Corporation and United Steelworkers of America AFL-
CIO, Local 5668
S-1
33-95486
March 28, 1996
10.2
Agreement, dated November 30, 1994, by and between
Ravenswood Aluminum Corporation and United Steelworkers of
America AFL-CIO, Local 5668
S-1
33-95486
March 28, 1996
10.3
Extension of Labor Agreement, dated February 21, 2002, by
and between Century Aluminum of West Virginia, Inc. and the
United Steelworkers of America AFL-CIO
10-Q
000-27918
May 14, 2002
10.4
Collective Bargaining Agreement, effective April 2, 2001,
by and between Century Aluminum of Kentucky, LLC and the United
Steelworkers of America, AFL-CIO-CLC
10-Q
000-27918
August 14, 2001
10.5
Amended and Restated Employment Agreement, effective as of
December 9, 2003, by and between Century Aluminum Company
and Craig A. Davis*
10-K
000-27918
February 26, 2004
10.6
Amendment to Employment Agreement, dated as of June 28,
2005, by and between Century Aluminum Company and Craig A. Davis*
10-Q
000-27918
August 9, 2005
10.7
Employment Agreement, effective as of January 1, 2002, by
and between Century Aluminum Company and Gerald J. Kitchen*
10-Q
000-27918
May 14, 2002
10.8
Amendment to Employment Agreement, effective as of
December 9, 2003, by and between Century Aluminum Company
and Gerald J. Kitchen*
10-K
000-27918
February 26, 2004
10.9
Second Amendment to Employment Agreement, dated as of
June 28, 2005, by and between Century Aluminum Company and
Gerald J. Kitchen*
10-Q
000-27918
August 9, 2005
103
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.10
Omnibus Amendment Agreement, dated as of December 8, 2005,
by and between Century Aluminum Company and Gerald J. Kitchen
X
10.11
Consulting Agreement, effective as of April 1, 2006, by and
between Century Aluminum Company and Gerald J. Kitchen (as
modified by Omnibus Agreement)
10-Q
000-27918
August 9, 2005
10.12
Employment Agreement, effective as of January 1, 2002, by
and between Century Aluminum Company and David W. Beckley*
10-Q
000-27918
May 14, 2002
10.13
First Amendment to Employment Agreement, effective as of
December 9, 2003, by and between Century Aluminum Company
and David W. Beckley*
10-K
000-27918
February 26, 2004
10.14
Second Amendment to Employment Agreement, dated as of
March 22, 2005, by and between Century Aluminum Company and
David W. Beckley*
10-Q
000-27918
May 5, 2005
10.15
Third Amendment to Employment Agreement, dated as of
June 28, 2005, by and between Century Aluminum Company and
David W. Beckley*
10-Q
000-27918
August 9, 2005
10.16
Omnibus Amendment Agreement, dated as of December 8, 2005,
by and between Century Aluminum Company and David W. Beckley
X
10.17
Employment Agreement, effective as October 14, 2003, by and
between Century Aluminum Company and E. Jack Gates*
10-K
000-27918
February 26, 2004
10.18
Amendment Agreement, dated as of December 8, 2005, by and
between Century Aluminum Company and E. Jack Gates.
X
10.19
Employment Agreement, dated as of December 13, 2005, by and
between Century Aluminum Company and Logan W. Kruger*
X
10.20
Amended and Restated Severance Protection Agreement, dated as of
August 1, 2005, by and between Century Aluminum Company and
Gerald J. Kitchen*
10-Q
000-27918
August 9, 2005
10.21
Amended and Restated Severance Protection Agreement, dated as of
August 1, 2005, by and between Century Aluminum Company and
David W. Beckley*
10-Q
000-27918
August 9, 2005
104
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.22
Amended and Restated Severance Protection Agreement, dated as of
August 1, 2005, by and between Century Aluminum Company and
E. Jack Gates*
10-Q
000-27918
August 9, 2005
10.23
Severance Protection Agreement, dated as of August 1, 2005,
by and between Century Aluminum Company and Daniel J. Krofcheck*
10-Q
000-27918
August 9, 2005
10.24
Severance Protection Agreement, dated as of December 13,
2005, by and between Century Aluminum Company and Logan W Kruger*
X
10.25
Non-Employee Directors Stock Option Plan*
S-1
33-95486
March 28, 1996
10.26
Century Aluminum Company Incentive Compensation Plan*
10-Q
000-27918
August 14, 1998
10.27
Amended and Restated 1996 Stock Incentive Plan*
8-K
000-27918
August 16, 2005
10.28
Form of Non-Qualified Stock Option Agreement Employee
X
10.29
Form of Non-Qualified Stock Option Agreement
Non-Employee Director
X
10.30
Form of Incentive Stock Option Agreement
X
10.31
Century Aluminum Company 1996 Stock Incentive Plan
Implementation Guidelines (as amended December 14, 2001)*
X
10.32
Century Aluminum Company Supplemental Retirement Income Benefit
Plan*
10-Q
000-27918
May 14, 2002
10.33
First Amendment of the Century Aluminum Company Supplemental
Retirement Income Benefit Plan*
10-K
000-27918
March 16, 2005
10.34
Second Amendment of the Century Aluminum Company Supplemental
Retirement Income Benefit Plan*
10-Q
000-27918
August 9, 2005
10.35
Amended and Restated Asset Purchase Agreement, dated as of
December 13, 1988, by and between Kaiser
Aluminum & Chemical Corporation and Ravenswood
Acquisition Corporation
S-1
33-95486
March 28, 1996
10.36
Acquisition Agreement, dated July 19, 1995, by and between
Virgin Islands Alumina Corporation and St. Croix Alumina, L.L.C
S-1
33-95486
March 28, 1996
10.37
Ravenswood Environmental Services Agreement, dated as of
February 7, 1989, by and between Kaiser Aluminum &
Chemical Corporation and Ravenswood Aluminum Corporation
S-1
33-95486
March 28, 1996
105
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.38
Asset Purchase Agreement, dated as of March 31, 2000, by
and between Xstrata Aluminum Corporation and Berkeley Aluminum,
Inc.
8-K
000-27918
April 20, 2000
10.39
Form of Tax Sharing Agreement
S-1
33-95486
March 28, 1996
10.40
Form of Disaffiliation Agreement
S-1
33-95486
March 28, 1996
10.41
Amended and Restated Owners Agreement, dated as of
January 26, 1996, by and between Alumax of South Carolina,
Inc., Berkeley Aluminum, Inc. and Glencore Primary Aluminum
Company LLC
S-1
33-95486
March 28, 1996
10.42
Alumina Supply Contract, dated January 1, 2001, by and
between Century Aluminum of West Virginia and Glencore Ltd.
10-Q
000-27918
May 14, 2002
10.43
Alumina Supply Contract, dated January 1, 2001, by and
between Berkeley Aluminum and Glencore AG
10-Q
000-27918
May 14, 2002
10.44
Purchase Agreement, dated as of May 17, 2004, among Kaiser
Aluminum & Chemical Corporation, Kaiser Bauxite
Company, Gramercy Alumina LLC and St. Ann Bauxite Limited**
10-Q
000-27918
November 9, 2004
10.45
Loan Agreement, dated as of February 10, 2005, among
Nordural ehf., the several lenders from time to time parties
thereto, Landsbanki Islands hf., as administrative agent and
Kaupthing Bank hf., as security trustee
S-1/A
333-121255
February 16, 2005
10.46
Accounts Pledge Agreement, dated as of February 10, 2005,
among Nordural ehf., Kaupthing Bank hf., as security trustee and
Kaupthing Bank hf. and Landsbanki Íslands hf. as account
banks
S-4/A
333-121729
February 11, 2005
10.47
Declaration of Pledge, dated as of February 10, 2005,
between Nordural ehf. and Kaupthing Bank hf., as security trustee
S-4/A
333-121729
February 11, 2005
10.48
Securities Pledge Agreement, dated as of February 10, 2005,
among Nordural Holdings I ehf., Nordural Holdings II ehf.,
Nordural ehf. and Kaupthing Bank hf., as security trustee
S-4/A
333-121729
February 11, 2005
10.49
General Bond, dated as of February 10, 2005, between
Nordural ehf. and Kaupthing Bank hf., as security trustee
S-4/A
333-121729
February 11, 2005
10.50
Amended and Restated Toll Conversion Agreement, dated as of
February 10, 2005, by Nordural ehf and Glencore AG
10-Q
000-27918
August 9, 2005
106
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.51
Loan and Security Agreement, dated as of September 19,
2005, by and among Bank of America, N.A., Century Aluminum
Company, Berkeley Aluminum, Inc., Century Aluminum of West
Virginia, Inc., Century Kentucky, Inc., and Century Aluminum of
Kentucky General Partnership
10-Q
000-27918
November 9, 2005
10.52
Joinder Agreement, dated as of December 31, 2005, among NSA
General Partnership, the Lenders party thereto, the existing
Borrowers party thereto, and Bank of America, N.A., in its
capacity as Agent under that certain Loan and Security
Agreement, dated as of September 19, 2005
X
10.53
Letter Agreement, dated March 5, 2006, from Integis, Inc.
and Century Aluminum Company
X
21.1
List of Subsidiaries
X
23.1
Consent of Deloitte & Touche LLP
X
24.1
Powers of Attorney
X
31.1
Rule 13a-14(a)/15d-14(a) Certification Chief
Executive Officer
X
31.2
Rule 13a-14(a)/15d-14(a) Certification Chief
Financial Officer
X
32.1
Section 1350 Certifications
X
*
|
Management contract or compensatory plan. | |
**
|
Schedules and exhibits are omitted and will be furnished to the Securities and Exchange Commission upon request. | |
***
|
Confidential information was omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. |
107
108
CENTURY ALUMINUM COMPANY
By:
/s/
MICHAEL A. BLESS
Michael A. Bless
Executive Vice President
and Chief Financial Officer
Signature
Title
Date
/s/
LOGAN W. KRUGER
Logan W. Kruger
Chief Executive Officer
March 16, 2006
/s/
MICHAEL A. BLESS
Michael A. Bless
Executive Vice President and Chief Financial Officer (Principal
Financial Officer and Principal Accounting Officer)
March 16, 2006
*
Craig A. Davis
Chairman
March 16, 2006
*
Jarl Berntzen
Director
March 16, 2006
*
Roman A. Bninski
Director
March 16, 2006
*
Robert E. Fishman
Director
March 16, 2006
*
John C. Fontaine
Director
March 16, 2006
*
John P. OBrien
Director
March 16, 2006
*
Stuart M. Schreiber
Director
March 16, 2006
*
Willy R. Strothotte
Director
March 16, 2006
*
Jack E. Thompson
Director
March 16, 2006
*By:
/s/
GERALD J. KITCHEN
Gerald J. Kitchen, as
Attorney-in-fact
109
Balance at
Charged To
Balance at
Beginning
Cost and
End of
of Period
Expense
Deductions
Period
(Dollars in thousands)
$
4,053
$
$
85
$
3,968
$
3,968
$
279
$
3,227
$
1,020
$
1,020
$
$
20
$
1,000
110
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
3.1
Restated Certificate of Incorporation of Century Aluminum
Company, as amended
8-K
000-27918
August 16, 2005
3.2
Amended and Restated Bylaws of Century Aluminum Company
8-K
000-27918
August 16, 2005
4.1
Form of Stock Certificate
S-1
33-95486
August 8, 1995
4.2
Purchase Agreement for Century Aluminum Companys
7.5% Senior Notes, dated August 10, 2004, among
Century Aluminum Company, as issuer, the guarantors party
thereto and Credit Suisse First Boston LLC, as representative of
the several purchasers
10-Q
000-27918
November 9, 2004
4.3
Registration Rights Agreement for Century Aluminum
Companys 7.5% Senior Notes, dated as of
August 26, 2004, among Century Aluminum Company, the
guarantors party thereto and Credit Suisse First Boston LLC, as
Representative of the Initial Purchasers
8-K
000-27918
September 1, 2004
4.4
Indenture for Century Aluminum Companys 7.5% Senior
Notes, dated as of August 26, 2004, among Century Aluminum
Company, as issuer, the guarantors party thereto and Wilmington
Trust Company, as trustee
8-K
000-27918
September 1, 2004
4.5
Supplemental Indenture No. 1 for Century Aluminum
Companys 7.5% Senior Notes, dated as of July 27,
2005, among Century Aluminum Company, as issuer, Century
Kentucky, LLC, as a guarantor, and Wilmington Trust Company, as
trustee
10-Q
000-27918
August 9, 2005
4.6
Supplemental Indenture No. 2 for Century Aluminum
Companys 7.5% Senior Notes dated as of December 29,
2005, among Century Aluminum Company, NSA General Partnership,
as a Guarantor and Wilmington Trust Company, as Trustee
X
4.7
Purchase Agreement for Century Aluminum Companys
1.75% Convertible Senior Notes, dated as of July 30,
2004, between Century Aluminum Company and Credit Suisse First
Boston LLC, as representative of the several purchasers
10-Q
000-27918
November 9, 2004
4.8
Registration Rights Agreement for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
August 9, 2004, between Century Aluminum Company and Credit
Suisse First Boston LLC, as representative of the initial
purchasers set forth therein
S-1
333-121255
December 14, 2004
111
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
4.9
Indenture for Century Aluminum Companys
1.75% Convertible Senior Notes, dated as of August 9,
2004, between Century Aluminum Company, as issuer, and
Wilmington Trust Company, as trustee
8-K
000-27918
November 1, 2004
4.10
Supplemental Indenture No. 1 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
October 26, 2004, among Century Aluminum Company, as
issuer, and Wilmington Trust Company, as trustee
8-K
000-27918
November 1, 2004
4.11
Supplemental Indenture No. 2 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
October 26, 2004, among Century Aluminum Company, as
issuer, the guarantors party thereto and Wilmington Trust
Company, as trustee
8-K
000-27918
November 1, 2004
4.12
Supplemental Indenture No. 3 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
July 27, 2005, among Century Aluminum Company, as issuer,
Century Kentucky, LLC, as a guarantor, and Wilmington Trust
Company, as trustee
10-Q
000-27918
August 9, 2005
4.13
Supplemental Indenture No. 4 for Century Aluminum
Companys 1.75% Convertible Senior Notes, dated as of
December 29, 2005, among Century Aluminum Company, NSA
General Partnership, as a Guarantor and Wilmington Trust
Company, as Trustee
X
10.1
Agreement, dated June 12, 1992, by and between Ravenswood
Aluminum Corporation and United Steelworkers of America AFL-
CIO, Local 5668
S-1
33-95486
March 28, 1996
10.2
Agreement, dated November 30, 1994, by and between
Ravenswood Aluminum Corporation and United Steelworkers of
America AFL-CIO, Local 5668
S-1
33-95486
March 28, 1996
10.3
Extension of Labor Agreement, dated February 21, 2002, by
and between Century Aluminum of West Virginia, Inc. and the
United Steelworkers of America AFL-CIO
10-Q
000-27918
May 14, 2002
10.4
Collective Bargaining Agreement, effective April 2, 2001,
by and between Century Aluminum of Kentucky, LLC and the United
Steelworkers of America, AFL-CIO-CLC
10-Q
000-27918
August 14, 2001
10.5
Amended and Restated Employment Agreement, effective as of
December 9, 2003, by and between Century Aluminum Company
and Craig A. Davis*
10-K
000-27918
February 26, 2004
112
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.6
Amendment to Employment Agreement, dated as of June 28,
2005, by and between Century Aluminum Company and Craig A. Davis*
10-Q
000-27918
August 9, 2005
10.7
Employment Agreement, effective as of January 1, 2002, by
and between Century Aluminum Company and Gerald J. Kitchen*
10-Q
000-27918
May 14, 2002
10.8
Amendment to Employment Agreement, effective as of
December 9, 2003, by and between Century Aluminum Company
and Gerald J. Kitchen*
10-K
000-27918
February 26, 2004
10.9
Second Amendment to Employment Agreement, dated as of
June 28, 2005, by and between Century Aluminum Company and
Gerald J. Kitchen*
10-Q
000-27918
August 9, 2005
10.10
Omnibus Amendment Agreement, dated as of December 8, 2005,
by and between Century Aluminum Company and Gerald J. Kitchen
X
10.11
Consulting Agreement, effective as of April 1, 2006, by and
between Century Aluminum Company and Gerald J. Kitchen (as
modified by Omnibus Agreement)
10-Q
000-27918
August 9, 2005
10.12
Employment Agreement, effective as of January 1, 2002, by
and between Century Aluminum Company and David W. Beckley*
10-Q
000-27918
May 14, 2002
10.13
First Amendment to Employment Agreement, effective as of
December 9, 2003, by and between Century Aluminum Company
and David W. Beckley*
10-K
000-27918
February 26, 2004
10.14
Second Amendment to Employment Agreement, dated as of
March 22, 2005, by and between Century Aluminum Company and
David W. Beckley*
10-Q
000-27918
May 5, 2005
10.15
Third Amendment to Employment Agreement, dated as of
June 28, 2005, by and between Century Aluminum Company and
David W. Beckley*
10-Q
000-27918
August 9, 2005
10.16
Omnibus Amendment Agreement, dated as of December 8, 2005,
by and between Century Aluminum Company and David W. Beckley
X
10.17
Employment Agreement, effective as October 14, 2003, by and
between Century Aluminum Company and E. Jack Gates*
10-K
000-27918
February 26, 2004
10.18
Amendment Agreement, dated as of December 8, 2005, by and
between Century Aluminum Company and E. Jack Gates.
X
113
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.19
Employment Agreement, dated as of December 13, 2005, by and
between Century Aluminum Company and Logan W. Kruger*
X
10.20
Amended and Restated Severance Protection Agreement, dated as of
August 1, 2005, by and between Century Aluminum Company and
Gerald J. Kitchen*
10-Q
000-27918
August 9, 2005
10.21
Amended and Restated Severance Protection Agreement, dated as of
August 1, 2005, by and between Century Aluminum Company and
David W. Beckley*
10-Q
000-27918
August 9, 2005
10.22
Amended and Restated Severance Protection Agreement, dated as of
August 1, 2005, by and between Century Aluminum Company and
E. Jack Gates*
10-Q
000-27918
August 9, 2005
10.23
Severance Protection Agreement, dated as of August 1, 2005,
by and between Century Aluminum Company and Daniel J. Krofcheck*
10-Q
000-27918
August 9, 2005
10.24
Severance Protection Agreement, dated as of December 13,
2005, by and between Century Aluminum Company and Logan W Kruger*
X
10.25
Non-Employee Directors Stock Option Plan*
S-1
33-95486
March 28, 1996
10.26
Century Aluminum Company Incentive Compensation Plan*
10-Q
000-27918
August 14, 1998
10.27
Amended and Restated 1996 Stock Incentive Plan*
8-K
000-27918
August 16, 2005
10.28
Form of Non-Qualified Stock Option Agreement Employee
X
10.29
Form of Non-Qualified Stock Option Agreement
Non-Employee Director
X
10.30
Form of Incentive Stock Option Agreement
X
10.31
Century Aluminum Company 1996 Stock Incentive Plan
Implementation Guidelines (as amended December 14, 2001)*
X
10.32
Century Aluminum Company Supplemental Retirement Income Benefit
Plan*
10-Q
000-27918
May 14, 2002
10.33
First Amendment of the Century Aluminum Company Supplemental
Retirement Income Benefit Plan*
10-K
000-27918
March 16, 2005
10.34
Second Amendment of the Century Aluminum Company Supplemental
Retirement Income Benefit Plan*
10-Q
000-27918
August 9, 2005
114
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.35
Amended and Restated Asset Purchase Agreement, dated as of
December 13, 1988, by and between Kaiser
Aluminum & Chemical Corporation and Ravenswood
Acquisition Corporation
S-1
33-95486
March 28, 1996
10.36
Acquisition Agreement, dated July 19, 1995, by and between
Virgin Islands Alumina Corporation and St. Croix Alumina, L.L.C
S-1
33-95486
March 28, 1996
10.37
Ravenswood Environmental Services Agreement, dated as of
February 7, 1989, by and between Kaiser Aluminum &
Chemical Corporation and Ravenswood Aluminum Corporation
S-1
33-95486
March 28, 1996
10.38
Asset Purchase Agreement, dated as of March 31, 2000, by
and between Xstrata Aluminum Corporation and Berkeley Aluminum,
Inc.
8-K
000-27918
April 20, 2000
10.39
Form of Tax Sharing Agreement
S-1
33-95486
March 28, 1996
10.40
Form of Disaffiliation Agreement
S-1
33-95486
March 28, 1996
10.41
Amended and Restated Owners Agreement, dated as of
January 26, 1996, by and between Alumax of South Carolina,
Inc., Berkeley Aluminum, Inc. and Glencore Primary Aluminum
Company LLC
S-1
33-95486
March 28, 1996
10.42
Alumina Supply Contract, dated January 1, 2001, by and
between Century Aluminum of West Virginia and Glencore Ltd.
10-Q
000-27918
May 14, 2002
10.43
Alumina Supply Contract, dated January 1, 2001, by and
between Berkeley Aluminum and Glencore AG
10-Q
000-27918
May 14, 2002
10.44
Purchase Agreement, dated as of May 17, 2004, among Kaiser
Aluminum & Chemical Corporation, Kaiser Bauxite
Company, Gramercy Alumina LLC and St. Ann Bauxite Limited**
10-Q
000-27918
November 9, 2004
10.45
Loan Agreement, dated as of February 10, 2005, among
Nordural ehf., the several lenders from time to time parties
thereto, Landsbanki Islands hf., as administrative agent and
Kaupthing Bank hf., as security trustee
S-1/A
333-121255
February 16, 2005
10.46
Accounts Pledge Agreement, dated as of February 10, 2005,
among Nordural ehf., Kaupthing Bank hf., as security trustee and
Kaupthing Bank hf. and Landsbanki Íslands hf. as account
banks
S-4/A
333-121729
February 11, 2005
10.47
Declaration of Pledge, dated as of February 10, 2005,
between Nordural ehf. and Kaupthing Bank hf., as security trustee
S-4/A
333-121729
February 11, 2005
115
Incorporated by Reference
Exhibit
Filed
Number
Description of Exhibit
Form
File No.
Filing Date
Herewith
10.48
Securities Pledge Agreement, dated as of February 10, 2005,
among Nordural Holdings I ehf., Nordural Holdings II ehf.,
Nordural ehf. and Kaupthing Bank hf., as security trustee
S-4/A
333-121729
February 11, 2005
10.49
General Bond, dated as of February 10, 2005, between
Nordural ehf. and Kaupthing Bank hf., as security trustee
S-4/A
333-121729
February 11, 2005
10.50
Amended and Restated Toll Conversion Agreement, dated as of
February 10, 2005, by Nordural ehf and Glencore AG
10-Q
000-27918
August 9, 2005
10.51
Loan and Security Agreement, dated as of September 19,
2005, by and among Bank of America, N.A., Century Aluminum
Company, Berkeley Aluminum, Inc., Century Aluminum of West
Virginia, Inc., Century Kentucky, Inc., and Century Aluminum of
Kentucky General Partnership
10-Q
000-27918
November 9, 2005
10.52
Joinder Agreement, dated as of December 31, 2005, among NSA
General Partnership, the Lenders party thereto, the existing
Borrowers party thereto, and Bank of America, N.A., in its
capacity as Agent under that certain Loan and Security
Agreement, dated as of September 19, 2005
X
10.53
Letter Agreement, dated March 5, 2006, from Integis, Inc.
and Century Aluminum Company
X
21.1
List of Subsidiaries
X
23.1
Consent of Deloitte & Touche LLP
X
24.1
Powers of Attorney
X
31.1
Rule 13a-14(a)/15d-14(a) Certification Chief
Executive Officer
X
31.2
Rule 13a-14(a)/15d-14(a) Certification Chief
Financial Officer
X
32.1
Section 1350 Certifications
X
*
|
Management contract or compensatory plan. | |
**
|
Schedules and exhibits are omitted and will be furnished to the Securities and Exchange Commission upon request. | |
***
|
Confidential information was omitted from this exhibit pursuant to a request for confidential treatment and filed separately with the Securities and Exchange Commission. |
116
-2-
CENTURY ALUMINUM COMPANY,
as Issuer |
||||||||||
|
||||||||||
By: |
/s/ Daniel J. Krofcheck
|
|||||||||
Name: | Daniel J. Krofcheck | |||||||||
Title: | Vice President and Treasurer | |||||||||
|
||||||||||
|
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NSA GENERAL PARTNERSHIP,
as a Guarantor |
||||||||||
|
||||||||||
By: |
CENTURY KENTUCKY, INC.,
its general partner |
|||||||||
|
||||||||||
By: |
/s/ Daniel J. Krofcheck
|
|||||||||
|
Name: | Daniel J. Krofcheck | ||||||||
|
Title: | Vice President and Treasurer | ||||||||
|
||||||||||
|
||||||||||
By: |
SKYLINER, LLC, its general
partner |
|||||||||
|
||||||||||
By: |
/s/ Daniel J. Krofcheck
|
|||||||||
|
Name: | Daniel J. Krofcheck | ||||||||
|
Title: | Vice President and Treasurer | ||||||||
|
||||||||||
|
||||||||||
WILMINGTON TRUST COMPANY,
as Trustee |
||||||||||
|
||||||||||
By: |
/s/ Kristin L Moore
|
|||||||||
Name: | Kristin L. Moore | |||||||||
Title: | Financial Services Officer |
-3-
-2-
-3-
-4-
-5-
CENTURY ALUMINUM COMPANY,
as Issuer |
||||||||||
|
||||||||||
By: |
/s/ Daniel J. Krofcheck
|
|||||||||
Name: | Daniel J. Krofcheck | |||||||||
Title: | Vice President and Treasurer | |||||||||
|
||||||||||
|
||||||||||
WILMINGTON TRUST COMPANY,
as Trustee |
||||||||||
|
||||||||||
By: |
/s/ Kristin L Moore
|
|||||||||
Name: | Kristin L. Moore | |||||||||
Title: | Financial Services Officer | |||||||||
|
||||||||||
|
||||||||||
NSA GENERAL PARTNERSHIP,
as a Guarantor |
||||||||||
|
||||||||||
By: |
CENTURY KENTUCKY, INC.,
its general partner |
|||||||||
|
||||||||||
By: |
/s/ Daniel J. Krofcheck
|
|||||||||
|
Name: | Daniel J. Krofcheck | ||||||||
|
Title: | Vice President and Treasurer | ||||||||
|
||||||||||
|
||||||||||
By: |
SKYLINER, LLC, its general
partner |
|||||||||
|
||||||||||
By: |
/s/ Daniel J. Krofcheck
|
|||||||||
|
Name: | Daniel J. Krofcheck | ||||||||
|
Title: | Vice President and Treasurer |
-6-
|
||||
CENTURY ALUMINUM COMPANY | ||||
By:
|
/s/ Craig A. Davis
Chairman and Chief Executive Officer |
|||
|
||||
|
/s/ Gerald J. Kitchen
|
2
By:
|
/s/ Craig A. Davis
|
|||
|
Chairman and Chief Executive Officer | |||
|
||||
|
/s/ David W. Beckley | |||
|
||||
|
David W. Beckley |
2
By: |
/s/ Gerald J. Kitchen
|
Title: |
Executive Vice President
|
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
-14-
CENTURY ALUMINUM COMPANY | ||||||
|
||||||
By:
|
/s/ Gerald J. Kitchen | /s/ Logan W. Kruger | ||||
|
Logan W. Kruger | |||||
|
||||||
Title:
|
Executive Vice President |
-15-
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
CENTURY ALUMINUM COMPANY | LOGAN W. KRUGER | |||||||||||||
|
||||||||||||||
By:
|
/s/ Gerald J. Kitchen | By: | /s/ Logan W. Kruger | |||||||||||
Name: | GERALD J. KITCHEN | Name: | LOGAN W. KRUGER | |||||||||||
Title: | EXECUTIVE VICE PRESIDENT | Title: | EXECUTIVE | |||||||||||
|
GENERAL COUNSEL |
-14-
|
||
|
||
|
||
|
||
|
2
3
4
CENTURY ALUMINUM COMPANY | ||||
|
||||
|
By: | |||
|
||||
|
Name: | |||
|
Title: | |||
|
||||
|
||||
|
||||
|
Optionee: |
5
2
3
CENTURY ALUMINUM COMPANY
|
||||
By: | ||||
Name: | Gerald J. Kitchen | |||
Title: | Executive Vice President | |||
Optionee: | ||||
4
2
3
4
CENTURY ALUMINUM COMPANY | ||||
|
||||
|
By: | |||
|
||||
|
Name: | |||
|
Title: | |||
|
||||
|
||||
|
||||
|
Optionee |
5
A. | Strategic performance Goals, such as completing an acquisition, disposing of non-performing assets, achieving a strategic restructuring, competitively securing a key resource (e.g., electrical power or alumina) or developing key management through recruiting, training and succession planning; | ||
B. | Cost reductions, such as lowering cash operating costs by targeted amounts, or meeting other operational improvement performance objectives such as successfully completing capital expenditure programs or contributing to the growth of the Company through research, processing or manufacturing improvements and marketing gains; and | ||
C. | Meeting financial performance targets that may be the aggregate of each annual profit plan in any Plan Period or may be expressed in terms of (i) earnings per Share, (ii) pre-tax profits (either at the Company or business unit level), (iii) net earnings or net worth, (iv) return on equity or assets, (v) any combination of the foregoing, or (vi) any other standard or standards deemed appropriate by the Committee. |
A. | Award shall be as defined in Section 5. | ||
B. | Award Targets generally shall include elements of all of the following, with the relative weighting of each element to be as determined by the Committee; however, the Committee retains full discretion to include fewer than all of these elements in an Award Target: |
(1) | The achievement of one or more strategic or other Goals of the sort described in Section 2. A.; and | ||
(2) | The accomplishment of cost improvements or other operational performance Goals as generally described in Section 2. B; and | ||
(3) | The attainment by the Company of specified financial performance Goals as described in Section 2. C. |
Page 2
C. | Board shall mean the Board of Directors of the Company. | ||
D. | Committee shall mean the Compensation Committee of the Board of Directors of the Company, two members or more of whom shall be outside directors within the meaning of Internal Revenue Code Section 162(m). | ||
E. | Company shall mean Century Aluminum Company. | ||
F. | Participant shall mean any full-time salaried employee of the Company or a Subsidiary designated as a Participant by the Committee. | ||
G. | Performance Shares shall have the meaning set forth in the Plan and shall entitle the grantee to receive one share of the Companys common stock for each Performance Share awarded. | ||
H. | Plan Periods shall mean overlapping periods of three consecutive calendar years each, the first of which commenced January 1, 2001, and will end December 31, 2003. | ||
I. | Section shall mean a section of these Guidelines. | ||
J. | Subsidiary shall mean any corporation the voting stock of which is 50% or more is owned, directly or indirectly, by the Company. |
A. | Award . The Committee, on or before each May 15 during each of the Plan Periods, shall make an award of Performance Shares to each Participant, which award shall be communicated in writing to each Participant by the Chief Executive Officer of the Company. Initially, Awards shall not be granted in amounts that exceed the |
Page 3
applicable percentages set forth below (i.e., 45% to 100%). Awards may be increased above those amounts only at the end of a Plan Period, and then only in the event (and to the extent) that the Committee determines the Company has exceeded its Target or Targets. For an Award to be granted at 150% of the applicable percentage, the Committee must determine that the Company has exceeded every one of its Targets for the applicable Plan Period. Awards will be issued as provided in Section 6. The Award for each Participant shall be determined by creating a monetary award, and converting that monetary award to Performance Share units. The monetary award shall be a percentage of such Participants base salary (within the allowable range), which percentage shall be established by the Committee at the beginning of each of the Plan Periods. The allowable percentages are as follows: |
Participants Position | Range of Allowable Percentages | |||
(of Base Salary) | ||||
CEO; President
|
45% to 100% | |||
Executive VPs
|
||||
All Other VPs
|
||||
Business Unit Head
|
||||
and Senior Staff
|
15% to 45% |
The number of Performance Shares in a Participants Award shall be determined by dividing the Participants monetary award by the average closing price for the Companys common stock for the month preceding the month in which the grant is made. | |||
B. | Award Target; Adjusted Award; Amending Target Assumptions . |
(1) | Committee Discretion . Notwithstanding any other provision of these Guidelines, the Committee shall have full and complete discretion to modify any award otherwise payable hereunder in light of considerations deemed appropriate by the Committee. This discretion shall include the right to determine that no award should be payable. | ||
(2) | Award Target. If the Award Targets are achieved in their entirety within the expectations of the Committee, then Participants shall be issued the number of shares equal to the number of Performance Share units in Participants Awards initially granted as provided in Section 5. A. |
Page 4
(3) | Adjusted Award . If some or all of the Award Targets are exceeded, the Committee may approve Awards in excess of the initial grants; however, the Committee may not approve Awards at the 150% level unless all of the Award Targets have been exceeded. If the Award Targets are not achieved in their entirety, Awards shall be adjusted downward from the initial Awards or eliminated entirely, at the discretion of the Committee, and Participants shall be issued proportionally reduced number of shares, or none at all. | ||
(4) | Amending Award Target Assumptions. Achievement of specified financial Award Targets under Section 3. C. may depend on the accuracy of the Companys forecasts of LME primary aluminum prices. In such cases, to the extent average LME prices vary, plus or minus, by more than $50 from forecasted LME aluminum prices in any year of a Plan Period, the Committee will have the discretion to appropriately amend the Award Target to more accurately reflect LME aluminum prices for such year, and the Companys performance will be measured against such amended Award Target. |
A. | On or before March 15 of each calendar year (or, if required, such later date when the annual audited financial statement of the Company are available) the Company shall, with respect to the Plan Period that has just ended, issue to each Participant Performance Shares in an amount equal to such Participants Award or Adjusted Award. | ||
B. | Except as provided in Section 6.C., no payment with respect to any Award shall be made to a Participant who is not employed full time by the Company or a Subsidiary on the 31 st day of December preceding the date of issuance provided in Section 5.A. | ||
C. | In the event of death, permanent disability or retirement of a Participant in any year following an Award, the Participant or his representative or designated beneficiaries shall be entitled to receive a portion of the amount calculated under Section 6.A., and payable in the year following death, permanent disability or retirement, determined by multiplying such amount by a fraction, the numerator of which is the number of weeks of full employment during any Plan Period and the denominator of which is 156 for any Plan Period. |
Page 5
D. | If an employee is selected as a Participant at any time other than the beginning of any Plan Period, such Participant shall be entitled to receive a portion of the amount calculated under Section 6.A. by multiplying such amount by a fraction the numerator of which is the number of weeks that such employee was a Participant under the plan during any Plan Period and the denominator of which is 156. For the purposes of this Section 6.D. an employee shall be deemed to have been a Participant under the Plan as of January 1 of the calendar year in which such employee was first selected as a Participant if such selection occurred on or before May 15 of such calendar year, and if such selection occurred after May 15 of any calendar year the employee shall be deemed to have first become a Participant on January 1 of the calendar year immediately following the employees election as a Participant. |
A. | Each grant of a Performance Share shall be evidenced by an agreement executed on behalf of the Company by an officer designated by the Compensation Committee and accepted by the recipient. Such agreement shall state that such award is subject to all the terms and provisions of the Plan. | ||
B. | Full power and authority to amend, modify, terminate, construe, interpret and administer these Guidelines shall be vested in the Committee. Any interpretation of these Guidelines by the Committee or any administrative act by the Committee shall be final and binding on all Participants. |
Page 6
|
/s/ Craig A. Davis
|
/s/ Gerald J. Kitchen
|
Page 7
1. | The Partnership, the Lenders, the existing Borrowers, and the Agent hereby acknowledge, agree and confirm that, by its execution of this Agreement, the Partnership will be a Borrower under the Loan Agreement and the other Loan Documents and shall have all of the rights and obligations of a Borrower thereunder as if it had executed the Loan Agreement and the other Loan Documents. The Partnership hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions, covenants, promises, agreements, obligations, duties, liabilities, and conditions contained in the Loan Documents that are applicable to Borrowers, including without limitation (a) all of the representations and warranties of the Borrowers set forth in Section 7 of the Loan Agreement (provided that with respect to the representations and warranties set forth in Sections 7.1.5 and 7.1.6, the applicable information for the Partnership is set forth on Schedule 1 hereto), and (b) all of the affirmative and negative covenants of the Borrowers set forth in Sections 5.3, 6, and 8 of the Loan Agreement. | |
Upon the effectiveness of this Agreement, all references to Borrower or Borrowers in each of the Loan Documents shall be deemed to include the Partnership. | ||
2. | Without limiting the generality of the terms of the foregoing paragraph 1 , to secure the prompt payment and performance to the Secured Parties of the Obligations, the Partnership hereby grants to the Agent, for the benefit of the Secured Parties, a continuing lien upon and security interest in all of the following |
(i) | Accounts; and | ||
(ii) | Inventory; |
together with all books, records, writings, data bases, information, Documents, and Supporting Obligations directly relating to or evidencing, embodying, or incorporating any of the foregoing, and all Proceeds of and from any of the foregoing. Notwithstanding the foregoing, Collateral shall not include real property, Fixtures, Equipment, Securities of Subsidiaries, the Proceeds and products of any of the foregoing Property or any other Property not specifically designated as Collateral hereby. | ||
3. | The Partnership hereby authorizes the Agent to file financing statements that indicate the Collateral as being of an equal or lesser scope, or with greater or lesser detail, than as set forth in the foregoing paragraph 2 . The Partnership also hereby ratifies its authorization for the Agent to have filed in any jurisdiction any such financing statements or amendments thereto if filed prior to the date hereof. | |
4. | This Agreement shall be effective as of the date hereof (the Effective Date ), but only upon the satisfaction of the following conditions precedent: |
(a) | Agent shall have received a duly executed copy of this Agreement. | ||
(b) | The representations and warranties of the Borrowers and Guarantors set forth in each of the Loan Documents shall be true and correct in all material respects on and as of the Effective Date with the same effect as though made on and as of such date (except to the extent such representations and warranties by their terms expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct, in all material respects, as of such earlier date). | ||
(c) | No Default or Event of Default shall have occurred and be continuing as of the Effective Date. | ||
(d) | The Partnership shall have paid all costs, fees and expenses referred to in paragraph 6 hereof of which the Agent has notified Borrower Representative prior to the date hereof. | ||
(e) | On or prior to the Effective Date, Agent shall have received each of the following in form and substance reasonably satisfactory to it (and duly executed by each of the parties thereto, to the extent applicable): |
(i) | Certificate of the general partner of the Partnership certifying as to (a) the Partnership Agreement of the Partnership, and (b) resolutions approving the transactions contemplated hereby; |
(ii) | Certificate of the general partner of the Partnership certifying as to the incumbency of each of the Persons executing this Agreement on behalf of the Partnership; | ||
(iii) | Certificate of the general partner of the Partnership certifying as to representations and warranties and no Default or Event of Default; | ||
(iv) | UCC financing statements covering the Collateral and naming the Partnership as debtor, in due form for filing with the Secretary of State of the jurisdiction of organization of the Partnership; and | ||
(v) | Opinion of Curtis, Mallet-Prevost, Colt & Mosle LLP, special New York counsel to the Partnership. |
5. | The Partnership acknowledges and confirms that it has received a copy of the Loan Agreement and the schedules and exhibits thereto and each of the other Loan Documents and the schedules and exhibits thereto. | |
6. | The Partnership agrees (a) to reimburse the Agent upon demand for all reasonable and documented costs, fees and expenses (including the reasonable fees and expenses of counsel to the Agent) incurred in connection with the preparation, execution and delivery of this Agreement, and (b) to deliver to the Agent, within 15 days following the date hereof, a letter of opinion of Stites & Harbison PLLC, special Kentucky counsel to the Partnership (or such other counsel to the Partnership as shall be reasonably acceptable to the Agent), in form and substance satisfactory to the Agent. | |
7. | This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. | |
8. | Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. | |
9. | THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED IN AND SHALL BE DEEMED TO HAVE BEEN MADE IN NEW YORK, NY. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. |
BORROWERS:
NSA GENERAL PARTNERSHIP |
||||
By: | CENTURY KENTUCKY, INC. | |||
Its: General Partner | ||||
By: | /s/ Daniel J. Krofcheck | |||
Name: | Daniel J. Krofcheck | |||
Title: | Vice President and Treasurer | |||
By: | SKYLINER LLC | |||
Its: General Partner | ||||
By: | /s/ Daniel J. Krofcheck | |||
Name: | Daniel J. Krofcheck | |||
Title: | Vice President and Treasurer | |||
CENTURY ALUMINUM COMPANY
|
||||
By: | /s/ Daniel J. Krofcheck | |||
Name: | Daniel J. Krofcheck | |||
Title: | Vice President and Treasurer | |||
BERKELEY ALUMINUM, INC.
|
||||
By: | /s/ Daniel J. Krofcheck | |||
Name: | Daniel J. Krofcheck | |||
Title: | Vice President and Treasurer | |||
CENTURY ALUMINUM OF WEST VIRGINIA, INC.
|
||||
By: | /s/ Daniel J. Krofcheck | |||
Name: | Daniel J. Krofcheck | |||
Title: | Vice President and Treasurer |
CENTURY KENTUCKY, INC.
|
||||
By: | /s/ Daniel J. Krofcheck | |||
Name: | Daniel J. Krofcheck | |||
Title: | Vice President and Treasurer | |||
CENTURY ALUMINUM OF KENTUCKY GENERAL PARTNERSHIP
|
||||
By: | ||||
Its: General Partner | ||||
By: | /s/ Daniel J. Krofcheck | |||
Name: | Daniel J. Krofcheck | |||
Title: | Vice President and Treasurer |
BANK OF AMERICA, N.A.,
as Agent and as a Lender |
||||
By: | /s/ Robert J. Lund | |||
Name: | Robert J. Lund | |||
Title: | Senior Vice President |
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
|
||||
By: | /s/ Jay Chall | |||
Name: | Jay Chall | |||
Title: | Director | |||
By: | /s/ Rianka Mohan | |||
Name: | Rianka Mohan | |||
Title: | Associate |
CITIBANK, N.A.
|
||||
By: | Daniel J. Miller | |||
Name: | Daniel J. Miller | |||
Title: | Vice President | |||
By: | Raymond G. Dunning | |||
Name: | Raymond G. Dunning | |||
Title: | Managing Director |
JPMORGAN CHASE BANK, N.A.
|
||||
By: | /s/ Mark Cuccenillo | |||
Name: | Mark Cuccenillo | |||
Title: | Vice President | |||
By: | ||||
Name: | ||||
Title: |
WACHOVIA CAPITAL FINANCE CORPORATION (WESTERN)
|
||||
By: | ||||
Name: | ||||
Title: | ||||
By: | ||||
Name: | ||||
Title: |
1. | Legal names and organizational details: |
(a) | Legal Name NSA General Partnership | ||
(b) | State of Formation Kentucky | ||
(c) | Type of Organization General Partnership | ||
(d) | Organizational I.D. Number N/A |
2. | Other legal, fictitious or trade names used: None | |
3. | Mergers, consolidations and acquisitions within five years immediately preceding the Closing Date: N/A | |
4. | Chief Executive Office: 1627 State Route 271 North, Hawesville, KY 42348-0500 | |
5. | In addition to the offices listed in #4 above, the Partnership may maintain books and records at: 2511 Garden Road, Building A, Suite 200, Monterey, CA 93940 | |
6. | Business locations of the Partnership where Inventory is located: 1627 State Route 271 North Hawesville, KY 42348-0500 |
State or Other
Jurisdiction of
Incorporation or
Company Name
Organization
Name Under Business is Conducted
Delaware
Berkeley Aluminum, Inc.
Delaware
Century Alumina
Delaware
Century Aluminum Holdings, Inc.
Kentucky
Century Aluminum of Kentucky, GP
Delaware
Century Aluminum of Kentucky LLC
Delaware
Century Aluminum of West Virginia, Inc.
Bermuda
Century Bermuda I Limited
Bermuda
Century Bermuda II Limited
Delaware
Century Kentucky, Inc.
Delaware
Century Louisiana, Inc.
Delaware
Hancock Aluminum, LLC
Georgia
Metalsco, Ltd.
Iceland
Nordural ehf.
Iceland
Nordural Holdings I eHf.
Iceland
Nordural Holdings II eHf.
Delaware
Nordural U.S. LLC
Kentucky
NSA GP
Delaware
Skyliner, Inc.
St. Lucia, West Indies
St. Ann Bauxite Holdings Limited
Delaware
VIALCO
|
/s/ Willy R. Strothotte | |||
|
|
|||
|
Director, Century Aluminum Company |
|
/s/ Jari Berntzen | |||
|
|
|||
|
Director, Century Aluminum Company |
|
/s/ Stuart M. Schreiber | |||
|
|
|||
|
Director, Century Aluminum Company |
|
/s/ Roman Bninski | |||
|
Director, Century Aluminum Company |
|
/s/ John C. Fontaine | |||
|
|
|||
|
Director, Century Aluminum Company |
|
/s/ John P.D. Brien | |||
|
|
|||
|
Director, Century Aluminum Company |
|
/s/ Craig A. Davis | ||
|
|||
|
Name: Craig A. Davis
Director, Century Aluminum Company |
|
/s/ Robert E. Fishman | ||
|
|||
|
Name: Robert E. Fishman
Director, Century Aluminum Company |
|
/s/ Jack E. Thompson | ||
|
|||
|
Name: Jack E. Thompson
Director, Century Aluminum Company |
(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 registrants
disclosure controls and procedures and presented in this report
the Companys 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
registrants internal control over financial reporting that
occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably
likely to materially affect, the registrants internal
control over financial reporting; and
(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
registrants 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
registrants internal control over financial reporting.
/s/
LOGAN W. KRUGER
Name: Logan W. Kruger
Title:
Chief Executive Officer
(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 registrants
disclosure controls and procedures and presented in this report
the Companys 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
registrants internal control over financial reporting that
occurred during the registrants most recent fiscal quarter
(the registrants fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably
likely to materially affect, the registrants internal
control over financial reporting; and
(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
registrants 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
registrants internal control over financial reporting.
/s/
MICHAEL A. BLESS
Name: Michael A. Bless
Title:
Executive Vice President and
Chief Financial Officer
/s/ Logan W. Kruger | |
|
|
By: Logan W. Kruger | |
Title: Chief Executive Officer |
/s/ Michael A. Bless | |
|
|
By: Michael A. Bless | |
Title: Chief Financial Officer |