Exhibit 99.1
Noranda
Reports Results for Fourth Quarter and Full-Year 2011
Fourth
Quarter 2011 Highlights
• Diluted
EPS was $0.36, compared to $0.59 in fourth quarter 2010; excluding
special items, diluted EPS was $0.01, compared to $0.41 in fourth
quarter 2010
• Total
segment profit was $31.1 million, compared to $71.9 million in fourth
quarter 2010
•
Operating activities generated $30.3 million of cash flow, compared to
$21.0 million in fourth quarter 2010
•
Maintenance events in the Alumina and Bauxite segments had a negative
impact on our results: $16.5 million impact on segment profit and
Adjusted EBITDA, $0.16 impact on diluted EPS and diluted EPS excluding
special items, $0.11 per pound impact on integrated net cash cost for
the quarter
•
Excluding the maintenance events, our baseline net cash cost was $0.72
per pound, compared to $0.65 per pound in fourth quarter 2010
Full-Year
2011 Highlights
• Diluted
EPS was $2.06, compared to $1.27 in 2010; excluding special items,
diluted EPS was $1.05, compared to $0.86 in 2010
• Total
segment profit was $261.9 million, compared to $216.1 million in 2010
•
Operating activities generated $140.6 million of cash flow, compared to
$82.1 million (excluding terminated aluminum hedges) in 2010
•
Maintenance events in the Alumina and Bauxite segments had a negative
impact on our results: $16.5 million impact on segment profit and
Adjusted EBITDA, $0.16 impact on diluted EPS and diluted EPS excluding
special items, $0.03 per pound impact on integrated net cash cost for
the year
•
Excluding the maintenance events, our baseline net cash cost was $0.72
per pound, compared to $0.70 per pound in 2010
FRANKLIN, Tenn.--(BUSINESS WIRE)--February 15, 2012--Noranda Aluminum
Holding Corporation (NYSE: NOR) today reported results for the fourth
quarter and full-year 2011.
"In 2011, Noranda's integrated business platform supported nearly $65
million in sustaining and value-added growth capital expenditures and
the prudent return of $71 million to our shareholders, demonstrating our
ability to generate strong cash flow through the commodity cycle," said
Layle K. (Kip) Smith, Noranda's President and Chief Executive Officer.
"In the fourth quarter, across our business, product demand and raw
material input costs were consistent with expectations. However, in the
Alumina and Bauxite segments, the impact of costs and lost volume from
maintenance events had a $16.5 million negative impact on operating
results. We believe the issues were contained to the fourth quarter, as
production rates following the resumption of normal operations have
equaled or exceeded those prior to the maintenance. Excluding the impact
of these issues, we are pleased to report a baseline net cash cost of
$0.72 per pound for 2011, compared to $0.70 per pound in 2010, driven by
our focus on productivity throughout a volatile and inflationary global
economic environment."
Noranda reported fourth quarter 2011 net income of $24.4 million
($0.36 per diluted share), compared to net income of $34.9 million
($0.59 per diluted share) for fourth quarter 2010. Excluding special
items, Noranda reported fourth quarter 2011 net income of $0.6 million
($0.01 per diluted share), compared to fourth quarter 2010 net income of
$24.0 million ($0.41 per diluted share). Both fourth quarter and
full-year 2011 results included $16.5 million ($0.16 per diluted share)
of costs associated with Alumina and Bauxite maintenance events.
Noranda reported full-year 2011 net income of $140.9 million ($2.06 per
diluted share), compared to net income of $66.9 million ($1.27 per
diluted share) in 2010. Excluding special items, Noranda reported
full-year 2011 net income of $72.0 million ($1.05 per diluted share),
compared to $45.4 million ($0.86 per diluted share) in 2010.
Fourth Quarter 2011 Results
Sales for fourth quarter 2011 were $338.5 million, compared to
$400.4 million in third quarter 2011 and $344.3 million in fourth
quarter 2010.
-
Of the $61.9 million third quarter 2011 to fourth quarter 2011 decline
in sales, $35.9 million was attributable to lower realized prices.
This decrease was driven principally by a decline in the London Metal
Exchange ("LME") aluminum price, which averaged $1.09 in third quarter
2011, compared to $0.95 in fourth quarter 2011. The remaining $26.0
million sequential quarter decline in sales was attributable primarily
to seasonally lower volumes in the Flat-Rolled Products business.
-
Comparing fourth quarter 2011 to fourth quarter 2010, revenues were
essentially flat due to a variety of segment specific shifts in price
and volume. LME prices averaged $0.95 in fourth quarter 2011 compared
to $1.06 in fourth quarter 2010.
Total fourth quarter 2011 segment profit was $31.1 million, compared to
$60.2 million in third quarter 2011 and $71.9 million in fourth
quarter 2010.
-
Fourth quarter 2011 segment profit represents a $29.1 million decrease
compared to third quarter 2011. That decrease resulted from several
factors, most notably a decline in the LME price of aluminum ($29.6
million combined impact for all segments) and seasonally lower volumes
in the Flat-Rolled Products segment ($6.5 million), both of which were
partially offset by the absence of peak power rates at our New Madrid
smelter ($15.1 million) and other decreases in energy costs such as
fuel adjustment charges at New Madrid and natural gas prices across
our businesses ($4.4 million combined favorable impact).
-
In addition to these factors, fourth quarter segment profit was
negatively impacted by $16.5 million from Alumina and Bauxite
maintenance events.
-
Excessive amounts of scale were identified during maintenance of
Gramercy's largest bauxite digester. As a result, the digester
experienced an extended outage and subsequently performed at less
than normal flow rates. Coincident with the extended digester
maintenance, Gramercy experienced the failure of equipment that
screens incoming bauxite and prevents rock and other material from
entering the production process. This failure further restricted
production until the piping and vessels were cleared. We estimate
that the combined impact of these two events was $14.5 million.
-
At St. Ann, the conveyor belt which transports dried bauxite to
the storage dome failed prior to a planned outage. This failure
limited bauxite movement and led to additional costs for demurrage
and re-drying bauxite. We estimate that the impact of this event
was $2.0 million.
-
Fourth quarter 2011 segment profit represents a $40.8 million decrease
compared to fourth quarter 2010. That decrease resulted from several
factors, including a decline in the LME price of aluminum ($23.9
million combined impact for all segments), maintenance events
discussed above ($16.5 million), and higher raw material input costs
($11.7 million) due to increases in carbon-based and chemical products
over the course of 2011.
Full-Year 2011 Results
Sales for 2011 were $1,559.8 million, compared to $1,294.9 million
in 2010. Of the increase in sales, $148.4 million was attributable to
higher realized prices. The LME price of aluminum averaged $1.09 in
2011, compared to $0.99 in 2010. The remaining $116.5 million increase
in sales was attributable primarily to higher volumes in the Bauxite,
Primary Aluminum and Flat-Rolled Products segments.
Total segment profit was $261.9 million in 2011 and $216.1 million
in 2010. The increase in segment profit for 2011 resulted from several
factors, most notably the increase in the LME price of aluminum ($76.9
million combined impact for all segments), and higher volumes. These
favorable impacts were offset in part by increases in carbon-based and
chemical products input costs over the course of 2011 and the impact of
the fourth quarter 2011 maintenance events discussed above.
Segment Information
|
|
|
|
|
Three months ended
|
|
Year ended December 31, 2011
|
|
|
|
December 31,
2011
|
|
September 30,
2011
|
|
December 31,
2010
|
|
|
|
|
|
|
|
2011
|
|
2010
|
|
Key primary aluminum products segment metrics:
|
|
|
|
|
|
|
|
|
|
|
|
Average realized Midwest transaction price (per pound)
|
|
$
|
1.04
|
|
|
$
|
1.18
|
|
|
$
|
1.10
|
|
|
$
|
1.17
|
|
|
$
|
1.04
|
|
|
Integrated net cash cost for primary aluminum products (per pound
shipped) (1)
|
|
$
|
0.83
|
|
|
$
|
0.81
|
|
|
$
|
0.65
|
|
|
$
|
0.75
|
|
|
$
|
0.70
|
|
|
Total primary aluminum shipments (pounds, in millions)
|
|
|
145.8
|
|
|
|
148.6
|
|
|
|
152.5
|
|
|
|
581.4
|
|
|
|
560.5
|
|
|
Segment profit (loss) (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
Bauxite
|
|
$
|
(0.7
|
)
|
|
$
|
6.8
|
|
|
$
|
3.8
|
|
|
$
|
18.5
|
|
|
$
|
23.8
|
|
|
Alumina
|
|
|
4.5
|
|
|
|
23.4
|
|
|
|
26.0
|
|
|
|
78.4
|
|
|
|
61.9
|
|
|
Primary Aluminum
|
|
|
22.7
|
|
|
|
21.8
|
|
|
|
42.1
|
|
|
|
140.3
|
|
|
|
112.2
|
|
|
Flat-Rolled Products
|
|
|
6.5
|
|
|
|
12.1
|
|
|
|
9.8
|
|
|
|
48.3
|
|
|
|
50.0
|
|
|
Corporate
|
|
|
(6.1
|
)
|
|
|
(8.0
|
)
|
|
|
(7.4
|
)
|
|
|
(27.9
|
)
|
|
|
(26.9
|
)
|
|
Eliminations
|
|
|
4.2
|
|
|
|
4.1
|
|
|
|
(2.4
|
)
|
|
|
4.3
|
|
|
|
(4.9
|
)
|
|
Total (1)
|
|
$
|
31.1
|
|
|
$
|
60.2
|
|
|
$
|
71.9
|
|
|
$
|
261.9
|
|
|
$
|
216.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) These results include the $16.5 million negative impact
from the Alumina and Bauxite maintenance events discussed above.
Excluding the impact of these maintenance events, our integrated net
cash cost for primary aluminum was $0.72 per pound for fourth quarter
and full-year 2011.
Bauxite. The Bauxite segment reported a $0.7 million segment loss
in fourth quarter 2011, compared to a $6.8 million profit in third
quarter 2011 and $3.8 million profit in fourth quarter 2010.
-
Compared to third quarter 2011, fourth quarter 2011 segment results
reflected lower bauxite pricing and a decrease in internal shipments,
partially offset by higher sales volume to external customers.
Compared to fourth quarter 2010, fourth quarter 2011 segment profit
reflected the favorable effects of higher third-party sales volumes
offset by lower bauxite pricing and the increase in fuel costs over
the course of 2011.
-
The fourth quarter 2011 Bauxite segment results also reflected $2.0
million of costs and inefficiencies associated with the failure of the
conveyor belt discussed above.
Alumina. The Alumina segment reported a $4.5 million segment
profit in fourth quarter 2011, compared to a $23.4 million profit in
third quarter 2011 and $26.0 million profit in fourth quarter 2010.
-
Compared to third quarter 2011, fourth quarter 2011 Alumina results
reflected unfavorable alumina pricing due to a decline in LME aluminum
prices, partially offset by lower natural gas prices. Compared to
fourth quarter 2010, fourth quarter 2011 Alumina results reflected
unfavorable alumina pricing due to a decline in LME aluminum prices,
and higher prices of raw materials and input costs, partially offset
by lower natural gas prices.
-
Fourth quarter 2011 Alumina segment results also included $14.5
million of costs, inefficiencies, and lost volumes associated with the
Alumina maintenance events described above.
Primary Aluminum. Segment profit in fourth quarter 2011 was $22.7
million, compared to $21.8 million in third quarter 2011 and $42.1
million in fourth quarter 2010.
-
Compared to third quarter 2011, fourth quarter 2011 Primary Aluminum
results were relatively flat, as the absence of peak power rates in
fourth quarter offset the effects of continued declines in LME
aluminum prices. Compared to fourth quarter 2010, fourth quarter 2011
results were negatively impacted by the effects of unfavorable LME
aluminum prices and by higher raw materials costs, particularly
carbon-based products, which rose over the course of 2011.
-
Excluding the impact from the Alumina and Bauxite maintenance events
discussed above, integrated net cash cost of primary aluminum
decreased to $0.72 per pound in fourth quarter 2011 from $0.81 per
pound in third quarter 2011. Third quarter 2011 results reflect the
impact of three full months of peak power rates.
Flat-Rolled Products. Segment profit in fourth quarter 2011 was
$6.5 million, compared to $12.1 million in third quarter 2011, and $9.8
million in fourth quarter 2010, as lower shipment volumes adversely
affected margins on both a per pound and total basis.
-
Shipment volumes for fourth quarter 2011 were consistent with historic
trends and with management expectations.
-
Compared to third quarter 2011 and fourth quarter 2010, stable demand
trends continued across key product groups in the Flat-Rolled Products
segment.
Liquidity
At December 31, 2011, the Company had $42.7 million of cash and cash
equivalents and $213.3 million of available borrowing capacity under its
revolving credit facility.
Operating activities generated $30.3 million of cash in the fourth
quarter 2011, compared to $33.7 million in third quarter 2011, and $21.0
million in fourth quarter 2010.
-
In fourth quarter 2011, the Company reported $23.6 million of Adjusted
EBITDA, which consists of $31.1 million of total segment profit less
$7.5 million of cash payments on natural gas hedges.
-
During fourth quarter 2011, the Company made $19.0 million of interest
and other payments, $19.0 million of income tax payments and generated
$44.8 million from operating working capital.
-
Fourth quarter 2011 capital expenditures totaled $20.5 million,
including $3.2 million related to the $38 million New Madrid capacity
expansion project.
-
During fourth quarter 2011, the Company returned $71.1 million to
shareholders in connection with the $0.03 regular and $1.00
supplemental dividends declared in November 2011.
The Company’s net debt (defined as debt less cash) to book equity ratio
was 1.5 to 1 at December 31, 2011, and its net debt to trailing twelve
month Adjusted EBITDA ratio was 1.2 to 1.
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(dollars in millions, except per share data and where noted)
|
|
(unaudited)
|
|
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Statements of operations data (unaudited):
|
|
|
|
|
|
|
|
|
|
Sales
|
|
338.5
|
|
|
344.3
|
|
|
1,559.8
|
|
|
1,294.9
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
312.7
|
|
|
282.9
|
|
|
1,344.5
|
|
|
1,112.4
|
|
|
Selling, general and administrative expenses
|
|
21.6
|
|
|
22.4
|
|
|
93.9
|
|
|
115.0
|
|
|
Total operating costs and expenses
|
|
334.3
|
|
|
305.3
|
|
|
1,438.4
|
|
|
1,227.4
|
|
|
Operating income
|
|
4.2
|
|
|
39.0
|
|
|
121.4
|
|
|
67.5
|
|
|
Other (income) expense:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
5.1
|
|
|
6.1
|
|
|
21.5
|
|
|
31.1
|
|
|
Gain on hedging activities, net
|
|
(20.8
|
)
|
|
(21.6
|
)
|
|
(86.4
|
)
|
|
(65.6
|
)
|
|
Loss on debt repurchase
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
0.1
|
|
|
Total other income
|
|
(15.7
|
)
|
|
(14.5
|
)
|
|
(64.9
|
)
|
|
(34.4
|
)
|
|
Income before income taxes
|
|
19.9
|
|
|
53.5
|
|
|
186.3
|
|
|
101.9
|
|
|
Income tax expense (benefit)
|
|
(4.5
|
)
|
|
18.6
|
|
|
45.4
|
|
|
35.0
|
|
|
Net income
|
|
24.4
|
|
|
34.9
|
|
|
140.9
|
|
|
66.9
|
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
0.36
|
|
|
0.60
|
|
|
2.10
|
|
|
1.30
|
|
|
Diluted
|
|
0.36
|
|
|
0.59
|
|
|
2.06
|
|
|
1.27
|
|
|
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
67.25
|
|
|
57.91
|
|
|
67.06
|
|
|
51.56
|
|
|
Diluted
|
|
68.44
|
|
|
59.12
|
|
|
68.35
|
|
|
52.80
|
|
|
Cash dividends declared per common share
|
|
1.03
|
|
|
—
|
|
|
1.03
|
|
|
—
|
|
|
Sales by segment:
|
|
|
|
|
|
|
|
|
|
Bauxite
|
|
35.6
|
|
|
29.7
|
|
|
151.0
|
|
|
120.4
|
|
|
Alumina
|
|
85.9
|
|
|
90.3
|
|
|
403.1
|
|
|
365.4
|
|
|
Primary Aluminum
|
|
163.0
|
|
|
177.1
|
|
|
724.1
|
|
|
621.3
|
|
|
Flat Rolled Products
|
|
122.9
|
|
|
121.1
|
|
|
611.2
|
|
|
521.4
|
|
|
Eliminations
|
|
(68.9
|
)
|
|
(73.9
|
)
|
|
(329.6
|
)
|
|
(333.6
|
)
|
|
Total
|
|
338.5
|
|
|
344.3
|
|
|
1,559.8
|
|
|
1,294.9
|
|
|
Segment profit (loss):
|
|
|
|
|
|
|
|
|
|
Bauxite
|
|
(0.7
|
)
|
|
3.8
|
|
|
18.5
|
|
|
23.8
|
|
|
Alumina
|
|
4.5
|
|
|
26.0
|
|
|
78.4
|
|
|
61.9
|
|
|
Primary Aluminum
|
|
22.7
|
|
|
42.1
|
|
|
140.3
|
|
|
112.2
|
|
|
Flat-Rolled Products
|
|
6.5
|
|
|
9.8
|
|
|
48.3
|
|
|
50.0
|
|
|
Corporate
|
|
(6.1
|
)
|
|
(7.4
|
)
|
|
(27.9
|
)
|
|
(26.9
|
)
|
|
Eliminations
|
|
4.2
|
|
|
(2.4
|
)
|
|
4.3
|
|
|
(4.9
|
)
|
|
Total
|
|
31.1
|
|
|
71.9
|
|
|
261.9
|
|
|
216.1
|
|
|
Financial and other data:
|
|
|
|
|
|
|
|
|
|
Average realized Midwest transaction price (per pound)(1)
|
|
1.04
|
|
|
1.10
|
|
|
1.17
|
|
|
1.04
|
|
|
Integrated net cash cost for primary aluminum products (per pound
shipped)(2)
|
|
0.83
|
|
|
0.65
|
|
|
0.75
|
|
|
0.70
|
|
|
Third party shipments:
|
|
|
|
|
|
|
|
|
|
Bauxite (kMts)
|
|
646.0
|
|
|
345.3
|
|
|
2,499.9
|
|
|
1,738.0
|
|
|
Alumina (kMts)
|
|
152.9
|
|
|
176.3
|
|
|
635.1
|
|
|
683.6
|
|
|
Primary Aluminum (pounds, in millions)
|
|
130.0
|
|
|
128.3
|
|
|
513.0
|
|
|
438.8
|
|
|
Flat Rolled Products (pounds, in millions)
|
|
76.3
|
|
|
78.7
|
|
|
362.6
|
|
|
346.4
|
|
|
Intersegment shipments:
|
|
|
|
|
|
|
|
|
|
Bauxite (kMts)
|
|
625.3
|
|
|
645.4
|
|
|
2,643.6
|
|
|
2,565.5
|
|
|
Alumina (kMts)
|
|
106.6
|
|
|
113.4
|
|
|
487.5
|
|
|
467.4
|
|
|
Primary Aluminum (pounds, in millions)
|
|
15.8
|
|
|
24.2
|
|
|
68.4
|
|
|
121.7
|
|
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(in millions, except par value)
|
|
(unaudited)
|
|
|
|
|
|
December 31,
|
|
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
ASSETS
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
Cash and cash equivalents
|
|
42.7
|
|
|
33.8
|
|
|
Accounts receivable, net
|
|
107.6
|
|
|
131.6
|
|
|
Inventories, net
|
|
186.5
|
|
|
201.1
|
|
|
Prepaid expenses
|
|
13.3
|
|
|
12.9
|
|
|
Other current assets
|
|
39.3
|
|
|
19.2
|
|
|
Total current assets
|
|
389.4
|
|
|
398.6
|
|
|
Property, plant and equipment, net
|
|
699.8
|
|
|
719.9
|
|
|
Goodwill
|
|
137.6
|
|
|
137.6
|
|
|
Other intangible assets, net
|
|
67.1
|
|
|
73.0
|
|
|
Other assets
|
|
81.6
|
|
|
85.6
|
|
|
Total assets
|
|
1,375.5
|
|
|
1,414.7
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
Accounts payable
|
|
95.9
|
|
|
85.1
|
|
|
Accrued liabilities
|
|
87.3
|
|
|
65.5
|
|
|
Taxes payable
|
|
2.6
|
|
|
4.8
|
|
|
Derivative liabilities, net
|
|
38.9
|
|
|
23.2
|
|
|
Deferred tax liabilities
|
|
35.9
|
|
|
48.5
|
|
|
Current portion of long-term debt
|
|
24.2
|
|
|
—
|
|
|
Total current liabilities
|
|
284.8
|
|
|
227.1
|
|
|
Long-term debt
|
|
404.3
|
|
|
419.7
|
|
|
Long-term derivative liabilities, net
|
|
0.1
|
|
|
18.4
|
|
|
Pension and other post-retirement liabilities
|
|
175.7
|
|
|
116.0
|
|
|
Other long-term liabilities
|
|
46.2
|
|
|
57.9
|
|
|
Long-term deferred tax liabilities
|
|
202.8
|
|
|
277.9
|
|
|
Common stock subject to redemption (0.2 shares at December 31, 2011
and 2010)
|
|
2.0
|
|
|
2.0
|
|
|
Shareholders’ equity:
|
|
|
|
|
|
Preferred stock (25.0 shares authorized, $0.01 par value; no shares
issued
and outstanding at December 31, 2011 and 2010)
|
|
—
|
|
|
—
|
|
|
Common stock (200.0 shares authorized; $0.01 par value; 67.30
shares
issued and outstanding at December 31, 2011, 66.81
shares issued and
outstanding at December 31, 2010, including
0.2 shares subject to
redemption at December 31, 2011 and 2010)
|
|
0.7
|
|
|
0.7
|
|
|
Capital in excess of par value
|
|
231.9
|
|
|
227.7
|
|
|
Retained earnings (accumulated deficit)
|
|
63.4
|
|
|
(8.2
|
)
|
|
Accumulated other comprehensive income (loss)
|
|
(42.4
|
)
|
|
69.5
|
|
|
Total shareholders’ equity
|
|
253.6
|
|
|
289.7
|
|
|
Non-controlling interest
|
|
6.0
|
|
|
6.0
|
|
|
Total equity
|
|
259.6
|
|
|
295.7
|
|
|
Total liabilities and equity
|
|
1,375.5
|
|
|
1,414.7
|
|
|
|
|
|
|
|
|
|
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
|
|
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Net income
|
|
24.4
|
|
|
34.9
|
|
|
140.9
|
|
|
66.9
|
|
|
Adjustments to reconcile net income to cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
24.6
|
|
|
22.6
|
|
|
97.7
|
|
|
98.7
|
|
|
Non-cash interest expense
|
|
0.7
|
|
|
9.4
|
|
|
11.7
|
|
|
23.7
|
|
|
Last in, first out and lower of cost or market inventory adjustments
|
|
(4.7
|
)
|
|
4.4
|
|
|
12.6
|
|
|
4.1
|
|
|
Loss on disposal of assets
|
|
1.5
|
|
|
0.6
|
|
|
3.3
|
|
|
4.0
|
|
|
Gain on hedging activities, net of cash settlements
|
|
(32.5
|
)
|
|
(32.3
|
)
|
|
(115.6
|
)
|
|
(64.6
|
)
|
|
Settlements from hedge terminations, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164.6
|
|
|
Loss on debt repurchase
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
0.1
|
|
|
Deferred income taxes
|
|
(22.1
|
)
|
|
7.4
|
|
|
(24.4
|
)
|
|
14.8
|
|
|
Stock compensation expense
|
|
0.9
|
|
|
1.7
|
|
|
5.3
|
|
|
5.9
|
|
|
Excess tax benefit related to share-based payment arrangements
|
|
—
|
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
Changes in other long-term assets
|
|
(1.0
|
)
|
|
(1.3
|
)
|
|
(6.7
|
)
|
|
(10.0
|
)
|
|
Changes in pension, other post-retirement liabilities and other
long-term liabilities
|
|
(0.4
|
)
|
|
(13.3
|
)
|
|
(14.3
|
)
|
|
(0.6
|
)
|
|
Changes in current operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
32.4
|
|
|
(16.3
|
)
|
|
24.0
|
|
|
(45.3
|
)
|
|
Inventories, net
|
|
22.2
|
|
|
(11.8
|
)
|
|
—
|
|
|
(25.0
|
)
|
|
Taxes receivable and taxes payable
|
|
(0.1
|
)
|
|
10.7
|
|
|
(1.9
|
)
|
|
5.6
|
|
|
Other current assets
|
|
2.1
|
|
|
(2.3
|
)
|
|
(17.9
|
)
|
|
15.8
|
|
|
Accounts payable
|
|
(9.8
|
)
|
|
10.2
|
|
|
7.2
|
|
|
9.7
|
|
|
Accrued liabilities
|
|
(7.9
|
)
|
|
(4.6
|
)
|
|
19.4
|
|
|
2.5
|
|
|
Cash provided by operating activities
|
|
30.3
|
|
|
21.0
|
|
|
140.6
|
|
|
270.9
|
|
|
INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
(20.5
|
)
|
|
(21.0
|
)
|
|
(64.6
|
)
|
|
(61.3
|
)
|
|
Proceeds from sale of property, plant and equipment
|
|
—
|
|
|
—
|
|
|
2.6
|
|
|
0.2
|
|
|
Cash used in investing activities
|
|
(20.5
|
)
|
|
(21.0
|
)
|
|
(62.0
|
)
|
|
(61.1
|
)
|
|
FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common shares for equity offerings
|
|
—
|
|
|
123.1
|
|
|
—
|
|
|
205.9
|
|
|
Proceeds from issuance of common shares for share-based payment
arrangements
|
|
0.1
|
|
|
|
|
0.7
|
|
|
0.1
|
|
|
Dividends paid
|
|
(69.3
|
)
|
|
—
|
|
|
(69.3
|
)
|
|
—
|
|
|
Distribution to optionholders
|
|
(1.8
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
—
|
|
|
Repayments on revolving credit facility
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(215.9
|
)
|
|
Repayment of long-term debt
|
|
—
|
|
|
(122.3
|
)
|
|
—
|
|
|
(333.3
|
)
|
|
Excess tax benefit related to share-based payment arrangements
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
Cash provided by (used in) financing activities
|
|
(71.0
|
)
|
|
0.8
|
|
|
(69.7
|
)
|
|
(343.2
|
)
|
|
Change in cash and cash equivalents
|
|
(61.2
|
)
|
|
0.8
|
|
|
8.9
|
|
|
(133.4
|
)
|
|
Cash and cash equivalents, beginning of period
|
|
103.9
|
|
|
33.0
|
|
|
33.8
|
|
|
167.2
|
|
|
Cash and cash equivalents, end of period
|
|
42.7
|
|
|
33.8
|
|
|
42.7
|
|
|
33.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
|
|
SEGMENT RESULTS
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Three months ended December 31, 2011
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
|
16.0
|
|
|
52.7
|
|
|
146.9
|
|
|
122.9
|
|
|
—
|
|
|
—
|
|
|
338.5
|
|
|
Intersegment
|
|
19.6
|
|
|
33.2
|
|
|
16.1
|
|
|
—
|
|
|
—
|
|
|
(68.9
|
)
|
|
—
|
|
|
|
|
35.6
|
|
|
85.9
|
|
|
163.0
|
|
|
122.9
|
|
|
—
|
|
|
(68.9
|
)
|
|
338.5
|
|
|
Segment profit (loss)
|
|
(0.7
|
)
|
|
4.5
|
|
|
22.7
|
|
|
6.5
|
|
|
(6.1
|
)
|
|
4.2
|
|
|
31.1
|
|
|
Depreciation and amortization
|
|
3.2
|
|
|
5.3
|
|
|
11.2
|
|
|
4.5
|
|
|
0.4
|
|
|
—
|
|
|
24.6
|
|
|
Capital expenditures
|
|
1.5
|
|
|
4.6
|
|
|
11.6
|
|
|
2.7
|
|
|
0.1
|
|
|
—
|
|
|
20.5
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2011
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Segment profit (loss)
|
|
(0.7
|
)
|
|
4.5
|
|
|
22.7
|
|
|
6.5
|
|
|
(6.1
|
)
|
|
4.2
|
|
|
31.1
|
|
|
Depreciation and amortization
|
|
(3.2
|
)
|
|
(5.3
|
)
|
|
(11.2
|
)
|
|
(4.5
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(24.6
|
)
|
|
Last in, first out and lower of cost or market inventory adjustments
|
|
—
|
|
|
—
|
|
|
4.9
|
|
|
(1.1
|
)
|
|
—
|
|
|
0.9
|
|
|
4.7
|
|
|
Loss on disposal of asset
|
|
—
|
|
|
—
|
|
|
(1.2
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
(1.5
|
)
|
|
Non-cash pension, accretion and stock compensation
|
|
—
|
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(2.8
|
)
|
|
Restructuring, relocation and severance
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
|
Consulting and sponsor fees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|
—
|
|
|
(0.5
|
)
|
|
Cash settlements on hedging transactions
|
|
—
|
|
|
—
|
|
|
0.4
|
|
|
2.0
|
|
|
—
|
|
|
—
|
|
|
2.4
|
|
|
Other, net
|
|
(0.1
|
)
|
|
(0.4
|
)
|
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
(3.4
|
)
|
|
(3.5
|
)
|
|
Operating income (loss)
|
|
(4.0
|
)
|
|
(1.4
|
)
|
|
14.6
|
|
|
1.1
|
|
|
(7.8
|
)
|
|
1.7
|
|
|
4.2
|
|
|
Interest expense, net
|
|
|
|
5.1
|
|
|
Gain on hedging activities, net
|
|
|
|
(20.8
|
)
|
|
Total other income, net
|
|
|
|
(15.7
|
)
|
|
Income before income taxes
|
|
|
|
19.9
|
|
|
|
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
|
|
SEGMENT RESULTS
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Three months ended December 31, 2010
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
|
12.2
|
|
|
60.9
|
|
|
150.1
|
|
|
121.1
|
|
|
—
|
|
|
—
|
|
|
344.3
|
|
|
Intersegment
|
|
17.5
|
|
|
29.4
|
|
|
27.0
|
|
|
—
|
|
|
—
|
|
|
(73.9
|
)
|
|
—
|
|
|
|
|
29.7
|
|
|
90.3
|
|
|
177.1
|
|
|
121.1
|
|
|
—
|
|
|
(73.9
|
)
|
|
344.3
|
|
|
Segment profit (loss)
|
|
3.8
|
|
|
26.0
|
|
|
42.1
|
|
|
9.8
|
|
|
(7.4
|
)
|
|
(2.4
|
)
|
|
71.9
|
|
|
Depreciation and amortization
|
|
1.5
|
|
|
3.9
|
|
|
11.9
|
|
|
5.0
|
|
|
0.3
|
|
|
—
|
|
|
22.6
|
|
|
Capital expenditures
|
|
2.3
|
|
|
4.6
|
|
|
6.4
|
|
|
7.5
|
|
|
0.2
|
|
|
—
|
|
|
21.0
|
|
|
|
|
|
|
|
|
Three months ended December 31, 2010
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Segment profit (loss)
|
|
3.8
|
|
|
26.0
|
|
|
42.1
|
|
|
9.8
|
|
|
(7.4
|
)
|
|
(2.4
|
)
|
|
71.9
|
|
|
Depreciation and amortization
|
|
(1.5
|
)
|
|
(3.9
|
)
|
|
(11.9
|
)
|
|
(5.0
|
)
|
|
(0.3
|
)
|
|
—
|
|
|
(22.6
|
)
|
|
Last in, first out and lower of cost or market inventory adjustments
|
|
—
|
|
|
—
|
|
|
(5.8
|
)
|
|
2.9
|
|
|
—
|
|
|
(1.5
|
)
|
|
(4.4
|
)
|
|
Loss on disposal of assets
|
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
|
(0.6
|
)
|
|
Non-cash pension, accretion and stock compensation
|
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
|
(1.7
|
)
|
|
—
|
|
|
(3.5
|
)
|
|
Restructuring, relocation and severance
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
(0.1
|
)
|
|
(2.8
|
)
|
|
—
|
|
|
(2.9
|
)
|
|
Cash settlements on hedging transactions
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(1.6
|
)
|
|
—
|
|
|
—
|
|
|
(1.7
|
)
|
|
Other, net
|
|
—
|
|
|
(0.8
|
)
|
|
0.1
|
|
|
0.1
|
|
|
0.7
|
|
|
2.7
|
|
|
2.8
|
|
|
Operating income (loss)
|
|
2.0
|
|
|
21.2
|
|
|
23.1
|
|
|
5.4
|
|
|
(11.5
|
)
|
|
(1.2
|
)
|
|
39.0
|
|
|
Interest expense, net
|
|
|
|
6.1
|
|
|
Gain on hedging activities, net
|
|
|
|
(21.6
|
)
|
|
Loss on debt repurchase
|
|
|
|
1.0
|
|
|
Total other income, net
|
|
|
|
(14.5
|
)
|
|
Income before income taxes
|
|
|
|
53.5
|
|
|
|
|
|
|
|
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
|
|
SEGMENT RESULTS
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Year ended December 31, 2011
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
|
68.0
|
|
|
234.9
|
|
|
645.7
|
|
|
611.2
|
|
|
—
|
|
|
—
|
|
|
1,559.8
|
|
|
Intersegment
|
|
83.0
|
|
|
168.2
|
|
|
78.4
|
|
|
—
|
|
|
—
|
|
|
(329.6
|
)
|
|
—
|
|
|
|
|
151.0
|
|
|
403.1
|
|
|
724.1
|
|
|
611.2
|
|
|
—
|
|
|
(329.6
|
)
|
|
1,559.8
|
|
|
Segment profit (loss)
|
|
18.5
|
|
|
78.4
|
|
|
140.3
|
|
|
48.3
|
|
|
(27.9
|
)
|
|
4.3
|
|
|
261.9
|
|
|
Depreciation and amortization
|
|
10.8
|
|
|
21.0
|
|
|
46.0
|
|
|
18.6
|
|
|
1.3
|
|
|
—
|
|
|
97.7
|
|
|
Capital expenditures
|
|
8.2
|
|
|
14.0
|
|
|
30.3
|
|
|
11.1
|
|
|
1.0
|
|
|
—
|
|
|
64.6
|
|
|
|
|
|
|
|
|
Year ended December 31, 2011
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Segment profit (loss)
|
|
18.5
|
|
|
78.4
|
|
|
140.3
|
|
|
48.3
|
|
|
(27.9
|
)
|
|
4.3
|
|
|
261.9
|
|
|
Depreciation and amortization
|
|
(10.8
|
)
|
|
(21.0
|
)
|
|
(46.0
|
)
|
|
(18.6
|
)
|
|
(1.3
|
)
|
|
—
|
|
|
(97.7
|
)
|
|
Last in, first out and lower of cost or market inventory adjustments
|
|
—
|
|
|
—
|
|
|
(5.5
|
)
|
|
(8.7
|
)
|
|
—
|
|
|
1.6
|
|
|
(12.6
|
)
|
|
Gain (loss) on disposal of assets
|
|
0.7
|
|
|
—
|
|
|
(2.8
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
Non-cash pension, accretion and stock compensation
|
|
(0.4
|
)
|
|
(0.6
|
)
|
|
(2.9
|
)
|
|
(2.5
|
)
|
|
(6.0
|
)
|
|
—
|
|
|
(12.4
|
)
|
|
Restructuring, relocation and severance
|
|
—
|
|
|
(0.2
|
)
|
|
(1.2
|
)
|
|
(0.9
|
)
|
|
(0.6
|
)
|
|
—
|
|
|
(2.9
|
)
|
|
Consulting and sponsor fees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
(2.2
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
Cash settlements on hedging transactions
|
|
—
|
|
|
—
|
|
|
0.3
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
Other, net
|
|
|
|
(0.7
|
)
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|
(5.1
|
)
|
|
(9.2
|
)
|
|
Operating income (loss)
|
|
8.0
|
|
|
55.9
|
|
|
82.2
|
|
|
15.9
|
|
|
(41.4
|
)
|
|
0.8
|
|
|
121.4
|
|
|
Interest expense, net
|
|
|
|
21.5
|
|
|
Gain on hedging activities, net
|
|
|
|
(86.4
|
)
|
|
Total other income, net
|
|
|
|
(64.9
|
)
|
|
Income before income taxes
|
|
|
|
186.3
|
|
|
|
|
|
|
|
|
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
|
|
SEGMENT RESULTS
|
|
(in millions)
|
|
(unaudited)
|
|
|
|
|
|
Year ended December 31, 2010
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
External customers
|
|
54.9
|
|
|
222.8
|
|
|
495.9
|
|
|
521.3
|
|
|
—
|
|
|
—
|
|
|
1,294.9
|
|
|
Intersegment
|
|
65.5
|
|
|
142.6
|
|
|
125.4
|
|
|
0.1
|
|
|
—
|
|
|
(333.6
|
)
|
|
—
|
|
|
|
|
120.4
|
|
|
365.4
|
|
|
621.3
|
|
|
521.4
|
|
|
—
|
|
|
(333.6
|
)
|
|
1,294.9
|
|
|
Segment profit (loss)
|
|
23.8
|
|
|
61.9
|
|
|
112.2
|
|
|
50.0
|
|
|
(26.9
|
)
|
|
(4.9
|
)
|
|
216.1
|
|
|
Depreciation and amortization
|
|
9.6
|
|
|
19.3
|
|
|
48.3
|
|
|
20.5
|
|
|
1.0
|
|
|
—
|
|
|
98.7
|
|
|
Capital expenditures
|
|
7.7
|
|
|
11.1
|
|
|
26.4
|
|
|
14.3
|
|
|
1.8
|
|
|
—
|
|
|
61.3
|
|
|
|
|
|
|
|
|
Year ended December 31, 2010
|
|
|
|
Bauxite
|
|
Alumina
|
|
Primary Aluminum
|
|
Flat-Rolled
Products
|
|
Corporate
|
|
Eliminations
|
|
Consolidated
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Segment profit (loss)
|
|
23.8
|
|
|
61.9
|
|
|
112.2
|
|
|
50.0
|
|
|
(26.9
|
)
|
|
(4.9
|
)
|
|
216.1
|
|
|
Depreciation and amortization
|
|
(9.6
|
)
|
|
(19.3
|
)
|
|
(48.3
|
)
|
|
(20.5
|
)
|
|
(1.0
|
)
|
|
—
|
|
|
(98.7
|
)
|
|
Last in, first out and lower of cost or market inventory adjustments
|
|
—
|
|
|
—
|
|
|
(6.1
|
)
|
|
3.7
|
|
|
—
|
|
|
(1.7
|
)
|
|
(4.1
|
)
|
|
Loss on disposal of assets
|
|
—
|
|
|
—
|
|
|
(3.3
|
)
|
|
(0.6
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(4.0
|
)
|
|
Non-cash pension, accretion and stock compensation
|
|
(0.8
|
)
|
|
(1.1
|
)
|
|
(3.3
|
)
|
|
(2.4
|
)
|
|
(7.3
|
)
|
|
—
|
|
|
(14.9
|
)
|
|
Restructuring, relocation and severance
|
|
(3.2
|
)
|
|
(1.5
|
)
|
|
(2.0
|
)
|
|
(1.5
|
)
|
|
(3.7
|
)
|
|
—
|
|
|
(11.9
|
)
|
|
Consulting and sponsor fees
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(18.9
|
)
|
|
—
|
|
|
(18.9
|
)
|
|
Cash settlements on hedging transactions
|
|
—
|
|
|
—
|
|
|
0.1
|
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
(2.4
|
)
|
|
Other, net
|
|
0.1
|
|
|
1.1
|
|
|
(0.1
|
)
|
|
—
|
|
|
0.7
|
|
|
4.5
|
|
|
6.3
|
|
|
Operating income (loss)
|
|
10.3
|
|
|
41.1
|
|
|
49.2
|
|
|
26.2
|
|
|
(57.2
|
)
|
|
(2.1
|
)
|
|
67.5
|
|
|
Interest expense, net
|
|
|
|
31.1
|
|
|
Gain on hedging activities, net
|
|
|
|
(65.6
|
)
|
|
Loss on debt repurchase
|
|
|
|
0.1
|
|
|
Total other income, net
|
|
|
|
(34.4
|
)
|
|
Income before income taxes
|
|
|
|
101.9
|
|
|
|
ADJUSTED EBITDA
(in millions)
(unaudited)
Management uses “Adjusted EBITDA” as a liquidity measure in respect of
the fixed-charge coverage ratio and the net senior secured leverage
ratio, as defined in the Company’s debt agreements. As used herein,
Adjusted EBITDA means net income before income taxes, net interest
expense and depreciation and amortization, adjusted to eliminate certain
non-cash expenses, restructuring charges, related party management fees,
charges resulting from purchase accounting and other specified items of
income or expense as outlined below (in millions):
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Adjusted EBITDA
|
|
23.6
|
|
|
64.9
|
|
|
235.8
|
|
|
226.1
|
|
|
Last in, first out and lower of cost or market inventory adjustments (a)
|
|
4.7
|
|
|
(4.4
|
)
|
|
(12.6
|
)
|
|
(4.1
|
)
|
|
Loss on disposal of assets
|
|
(1.5
|
)
|
|
(0.6
|
)
|
|
(3.3
|
)
|
|
(4.0
|
)
|
|
Non-cash pension, accretion and stock compensation
|
|
(2.8
|
)
|
|
(3.5
|
)
|
|
(12.4
|
)
|
|
(14.9
|
)
|
|
Restructuring, relocation and severance
|
|
(1.1
|
)
|
|
(2.9
|
)
|
|
(2.9
|
)
|
|
(11.9
|
)
|
|
Consulting and sponsor fees
|
|
(0.5
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
(18.9
|
)
|
|
Interest rate swaps
|
|
(2.3
|
)
|
|
(5.4
|
)
|
|
(4.6
|
)
|
|
(11.0
|
)
|
|
Loss on debt repurchase
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
Charges and fees related to hedge terminations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.0
|
)
|
|
Non-cash derivative gains (b)
|
|
33.1
|
|
|
32.3
|
|
|
117.0
|
|
|
73.2
|
|
|
Other, net
|
|
(3.6
|
)
|
|
2.8
|
|
|
(9.2
|
)
|
|
6.3
|
|
|
Depreciation and amortization
|
|
(24.6
|
)
|
|
(22.6
|
)
|
|
(97.7
|
)
|
|
(98.7
|
)
|
|
Interest expense, net
|
|
(5.1
|
)
|
|
(6.1
|
)
|
|
(21.5
|
)
|
|
(31.1
|
)
|
|
Income tax (expense) benefit
|
|
4.5
|
|
|
(18.6
|
)
|
|
(45.4
|
)
|
|
(35.0
|
)
|
|
Net income
|
|
24.4
|
|
|
34.9
|
|
|
140.9
|
|
|
66.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA is not a measure of financial performance under U.S.
GAAP, and may not be comparable to similarly titled measures used by
other companies in the Company’s industry. Adjusted EBITDA should not be
considered in isolation from or as an alternative to net income, income
from continuing operations, operating income or any other performance
measures derived in accordance with U.S. GAAP. Adjusted EBITDA has
limitations as an analytical tool and you should not consider it in
isolation or as a substitute for analysis of the Company’s results as
reported under U.S. GAAP. For example, Adjusted EBITDA excludes certain
tax payments that may represent a reduction in cash available to us;
does not reflect any cash requirements for the assets being depreciated
and amortized that may have to be replaced in the future; does not
reflect capital cash expenditures, future requirements for capital
expenditures or contractual commitments; does not reflect changes in, or
cash requirements for, the Company’s working capital needs; and does not
reflect the interest expense, or the cash requirements necessary to
service interest or principal payments, on the Company’s indebtedness.
Adjusted EBITDA also includes incremental stand-alone costs and adds
back non-cash hedging gains and losses, and certain other non-cash
charges that are deducted in calculating net income. However, these are
expenses that may recur, vary greatly and are difficult to predict. In
addition, certain of these expenses can represent the reduction of cash
that could be used for other corporate purposes. You should not consider
the Company’s Adjusted EBITDA as an alternative to operating income or
net income, determined in accordance with U.S. GAAP, as an indicator of
the Company’s operating performance, or as an alternative to cash flows
from operating activities, determined in accordance with U.S. GAAP, as
an indicator of the Company’s cash flows or as a measure of liquidity.
The following table reconciles Adjusted EBITDA to cash flow from
operating activities for the periods presented (in millions):
|
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Adjusted EBITDA
|
|
23.6
|
|
|
64.9
|
|
|
235.8
|
|
|
226.1
|
|
|
Settlements from hedge terminations, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
164.6
|
|
|
Stock compensation expense
|
|
0.9
|
|
|
1.7
|
|
|
5.3
|
|
|
5.9
|
|
|
Changes in other assets
|
|
(1.0
|
)
|
|
(1.3
|
)
|
|
(6.7
|
)
|
|
(10.0
|
)
|
|
Changes in pension, other post-retirement liabilities and other
long-term liabilities
|
|
(0.4
|
)
|
|
(13.3
|
)
|
|
(14.3
|
)
|
|
(0.6
|
)
|
|
Changes in current operating assets and liabilities
|
|
38.9
|
|
|
(17.7
|
)
|
|
30.8
|
|
|
(36.7
|
)
|
|
Changes in current income taxes
|
|
(17.6
|
)
|
|
(11.2
|
)
|
|
(70.5
|
)
|
|
(20.2
|
)
|
|
Changes in accrued interest
|
|
(4.4
|
)
|
|
3.3
|
|
|
(9.8
|
)
|
|
(7.4
|
)
|
|
Non-cash pension, accretion and stock compensation
|
|
(2.8
|
)
|
|
(3.5
|
)
|
|
(12.4
|
)
|
|
(14.9
|
)
|
|
Restructuring, relocation and severance
|
|
(1.1
|
)
|
|
(2.9
|
)
|
|
(2.9
|
)
|
|
(11.9
|
)
|
|
Consulting and sponsor fees
|
|
(0.5
|
)
|
|
—
|
|
|
(2.3
|
)
|
|
(18.9
|
)
|
|
Interest rate swaps
|
|
(2.3
|
)
|
|
(5.4
|
)
|
|
(4.6
|
)
|
|
(11.0
|
)
|
|
Other, net
|
|
(3.0
|
)
|
|
6.4
|
|
|
(7.8
|
)
|
|
5.9
|
|
|
Cash flow from operating activities
|
|
30.3
|
|
|
21.0
|
|
|
140.6
|
|
|
270.9
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
The Company’s New Madrid smelter and the Company's rolling mills use
the LIFO method of inventory accounting for financial reporting and
tax purposes. This adjustment restates net income to the FIFO method
by eliminating LIFO expenses related to inventories held at the New
Madrid smelter and the rolling mills. Product inventories at
Gramercy and St. Ann and supplies inventories at New Madrid are
stated at lower of weighted-average cost or market, and are not
subject to the LIFO adjustment. The Company also reduces inventories
to the lower of cost (adjusted for purchase accounting) or market
value.
|
|
(b)
|
|
|
|
|
The Company uses derivative financial instruments to mitigate
effects of fluctuations in aluminum and natural gas prices. This
adjustment eliminates the non-cash gains and losses resulting from
fair market value changes of aluminum swaps. Cash settlements
(received) or paid, except settlements on hedge terminations,
related to the Company’s derivatives are included in Adjusted EBITDA
and are shown in the table below:
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Fixed price aluminum swaps
|
|
—
|
|
—
|
|
|
—
|
|
|
(24.2
|
)
|
|
Variable price aluminum offset swaps and other
|
|
2.5
|
|
(1.7
|
)
|
|
(0.1
|
)
|
|
(2.5
|
)
|
|
Natural gas swaps
|
|
7.5
|
|
7.0
|
|
|
26.1
|
|
|
23.3
|
|
|
Interest rate swaps
|
|
2.3
|
|
5.4
|
|
|
4.6
|
|
|
11.0
|
|
|
Total
|
|
12.3
|
|
10.7
|
|
|
30.6
|
|
|
7.6
|
|
|
|
|
|
|
|
|
|
|
|
The previous table presents fixed price aluminum swap cash settlement
amounts, net of early termination discounts, totaling $9.0 million in
the year ended December 31, 2010. The Company settled all fixed price
aluminum swaps in connection with its IPO.
NORANDA ALUMINUM HOLDING CORPORATION
NET CASH COST OF
PRIMARY ALUMINUM
(unaudited)
Unit net cash cost for primary aluminum per pound represents the costs
of producing commodity grade aluminum net of value-added premiums on
primary aluminum sales. The Company has provided unit net cash cost per
pound of aluminum shipped because it provides investors with additional
information to measure operating performance. Using this metric,
investors are able to assess the prevailing LME price plus Midwest
premium per pound versus unit net costs per pound shipped. Unit net cash
cost per pound is positively or negatively impacted by changes in
primary aluminum, alumina and bauxite production and sales volumes,
natural gas and oil related costs, seasonality in electrical contract
rates, and increases or decreases in other production related costs.
Unit net cash costs is not a measure of financial performance under
U.S. GAAP and may not be comparable to similarly titled measures used by
other companies. Unit net cash costs per pound shipped should not be
considered in isolation from or as an alternative to any performance
measures derived in accordance with U.S. GAAP. The following table shows
the calculation of integrated net cash cost of primary aluminum:
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
Total primary aluminum cash cost (in millions)
|
|
$
|
121.3
|
|
|
$
|
98.7
|
|
|
$
|
436.0
|
|
|
$
|
391.2
|
|
|
Total shipments (pounds, in millions)
|
|
|
145.8
|
|
|
|
152.5
|
|
|
|
581.4
|
|
|
|
560.5
|
|
|
Integrated primary aluminum net cash cost (per pound)
|
|
$
|
0.83
|
|
|
$
|
0.65
|
|
|
$
|
0.75
|
|
|
$
|
0.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Total primary aluminum cash cost is calculated below (in millions):
|
|
|
|
|
|
|
|
|
|
|
Total Primary Aluminum revenue
|
|
$
|
163.0
|
|
|
$
|
177.1
|
|
|
$
|
724.1
|
|
|
$
|
621.3
|
|
|
|
Less: fabrication premiums and other revenue
|
|
|
(11.0
|
)
|
|
|
(8.9
|
)
|
|
|
(46.6
|
)
|
|
|
(37.1
|
)
|
|
|
Realized Midwest Transaction Price revenue
|
|
|
152.0
|
|
|
|
168.2
|
|
|
|
677.5
|
|
|
|
584.2
|
|
|
|
Primary Aluminum segment profit
|
|
|
22.7
|
|
|
|
42.1
|
|
|
|
140.3
|
|
|
|
112.2
|
|
|
|
Alumina segment profit
|
|
|
4.5
|
|
|
|
26.0
|
|
|
|
78.4
|
|
|
|
61.9
|
|
|
|
Bauxite segment profit
|
|
|
(0.7
|
)
|
|
|
3.8
|
|
|
|
18.5
|
|
|
|
23.8
|
|
|
|
Eliminations
|
|
|
4.2
|
|
|
|
(2.4
|
)
|
|
|
4.3
|
|
|
|
(4.9
|
)
|
|
|
Total
|
|
|
30.7
|
|
|
|
69.5
|
|
|
|
241.5
|
|
|
|
193.0
|
|
|
|
Total primary aluminum cash cost
|
|
$
|
121.3
|
|
|
$
|
98.7
|
|
|
$
|
436.0
|
|
|
$
|
391.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NORANDA ALUMINUM HOLDING CORPORATION
CALCULATION OF DILUTED
EARNINGS PER SHARE,
EXCLUDING SPECIAL ITEMS
(in
millions, except per share information)
(unaudited)
“Net income, excluding special items” means net income adjusted to
eliminate the impact of certain transactions and events referred to as
“special items,” as listed herein. “Diluted earnings per share,
excluding special items” refers to net income excluding special items,
divided by the number of diluted weighted-average common shares
outstanding. Management has provided net income, excluding special items
and diluted earnings per share, excluding special items because the
measure provides investors with additional information with which to
measure operating results. Using these metrics, investors are able to
assess the impact of certain transactions and events on earnings and to
compare net income from period to period with the impact of those
transactions and events removed from all periods. Management believes
this metric is a valuable tool in assisting investors to compare
financial results from period to period.
Net income, excluding special items may not be comparable to similarly
titled measures used by other companies. Net income, excluding special
items should not be considered in isolation from or as an alternative to
net income or any other performance measures derived in accordance with
U.S. GAAP. Net income, excluding special items has limitations as an
analytical tool and you should not consider it in isolation or as a
substitute for analysis of results as reported under U.S. GAAP.
Special items are outlined below (in millions):
|
|
|
|
|
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
|
|
Increase (decrease) to net income
|
|
Increase (decrease) to net income
|
|
Special items:
|
|
|
|
|
|
|
|
|
|
Release of indemnification receivable related to uncertain tax
positions(1)
|
|
(1.1
|
)
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
Early retirement benefits (2)
|
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
—
|
|
|
Restructuring
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
|
Loss on debt repurchase
|
|
—
|
|
|
(1.0
|
)
|
|
—
|
|
|
(0.1
|
)
|
|
Executive separation agreement
|
|
—
|
|
|
(3.3
|
)
|
|
—
|
|
|
(3.3
|
)
|
|
Management agreement termination
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12.5
|
)
|
|
Modification of stock options
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.2
|
)
|
|
Transaction related legal costs
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.5
|
)
|
|
Gain on hedging activities
|
|
20.8
|
|
|
21.6
|
|
|
86.4
|
|
|
65.6
|
|
|
Total special items (pre-tax)
|
|
19.0
|
|
|
17.3
|
|
|
81.2
|
|
|
33.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
In 2011, the Company expensed an indemnification receivable from
Xstrata through selling, general and administrative expenses because
statutes to examine certain income tax returns expired. Net income
was not impacted by the release of this indemnification receivable
as a corresponding tax benefit was recorded for the year ended
December 31, 2011.
|
|
|
|
|
|
(2)
|
|
|
|
|
Early retirement benefits were paid to terminated employees in the
fourth quarter of 2011.
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share, excluding special items is calculated as
follows (in millions):
|
|
|
|
|
Three months ended December 31,
|
|
Year ended December 31,
|
|
|
|
2011
|
|
2010
|
|
2011
|
|
2010
|
|
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Pre-tax income
|
|
19.9
|
|
|
53.5
|
|
|
186.3
|
|
|
101.9
|
|
|
Pre-tax impact of special items
|
|
(19.0
|
)
|
|
(17.3
|
)
|
|
(81.2
|
)
|
|
(33.4
|
)
|
|
Pre-tax income, excluding special items
|
|
0.9
|
|
|
36.2
|
|
|
105.1
|
|
|
68.5
|
|
|
Income taxes, excluding special items (1)(2)
|
|
0.3
|
|
|
12.2
|
|
|
33.1
|
|
|
23.1
|
|
|
Net income, excluding special items
|
|
0.6
|
|
|
24.0
|
|
|
72.0
|
|
|
45.4
|
|
|
Weighted average common shares outstanding, diluted (shares, in
millions)
|
|
68.44
|
|
|
59.12
|
|
|
68.35
|
|
|
52.80
|
|
|
Diluted earnings per share, excluding special items
|
|
0.01
|
|
|
0.41
|
|
|
1.05
|
|
|
0.86
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
|
|
2011 amounts calculated at 31.5% effective tax rate, excluding
special tax items as detailed in the table below. Uncertain tax
positions were released as a result of the expiration of the
statute of limitations with respect to certain income tax returns.
We decreased our valuation allowance by $8.6 million which
consists of a $10.0 million release related primarily to capital
loss carryforwards which were either utilized in 2011 or expired
pursuant to the relevant statute of limitations, partially offset
by a $1.4 million increase for our deferred tax assets, primarily
statement operating loss carryforwards.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
$
|
186.3
|
|
|
|
|
|
|
|
|
|
|
|
Remove pre-tax effect of tax indemnification release
|
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
Pre-tax income before tax special item
|
|
|
190.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
45.4
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted to remove effects of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Release of valuation allowance
|
|
|
8.4
|
|
|
|
|
|
|
|
|
|
|
|
Release reserve for indemnified uncertain tax position
|
|
|
4.5
|
|
|
|
|
|
|
|
|
|
|
|
Release reserve for uncertain tax position
|
|
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense before tax special items
|
|
$
|
60.1
|
|
|
|
|
|
|
|
|
|
|
|
Effective annual tax rate, excluding special items
|
|
|
31.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
|
|
2010 amounts calculated at 33.7% effective tax rate.
|
|
|
|
|
|
|
|
|
|
|
|
Forward‐Looking Statements
This press release contains “forward-looking statements” within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are statements about future, not past, events
and involve certain important risks and uncertainties, any of which
could cause the Company’s actual results to differ materially from those
expressed in forward-looking statements, including, without limitation:
the cyclical nature of the aluminum industry and fluctuating commodity
prices, which cause variability in earnings and cash flows; a downturn
in general economic conditions, including changes in interest rates, as
well as a downturn in the end-use markets for certain of the Company’s
products; fluctuations in the relative cost of certain raw materials and
energy compared to the price of primary aluminum and aluminum rolled
products; the effects of competition in Noranda’s business lines;
Noranda’s ability to retain customers, a substantial number of which do
not have long-term contractual arrangements with the Company; the
ability to fulfill the business’s substantial capital investment needs;
labor relations (i.e. disruptions, strikes or work stoppages) and labor
costs; unexpected issues arising in connection with Noranda’s operations
outside of the United States; the ability to retain key management
personnel; and Noranda’s expectations with respect to its acquisition
activity, or difficulties encountered in connection with acquisitions,
dispositions or similar transactions.
Forward-looking statements contain words such as “believes,” “expects,”
“may,” “should,” “seeks,” “approximately,” “intends,” “plans,”
“estimates,” or “anticipates” or similar expressions that relate to
Noranda’s strategy, plans or intentions. All statements Noranda makes
relating to its estimated and projected earnings, margins, costs,
expenditures, cash flows, growth rates and financial results or to the
Company’s expectations regarding future industry trends are
forward-looking statements. Noranda undertakes no obligation to publicly
update or revise any forward-looking statement as a result of new
information, future events or otherwise, except as otherwise required by
law. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date on which
they are made and which reflect management's current estimates,
projections, expectations or beliefs.
For a discussion of additional risks and uncertainties that may affect
the future results of Noranda, please see the Company’s filings with the
Securities and Exchange Commission, including its Annual Report on Form
10-K and its Quarterly Reports on Form 10-Q.
Non-GAAP Financial Measures
This press release and the presentation slides for the earnings call
contain non-GAAP financial measures as defined by SEC rules. Management
believes that these measures are helpful to investors in measuring
financial performance and comparing performance to that of its peers.
However, these non-GAAP financial measures may not be comparable to
similarly titled non-GAAP financial measures used by other companies.
These non-GAAP financial measures have limitations as an analytical tool
and should not be considered in isolation or as a substitute for
U.S. GAAP financial measures. To the extent non-GAAP financial measures
are discussed on the earnings call, a reconciliation of each measure to
the most directly comparable U.S. GAAP measure will be available within
this press release or within the presentation slides filed as
Exhibit 99.2 to the Current Report on Form 8-K furnished to the SEC
concurrent with the issuance of this press release.
About the Company
Noranda Aluminum Holding Corporation is a leading North American
integrated producer of value-added primary aluminum products, as well as
high quality rolled aluminum coils. Noranda is a public company
controlled by affiliates of its private equity sponsor.
For Question-and-Answer Participants
Participants are strongly encouraged to pre-register for the conference
call using the URL below, as it will expedite entry into the conference
call. Pre-registrants are issued an individual PIN number that provides
immediate access into the live conference call. If you do not wish to
pre-register, please dial the appropriate number below at least 15
minutes prior to the start of the call to participate in the
question-and-answer session.
Preregistration URL: https://www.theconferencingservice.com/prereg/key.process?key=PD6MGVBKY
U.S.
participants: 888.679.8034
International participants: 617.213.4847
Participant
Passcode: 17781261
CONTACT:
Noranda Aluminum Holding Corporation
Robert Mahoney,
615-771-5752
Chief Financial Officer
robert.mahoney@noralinc.com
