Delaware
(State
or other Jurisdiction of Incorporation or Organization)
|
13-3070826
(IRS
Employer Identification No.)
|
2511
Garden Road
Building
A, Suite 200
Monterey,
California
(Address
of principal executive offices)
|
93940
(Zip
Code)
|
Large
Accelerated Filer
|
x
|
Accelerated
Filer
|
o
|
Non-Accelerated
Filer
(Do
not check if a smaller reporting company)
|
o
|
Smaller
Reporting Company
|
o
|
Page
|
|
PART
I – FINANCIAL INFORMATION
|
|
PART
II. OTHER INFORMATION
|
|
CENTURY
ALUMINUM COMPANY
|
||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
(Dollars
in thousands, except share data)
|
||||||||
(Unaudited)
|
||||||||
March
31,
|
December
31,
|
|||||||
2009
|
2008
|
|||||||
ASSETS
|
||||||||
Cash
|
$ | 267,492 | $ | 129,400 | ||||
Restricted
cash
|
865 | 865 | ||||||
Short-term
investments
|
— | 13,686 | ||||||
Accounts
receivable — net
|
34,517 | 60,859 | ||||||
Due
from affiliates
|
12,158 | 39,062 | ||||||
Inventories
|
112,753 | 138,111 | ||||||
Prepaid
and other current assets
|
23,557 | 99,861 | ||||||
Deferred
taxes — current portion
|
— | 32,290 | ||||||
Total
current assets
|
451,342 | 514,134 | ||||||
Property,
plant and equipment — net
|
1,329,956 | 1,340,037 | ||||||
Intangible
asset — net
|
28,490 | 32,527 | ||||||
Due
from affiliates – less current portion
|
7,599 | 7,599 | ||||||
Other
assets
|
160,642 | 141,061 | ||||||
TOTAL
|
$ | 1,978,029 | $ | 2,035,358 | ||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||
LIABILITIES:
|
||||||||
Accounts
payable, trade
|
$ | 80,189 | $ | 102,143 | ||||
Due
to affiliates
|
62,920 | 70,957 | ||||||
Accrued
and other current liabilities
|
64,172 | 58,777 | ||||||
Accrued
employee benefits costs — current portion
|
12,070 | 12,070 | ||||||
Convertible
senior notes
|
154,691 | 152,700 | ||||||
Industrial
revenue bonds
|
7,815 | 7,815 | ||||||
Total
current liabilities
|
381,857 | 404,462 | ||||||
Senior
unsecured notes payable
|
250,000 | 250,000 | ||||||
Revolving
credit facility
|
— | 25,000 | ||||||
Accrued
pension benefits costs — less current portion
|
49,336 | 50,008 | ||||||
Accrued
postretirement benefits costs — less
current portion
|
180,464 | 219,539 | ||||||
Other
liabilities
|
42,023 | 33,464 | ||||||
Deferred
taxes
|
65,443 | 71,805 | ||||||
Total
noncurrent liabilities
|
587,266 | 649,816 | ||||||
CONTINGENCIES
AND COMMITMENTS (NOTE 13)
|
||||||||
SHAREHOLDERS’
EQUITY:
|
||||||||
Preferred
stock (one cent par value, 5,000,000 shares authorized; 153,555 and
155,787 shares issued and outstanding at March 31, 2009 and December 31,
2008, respectively)
|
2 | 2 | ||||||
Common
stock (one cent par value, 100,000,000 shares authorized; 74,139,488 and
49,052,692 shares issued and outstanding at March 31, 2009 and December
31, 2008, respectively)
|
741 | 491 | ||||||
Additional
paid-in capital
|
2,377,310 | 2,272,128 | ||||||
Accumulated
other comprehensive loss
|
(100,190 | ) | (137,208 | ) | ||||
Accumulated
deficit
|
(1,268,957 | ) | (1,154,333 | ) | ||||
Total
shareholders’ equity
|
1,008,906 | 981,080 | ||||||
TOTAL
|
$ | 1,978,029 | $ | 2,035,358 |
CENTURY
ALUMINUM COMPANY
|
||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
||||||||
(Dollars
in thousands, except per share amounts)
|
||||||||
(Unaudited)
|
||||||||
Three
months ended March 31,
|
||||||||
2009
|
2008
|
|||||||
NET
SALES:
|
||||||||
Third-party
customers
|
$ | 170,414 | $ | 356,893 | ||||
Related
parties
|
54,173 | 114,249 | ||||||
224,587 | 471,142 | |||||||
Cost
of goods sold
|
296,948 | 375,147 | ||||||
Gross
profit (loss)
|
(72,361 | ) | 95,995 | |||||
Other
operating expenses
|
24,332 | — | ||||||
Selling,
general and administrative expenses
|
10,120 | 18,866 | ||||||
Operating
income (loss)
|
(106,813 | ) | 77,129 | |||||
Interest
expense
|
(8,043 | ) | (8,032 | ) | ||||
Interest
income
|
725 | 2,523 | ||||||
Interest
income – affiliates
|
142 | — | ||||||
Net
loss on forward contracts
|
(3,602 | ) | (448,308 | ) | ||||
Other
expense - net
|
(242 | ) | (533 | ) | ||||
Loss
before income taxes and equity in earnings of joint
ventures
|
(117,833 | ) | (377,221 | ) | ||||
Income
tax benefit
|
4,096 | 138,892 | ||||||
Loss
before equity in earnings of joint ventures
|
(113,737 | ) | (238,329 | ) | ||||
Equity
in (losses) earnings of joint ventures
|
(887 | ) | 4,393 | |||||
Net
loss
|
$ | (114,624 | ) | $ | (233,936 | ) | ||
LOSS
PER COMMON SHARE:
|
||||||||
Basic
and Diluted
|
$ | (1.77 | ) | $ | (5.70 | ) | ||
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING:
|
||||||||
Basic
and Diluted
|
64,608 | 41,040 |
CENTURY
ALUMINUM COMPANY
|
||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
(Dollars
in thousands)
|
||||||||
(Unaudited)
|
||||||||
Three
months ended March 31,
|
||||||||
2009
|
2008
|
|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net
loss
|
$ | (114,624 | ) | $ | (233,936 | ) | ||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||
Unrealized
net loss on forward contracts
|
1,817 | 395,930 | ||||||
Accrued
plant curtailment costs
|
18,235 | — | ||||||
Depreciation
and amortization
|
20,845 | 20,785 | ||||||
Lower
of cost or market inventory adjustment
|
2,271 | — | ||||||
Deferred
income taxes
|
25,548 | (144,331 | ) | |||||
Pension
and other post retirement benefits
|
4,112 | 4,177 | ||||||
Stock-based
compensation
|
(90 | ) | 8,470 | |||||
Excess
tax benefits from share-based compensation
|
— | (499 | ) | |||||
Undistributed
losses (earnings) of joint ventures
|
887 | (4,393 | ) | |||||
Changes
in operating assets and liabilities:
|
||||||||
Accounts
receivable – net
|
26,342 | (6,356 | ) | |||||
Purchase
of short-term trading securities
|
— | (108,536 | ) | |||||
Sale
of short-term trading securities
|
13,686 | 127,450 | ||||||
Due
from affiliates
|
26,904 | (8,513 | ) | |||||
Inventories
|
4,761 | (12,802 | ) | |||||
Prepaid
and other current assets
|
74,187 | 2,710 | ||||||
Accounts
payable, trade
|
(12,201 | ) | 12,797 | |||||
Due
to affiliates
|
(8,037 | ) | 24,542 | |||||
Accrued
and other current liabilities
|
(9,887 | ) | (18,974 | ) | ||||
Other
– net
|
(20 | ) | 329 | |||||
Net
cash provided by operating activities
|
74,736 | 58,850 | ||||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase
of property, plant and equipment
|
(9,184 | ) | (8,915 | ) | ||||
Nordural
expansion
|
(6,501 | ) | (7,389 | ) | ||||
Net
cash used in investing activities
|
(15,685 | ) | (16,304 | ) | ||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayments
under revolving credit facility
|
(25,000 | ) | — | |||||
Excess
tax benefits from shared-based compensation
|
— | 499 | ||||||
Issuance
of common stock – net of issuance costs
|
104,041 | 1,543 | ||||||
Net
cash provided by financing activities
|
79,041 | 2,042 | ||||||
NET
CHANGE IN CASH
|
138,092 | 44,588 | ||||||
Cash,
beginning of the period
|
129,400 | 60,962 | ||||||
Cash,
end of the period
|
$ | 267,492 | $ | 105,550 |
1.
|
2.
|
Management’s
Plans
|
3.
|
FSP
APB 14-1 Adoption
|
March
31, 2009
|
December
31, 2008
|
|||||||
Principal
of the liability component of 1.75% convertible senior
notes
|
$ | 175,000 | $ | 175,000 | ||||
Unamortized
debt discount
|
(20,309 | ) | (22,300 | ) | ||||
Net
carrying amount of liability component of 1.75% convertible senior
notes
|
$ | 154,691 | $ | 152,700 | ||||
Net
carrying amount of equity component of 1.75% convertible senior notes (net
of $18,261 taxes and $1,799 issuance costs)
|
$ | 32,114 | $ | 32,114 |
Interest
expense related to the 1.75% convertible senior notes:
|
||||||||
Three
months ended
March 31,
|
||||||||
2009
|
2008
|
|||||||
Contractual
interest coupon
|
$ | 766 | $ | 766 | ||||
Amortization
of the debt discount on the liability component
|
1,990 | 1,853 | ||||||
Total
|
$ | 2,756 | $ | 2,619 | ||||
Effective
interest rate for the liability component for the period
|
6.30 | % | 5.99 | % |
Nine
months ending December 31, 2009
|
2010
|
2011
|
||||||||||
Estimated
debt discount amortization expense
|
$ | 6,163 | $ | 8,755 | $ | 5,391 |
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||||||
December
31, 2008
|
||||||||||||
As
Reported
|
Effect
of change
|
As
Adjusted
|
||||||||||
ASSETS
|
||||||||||||
Total
current assets
|
$ | 514,134 | $ | — | $ | 514,134 | ||||||
Property,
plant and equipment — net
|
1,340,037 | — | 1,340,037 | |||||||||
Intangible
asset — net
|
32,527 | — | 32,527 | |||||||||
Due
from affiliates – less current portion
|
7,599 | — | 7,599 | |||||||||
Other
assets
|
141,802 | (741 | ) | 141,061 | ||||||||
TOTAL
|
$ | 2,036,099 | $ | (741 | ) | $ | 2,035,358 | |||||
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
||||||||||||
LIABILITIES:
|
||||||||||||
Accounts
payable, trade
|
$ | 102,143 | $ | — | $ | 102,143 | ||||||
Due
to affiliates
|
70,957 | — | 70,957 | |||||||||
Accrued
and other current liabilities
|
58,777 | — | 58,777 | |||||||||
Accrued
employee benefits costs — current portion
|
12,070 | — | 12,070 | |||||||||
Convertible
senior notes
|
175,000 | (22,300 | ) | 152,700 | ||||||||
Industrial
revenue bonds
|
7,815 | — | 7,815 | |||||||||
Total
current liabilities
|
426,762 | (22,300 | ) | 404,462 | ||||||||
Total
noncurrent liabilities
|
649,816 | — | 649,816 | |||||||||
SHAREHOLDERS’
EQUITY:
|
||||||||||||
Preferred
stock
|
2 | — | 2 | |||||||||
Common
stock
|
491 | — | 491 | |||||||||
Additional
paid-in capital
|
2,240,014 | 32,114 | 2,272,128 | |||||||||
Accumulated
other comprehensive loss
|
(137,208 | ) | — | (137,208 | ) | |||||||
Accumulated
deficit
|
(1,143,778 | ) | (10,555 | ) | (1,154,333 | ) | ||||||
Total
shareholders’ equity
|
959,521 | 21,559 | 981,080 | |||||||||
TOTAL
|
$ | 2,036,099 | $ | (741 | ) | $ | 2,035,358 |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
||||||||||||
Three
months ended March 31, 2008
|
||||||||||||
As
Reported
|
Effect
of change
|
As
Adjusted
|
||||||||||
Net
Sales
|
$ | 471,142 | $ | — | $ | 471,142 | ||||||
Cost
of goods sold
|
375,147 | — | 375,147 | |||||||||
Gross
profit
|
95,995 | — | 95,995 | |||||||||
Selling,
general and administrative expenses
|
18,866 | — | 18,866 | |||||||||
Operating
income
|
77,129 | — | 77,129 | |||||||||
Interest
expense
|
(6,243 | ) | (1,789 | ) | (8,032 | ) | ||||||
Interest
income
|
2,523 | — | 2,523 | |||||||||
Net
loss on forward contracts
|
(448,308 | ) | — | (448,308 | ) | |||||||
Other
expense - net
|
(533 | ) | — | (533 | ) | |||||||
Loss
before income taxes and equity in earnings of joint
ventures
|
(375,432 | ) | (1,789 | ) | (377,221 | ) | ||||||
Income
tax benefit
|
138,243 | 649 | 138,892 | |||||||||
Loss
before equity in earnings of joint ventures
|
(237,189 | ) | (1,140 | ) | (238,329 | ) | ||||||
Equity
in earnings of joint ventures
|
4,393 | — | 4,393 | |||||||||
Net
loss
|
$ | (232,796 | ) | $ | (1,140 | ) | $ | (233,936 | ) | |||
LOSS
PER COMMON SHARE:
|
||||||||||||
Basic
and Diluted
|
$ | (5.67 | ) | $ | (0.03 | ) | $ | (5.70 | ) | |||
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING:
|
||||||||||||
Basic
and Diluted (in thousands)
|
41,040 | — | 41,040 |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||||||
Three
months ended March 31, 2008
|
||||||||||||
As
Reported
|
Effect
of change
|
As
Adjusted
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||
Net
loss
|
$ | (232,796 | ) | $ | (1,140 | ) | $ | (233,936 | ) | |||
Adjustments
to reconcile net loss to net cash provided by operating
activities:
|
||||||||||||
Unrealized
net loss on forward contracts
|
395,930 | — | 395,930 | |||||||||
Depreciation
and amortization
|
20,785 | — | 20,785 | |||||||||
Deferred
income taxes
|
(143,682 | ) | (649 | ) | (144,331 | ) | ||||||
Pension
and other post retirement benefits
|
4,177 | — | 4,177 | |||||||||
Stock-based
compensation
|
8,470 | — | 8,470 | |||||||||
Excess
tax benefits from share-based compensation
|
(499 | ) | — | (499 | ) | |||||||
Undistributed
earnings of joint ventures
|
(4,393 | ) | — | (4,393 | ) | |||||||
Changes
in operating assets and liabilities:
|
||||||||||||
Accounts
receivable – net
|
(6,356 | ) | — | (6,356 | ) | |||||||
Purchase
of short-term trading securities
|
(108,536 | ) | — | (108,536 | ) | |||||||
Sale
of short-term trading securities
|
127,450 | — | 127,450 | |||||||||
Due
from affiliates
|
(8,513 | ) | — | (8,513 | ) | |||||||
Inventories
|
(12,802 | ) | — | (12,802 | ) | |||||||
Prepaid
and other current assets
|
2,710 | — | 2,710 | |||||||||
Accounts
payable, trade
|
12,797 | — | 12,797 | |||||||||
Due
to affiliates
|
24,542 | — | 24,542 | |||||||||
Accrued
and other current liabilities
|
(18,974 | ) | — | (18,974 | ) | |||||||
Other
– net
|
(1,460 | ) | 1,789 | 329 | ||||||||
Net
cash provided by operating activities
|
58,850 | — | 58,850 | |||||||||
Net
cash used in investing activities
|
(16,304 | ) | — | (16,304 | ) | |||||||
Net
cash provided by financing activities
|
2,042 | — | 2,042 | |||||||||
NET
CHANGE IN CASH
|
44,588 | — | 44,588 | |||||||||
Cash,
beginning of the period
|
60,962 | — | 60,962 | |||||||||
Cash,
end of the period
|
$ | 105,550 | $ | — | $ | 105,550 |
4.
|
Curtailment
of Operations – Ravenswood and
Hawesville
|
Three
months ended
|
||||
March
31, 2009
|
||||
Severance/employee-related
cost
|
$ | 24,590 | ||
Alumina
contract – spot sales losses
|
3,331 | |||
Power/other
contract termination costs
|
6,332 | |||
Ongoing
site costs
|
1,589 | |||
Gross
expense
|
35,842 | |||
Pension
plan curtailment adjustment
|
2,483 | |||
OPEB
plan curtailment adjustment
|
(13,993 | ) | ||
Net
expense
|
$ | 24,332 |
Total
gross cash expenditure forecast
|
Approximate
cash payments through March 31, 2009
|
|||||||
Curtailment
of operations at Ravenswood and Kentucky (24 months)
|
$ | 33,000 | $ | 4,450 | ||||
Ongoing
idling costs at Ravenswood (24 months)
|
$ | 32,000 | $ | 500 | ||||
Contract
termination costs – alumina purchase contract (1)
|
$ | 9,000 | $ | 2,750 |
(1)
|
This
estimate is based on actual losses during the first quarter and $6,000 in
future payments to St. Ann Bauxite Ltd. in compensation for
the reduced bauxite sales related to alumina and bauxite contract
amendments. See Note 21 Subsequent Events for additional
information about the alumina and bauxite contract
amendments.
|
5.
|
Equity
Offering
|
6.
|
Fair
Value Measurements and Derivative
Instruments
|
Fair
Value of Derivative Assets and Liabilities
|
|||||||||
Balance
sheet location
|
March
31, 2009
|
December
31, 2008
|
|||||||
DERIVATIVE
ASSETS:
|
|||||||||
Power
contract
|
Prepaid
and other assets
|
$ | 85 | $ | 2,202 | ||||
TOTAL
DERIVATIVE ASSETS
|
85 | 2,202 | |||||||
DERIVATIVE
LIABILITIES:
|
|||||||||
Natural
gas forward financial contracts
|
Accrued
and other current liabilities
|
$ | (6,208 | ) | $ | (10,130 | ) | ||
Aluminum
sales premium contracts – current portion
|
Accrued
and other current liabilities
|
(932 | ) | (1,256 | ) | ||||
Aluminum
sales premium contracts – less current portion
|
Other
liabilities
|
$ | (492 | ) | (503 | ) | |||
TOTAL
DERIVATIVE LIABILITIES
|
$ | (7,632 | ) | (11,889 | ) |
Derivatives
in SFAS 133 Cash Flow Hedging Relationships:
|
|||||||||||||||||
Three
months ended March 31, 2009
|
|||||||||||||||||
Amount
of loss recognized in OCI on derivative, net of tax (effective
portion)
|
Loss
reclassified from OCI to income on derivatives (effective
portion)
|
Loss
recognized in income on Derivative (ineffective portion)
|
|||||||||||||||
Amount
|
Location
|
Amount
|
Location
|
Amount
|
|||||||||||||
Natural
gas forward financial contracts
|
$ | (6,208 | ) |
Cost
of goods sold
|
$ | (8,767 | ) | — | |||||||||
Foreign
currency (1)
|
$ | (4,110 | ) |
Cost
of goods sold
|
$ | (2,526 | ) |
Net
loss on forward contracts
|
$ | (1,607 | ) |
(1)
|
We
have no foreign currency forwards or options outstanding at March 31, 2009
or December 31, 2008. We settled our foreign currency forward
contracts in October 2008.
|
March
31, 2009
|
December
31, 2008
|
|
Natural
gas forward financial contracts (thousands of MMBTU)
|
1,730
|
3,340
|
Derivatives
Not designated as Hedging Instruments under SFAS 133:
|
|||||
Three
months ended March 31, 2009
|
|||||
Gain
(loss) recognized in income on derivative
|
|||||
Location
|
Amount
|
||||
Power
contracts
|
Net
loss on forward contracts
|
$ | (2,117 | ) | |
Aluminum
sales premium contracts
|
Related
party sales
|
$ | 804 | ||
Aluminum
sales premium contracts
|
Net
loss on forward contracts
|
$ | 122 |
March
31, 2009
|
December
31, 2008
|
|||||||
Power
contract (in megawatt hours) (1)
|
3,931 | 1,066,000 | ||||||
Aluminum
sales contract premiums (pounds of primary aluminum) (2)
|
297,278,000 | 335,102,000 |
(1)
|
We
mark this contract to market based on our expected usage during the
remaining term of the contract. Our expected usage at March 31,
2009 reflects the curtailment of operations at Ravenswood in February
2009.
|
(2)
|
Represents
the remaining physical deliveries under our Glencore Metal Agreements I
and II.
|
Recurring
Fair Value Measurements
|
As
of March 31, 2009
|
|||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
ASSETS:
|
||||||||||||||||
Derivative
assets
|
$ | — | $ | — | $ | 85 | $ | 85 | ||||||||
LIABILITIES:
|
||||||||||||||||
Derivative
liabilities
|
$ | (6,208 | ) | $ | — | $ | (1,424 | ) | $ | (7,632 | ) |
Recurring
Fair Value Measurements
|
As
of December 31, 2008
|
|||||||||||||||
Level
1
|
Level
2
|
Level
3
|
Total
|
|||||||||||||
ASSETS:
|
||||||||||||||||
Short-term
investments
|
$ | — | $ | 13,686 | $ | — | $ | 13,686 | ||||||||
Derivative
assets
|
— | — | 2,202 | 2,202 | ||||||||||||
TOTAL
|
$ | — | $ | 13,686 | $ | 2,202 | $ | 15,888 | ||||||||
LIABILITIES:
|
||||||||||||||||
Derivative
liabilities
|
$ | (10,130 | ) | $ | — | $ | (1,759 | ) | $ | (11,889 | ) |
Change
in Level 3 Fair Value Measurements during the three months ended March
31,
|
||||||||
Derivative
liabilities/assets
|
||||||||
2009
|
2008
|
|||||||
Beginning
balance January 1,
|
$ | 443 | $ | (1,070,290 | ) | |||
Total
loss (realized/unrealized) included in earnings
|
(1,946 | ) | (448,238 | ) | ||||
Settlements
|
164 | 41,415 | ||||||
Ending
balance, March 31,
|
$ | (1,339 | ) | $ | (1,477,113 | ) | ||
Amount
of total loss included in earnings attributable to the change in
unrealized losses relating to assets and liabilities held at March
31,
|
$ | (1,770 | ) | $ | (396,006 | ) |
7.
|
Earnings
Per Share
|
For
the three months ended March 31,
|
||||||||||||
2009
|
2008
|
|||||||||||
Loss
|
Shares
(000)
|
Per-Share
|
Loss
|
Shares
(000)
|
Per-Share
|
|||||||
Net
loss
|
$ | (114,624 | ) | $ | (233,936 | ) | ||||||
Amount
allocated to common shareholders (1)
|
100 | % | 100 | % | ||||||||
Basic
and Diluted EPS:
|
||||||||||||
Loss
allocable to common shareholders
|
$ | (114,624 | ) |
64,608
|
$(1.77)
|
$ | (233,936 | ) |
41,040
|
$(5.70)
|
(1)
|
We
have not allocated the net loss allocable to common shareholders between
common and preferred shareholders, as the holders of our preferred shares
do not have a contractual obligation to share in the loss. For
the three months ended March 31, 2008, there was no preferred stock
outstanding.
|
8.
|
Shareholders’
Equity
|
Automatic
conversion of Series A Convertible
Preferred Stock during the period:
|
Series A
Convertible Preferred Stock
|
Shares
of common stock issued upon conversion
|
||||||
Year
ended December 31, 2008
|
4,213 | 421,282 | ||||||
Three
months ended March 31, 2009
|
2,232 | 223,252 | ||||||
Total
preferred stock conversions
|
6,445 | 644,534 |
9.
|
Income
Taxes
|
10.
|
Inventories
|
March
31, 2009
|
December
31, 2008
|
|||||||
Raw
materials
|
$ | 7,150 | $ | 19,664 | ||||
Work-in-process
|
11,764 | 16,133 | ||||||
Finished
goods
|
15,291 | 8,203 | ||||||
Operating
and other supplies
|
78,548 | 94,111 | ||||||
Inventories
|
$ | 112,753 | $ | 138,111 |
11.
|
Goodwill
and Intangible Asset
|
12.
|
Debt
|
March
31, 2009
|
December
31, 2008
|
|||||||
Debt
classified as current liabilities:
|
||||||||
1.75%
convertible senior notes due 2024, interest payable semiannually, net of
debt discount of $20,309 and $22,300, respectively
(1)(2)(3)(4)
|
$ | 154,691 | $ | 152,700 | ||||
Hancock
County industrial revenue bonds due 2028, interest payable quarterly
(variable interest rates (not to exceed 12%))(1)
|
7,815 | 7,815 | ||||||
Debt
classified as non-current liabilities:
|
||||||||
7.5%
senior unsecured notes payable due 2014, interest payable semiannually
(3)(5)
|
250,000 | 250,000 | ||||||
Revolving
credit facility (6)
|
— | 25,000 | ||||||
Total
Debt
|
$ | 412,506 | $ | 435,515 |
(1)
|
The
1.75% convertible senior notes are classified as current because they are
convertible at any time by the holder. 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
IRB interest rate at March 31, 2009 was 0.84%.
|
(2)
|
The
1.75% convertible senior 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 senior 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 1.75%
convertible senior note, the holder of such convertible note shall receive
cash up to the principal amount of the 1.75% convertible senior note
and, at our election, either cash or Century common stock, or a
combination thereof, for the 1.75% convertible senior notes conversion
value in excess of such principal amount, if any. We may redeem
some or all of the notes on or after August 6, 2009 at a price equal
to 100% of the principal amount of the notes being redeemed, plus accrued
and unpaid interest, if any. Holders of the 1.75% convertible
senior notes may require us to purchase for cash all or part of the notes
on each of August 1, 2011, August 1, 2014 and August 1,
2019 at a price equal to 100% of the principal amount of the notes being
purchased, plus accrued and unpaid interest, if any.
|
(3)
|
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. 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.
|
(4)
|
Amounts
reflect the adoption and retrospective application of FSP APB 14-1 as of
January 1, 2009. This pronouncement changes the accounting
treatment for certain convertible debt instruments requiring the
segregation of these instruments into a liability and equity
component. These amounts represent the fair value of the
liability component. See Note 3 Adoption of FSP APB 14-1 for
additional information.
|
(5)
|
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
principal amount, plus accrued and unpaid interest, beginning on August
15, 2012.
|
(6)
|
Borrowings
under the revolving line of credit are, at our option, at the LIBOR rate
or bank base rate, plus or minus in each case an applicable
margin. The revolving line of credit is subject to customary
covenants, including limitations on capital expenditures, additional
indebtedness, affiliate transactions, liens, guarantees, mergers and
acquisitions, dividends, distributions, capital redemptions and
investments.
|
13.
|
Contingencies
and Commitments
|
14.
|
Forward
Delivery Contracts and Financial
Instruments
|
Contract
|
Customer
|
Volume
|
Term
|
Pricing
|
Alcan
Metal Agreement (1)(2)
|
Alcan
|
14
million pounds per month
|
Through
August 31, 2009
|
Variable,
based on U.S. Midwest market
|
Glencore
Metal Agreement I (3)
|
Glencore
|
50,000
mtpy
|
Through
December 31, 2009
|
Variable,
LME-based
|
Glencore
Metal Agreement II (4)
|
Glencore
|
20,400
mtpy
|
Through
December 31, 2013
|
Variable,
based on U.S. Midwest market
|
Southwire
Metal Agreement (5)
|
Southwire
|
240
million pounds per year (high conductivity molten
aluminum)
|
Through
March 31, 2011
|
Variable,
based on U.S. Midwest market
|
Southwire
Metal Agreement
|
Southwire
|
60
million pounds per year (standard-grade molten aluminum)
|
Through
December 31, 2010
|
Variable,
based on U.S. Midwest market
|
(1)
|
See
Note 21 Subsequent Events for additional information about this
agreement.
|
(2)
|
A
force majeure event at the Alcan facility reduced our January 2009
shipments under this contract approximately 3 million
pounds.
|
(3)
|
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.
|
(4)
|
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.
|
(5)
|
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
|
Billiton
Tolling Agreement (1)
|
BHP
Billiton
|
130,000
mtpy
|
Through
December 31, 2013
|
LME-based
|
Glencore
Toll Agreement (1)(2)
|
Glencore
|
90,000
mtpy
|
Through
July 31, 2016
|
LME-based
|
Glencore
Toll Agreement (1)
|
Glencore
|
40,000
mtpy
|
Through
December 31, 2014
|
LME-based
|
Billiton
Tolling Agreement
|
BHP
Billiton
|
9,900
mtpy
|
Through
December 31, 2009
|
LME-based
|
(1)
|
Grundartangi’s
tolling revenues include a premium based on the European Union (“EU”)
import duty for primary aluminum. In May 2007, the EU members
reduced the EU import duty for primary aluminum from six percent to three
percent and agreed to review the new duty after three
years. This decrease in the
EU import duty for primary aluminum negatively impacts Grundartangi’s
revenues and further decreases would also have a negative impact on
Grundartangi’s revenues, but it is not expected to have a material
effect on our financial position and results of
operations.
|
(2)
|
Glencore
assigned 50% of its tolling rights under this agreement to Hydro Aluminum
through December 31, 2010.
|
15.
|
Supplemental
Cash Flow Information
|
Three
months ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Cash
paid for:
|
||||||||
Interest
|
$ | 11,068 | $ | 10,981 | ||||
Income
tax
|
106 | 505 | ||||||
Cash
received for:
|
||||||||
Interest
|
1,205 | 1,874 | ||||||
Income
tax refunds (1)
|
90,337 | — |
(1)
|
See
Note 9 Income Taxes for more
information.
|
16.
|
Asset
Retirement Obligations
|
Three
months ended March 31, 2009 |
Year
ended December 31, 2008
|
|||||||
Beginning
balance, ARO liability
|
$ | 14,337 | $ | 13,586 | ||||
Additional
ARO liability incurred
|
224 | 2,140 | ||||||
ARO
liabilities settled
|
(279 | ) | (2,464 | ) | ||||
Accretion
expense
|
278 | 1,075 | ||||||
Ending
balance, ARO liability
|
$ | 14,560 | $ | 14,337 |
17.
|
Comprehensive
Loss and Accumulated Other Comprehensive
Loss
|
Comprehensive
Loss:
|
||||||||
Three
months ended March 31,
|
||||||||
2009
|
2008
|
|||||||
Net
loss
|
$ | (114,624 | ) | $ | (233,936 | ) | ||
Other
comprehensive income (loss):
|
||||||||
Net
unrealized loss on financial instruments, net of $0 and $2 tax of,
respectively
|
(4,847 | ) | (190 | ) | ||||
Net
losses on cash flow hedges reclassified to income, net of tax
of $(2,633) and $(2,528), respectively
|
6,135 | 5,225 | ||||||
Net
loss (gain) on foreign currency cash flow hedges reclassified to income,
net of tax of $(379) and $6, respectively
|
3,754 | (38 | ) | |||||
Defined
benefit pension and other postemployment benefit plans:
|
||||||||
Net
curtailment gain arising during the period, net of $0
tax
|
33,018 | — | ||||||
Amortization
of net loss during the period, net of $(71) and $(300) tax,
respectively
|
290 | 780 | ||||||
Amortization
of prior service cost during the period, net of $396 and $100 tax,
respectively
|
(1,332 | ) | (259 | ) | ||||
Other
Comprehensive Income:
|
37,018 | 5,518 | ||||||
Comprehensive
loss
|
$ | (77,606 | ) | $ | (228,418 | ) |
Components
of Accumulated Other Comprehensive Loss:
|
||||||||
March
31, 2009
|
December
31, 2008
|
|||||||
Unrealized
loss on financial instruments, net of $(82) and $784 tax benefit,
respectively
|
$ | (10,318 | ) | $ | (17,506 | ) | ||
Defined
benefit plan liabilities, net of $24,064 and $26,534 tax benefit,
respectively
|
(84,202 | ) | (114,032 | ) | ||||
Equity
in investee other comprehensive income (1)
|
(5,670 | ) | (5,670 | ) | ||||
$ | (100,190 | ) | $ | (137,208 | ) |
(1)
|
Includes
our equity in the other comprehensive income of Gramercy Alumina LLC, St.
Ann Bauxite Ltd and Mt. Holly Aluminum Company. Their other
comprehensive income consists primarily of pension and other
postretirement benefit obligations.
|
18.
|
Components
of Net Periodic Benefit Cost
|
Pension
Benefits
|
Other
Postretirement Benefits
|
|||||||||||||||
Three
months ended March 31,
|
Three
months ended March 31,
|
|||||||||||||||
2009
|
2008
|
2009
|
2008
|
|||||||||||||
Service
cost
|
$ | 835 | $ | 1,028 | $ | 1,514 | $ | 1,642 | ||||||||
Interest
cost
|
1,603 | 1,551 | 2,985 | 3,104 | ||||||||||||
Expected
return on plan assets
|
(1,104 | ) | (1,893 | ) | — | — | ||||||||||
Amortization
of prior service cost
|
61 | 182 | (422 | ) | (540 | ) | ||||||||||
Amortization
of net loss
|
634 | 128 | 1,095 | 950 | ||||||||||||
Curtailment
|
2,601 | — | (14,312 | ) | — | |||||||||||
Net
periodic benefit cost
|
$ | 4,630 | $ | 996 | $ | (9,140 | ) | $ | 5,156 |
19.
|
Recently
Issued Accounting Standards
|
20.
|
Condensed
Consolidating Financial Information
|
CONDENSED
CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As
of March 31, 2009
|
||||||||||||||||||||
Combined
Guarantor Subsidiaries
|
Combined
Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications
and Eliminations
|
Consolidated
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash
|
$ | — | $ | 76,630 | $ | 190,862 | $ | — | $ | 267,492 | ||||||||||
Restricted
cash
|
865 | — | — | — | 865 | |||||||||||||||
Accounts
receivable — net
|
23,190 | 11,327 | — | — | 34,517 | |||||||||||||||
Due
from affiliates
|
586,916 | 2,009 | 2,452,213 | (3,028,980 | ) | 12,158 | ||||||||||||||
Inventories
|
64,470 | 48,283 | — | — | 112,753 | |||||||||||||||
Prepaid
and other assets
|
334 | 8,864 | 14,359 | — | 23,557 | |||||||||||||||
Deferred
taxes — current portion
|
18,250 | — | — | (18,250 | ) | — | ||||||||||||||
Total
current assets
|
694,025 | 147,113 | 2,657,434 | (3,047,230 | ) | 451,342 | ||||||||||||||
Investment
in subsidiaries
|
38,057 | — | (969,143 | ) | 931,086 | — | ||||||||||||||
Property,
plant and equipment — net
|
420,127 | 908,480 | 1,359 | (10 | ) | 1,329,956 | ||||||||||||||
Intangible
asset — net
|
28,490 | — | — | — | 28,490 | |||||||||||||||
Due
from affiliates — less current portion
|
— | 7,599 | — | — | 7,599 | |||||||||||||||
Deferred
taxes — less current portion
|
— | — | 5,483 | (5,483 | ) | — | ||||||||||||||
Other
assets
|
82,311 | 48,716 | 17,101 | 12,514 | 160,642 | |||||||||||||||
Total
assets
|
$ | 1,263,010 | $ | 1,111,908 | $ | 1,712,234 | $ | (2,109,123 | ) | $ | 1,978,029 | |||||||||
Liabilities
and shareholders’ equity:
|
||||||||||||||||||||
Accounts
payable – trade
|
$ | 40,625 | $ | 38,336 | $ | 1,228 | $ | — | $ | 80,189 | ||||||||||
Due
to affiliates
|
1,822,324 | 42,472 | 149,331 | (1,951,207 | ) | 62,920 | ||||||||||||||
Accrued
and other current liabilities
|
35,462 | 9,683 | 19,027 | — | 64,172 | |||||||||||||||
Accrued
employee benefits costs — current portion
|
10,745 | — | 1,325 | — | 12,070 | |||||||||||||||
Deferred
taxes — current portion
|
— | — | 94,073 | (94,073 | ) | — | ||||||||||||||
Convertible
senior notes
|
— | — | 154,691 | — | 154,691 | |||||||||||||||
Industrial
revenue bonds
|
7,815 | — | — | — | 7,815 | |||||||||||||||
Total
current liabilities
|
1,916,971 | 90,491 | 419,675 | (2,045,280 | ) | 381,857 | ||||||||||||||
Senior
unsecured notes payable
|
— | — | 250,000 | — | 250,000 | |||||||||||||||
Accrued
pension benefit costs — less current portion
|
29,999 | — | 19,337 | — | 49,336 | |||||||||||||||
Accrued
postretirement benefit costs — less current portion
|
178,422 | — | 2,042 | — | 180,464 | |||||||||||||||
Other
liabilities/intercompany loan
|
47,429 | 659,331 | 12,274 | (677,011 | ) | 42,023 | ||||||||||||||
Deferred
taxes — less current portion
|
317,918 | 65,443 | — | (317,918 | ) | 65,443 | ||||||||||||||
Total
noncurrent liabilities
|
573,768 | 724,774 | 283,653 | (994,929 | ) | 587,266 | ||||||||||||||
Shareholders’
equity:
|
||||||||||||||||||||
Preferred
stock
|
— | — | 2 | — | 2 | |||||||||||||||
Common
stock
|
60 | 12 | 741 | (72 | ) | 741 | ||||||||||||||
Additional
paid-in capital
|
297,292 | 144,371 | 2,377,310 | (441,663 | ) | 2,377,310 | ||||||||||||||
Accumulated
other comprehensive income (loss)
|
(113,166 | ) | (2,083 | ) | (100,190 | ) | 115,249 | (100,190 | ) | |||||||||||
Retained
earnings (accumulated deficit)
|
(1,411,915 | ) | 154,343 | (1,268,957 | ) | 1,257,572 | (1,268,957 | ) | ||||||||||||
Total
shareholders’ equity
|
(1,227,729 | ) | 296,643 | 1,008,906 | 931,086 | 1,008,906 | ||||||||||||||
Total
liabilities and shareholders’ equity
|
$ | 1,263,010 | $ | 1,111,908 | $ | 1,712,234 | $ | (2,109,123 | ) | $ | 1,978,029 |
CONDENSED
CONSOLIDATING BALANCE SHEET
|
||||||||||||||||||||
As
of December 31, 2008
|
||||||||||||||||||||
Combined
Guarantor Subsidiaries
|
Combined
Non-Guarantor Subsidiaries
|
The Company
|
Reclassifications
and Eliminations
|
Consolidated
|
||||||||||||||||
Assets:
|
||||||||||||||||||||
Cash
|
$ | — | $ | 71,545 | $ | 57,855 | $ | — | $ | 129,400 | ||||||||||
Restricted
|