10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2010

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [                     to                     ].

Commission file number: 001-34741

NORANDA ALUMINUM HOLDING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Delaware	20-8908550
(State or Other Jurisdiction of Incorporation)	(I.R.S. Employer Identification Number)
801 Crescent Centre Drive, Suite 600 Franklin, Tennessee	37067
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (615) 771-5700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YES  þ    NO  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve months (or for such shorter period that the registrant was required to submit and post such files).    YES  ¨    NO  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	þ  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).    YES  ¨    NO  þ

As of July 29, 2010, there were 55,280,232 shares of Noranda common stock outstanding.

TABLE OF CONTENTS

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	53
Item 4.	Controls and Procedures	54
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	55
Item 1A.	Risk Factors	55
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Sales	55
Item 3.	Defaults upon Senior Securities	55
Item 4.	Removed and Reserved	55
Item 5.	Other Information	55
Item 6.	Exhibits	55
SIGNATURES		56

-i-

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

NORANDA ALUMINUM HOLDING CORPORATION

Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2009			2010			2009			2010
	$			$			$			$
Sales		157,679			334,905			321,994			636,414
Operating costs and expenses:
Cost of sales		163,745			290,973			348,064			555,899
Selling, general and administrative expenses		10,717			43,130			32,943			72,131
Goodwill and other intangible asset impairment		—			—			43,000			—
Excess insurance proceeds		(29,185	)		—			(29,185	)		—
		145,277			334,103			394,822			628,030
Operating income (loss)		12,402			802			(72,828	)		8,384
Other (income) expenses:
Interest expense, net		14,100			8,539			29,974			17,786
Gain on hedging activities, net		(53,198	)		(20,519	)		(98,326	)		(22,282	)
Equity in net loss of investments in affiliates		34,051			—			78,101			—
(Gain) loss on debt repurchase		(12,442	)		2,508			(164,650	)		2,612
Total other (income) expenses		(17,489	)		(9,472	)		(154,901	)		(1,884	)
Income before income taxes		29,891			10,274			82,073			10,268
Income tax expense		42,017			3,401			49,920			3,450
Net income (loss) for the period		(12,126	)		6,873			32,153			6,818
Net income (loss) per share
Basic	$	(0.28	)	$	0.14		$	0.74		$	0.15
Diluted	$	(0.28	)	$	0.14		$	0.74		$	0.14
Weighted-average shares outstanding
Basic		43,487			49,088			43,485			46,443
Diluted		43,487			50,103			43,485			47,080

See accompanying notes

1

NORANDA ALUMINUM HOLDING CORPORATION

Consolidated Balance Sheets

(in thousands, except share and per share amounts)

(unaudited)

	December 31, 2009		June 30, 2010
	$		$
ASSETS
Current assets:
Cash and cash equivalents (includes $117 and $498 related to a consolidated Variable Interest Entity (“VIE”) at December 31, 2009 and June 30, 2010, respectively)	167,236		31,678
Accounts receivable, net	85,530		118,615
Inventories (includes $11,813 and $11,174 related to a consolidated VIE at December 31, 2009 and June 30, 2010, respectively)	182,356		186,162
Derivative assets, net	68,755		—
Taxes receivable	730		9,279
Prepaid assets	36,418		15,855
Other current assets	13,808		14,596
Total current assets	554,833		376,185
Property, plant and equipment, net (includes $36,911 and $35,815 related to a consolidated VIE at December 31, 2009 and June 30, 2010, respectively)	745,498		724,336
Goodwill	137,570		137,570
Other intangible assets, net	79,047		76,019
Long-term derivative assets, net	95,509		—
Other assets (includes $2,305 and $3,302 related to a consolidated VIE at December 31, 2009 and June 30, 2010, respectively)	85,131		87,618
Total assets	1,697,588		1,401,728
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable (includes $6,208 and $8,420 related to a consolidated VIE at December 31, 2009 and June 30, 2010, respectively)	69,912		89,633
Accrued liabilities (includes $3,583 and $6,186 related to a consolidated VIE at December 31, 2009 and June 30, 2010, respectively)	61,961		54,523
Accrued interest	167		894
Derivative liabilities, net	—		26,136
Deferred tax liabilities	27,311		15,992
Current portion of long-term debt	7,500		—
Total current liabilities	166,851		187,178
Long-term debt, net	944,166		553,713
Long-term derivative liabilities, net	—		22,471
Pension and OPEB liabilities	106,393		112,287
Other long-term liabilities (includes $5,435 and $5,706 related to a consolidated VIE at December 31, 2009 and June 30, 2010, respectively)	55,632		54,120
Deferred tax liabilities	330,382		317,206
Common stock subject to redemption (200,000 shares at December 31, 2009 and June 30, 2010)	2,000		2,000
Shareholders’ equity:
Preferred stock (25,000,000 shares authorized; no shares outstanding)	—		—
Common stock (200,000,000 shares authorized; $0.01 par value; 43,752,832 shares issued and outstanding at December 31, 2009; 55,280,232 shares issued and outstanding at June 30, 2010, including 200,000 shares subject to redemption at December 31, 2009 and June 30, 2010)	436		551
Capital in excess of par value	16,123		102,890
Accumulated deficit	(75,123	)	(68,305	)
Accumulated other comprehensive income	144,728		111,617
Total Noranda shareholders’ equity	86,164		146,753
Noncontrolling interest	6,000		6,000
Total shareholders’ equity	92,164		152,753
Total liabilities and shareholders’ equity	1,697,588		1,401,728

See accompanying notes

2

NORANDA ALUMINUM HOLDING CORPORATION

Consolidated Statements of Shareholders’ Equity

(in thousands)

(unaudited)

	Common stock	Capital in excess of par value		Accumulated deficit		Accumulated other comprehensive income (loss)		Non-controlling interest	Total
	$	$		$		$			$
Balance, December 31, 2008	434	14,383		(176,497	)	198,315		—	36,635
Net income	—	—		101,375		—		—	101,375
Components of other comprehensive income (loss):
Pension adjustment, net of tax of $6,866	—	—		—		11,164		—	11,164
Unrealized gains on derivatives, net of tax of $25,419	—	—		—		45,143		—	45,143
Reclassification of derivative amounts realized in net income, net of tax benefit of $62,354	—	—		—		(109,894	)	—	(109,894	)
Total comprehensive income	—	—		—		—		—	47,788
Noncontrolling interest	—	—		—		—		6,000	6,000
Repurchase of shares	—	(90	)	—		—		—	(90	)
Issuance of shares	2	290		(1	)	—		—	291
Stock compensation expense	—	1,540		—		—		—	1,540
Balance, December 31, 2009	436	16,123		(75,123	)	144,728		6,000	92,164
Net income	—	—		6,818		—		—	6,818
Components of other comprehensive income (loss):
Unrealized gain (loss) on derivatives, net of tax benefit of $6,444	—	—		—		(8,394	)	—	(8,394	)
Reclassification of derivative amounts realized in net income, net of tax benefit of $12,507	—	—		—		(24,717	)	—	(24,717	)
Total comprehensive income (loss)	—	—		—		—		—	(26,293	)
Repurchase of shares	—	(16	)	—		—		—	(16	)
Issuance of shares	115	82,814		—		—		—	82,929
Stock compensation expense	—	3,969		—		—		—	3,969
Balance, June 30, 2010	551	102,890		(68,305	)	111,617		6,000	152,753

See accompanying notes

3

NORANDA ALUMINUM HOLDING CORPORATION

Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

	Six months ended June 30,
	2009		2010
	$		$
OPERATING ACTIVITIES
Net income	32,153		6,818
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	45,720		51,185
Non-cash interest	23,649		13,193
Loss on disposal of property, plant and equipment	3,475		1,903
Insurance proceeds applied to capital expenditures	(7,161	)	—
Goodwill and other intangible asset impairment	43,000		—
Gain on hedging activities, net of cash settlements	(70,211	)	(4,513	)
Settlements from hedge terminations, net	70,139		164,603
(Gain) loss on debt repurchase	(164,650	)	2,612
Equity in net (income) loss of investments in affiliates	78,101		—
Deferred income taxes	62,130		3,449
Stock compensation expense	740		3,969
Changes in other assets	3,046		(7,718	)
Changes in pension and other long-term liabilities	4,071		4,224
Changes in operating assets and liabilities:
Accounts receivable, net	13,848		(32,366	)
Insurance receivable	(34,125	)	—
Inventories	3,810		(3,806	)
Taxes receivable	(4,513	)	(14,422	)
Other current assets	12,438		16,813
Accounts payable	(903	)	19,721
Accrued liabilities and accrued interest	(6,627	)	(6,711	)
Cash provided by operating activities	108,130		218,954
INVESTING ACTIVITIES
Capital expenditures	(22,360	)	(27,810	)
Proceeds from insurance related to capital expenditures	7,161		—
Proceeds from sale of property, plant and equipment	—		163
Cash used in investing activities	(15,199	)	(27,647	)
FINANCING ACTIVITIES
Proceeds from issuance of shares, net of issuance costs	41		82,929
Repurchase of shares	(90	)	(16	)
Repayments on revolving credit facility	—		(215,930	)
Repayment of long-term debt at face value	(24,500	)	(193,848	)
Repurchase of debt	(70,840	)	—
Cash used in financing activities	(95,389	)	(326,865	)
Change in cash and cash equivalents	(2,458	)	(135,558	)
Cash and cash equivalents, beginning of period	184,716		167,236
Cash and cash equivalents, end of period	182,258		31,678

See accompanying notes

4

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements

1. ACCOUNTING POLICIES

Basis of presentation

The accompanying consolidated financial statements represent the consolidation of Noranda Aluminum Holding Corporation and all companies that we directly or indirectly control (“Noranda,” “the Company,” “we,” “us,” and “our”). “Noranda HoldCo” refers only to Noranda Aluminum Holding Corporation, excluding its subsidiaries. “Noranda AcquisitionCo” refers only to Noranda Aluminum Acquisition Corporation, the wholly owned direct subsidiary of Noranda HoldCo, excluding its subsidiaries.

These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. The consolidated financial statements, including these notes, are unaudited and exclude some of the disclosures required in annual financial statements. Consolidated balance sheet data as of December 31, 2009 was derived from audited financial statements. In management’s opinion, the consolidated financial statements include all adjustments (including normal recurring accruals) that are considered necessary for the fair presentation of our financial position and operating results. All intercompany transactions and accounts have been eliminated in consolidation. Certain reclassifications have been made to previously issued financial statements to conform to the current period presentation. These reclassifications had no impact on net income or net cash flows.

We are a vertically integrated producer of value-added primary aluminum products and high quality rolled aluminum coils. We have two businesses: our upstream business and downstream business. Our upstream business consists of three reportable segments: primary aluminum products, alumina refining, and bauxite. These three segments are closely integrated and consist of an aluminum smelter near New Madrid, Missouri, which we refer to as “New Madrid,” and supporting operations at our bauxite mining operations in St. Ann, Jamaica (Noranda Bauxite Limited, or “St. Ann”) and our alumina refinery in Gramercy, Louisiana (Noranda Alumina, LLC, or “Gramercy”). New Madrid has annual production capacity of approximately 580 million pounds (263,000 metric tons). Our downstream business comprises our flat rolled products segment, which consists of four rolling mill facilities with a combined maximum annual production capacity of 410 to 495 million pounds, depending on production mix.

The operating results presented for interim periods are not necessarily indicative of the results that may be expected for any other interim period or for the entire year. These financial statements should be read in conjunction with our 2009 annual financial statements included in our Form 10-K, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 2, 2010 and our Form 8-K, filed with the SEC on April 26, 2010 to reflect the effects of a change in segments and a two-for-one stock split.

Power outage

In January 2009, an ice storm disrupted the power grid throughout Southeastern Missouri. The resulting power outage disabled two of New Madrid’s three production lines, initially reducing our daily production to 25% of pre-outage levels. This event had a substantial negative impact on our 2009 operating results, resulting in an average operating rate of 58% of capacity during 2009. This is significantly below our operating rate for the past 20 years of 99%. We reached a settlement with our insurance providers pursuant to which we collected approximately $67.5 million in the second and third quarters of 2009, and the smelter became fully operational during first quarter 2010.

Net income (loss) per share

Basic earnings per share (“EPS”) is calculated as income available to common stockholders divided by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated using the weighted-average outstanding common shares determined using the treasury stock method for options.

Joint Venture Transaction

Through August 31, 2009, we held a 50% interest in Gramercy and in St. Ann. Our investments in these noncontrolled entities, in which we had the ability to exercise equal or significant influence over operating and financial policies, were accounted for by the equity method. On August 3, 2009, we entered into an agreement with Century Aluminum Company (together with its subsidiaries, (“Century”) whereby we would become the sole owner of both Gramercy and St. Ann. The transaction closed on August 31, 2009 and is referred to as the “Joint Venture Transaction.”

5

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

Segment changes

During first quarter 2010, in connection with continued integration activities of our alumina refinery and our bauxite mining operations, we changed the composition of our reportable segments. Those integration activities included a re-evaluation of the financial information provided to our Chief Operating Decision Maker, as that term is defined in US GAAP. During the first and second quarter 2009, we reported two segments: upstream (which included corporate expenses) and downstream. We have now identified five reportable segments, with the components previously comprising upstream now representing four segments: primary aluminum products, alumina refining, bauxite, and corporate. The downstream segment will be referred to as the flat rolled products segment. All segment information presented herein has been revised to reflect the new structure. These segment changes had no impact on our historical consolidated financial position, results of operations or cash flows.

Stock split

On April 16, 2010, our Board of Directors approved a two-for-one split of our outstanding shares of common stock to be effected in the form of a stock dividend. Stockholders of record at the close of business on April 19, 2010, were issued one additional share of common stock for each share owned by such stockholder as of that date. The additional shares were issued on April 20, 2010. The stock split increased the number of shares of common stock outstanding from approximately 21.9 million to approximately 43.8 million. Share and per-share amounts shown in the condensed consolidated financial statements and related notes reflect the split as though it occurred on January 1, 2009. The total number of authorized common shares and the par value thereof was not changed by the split.

Initial Public Offering

In May 2010, we completed an initial public offering (“IPO”) of 11.5 million shares of common stock at a public offering price of $8.00 per share (NYSE: NOR). The net proceeds after the underwriting discounts, commissions, fees and expenses amounted to $82.9 million. We used those net proceeds from the offering together with $95.9 million of proceeds from settling all outstanding fixed-price aluminum hedges, to repurchase the $66.3 million remaining principal amount of outstanding Holdco Notes, and to repay $110.0 million principal amount outstanding under the term B loan. The remaining $2.5 million was used for other corporate purposes.

In connection with the IPO, pursuant to our amended and restated certificate of incorporation, our authorized capital stock increased from 100.0 million to 225.0 million, of which 200.0 million ($0.01 par value) is designated as common stock and 25.0 million (at $0.01 par value) is designated as preferred stock. As of June 30, 2010, no preferred stock was outstanding.

2. JOINT VENTURE TRANSACTION

On August 31, 2009, we became the sole owner of both Gramercy and St. Ann (“the Joint Venture Transaction”). The results of operations of Gramercy and St. Ann have been included in our consolidated financial statements since the Joint Venture Transaction date. Prior to the Joint Venture Transaction, our 50% investment interests in the joint ventures were accounted for by the equity method. The results of operations related to Gramercy and St. Ann are included in our consolidated financial statements from the closing date of the transaction. Unaudited pro forma condensed consolidated statement of operations data is summarized below (in thousands):

	Pro Forma(1)		Actual	Pro Forma(1)		Actual
	Three months ended June 30,			Six months ended June 30,
	2009		2010	2009		2010
	$		$	$		$
Sales	196,951		334,905	399,674		636,414
Operating income (loss)	7,862		802	(94,256	)	8,384
Net income (loss)	(12,983	)	6,873	54,378		6,818

(1) The unaudited pro forma condensed statement of operations data for the three and six months ended June 30, 2009 reflects our consolidated results of operations as if the Joint Venture Transaction had occurred January 1, 2009. These amounts have been calculated by adjusting the results of Gramercy and St. Ann to reflect the additional inventory cost, depreciation and amortization that would have been charged assuming the fair value adjustments to inventory, property, plant and equipment and intangible assets had been applied on January 1, 2009, together with the consequential tax effects. The unaudited pro forma condensed statement of operations data is not intended to represent the consolidated results of operations we would have reported if the acquisition had been completed at January 1, 2009, nor is it necessarily indicative of future results.

6

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

Investment in affiliates

Summarized financial information for the joint ventures, as recorded in their respective consolidated financial statements, at full value, prior to the Joint Venture Transaction is presented below.

	Three months ended June 30, 2009	Six months ended June 30, 2009
	$	$
St. Ann to Gramercy	6,957	20,205
St. Ann to third parties	7,559	13,379
Gramercy to us and joint venture partner	32,851	89,855
Gramercy to third parties	18,624	33,355
Net sales	65,991	156,794
Gross profit	4,337	10,927
Net income(1)	5,182	11,496

(1) Includes other income of $1.5 million during the three and six months ended June 30, 2009.

Impairment

Beginning in fourth quarter 2008 and continuing through second quarter 2009, the cost of alumina purchased from the Gramercy refinery exceeded the spot prices of alumina available from other sources. Because of the reduced need for alumina caused by the smelter power outage and depressed market conditions, during first quarter 2009 Gramercy reduced its annual production rate of smelter grade alumina from approximately 1.0 million metric tonnes to approximately 0.5 million metric tonnes and implemented other cost saving activities.

These production changes led us to evaluate our investments in the joint ventures for impairment in first quarter 2009, which resulted in a $45.3 million write down ($39.3 million for St. Ann and $6.0 million for Gramercy). In second quarter 2009, revisions to our assumptions about St. Ann’s future profitability and cash flows resulted in a $35.0 million write down. Impairment expenses are recorded within equity in net loss of investments in affiliates in the consolidated statements of operations.

3. NEW MADRID POWER OUTAGE

During the week of January 26, 2009, power supply to our New Madrid smelter, which supplies all of the upstream business’ production, was interrupted several times because of a severe ice storm in Southeastern Missouri. As a result of the outage, we lost approximately 75% of the smelter capacity. The smelter returned to operating above 55% of capacity at June 30, 2009.

During the three months ended June 30, 2009, we reached a $43.9 million settlement with our primary insurance carrier, Factory Mutual Insurance Company (“FM Global”). In addition, we reached a settlement of $23.6 million with the other insurance carriers during third quarter 2009, bringing the total insurance settlement to $67.5.

The following table shows the insurance activity as presented in the financial statement (in thousands):

	Three months ended June 30, 2009					Six months ended June 30, 2009
	Items incurred	Related proceeds		Net impact		Items incurred	Related proceeds		Net impact
	$	$		$		$	$		$
Cost of sales	6,503	(6,523	)	(20	)	13,767	(13,767	)	—
Selling, general and administrative expenses	2,048	(6,173	)	(4,125	)	6,173	(6,173	)	—
Excess insurance proceeds	—	(29,185	)	(29,185	)	—	(29,185	)	(29,185	)
Total	8,551	(41,881	)	(33,330	)	19,940	(49,125	)	(29,185	)
Insurance cash receipts through June 30, 2009							(15,000	)
Insurance receivable recorded at June 30, 2009							34,125

The line item titled “Excess insurance proceeds” reflects the residual insurance recovery after applying total expected proceeds recognized against the losses incurred through June 30, 2009. This amount is not intended to represent a gain on the insurance claim, but only a timing difference between expected proceeds recognized and claim-related costs incurred.

7

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

4. RESTRUCTURING

On February 26, 2010, we announced a workforce and business process restructuring in our U.S. operations. The U.S. workforce restructuring plan reduced headcount by 89 employees through a combination of voluntary retirement packages and involuntary terminations. Substantially all activities associated with this workforce reduction were completed as of February 26, 2010.

In connection with a decision to contract the substantial portion of our bauxite mining to third party contractors, on April 21, 2010, we announced a workforce reduction in our Jamaican bauxite mining operations. The workforce restructuring plan reduced headcount by approximately 160 employees through a combination of voluntary retirement packages and involuntary terminations.

These actions resulted in $3.2 million of pre-tax charges recorded in second quarter 2010, and $7.8 million for the first half of 2010, primarily due to one-time termination benefits and pension benefits. These charges are reflected as a component of selling, general and administrative expenses.

The following table summarizes the impact of these restructurings (in thousands):

	Total  restructuring costs(1)
	$
Balance at December 31, 2009	4
2010 restructuring expense:
Corporate	220
Alumina refining	1,619
Bauxite	3,029
Primary aluminum products	1,871
Flat rolled products	1,068
Total	7,811
Benefits paid in 2010	(4,953	)
Balance at June 30, 2010	2,858

(1) Restructuring costs are recorded in accrued liabilities on the consolidated balance sheets at June 30, 2010. This table does not include window benefits of which $1.6 million was recorded in pension liabilities and $0.3 million were recorded in other accrued liabilities during first quarter 2010 and will be adjusted through net periodic pension costs.

5. SUPPLEMENTAL FINANCIAL STATEMENT DATA

Statements of operations (in thousands):

	Three months ended June 30,				Six months ended June 30,
	2009		2010		2009		2010
	$		$		$		$
Interest expense	14,163		8,557		30,060		17,834
Interest income	(63	)	(18	)	(86	)	(48	)
Interest expense, net	14,100		8,539		29,974		17,786

Statements of cash flow (in thousands):

	Six months ended June 30,
	2009		2010
	$		$
Interest paid	10,320		4,254
Income taxes paid (received)	(6,702	)	24,434

8

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

6. CASH AND CASH EQUIVALENTS

Cash and cash equivalents consisted of the following (in thousands):

	December 31, 2009	June 30, 2010
	$	$
Cash	12,334	15,309
Money market funds	154,902	16,369
Total cash and cash equivalents	167,236	31,678

Cash and cash equivalents include all cash balances and highly liquid investments with a maturity of three months or less at the date of purchase. We place our temporary cash investments with high credit quality financial institutions, which include money market funds invested in U.S. Treasury securities, short-term treasury bills and commercial paper. At December 31, 2009 all cash balances, excluding the money market funds, were fully insured by the Federal Deposit Insurance Corporation (“FDIC”). At June 30, 2010, $1.4 million of the cash balance is fully insured by the FDIC. We consider our investments in money market funds to be available for use in our operations.

7. INVENTORIES

We use the last-in-first-out (“LIFO”) method of valuing raw materials, work-in-process and finished goods inventories at our New Madrid smelter and our rolling mills. Inventories at Gramercy and St. Ann are valued at weighted average cost. The components of our inventories were (in thousands):

	December 31, 2009		June 30, 2010
	$		$
Raw materials, at cost	55,202		66,064
Work-in-process, at cost	50,720		60,309
Finished goods, at cost	24,638		21,430
Total inventory, at cost	130,560		147,803
LIFO adjustment(1)	23,348		22,205
Lower of cost or market (“LCM”) reserve	(7,892	)	(17,293	)
Inventory, at lower of cost or market	146,016		152,715
Supplies	36,340		33,447
Total inventories	182,356		186,162

(1) Inventories at Gramercy and St. Ann are stated at weighted average cost and are not subject to the LIFO adjustment. Gramercy and St. Ann inventories comprise 30.0% and 27.2% of total inventories at cost at December 31, 2009 and June 30, 2010, respectively.

Work-in-process and finished goods inventories consist of the cost of materials, labor and production overhead costs. Supplies inventory consists primarily of maintenance supplies expected to be used within the next twelve months. Non-current maintenance supplies are included in other assets in the accompanying consolidated balance sheets.

An actual valuation of inventories valued under the LIFO method is made at the end of each year based on inventory levels and costs at that time. Quarterly inventory determinations under LIFO are based on assumptions about projected inventory levels at the end of the year. During the six months ended June 30, 2009, we recorded a LIFO loss of $11.9 million due to a decrement in inventory quantities. During the six months ended June 30, 2010 we recorded a $0.2 million loss due to a decrement in inventory quantities in our primary aluminum segment.

9

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

8. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost. Depreciation is based on the estimated useful lives of the assets computed principally by the straight-line method for financial reporting purposes.

Property, plant and equipment, net consisted of the following (in thousands):

	Estimated useful lives	December 31, 2009(1)		June 30, 2010
	(in years)	$		$
Land		45,472		45,630
Buildings and improvements	10 — 47	114,898		114,921
Machinery and equipment	3 — 50	784,609		798,550
Construction in progress	—	28,723		34,627
		973,702		993,728
Accumulated depreciation		(228,204	)	(269,392	)
Total property, plant and equipment, net		745,498		724,336

⁽¹⁾ We have reclassified certain assets in the December 31, 2009 financial statements between land, buildings and improvements, and machinery and equipment to be consistent with June 30, 2010 presentation.

Cost of sales includes depreciation expense of the following amount in each period (in thousands):

Quarter-to-date	$
Three months ended June 30, 2009	19,440
Three months ended June 30, 2010	22,423
Year-to-date	$
Six months ended June 30, 2009	43,873
Six months ended June 30, 2010	45,918

Depreciation expense related to Gramercy and St. Ann was $6.5 million and $13.9 million during the three and six months ended June 30, 2010, respectively. This increase in depreciation was offset entirely by decreased depreciation in our primary aluminum and flat rolled products segments due to certain fixed assets which became fully-depreciated in second quarter 2009.

9. GOODWILL

Goodwill represents the excess of acquisition consideration paid over the fair value of identifiable net tangible and identifiable intangible assets acquired. Goodwill and other indefinite-lived intangible assets are not amortized, but are reviewed for impairment at least annually, in the fourth quarter, or upon the occurrence of certain triggering events.

The following presents changes in the carrying amount of goodwill for the following periods (in thousands):

	Primary Aluminum		Flat Rolled Products			Total
	Goodwill	Impairment losses	Goodwill	Impairment losses
	$	$	$	$		$
Balance, December 31, 2008	137,570	—	130,706	(25,500	)	242,776
Impairment loss	—	—	—	(105,206	)	(105,206	)
Balance, December 31, 2009	137,570	—	130,706	(130,706	)	137,570
Balance, June 30, 2010	137,570	—	130,706	(130,706	)	137,570

Impairment

Based on our interim impairment analysis of goodwill and other intangible assets during first quarter 2009, we recorded an impairment charge of $2.8 million on trade names and $40.2 million on goodwill in the flat rolled products segment. No further deterioration was noted in second quarter 2009 regarding the recoverability of goodwill; therefore, no goodwill impairment testing was necessary at June 30, 2009. Our analyses included assumptions about future profitability and cash flows of our segments, which we believe reflect our best estimates at the date the valuations were performed. The estimates were based on information that was known or knowable at the date of the valuations, and is at least reasonably possible that the assumptions we employed will be materially different from the actual amounts or results. Future impairment charges could be required if we do not achieve our current cash flow, revenue and profitability projections.

10

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

10. OTHER INTANGIBLE ASSETS

Intangible assets consisted of the following (in thousands):

	December 31, 2009		June 30, 2010
	$		$
Non-amortizable:
Trade names (indefinite life)	17,694		17,694
Amortizable:
Customer relationships (13.0 year weighted-average life)	69,468		69,468
Other (2.5 year weighted-average life)	2,309		2,309
	89,471		89,471
Accumulated amortization	(10,424	)	(13,452	)
Total intangible assets, net	79,047		76,019

Amortization expense related to intangible assets is included in selling, general and administrative expenses of the following amount in each period (in thousands):

Quarter-to-date	$
Three months ended June 30, 2009	912
Three months ended June 30, 2010	1,482
Year-to-date	$
Six months ended June 30, 2009	1,847
Six months ended June 30, 2010	3,028

As part of our interim impairment analysis of intangible assets during first quarter 2009 discussed in Note 9, we recorded an impairment charge of $2.8 million related to the indefinite-lived trade names in the flat rolled products segment.

11. DETAILS OF CERTAIN BALANCE SHEET ACCOUNTS

Accounts receivable, net consisted of the following (in thousands):

	December 31, 2009		June 30, 2010
	$		$
Trade	85,732		118,765
Allowance for doubtful accounts	(202	)	(150	)
Total accounts receivable, net	85,530		118,615

Other current assets consisted of the following (in thousands):

	December 31, 2009	June 30, 2010
	$	$
Current foreign deferred tax asset	5,911	2,948
Employee loans receivable, net	2,083	1,994
Other current assets	5,814	9,654
Total other current assets	13,808	14,596

11

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

Other assets consisted of the following (in thousands):

	December 31, 2009	June 30, 2010
	$	$
Deferred financing costs, net of amortization	17,859	13,878
Cash surrender value of life insurance	22,775	22,905
Pension assets	6,543	6,825
Restricted cash (see Note 18, “Reclamation, Land and Asset Retirement Obligations”)	10,708	12,706
Supplies	17,045	16,068
Prepaid income taxes (see Note 22, “Commitments and Contingencies”)	—	5,000
Other	10,201	10,236
Total other assets	85,131	87,618

Accrued liabilities consisted of the following (in thousands):

	December 31, 2009	June 30, 2010
	$	$
Compensation and benefits	31,752	21,314
Workers’ compensation	4,822	5,276
Asset retirement obligations (see Note 18, “Reclamation, Land and Asset Retirement Obligations”)	1,600	2,020
Land obligation (see Note 18, “Reclamation, Land and Asset Retirement Obligations”)	2,552	2,262
Reclamation obligation (see Note 18, “Reclamation, Land and Asset Obligations”)	1,698	1,832
Environmental remediation obligation (see Note 22, “Commitments and Contingencies”)	1,317	1,317
Obligations to the Government of Jamaica (“GOJ”) (see Note 19, “Noncontrolling interest”)	4,929	3,097
Pension and OPEB liabilities	454	454
Restructuring costs	4	2,858
Other	12,833	14,093
Total accrued liabilities	61,961	54,523

Other long-term liabilities consisted of the following (in thousands):

	December 31, 2009	June 30, 2010
	$	$
Reserve for uncertain tax positions	10,090	10,248
Workers’ compensation	9,485	9,544
Asset retirement obligations (see Note 18, “Reclamation, Land and Asset Obligations”)	11,842	12,121
Land obligation (see Note 18, “Reclamation, Land and Asset Obligations”)	5,104	4,695
Reclamation obligation (see Note 18, “Reclamation, Land and Asset Obligations”)	7,244	7,515
Environmental remediation obligation (see Note 22, “Commitments and Contingencies”)	3,046	3,029
Deferred interest payable	2,894	2,372
Deferred compensation and other	5,927	4,596
Total other long-term liabilities	55,632	54,120

12

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

Accumulated other comprehensive income consisted of the following (in thousands):

	December 31, 2009		June 30, 2010
	$		$
Net unrealized gains (losses) on derivatives, net of taxes of $113,361 and $94,410, respectively	199,031		165,920
Pension and OPEB adjustments, net of tax benefit of $32,212 and $32,212, respectively	(54,303	)	(54,303	)
Total accumulated other comprehensive income	144,728		111,617

12. RELATED PARTY TRANSACTIONS

The Apollo Acquisition was consummated on May 18, 2007, when Noranda AcquisitionCo acquired the Noranda Aluminum business of Xstrata (Schweiz) A.G., or “Xstrata,” by acquiring the stock of a subsidiary of Xstrata. In connection with the Apollo Acquisition, we entered into a management consulting and advisory services agreement with our principal stockholders (affiliated with Apollo Management VI) for the provision of certain structuring, management and advisory services for an initial term ending on May 18, 2017. Terms of the agreement provide for annual fees of $2.0 million, payable in one lump sum annually. Historically, we expensed approximately $0.5 million of such fees each quarter within selling, general and administrative expenses in our consolidated statements of operations. Upon completion of our initial public offering in second quarter 2010, as permitted by the terms of that management agreement, Apollo terminated the agreement and received a $13.5 million fee from the Company. This payment consisted of $1.0 million in management fees accrued for the six months ended June 30, 2010 and $12.5 million in accelerated management fees due upon termination of the management agreement. Such fee is included in selling, general and administrative expenses in the three and six month periods ended June 30, 2010.

We sell flat rolled aluminum products to Berry Plastics Corporation, a portfolio company of Apollo, under an annual sales contract. Sales to this entity were as follows (in thousands):

Quarter-to-date	$
Three months ended June 30, 2009	1,182
Three months ended June 30, 2010	3,197
Year-to-date	$
Six months ended June 30, 2009	2,354
Six months ended June 30, 2010	6,718

We purchase alumina from Gramercy. Until the Joint Venture Transaction on August 31, 2009, Gramercy was our 50% owned joint venture, and purchases of alumina from Gramercy were considered related party transactions. Related party purchases from Gramercy prior to the Joint Venture Transaction were as follows (in thousands):

	$
Three months ended June 30, 2009	16,938
Six months ended June 30, 2009	44,696

13

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

13. LONG-TERM DEBT

The carrying values and fair values of our outstanding debt were as follows (in thousands):

	December 31, 2009				June 30, 2010
	Carrying value		Fair value	Interest rate	Carrying value	Fair value	Interest rate
	$		$	%	$	$	%
Noranda HoldCo:
Senior Floating Rate Notes due 2014 (“HoldCo Notes”)(1)	63,597		41,338	7.02	—	—	—
Noranda AcquisitionCo:
Senior Floating Rate Notes due 2015 (“AcquisitionCo Notes”)	344,068		264,932	5.27	353,142	271,919	5.37
Term B loan due 2014	328,071		328,071	2.23	200,571	200,571	2.54
Revolving credit facility(2)	215,930		215,930	2.23	—	—	—
Total debt, net(1)	951,666				553,713
Less: current portion	(7,500	)			—
Long-term debt, net(1)	944,166				553,713

(1) Net of unamortized discount of $0.5 million and $0 at December 31, 2009 and June 30, 2010, respectively.

(2) As of June 30, 2010, outstanding letters of credit on the revolving credit facility totaled $27.5 million and $215.2 million was available for borrowing.

On May 15, 2010, AcquisitionCo and HoldCo issued $9.1 million and $2.3 million in AcquisitionCo Notes and HoldCo Notes, respectively, as payment for PIK interest due May 15, 2010. Additionally, we have made a permitted election under the indentures governing our AcquisitionCo Notes, to pay all interest due hereunder on Nov 15, 2010, entirely in kind.

(Gain) loss on debt repurchase

During second quarter 2010, we used proceeds from our completed IPO and the termination of fixed-price aluminum swaps completed in connection with our IPO, as discussed in Note 1, to repay $110.0 million of our term B loan and the remaining $66.3 million principal balance of our HoldCo Notes. We used proceeds from April 2010 hedge terminations to repay $10.0 million principal amount of the term B loan. During the first quarter of 2010, we repaid $7.5 million of our term B loan. During the six months ended June 30, 2010, we repaid $127.5 million and $215.9 million of outstanding principal balances on the term B loan and revolving credit facility, respectively. Debt repayments resulted in the accelerated amortization of deferred financing costs of $2.5 million and $2.6 million of deferred financing costs and unamortized debt issuance discount for the three and six months ended June 30, 2010, respectively.

During second quarter 2009, we repurchased $1.6 million and $6.8 million aggregate principal balance of our HoldCo and AcquisitionCo Notes, respectively, and repaid $43.5 million and $6.6 million of outstanding principal balance on the term B loan and revolving credit facility borrowings, respectively. During the six months ended June 30, 2009, we repurchased $149.2 million and $64.9 million aggregate principal balance of our HoldCo and AcquisitionCo notes, respectively, and repaid $43.5 million and $6.6 million of outstanding principal balance on the term B loan and revolving credit facility borrowings, respectively. (Gain) loss on debt repurchases consisted of the following (in thousands):

	Three months ended June 2009
	HoldCo Notes		AcquisitionCo Notes		Term B loan		Revolving credit facility		Total
	$		$		$		$		$
Net carrying amount of debt repurchased or repaid(1)	(1,566	)	(6,297	)	(43,013	)	(6,404	)	(57,280	)
Amount paid to repurchase debt	559		3,428		36,822		4,029		44,838
(Gain) loss on debt repurchase	(1,007	)	(2,869	)	(6,191	)	(2,375	)	(12,442	)
	Three months ended June 30, 2010
	HoldCo Notes		AcquisitionCo Notes		Term B loan		Revolving credit facility		Total
	$		$		$		$		$
Net carrying amount of debt repurchased or repaid(1)	(65,388	)	—		(118,452	)	—		(183,840	)
Amount paid to repurchase debt	66,348		—		120,000		—		186,348
(Gain) loss on debt repurchase	960		—		1,548		—		2,508

14

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

	Six months ended June 30, 2009
	HoldCo Notes		AcquisitionCo Notes		Term B loan		Revolving credit facility		Total
	$		$		$		$		$
Net carrying amount of debt repurchased or repaid(1)	(147,093	)	(64,388	)	(43,013	)	(6,404	)	(260,898	)
Amount paid to repurchase debt(2)	36,885		18,512		36,822		4,029		96,248
(Gain) loss on debt repurchase	(110,208	)	(45,876	)	(6,191	)	(2,375	)	(164,650	)
	Six months ended June 30, 2010
	HoldCo Notes		AcquisitionCo Notes		Term B loan		Revolving credit facility		Total
	$		$		$		$		$
Net carrying amount of debt repurchased or repaid(1)	(65,388	)	—		(125,848	)	(215,930	)	(407,166	)
Amount paid to repurchase debt	66,348		—		127,500		215,930		409,778
(Gain) loss on debt repurchase	960		—		1,652		—		2,612

(1) Net carrying amount includes principal balance and accrued interest, net of any unamortized discount and deferred financing fees.

(2) Includes transaction fees of $0.9 million for the six months ended June 30, 2009.

14. PENSIONS AND OTHER POST-RETIREMENT BENEFITS

We sponsor defined benefit pension plans for hourly and salaried employees. Benefits under our sponsored defined benefit pension plans are based on years of service and/or eligible compensation prior to retirement. We also sponsor other post-retirement benefit (“OPEB”) plans for certain employees. In addition, we provide supplemental executive retirement benefits for certain executive officers.

During the six months ended June 30, 2010, we completed a workforce and business process restructuring in our U.S. operations and a workforce reduction at St. Ann (see Note 4, “Restructuring”). In conjunction with the U.S. restructuring, we recorded, as a component of net periodic cost for the Noranda plans, $1.6 million of special voluntary termination benefits which were provided to employees that met certain criteria for early retirement and who accepted the offer. The workforce reduction at St. Ann triggered a curtailment of the St. Ann benefit plans. Curtailment gains were recognized as of April 30, 2010 as a component of net periodic cost.

Net periodic benefit costs comprise the following (in thousands):

	Noranda Pension				Noranda OPEB
	Three months ended June 30,				Three months ended June 30,
	2009		2010		2009		2010
	$		$		$		$
Service cost	1,716		2,248		34		85
Interest cost	4,350		4,397		105		139
Expected return on plan assets	(3,100	)	(5,132	)	—		(2	)
Actuarial (gain) loss	1,897		626		(10	)	(42	)
Prior service cost	87		81		—		66
Settlement and termination benefits	150		—		—		—
Net periodic cost	5,100		2,220		129		246
	Noranda Pension				Noranda OPEB
	Six months ended June 30,				Six months ended June 30,
	2009		2010		2009		2010
	$		$		$		$
Service cost	3,950		4,510		67		145
Interest cost	8,700		8,814		210		250
Expected return on plan assets	(6,200	)	(8,400	)	—		(2	)
Actuarial (gain) loss	3,333		2,486		(20	)	(58	)
Prior service cost	153		167		—		66
Settlement and termination benefits	264		1,630		—		—
Net periodic cost	10,200		9,207		257		401

15

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

	St. Ann Pension		St. Ann OPEB
	Three months ended June 30, 2010		Three months ended June 30, 2010
	$		$
Service cost	136		71
Interest cost	397		181
Expected return on plan assets	(572	)	—
Recognized net (gain) loss	1,519		1,203
Curtailment gain	(1,511	)	(1,201	)
Net amortization and deferral	9		12
Net periodic cost	(22	)	266
	St. Ann Pension		St. Ann OPEB
	Six months ended June 30, 2010		Six months ended June 30, 2010
	$		$
Service cost	271		130
Interest cost	878		389
Expected return on plan assets	(1,257	)	—
Recognized net (gain) loss	1,544		1,203
Curtailment gain	(1,511	)	(1,201	)
Net amortization and deferral	9		12
Net periodic cost	(66	)	533

Employer contributions

We plan to contribute approximately $10.0 million, $0.4 million, and $0.3 million for the Noranda pension plans, the St. Ann pension and OPEB plans, and the Noranda OPEB plans, respectively in 2010. During the six months ended June 30, 2010, we contributed $3.8 million to the Noranda pension plans, and $0.2 million to the St. Ann pension plan. We may contribute additional funds to the plans in order to maintain an Adjusted Funding Target Attainment Percentage (“AFTAP”) under the Pension Protection Act of 2006 of 80%.

15. SHAREHOLDERS’ EQUITY AND SHARE-BASED PAYMENTS

Noranda long-term incentive plan

In connection with the stock split, the number of shares of our common stock under our 2007 Long-Term Incentive Plan (the “2007 Incentive Award Plan”) which are reserved for issuance to employees and non-employee directors increased from 1,900,000 shares to 3,800,000 shares. Of this amount at June 30, 2010, employees owned 940,232 shares and there were 2,162,432 option grants outstanding. The remaining 697,336 shares remained available for issuance.

In May 2010, our Board of Directors adopted the Noranda 2010 Incentive Award Plan (the “2010 Incentive Award Plan”). The 2010 Incentive Award Plan provides for a variety of share-based awards, including non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, dividend equivalents, performance share awards, performance-based cash awards and stock payment awards. Option terms will be set by our Board of Directors subject to the condition that no option term shall be longer than ten years from the date of grant. Upon termination of an outstanding optionholder’s services with us, the holder may exercise his or her options within the period of time specified in the option grant, to the extent that the options were vested at the time of termination. Our Board of Directors is generally authorized to adopt, amend and rescind rules relating to the administration of the 2010 Incentive Plan, and our Board of Directors is authorized to amend, suspend and terminate the 2010 Incentive Award Plan once put in place. We expect that we will generally be required to obtain approval of our stockholders to increase the number of shares of our common stock that may be issued under the 2010 Incentive Award Plan. We reserved 5,200,000 shares of common stock for issuance under the 2010 Incentive Plan, all of which remained available for issuance at June 30, 2010.

16

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

The summary of our stock option activity and related information were as follows:

	Employee Options and Non-Employee Director Options			Investor Director Provider Options
	Common shares		Weighted average exercise price	Common shares	Weighted average exercise price
			$		$
Outstanding - December 31, 2009	2,129,890		1.53	140,000	9.00
Granted	35,400		2.18	—	—
Modified	—		—	—	—
Exercised	—		—	—	—
Expired	—		—	—	—
Forfeited	(2,858	)	1.14	—	—
Outstanding - June 30, 2010	2,162,432		1.82	140,000	9.00
Fully vested - end of period (weighted average remaining contractual term of 7.0 and 7.3 years, respectively)	1,123,168		2.05	140,000	9.00
Currently exercisable - end of period (weighted average remaining contractual term of 7.0 and 7.3 years, respectively)	1,025,088		2.05	140,000	9.00

The fair value of stock options was estimated at the grant date using the Black-Scholes-Merton option pricing model. The following summarized information concerning stock option grants:

	Three months ended June 30,				Six months ended June 30,
	2009			2010	2009			2010
Expected price volatility		47.0	%	—		47.0	%	90.9	%
Risk-free interest rate		4.0	%	—		4.0	%	3.1	%
Weighted average expected lives in years		7.5		—		7.5		7.5
Weighted average fair value	$	0.76		—	$	0.76		1.76
Forfeiture rate		—		—		—		—
Dividend yield		—		—		—		—

We recorded stock compensation expense of the following amounts (in thousands):

Quarter-to-date	$
Three months ended June 30, 2009	370
Three months ended June 30, 2010	3,580
Year-to-date	$
Six months ended June 30, 2009	740
Six months ended June 30, 2010	3,969

In May 2010, in connection with the Company’s IPO, stock options were modified to remove a call option which had created an implicit seven year vesting period. The effect of this modification was to accelerate expense recognition for certain fully-vested options and to change the amount of expense to be recognized based on an assumed forfeiture rate. We recorded $3.2 million of compensation expense during the three months ended June 30, 2010 in connection with this modification. The modification also shortened the period over which compensation expense is recognized for service awards which continue to vest, resulting in an immaterial amount of additional compensation expense during the three months ended June 30, 2010.

As of June 30, 2010, total unrecognized stock compensation expense related to non-vested stock options was $4.1 million with a weighted average expense recognition period of 4.3 years.

16. INCOME TAXES

Our effective income tax rate was approximately 33.6% for the six months ended June 30, 2010 and 60.8% for the six months ended June 30, 2009.

• The effective tax rate for the six months ended June 30, 2010 was primarily impacted by state income taxes, the Internal Revenue Code Section 199 manufacturing deduction, and accrued interest related to unrecognized tax benefits.

17

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

• The effective tax rate for the six months ended June 30, 2009 was primarily impacted by state income taxes, equity method investee income, and goodwill impairment.

Each interim period is considered an integral part of the annual period and tax expense is measured using the estimated annual effective tax rate. Estimates of the annual effective tax rate at the end of interim periods are, of necessity, based on evaluations of possible future events and transactions and may be subject to subsequent refinement or revision.

• For the six months ended June 30, 2010, we used the annual effective tax rate based on estimated ordinary income for the year ended December 31, 2010.

• For the six months ended June 30, 2009, we determined that our annual ordinary income for the year ended December 31, 2009 could not be reliably estimated because we expected near break-even operations and had a significant permanent difference (i.e. goodwill impairment) such that a minor change in our estimated ordinary income could have resulted in a material change in our estimated annual effective income tax rate. As a result, we determined that the actual effective income tax rate for the six months ending June 30, 2009 was the best estimate of the annual effective tax rate.

As of June 30, 2010 and December 31, 2009, we had unrecognized income tax benefits (including interest) of approximately $11.6 million and $11.5 million, respectively (of which approximately $7.6 million and $7.5 million respectively, if recognized, would favorably impact the effective income tax rate). As of June 30, 2010, the gross amount of unrecognized tax benefits has not changed. It is expected that the unrecognized tax benefits may change in the next twelve months; however, because Xstrata indemnified us for tax obligations related to periods ending on or before the acquisition date, we do not expect the change to have a significant impact on our results of operations or our financial position.

In April 2009, the Internal Revenue Service (“IRS”) commenced an examination of our U.S. income tax return for 2006. As part of the Apollo Acquisition, Xstrata indemnified us for tax obligations related to periods ending on or before the acquisition date. Therefore, we do not anticipate that the IRS examination will have a material impact on our financial statements

17. DERIVATIVE FINANCIAL INSTRUMENTS

We use derivative instruments to mitigate the risks associated with fluctuations in aluminum prices, natural gas prices and interest rates. All derivatives are held for purposes other than trading.

• Fixed-price aluminum swaps. In 2007 and 2008, we implemented a hedging strategy designed to reduce commodity price risk and protect operating cash flows in the primary aluminum products segment through the use of fixed-price aluminum sale swaps. In addition, during first quarter 2009, we entered into fixed-price aluminum purchase swaps to lock in a portion of the favorable market position of our fixed-price aluminum sale swaps. In March 2009, we entered into a hedge settlement agreement with Merrill Lynch to provide a mechanism for us to monetize our favorable net fixed-price swap positions to fund debt repurchases, subject to certain limitations.

At the closing of our IPO in May 2010, we settled all of our remaining fixed-price aluminum swaps and used the proceeds to repay indebtedness. As of June 30, 2010, we have no outstanding fixed-price aluminum swaps.

• Variable-price aluminum swaps. We also enter into forward contracts with our customers to sell aluminum in the future at fixed-prices in the normal course of business. Because these contracts expose us to aluminum market price fluctuations, we economically hedge this risk by entering into variable-price aluminum swap contracts with various brokers, typically for terms not greater than one year.

• Natural gas swaps. We purchase natural gas to meet our production requirements. These purchases expose us to the risk of fluctuating natural gas prices. To offset changes in the Henry Hub Index Price of natural gas, we enter into financial swaps, by purchasing the fixed forward price for the Henry Hub Index and simultaneously entering into an agreement to sell the actual Henry Hub Index Price.

• Interest rate swaps. We have floating-rate debt, which is subject to variations in interest rates. We have entered into an interest rate swap agreement to limit our exposure to floating interest rates for the periods through November 15, 2011

18

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

As of June 30, 2010, our outstanding hedges were as follows:

Aluminum swaps-variable-price

Year	Average hedged price per pound	Pounds hedged annually
	$	(in thousands)
2010	0.93	38,574
2011	0.99	12,097
		50,671

Natural gas swaps

Year	Average price per million BTU’s		Million BTU’s hedged annually
	$		(in thousands)
2010	7.30		4,006
2011	7.28		8,048
2012	7.46		8,092
			20,146
	Hedged LIBOR Rate		Variable Rate Debt Hedged
			$ (in thousands)
Interest rate swap
November 15, 2010	4.98	%	250,000
May 15, 2011	4.98	%	100,000
November 15, 2011	4.98	%	100,000

We recognize all derivative instruments as either assets or liabilities at their estimated fair value in our balance sheet. The following table presents the carrying values, which were recorded at fair value, of our derivative instruments outstanding (in thousands):

	December 31, 2009		June 30, 2010
	$		$
Aluminum swaps-fixed-price	196,602		—
Aluminum swaps-variable-price	6,813		(1,087	)
Interest rate swaps	(13,312	)	(9,116	)
Natural gas swaps	(25,839	)	(38,404	)
Total	164,264		(48,607	)

Merrill Lynch is the counterparty for a substantial portion of our derivatives. All swap arrangements with Merrill Lynch are part of a master arrangement which is subject to the same guarantee and security provisions as the senior secured credit facilities. The master arrangement does not require us to post additional collateral, or cash margin. We present the fair values of derivatives where Merrill Lynch is the counterparty in a net position on the consolidated balance sheet as a result of our master netting agreement. The following is a presentation of the gross components of our net derivative balances (in thousands):

	December 31, 2009		June 30, 2010
	$		$
Current derivative assets	97,382		1,271
Current derivative liabilities	(28,627	)	(27,407	)
Current derivative assets (liabilities), net	68,755		(26,136	)
Long-term derivative assets	113,026		17
Long-term derivative liabilities	(17,517	)	(22,488	)
Long-term derivative assets (liabilities), net	95,509		(22,471	)

19

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

The following is a gross presentation of the derivative balances segregated by type of contract and between derivatives that are designated and qualify for hedge accounting and those that are not:

	As of December 31, 2009						As of June 30, 2010
	Hedges that qualify  for hedge accounting			Hedges that do not qualify for hedge accounting			Hedges that qualify  for hedge accounting			Hedges that do not qualify  for hedge accounting
	Asset	Liability		Asset	Liability		Asset	Liability		Asset	Liability
Aluminum swaps-fixed-price	—	—		202,726	(6,124	)	—	—		—	—
Aluminum swaps-variable-price	—	—		6,898	(85	)	—	—		1,288	(2,375	)
Interest rate swaps	—	—		—	(13,312	)	—	—		—	(9,116	)
Natural gas swaps	784	(3,608	)	—	(23,015	)	—	(15,903	)	—	(22,501	)
Total	784	(3,608	)	209,624	(42,536	)	—	(15,903	)	1,288	(33,992	)

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of any gain or loss on the derivative is reported as a component of accumulated other comprehensive loss (“AOCI”) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings.

• Aluminum swaps—fixed-price. From January 1, 2008 to January 29, 2009, fixed-price aluminum-swaps were designated and qualified as cash flow hedges. As a result of the New Madrid power outage in January 2009, management concluded that certain hedged sale transactions were no longer probable of occurring, and we discontinued hedge accounting for all our aluminum fixed-price sale swaps on January 29, 2009. At that date, amounts were frozen in AOCI until such time as they are reclassified into earnings in the period the hedged sales occur, or until it is determined that the original forecasted sales are probable of not occurring.

• Natural gas swaps. We entered into certain natural gas contracts during the fourth quarter of 2009 that qualified for and were designated as cash flow hedges based on a portion of estimated consumption of natural gas.

The following table presents the net amount of unrealized gains (losses) on cash flow hedges that were reported as a component of AOCI at June 30, 2010, and the expected timing of those amounts being reclassified into earnings:

	Amounts expected to be reclassified into earnings				Net unrealized gains (losses) on cash flow hedges, pre-tax, in AOCI at June 30, 2010
	July 1, 2010 to June 30, 2011		Thereafter
	$		$		$
Aluminum swaps-fixed-price	101,596		174,635		276,231
Natural gas swaps	(5,538	)	(10,363	)	(15,901	)
Total	96,058		164,272		260,330

Gains and losses on the derivatives representing hedge ineffectiveness are recognized in current earnings, along with amounts that are reclassified from AOCI. Derivatives that do not qualify for hedge accounting or have not been designated for hedge accounting treatment are adjusted to fair value through earnings in gains (losses) on hedging activities in the consolidated statements of operations. The following table presents how our hedging activities affected our consolidated statements of operations for each period.

20

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

	Derivatives qualified as hedges				Derivatives not qualified as hedges		Total
	Amount reclassified from AOCI		Hedge ineffectiveness		Change in fair value
	$		$		$		$
Three months ended June 30, 2009:
Aluminum swaps-fixed-price	(69,855	)	—		24,739		(45,116	)
Aluminum swaps-variable price	—		—		(8,221	)	(8,221	)
Interest rate swaps	—		—		307		307
Natural gas swaps	—		—		(168	)	(168	)
Total (gain) loss on hedging activities	(69,855	)	—		16,657		(53,198	)
Three months ended June 30, 2010:
Aluminum swaps-fixed-price	(22,191	)	—		(5,956	)	(28,147	)
Aluminum swaps-variable price	—		—		6,613		6,613
Interest rate swaps	—		—		238		238
Natural gas swaps	1,502		1		(726	)	777
Total (gain) loss on hedging activities	(20,689	)	1		169		(20,519	)
Six months ended June 30, 2009:
Aluminum swaps-fixed-price	(125,668	)	(69	)	14,952		(110,785	)
Aluminum swaps-variable price	—		—		(4,410	)	(4,410	)
Interest rate swaps	—		—		850		850
Natural gas swaps	—		—		16,019		16,019
Total (gain) loss on hedging activities	(125,668	)	(69	)	27,411		(98,326	)
Six months ended June 30, 2010:
Aluminum swaps-fixed-price	(39,024	)	—		(1,499	)	(40,523	)
Aluminum swaps-variable price	—		—		6,889		6,889
Interest rate swaps	—		—		1,405		1,405
Natural gas swaps	1,800		(34	)	8,181		9,947
Total (gain) loss on hedging activities	(37,224	)	(34	)	14,976		(22,282	)

18. RECLAMATION, LAND, AND ASSET RETIREMENT OBLIGATIONS

Reclamation obligation

St. Ann has a reclamation obligation to rehabilitate land disturbed by St. Ann’s bauxite mining operations. At June 30, 2010, the current and long-term portions of the reclamation obligation of $1.8 million and $7.5 million are included in accrued liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheet.

The following is a reconciliation of the aggregate carrying amount of the reclamation obligation at St. Ann (in thousands):

	Six months ended June 30, 2010
	$
Balance, December 31, 2009	8,942
Additional liabilities incurred	1,297
Liabilities settled	(892	)
Balance, June 30, 2010	9,347

Land obligation

In cases where land to be mined is privately owned, St. Ann offers to purchase the residents’ homes for cash, relocate the residents to another area, or a combination of these two options. These costs are recorded as liabilities as incurred. At June 30, 2010,

21

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

the current and long-term portions of the land obligation of $2.3 million and $4.7 million are included in accrued liabilities and other long-term liabilities, respectively, in the accompanying consolidated balance sheet.

Asset retirement obligations

Our asset retirement obligations (“ARO”) consist of costs related to the disposal of certain spent pot liners associated with the New Madrid smelter, as well as costs associated with the future closure and post-closure care of “red mud lakes” at the Gramercy facility, where Gramercy disposes of red mud wastes from its refining process.

The current portion of the liability of $1.6 million and $2.0 million at December 31, 2009 and June 30, 2010, respectively, relates to the disposal of spent pot-liners at New Madrid and is recorded in accrued liabilities in the accompanying consolidated balance sheets. The remaining non-current portion of $11.8 million and $12.1 million at December 31, 2009 and June 30, 2010, respectively, is included in other long-term liabilities in the accompanying consolidated balance sheets.

The following is a reconciliation of the aggregate carrying amount of liabilities for the asset retirement obligations (in thousands):

	Six months ended June 30, 2010
	$
Balance, December 31, 2009	13,442
Additional liabilities incurred	731
Liabilities settled	(536	)
Accretion expense	504
Balance, June 30, 2010	14,141

At December 31, 2009 and June 30, 2010, we had $6.2 million and $8.3 million, respectively, of restricted cash in an escrow account as security for the payment of red mud lake closure obligations that would arise under state environmental laws upon the termination of operations at the Gramercy facility. This amount is included in other assets in the accompanying consolidated balance sheet. The remaining restricted cash relates primarily to funds for workers’ compensation claims.

19. NONCONTROLLING INTEREST

Through St. Ann, we hold a 49% partnership interest in Noranda Jamaica Bauxite Partners (“NJBP”), in which the Government of Jamaica (“GOJ”) holds 51% interest. NJBP mines bauxite, approximately 50% of which is sold to Gramercy, with the balance sold to third parties.

We have determined that NJBP is a variable interest entity under U.S. GAAP, and St. Ann is NJBP’s primary beneficiary. The determination that St. Ann is the primary beneficiary was based on the fact that St. Ann absorbs the profits and losses associated with the partnership, while the GOJ receives certain fees from St. Ann (royalties, production and asset usage fees, etc.). Therefore, we consolidate NJBP into our financial statements beginning with the date of the Joint Venture Transaction. On January 1, 2010, we adopted Accounting Standards Update (ASU) No. 2009-17, “Improvements in Financial Reporting by Enterprises Involved with Variable Interest Entities,” (“ASU 2009-17”). ASU 2009-17 amends consolidation guidance for determining which enterprise, if any, is the primary beneficiary of a variable interest entity (“VIE”) and is therefore required to consolidate a VIE by replacing a quantitative approach with a qualitative approach. The qualitative approach is focused on identifying which enterprise has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits that could be significant to the VIE. The adoption of ASU 2009-17 did not change our previous conclusion that St. Ann is NJBP’s primary beneficiary, and therefore did not have an effect on our financial statements at the date of adoption.

22

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

Due to the consolidation of NJBP, we reflected the following amounts in our balance sheet (in thousands):

	December 31, 2009						June 30, 2010
	NJBP Balances		Impact of Eliminations		Impact on Consolidated Statements		NJBP Balances		Impact of Eliminations		Impact on Consolidated Statements
	$		$		$		$		$		$
Cash and cash equivalents	117		—		117		498		—		498
Accounts receivable	12,393		(12,393	)	—		16,655		(16,655	)	—
Inventories, consisting of maintenance supplies inventory and fuel	11,813		—		11,813		11,174		—		11,174
Property, plant and equipment	36,911		—		36,911		35,815		—		35,815
Other assets	2,305		—		2,305		3,302		—		3,302
Accounts payable and accrued liabilities	(43,621	)	36,547		(7,074	)	(47,123	)	35,368		(11,755	)
Environmental, land and reclamation liabilities	(8,152	)	—		(8,152	)	(8,557	)	—		(8,557	)
Noncontrolling interest (at 51%)	(6,000	)	—		(6,000	)	(6,000	)	—		(6,000	)
St. Ann’s net investment and advances to NJBP	5,766		24,154		29,920		5,764		18,713		24,477

The liabilities recognized as a result of consolidating NJBP do not represent additional claims on our general assets. NJBP’s creditors have claims only on the specific assets of NJBP and St. Ann. Similarly, the assets of NJBP we consolidate do not represent additional assets available to satisfy claims against our general assets.

St. Ann receives bauxite from NJBP at cost, excluding certain mining lease fees; therefore, NJBP operates at breakeven. Further, all returns to the GOJ are provided through the payments from St. Ann under the various fees, levies, and royalties. In these circumstances, no portion of NJBP’s net income (loss) or consolidated comprehensive income (loss) is allocated to the noncontrolling interest. We do not expect the balance of the non-controlling interest to change from period-to-period unless there is an adjustment to the fair value of inventory or property, plant and equipment, as may occur in a LCM or asset impairment scenario.

20. NET INCOME (LOSS) PER SHARE

We present both basic and diluted EPS on the face of the consolidated statements of operations. Basic EPS is calculated as net income available to common stockholders divided by the weighted-average number of shares outstanding during the period. Diluted EPS is calculated using the weighted-average outstanding common shares determined using the treasury stock method for options (in thousands, except per share).

	Three months ended June 30,					Six months ended June 30,
	2009			2010		2009		2010
Net income (loss)	$	(12,126	)	$	6,873	$	32,153	$	6,818
Weighted-average common shares outstanding:
Basic		43,487			49,088		43,485		46,443
Effect of diluted securities		—			1,015		—		637
Diluted		43,487			50,103		43,485		47,080
Basic EPS	$	(0.28	)	$	0.14	$	0.74	$	0.15
Diluted EPS	$	(0.28	)	$	0.14	$	0.74	$	0.14

Certain stock options whose terms and conditions are described in Note 15, “Shareholders’ Equity and Share-Based Payments,” could potentially dilute basic EPS in the future, but were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented. Stock options excluded from the computation of diluted EPS were:

	Three months ended June 30,		Six months ended June 30,
	2009	2010	2009	2010
Antidilutive options	1,768,788	—	1,768,788	55,246

21. FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We incorporate assumptions that market participants would use in pricing

23

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

the asset or liability, and utilize market data to the maximum extent possible. Our fair value measurements incorporate nonperformance risk (i.e., the risk that an obligation will not be fulfilled). In measuring fair value, we reflect the impact of our own credit risk on our liabilities, as well as any collateral. We also consider the credit standing of our counterparties in measuring the fair value of our assets.

We use any of three valuation techniques to measure fair value: the market approach, the income approach, and the cost approach. We determine the appropriate valuation technique based on the nature of the asset or liability being measured and the reliability of the inputs used in arriving at fair value.

The inputs used in applying valuation techniques include assumptions that market participants would use in pricing the asset or liability (i.e., assumptions about risk). Inputs may be observable or unobservable. We use observable inputs in our valuation techniques, and classify those inputs in accordance with the fair value hierarchy established by applicable accounting guidance, which prioritizes those inputs. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

Level 1 inputs — Unadjusted quoted prices in active markets for identical assets or liabilities that we have access as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Fair value measurements that may be subject to Level 1 inputs include exchange-traded derivatives or listed equities.

Level 2 inputs — Inputs other than quoted prices included in Level 1, which are either directly or indirectly observable as of the reporting date. A Level 2 input must be observable for substantially the full term of the asset or liability. Fair value measurements that may fall into Level 2 could include financial instruments with observable inputs such as interest rates or yield curves.

Level 3 inputs — Unobservable inputs that reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability. Fair value measurements that may be classified as Level 3 could, for example, be determined from our internally developed model that results in our best estimate of fair value. Fair value measurements that may fall into Level 3 could include certain structured derivatives or financial products that are specifically tailored to a customer’s needs.

Financial assets and liabilities are classified based on the lowest enumerated level of input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the fair value of assets and liabilities and their placement within the fair value hierarchy.

24

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

Valuations on a recurring basis

The table below sets forth by level within the fair value hierarchy of our assets and liabilities that were measured at fair value on a recurring basis as of June 30, 2010 (in thousands):

	Level 1	Level 2		Level 3	Total Fair Value
	$	$		$	$
Cash equivalents	16,369	—		—	16,369
Derivative assets	—	1,288		—	1,288
Derivative liabilities	—	(49,895	)	—	(49,895	)
Pension plan assets:
Equity securities:
Large capitalization	53,753	—		—	53,753
Small and mid capitalization growth	11,868	16,632		1,319	29,819
Global mid-capitalization blend	45,034	—		—	45,034
Global equity and other	5,541	970		—	6,511
Fixed income securities:
Global government bonds	49,681	—		—	49,681
Government of Jamaica bonds	7,758	3,019		—	10,777
Global corporate bonds	13,322	—		—	13,322
Mortgage-backed securities	12,364	—		—	12,364
Other	1,486	—		—	1,486
Cash and cash equivalents	5,462	1,471		—	6,933
Total	222,638	(26,515	)	1,319	197,442

Cash equivalents are invested in U.S. treasury securities, short-term treasury bills and commercial paper. These instruments are valued based upon unadjusted, quoted prices in active markets and are classified within Level 1.

Fair values of all derivative instruments are classified as Level 2. Those fair values are primarily measured using industry standard models that incorporate inputs including: quoted forward prices for commodities, interest rates, and current market prices for those assets and liabilities. Substantially all of the inputs are observable throughout the full term of the instrument. The counterparty of our derivative trades is Merrill Lynch, with the exception of a small portion of our variable price aluminum swaps.

Pension plan assets were valued based upon the fair market value of the underlying investments. The majority of plan assets are invested in debt and equity securities traded in active markets, and are classified within Level 1. Certain investments do not have guaranteed liquidity, and are therefore classified as Level 2. Our investment in a small capitalization equity fund that has underlying investments for which significant unobservable inputs were used to determine fair value is classified as Level 3 within the hierarchy. The fair value of the underlying investments are measured based on the original transaction price or recent transactions involving the same or similar instruments. The fair value measurement of investments classified as Level 3 may also reflect adjustments for illiquidity or non-transferability of the underlying investments.

In Note 13, “Long-Term Debt,” we disclose the fair values of our debt instruments. Those fair values are classified as Level 2 within the hierarchy. While the senior floating rate notes have quoted market prices, we do not believe transactions on those instruments occur in sufficient enough frequency or volume to warrant a Level 1 classification. Further, the fair values of the term B loan and revolving credit facility are based on interest rates available at each balance sheet date, resulting in a Level 2 classification as well.

Valuations on a non-recurring basis

Fair value of goodwill, trade names and investment in affiliates (prior to the Joint Venture Transaction) are classified as Level 3 within the hierarchy, as their fair values are measured using management’s assumptions about future profitability and cash flows. Such assumptions include a combination of discounted cash flow and market-based valuations. Discounted cash flow valuations require assumptions about future profitability and cash flows, which we believe reflects the best estimates at the date the valuations were performed. Key assumptions used to determine discounted cash flow valuations at March 31, 2009 and June 30, 2009 and December 31, 2009 include: (a) cash flow periods ranging from five to seven years; (b) terminal values based upon long-term growth rates ranging from 1.0% to 2.0%; and (c) discount rates based on a risk-adjusted weighted average cost of capital ranging from 12.5% to 13.8% for intangibles and to 19.0% for investment in affiliates.

25

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

22. COMMITMENTS AND CONTINGENCIES

Labor commitments

We are a party to six collective bargaining agreements that expire at various times. One agreement at St. Ann expires in December 2010. We expect, during the last half of 2010, to begin renegotiating the bargaining agreement at St. Ann with the University and Allied Workers Union (“UAWU”), which expired on April 30, 2010. Additionally, we have completed the process of formalizing recognition of a third union at St. Ann, with the Bustamante Industrial Trade Union (“BITU”). We are currently in negotiations to finalize terms of the agreement.

Our agreement with the union at Gramercy expires in September 2010. All other collective bargaining agreements expire within the next five years.

Legal contingencies

We are a party to legal proceedings incidental to our business. In the opinion of management, the ultimate liability with respect to these actions will not materially affect our financial position, results of operations, and cash flows.

Environmental matters

In addition to our asset retirement obligations discussed in Note 18, “Reclamation, Land and Asset Retirement Obligations,” we have identified certain environmental conditions requiring remedial action or ongoing monitoring at the Gramercy refinery. As of June 30, 2010, we recorded undiscounted liabilities of $1.3 million and $3.0 million in accrued liabilities and other long-term liabilities, respectively, for remediation of Gramercy’s known environmental conditions. Approximately two-thirds of the recorded liability represents clean-up costs expected to be incurred during the next five years. The remainder represents monitoring costs which will be incurred ratably over a thirty year period. Because the remediation and subsequent monitoring related to these environmental conditions occurs over an extended period of time, these estimates are subject to change based on cost. No other responsible parties are involved in any ongoing environmental remediation activities. We cannot predict what environmental laws or regulations will be enacted or amended in the future, how existing or future laws or regulations will be interpreted or enforced or the amount of future expenditures that may be required to comply with such laws or regulations. Such future requirements may result in liabilities which may have a material adverse effect on our financial condition, results of operations or cash flows.

Production Levy

At the end of 2009, the Company and the GOJ reached an amendment to the establishment agreement setting the fiscal regime structure for St. Ann’s bauxite mining operations through December 31, 2014. The amendment covers the fiscal regime, as well as commitments for certain expenditures for haulroad development, maintenance, dredging, land purchases, contract mining, training and other general capital expenditures from 2009 through 2014. We signed the formal amendment with the GOJ on the fiscal structure in June 2010, which did not change the cost structure from the agreement reached in 2009. The terms of the agreement required us to make a $14.0 million prepayment of Jamaican income taxes, of which $10.0 million was paid in June 2010 and the remainder will be paid in April 2011. As of June 30, 2010, $5.0 million of the June 2010 prepayment is recorded in prepaid assets and $5.0 million is in other assets.

Guarantees

In connection with the 2005 disposal of a former subsidiary, American Racing Equipment, Inc (“ARE”), we guaranteed certain outstanding leases for the automotive wheel facilities located in Rancho Dominguez, California. The leases have various expiration dates that extend through December 2011. Since March 2008, we were released from the guarantee obligation on one of the properties, resulting in a reduction of the remaining maximum future lease obligations. As of June 30, 2010 the remaining maximum future payments under these lease obligations totaled approximately $0.8 million. We have concluded that it is not probable that we will be required to make payments pursuant to these guarantees and we have not recorded a liability for these guarantees. Further, ARE’s purchaser has indemnified us for all losses associated with the guarantees.

Power Contract

Electricity is the largest cost component at our New Madrid smelter and is a key factor to our long-term competitive position in the primary aluminum business. We have a power purchase agreement with AmerenUE (“Ameren”) pursuant to which we have agreed to purchase substantially all of New Madrid’s electricity through May 2020. Our current rate structure with Ameren consists of two components: a base rate and a fuel adjustment clause. On June 21, 2010, the Missouri Public Service Commission (“MoPSC”) ruled on the power rate case filed by Ameren on July 24, 2009. The MoPSC’s ruling resulted in no substantive change to the base power rate for the Company’s aluminum smelter in New Madrid.

26

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

23. SEGMENTS

We manage and operate our business segments based on the markets we serve and the products and services provided to those markets. We evaluate performance and allocate resources based on profit from operations before income taxes.

Prior to August 2009, we reported results in two segments: upstream (which included corporate expenses) and downstream. In August 2009, with the completion of the Joint Venture Transaction, we changed our segment reporting so that corporate was a separate segment, and Gramercy and St. Ann were included in the upstream segment.

During first quarter 2010, in connection with continued integration activities of our alumina refinery and our bauxite mining operations, we changed the composition of our reportable segments. Those integration activities included a re-evaluation of the financial information provided to our Chief Operating Decision Maker, as that term is defined in US GAAP. We have now identified five reportable segments, disaggregating the post-Joint Venture Transaction upstream segment into three segments: primary aluminum products, alumina refining and bauxite. The downstream segment will be referred to as the flat rolled products segment. Our corporate expenses are reflected in the corporate segment. All segment information presented herein has been revised to reflect the new structure. These segment changes had no impact on our historical consolidated financial position, results of operations or cash flows.

Our bauxite segment mines and produces the bauxite used for alumina production at our Gramercy refinery, and the remaining bauxite not taken by the refinery is sold to a third party. Our alumina refining segment chemically refines and converts bauxite into alumina, which is the principal raw material used in the production of primary aluminum products. The Gramercy refinery is the source for the vast majority of our New Madrid smelter’s alumina requirements. The remaining alumina production at the Gramercy refinery that is not taken by New Madrid is in the form of smelter grade alumina and alumina hydrate, or chemical grade alumina, and is sold to third parties. The primary aluminum products segment produces value-added aluminum products in several forms: billet, used mainly for building construction, architectural and transportation applications; rod, used mainly for electrical applications and steel deoxidation; value-added sow, used mainly for aerospace; and foundry, used mainly for transportation. In addition to these value-added products, we produce commodity grade sow, the majority of which is used in our rolling mills. Our flat rolled products segment has rolling mill facilities whose major foil products are: finstock, used mainly for the air conditioning, ventilation and heating industry, and container stock, used mainly for food packaging, pie pans and convenience food containers.

27

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

Geographic Region Information

Substantially all of our sales are within the United States. Sales whose country of origin was outside of the United States represented less than 5% of our consolidated sales in 2009 and 2010. All long-lived assets are located in the United States except those assets of our St. Ann bauxite mine comprising $52.9 million at December 31, 2009 and $50.9 million at June 30, 2010, which are located in Jamaica. The following tables summarize the operating results and assets of our reportable segments (in thousands):

	Three months ended June 30, 2009 (1)
	Primary aluminum products		Flat rolled products	Corporate		Eliminations		Consolidated
	$		$	$		$		$
Sales:
External customers	59,832		97,847	—		—		157,679
Intersegment	10,638		—	—		(10,638	)	—
	70,470		97,847	—		(10,638	)	157,679
Costs and Expenses:
Cost of sales	89,225		85,158	—		(10,638	)	163,745
Selling, general and administrative expenses	(32	)	2,814	7,935		—		10,717
Excess insurance proceeds	(29,185	)	—	—		—		(29,185	)
	60,008		87,972	7,935		(10,638	)	145,277
Operating income (loss)	10,462		9,875	(7,935	)	—		12,402
Interest expense, net								14,100
(Gain) loss on hedging activities, net								(53,198	)
Equity in net (income) loss of investments in affiliates								34,051
(Gain) loss on debt repurchase								(12,442	)
Income (loss) before income taxes								29,891
Depreciation and amortization	14,718		5,556	78		—		20,352
Capital expenditures	10,548		1,367	757		—		12,672

	Three months ended June 30, 2010 (1)
	Bauxite		Alumina refining	Primary aluminum products	Flat rolled products	Corporate		Eliminations		Consolidated
	$		$	$	$	$		$		$
Sales:
External customers	10,226		55,847	128,030	140,802	—		—		334,905
Intersegment	17,427		40,075	33,559	—	—		(91,061	)	—
	27,653		95,922	161,589	140,802	—		(91,061	)	334,905
Costs and Expenses:
Cost of sales	22,475		80,447	146,128	132,984	—		(91,061	)	290,973
Selling, general and administrative expenses	6,490		1,487	4,549	1,798	28,806		—		43,130
	28,965		81,934	150,677	134,782	28,806		(91,061	)	334,103
Operating income (loss)	(1,312	)	13,988	10,912	6,020	(28,806	)	—		802
Interest expense, net										8,539
(Gain) loss on hedging activities, net										(20,519	)
(Gain) loss on debt repurchase										2,508
Income (loss) before income taxes										10,274
Depreciation and amortization	2,593		4,984	12,185	5,159	205		—		25,126
Capital expenditures	1,412		2,584	7,734	2,665	423		—		14,818

(1) Our bauxite and alumina refining segments are presented subsequent to the Joint Venture Transaction, prior to which the results of Gramercy and St. Ann were reported using the equity method.

28

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

	Six months ended June 30, 2009 (1)
	Primary aluminum products		Flat rolled products		Corporate		Eliminations		Consolidated
	$		$		$		$		$
Sales:
External customers	126,914		195,080		—		—		321,994
Intersegment	18,856		—		—		(18,856	)	—
	145,770		195,080		—		(18,856	)	321,994
Costs and Expenses:
Cost of sales	190,275		176,645		—		(18,856	)	348,064
Selling, general and administrative expenses	10,210		6,308		16,425		—		32,943
Goodwill and other intangible asset impairment	—		43,000		—		—		43,000
Excess insurance proceeds	(29,185	)	—		—		—		(29,185	)
	171,300		225,953		16,425		(18,856	)	394,822
Operating income (loss)	(25,530	)	(30,873	)	(16,425	)	—		(72,828	)
Interest expense, net									29,974
(Gain) loss on hedging activities, net									(98,326	)
Equity in net (income) loss of investments in affiliates									78,101
(Gain) loss on debt repurchase									(164,650	)
Income (loss) before income taxes									82,073
Depreciation and amortization	33,826		11,750		144		—		45,720
Capital expenditures	18,762		2,543		1,055		—		22,360

	Six months ended June 30, 2010 (1)
	Bauxite	Alumina refining	Primary aluminum products	Flat rolled products	Corporate		Eliminations		Consolidated
	$	$	$	$	$		$		$
Sales:
External customers	25,104	109,706	235,048	266,556	—		—		636,414
Intersegment	30,104	77,825	60,089	—	—		(168,018	)	—
	55,208	187,531	295,137	266,556	—		(168,018	)	636,414
Costs and Expenses:
Cost of sales	42,186	168,048	261,628	252,055	—		(168,018	)	555,899
Selling, general and administrative expenses	9,818	5,273	12,014	6,560	38,466		—		72,131
	52,004	173,321	273,642	258,615	38,466		(168,018	)	628,030
Operating income (loss)	3,204	14,210	21,495	7,941	(38,466	)	—		8,384
Interest expense, net									17,786
(Gain) loss on hedging activities, net									(22,282	)
(Gain) loss on debt repurchase									2,612
Income (loss) before income taxes									10,268
Depreciation and amortization	5,632	10,365	24,376	10,396	416		—		51,185
Capital expenditures	2,946	4,193	15,246	4,487	938		—		27,810

(1) Our bauxite and alumina refining segments are presented subsequent to the Joint Venture Transaction, prior to which the results of Gramercy and St. Ann were reported using the equity method.

29

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

	December 31, 2009		June 30, 2010
	$		$
Segment assets:
Bauxite	125,168		130,050
Alumina refining	237,886		221,383
Primary aluminum products	612,099		590,722
Flat rolled products	382,601		398,306
Corporate	373,645		103,480
Eliminations	(33,811	)	(42,213	)
Total assets	1,697,588		1,401,728

24. SUBSIDIARY ISSUER OF GUARANTEED NOTES

On May 18, 2007, Noranda AcquisitionCo issued $510.0 million senior floating rate notes due 2015 (“the AcquisitionCo Notes”). The AcquisitionCo Notes are senior unsecured obligations of Noranda AcquisitionCo, and are fully and unconditionally guaranteed on a joint and several basis by the parent company, Noranda HoldCo, and by the existing and future wholly owned domestic subsidiaries of Noranda AcquisitionCo that guarantee the senior secured credit facilities. NHB Capital LLC (“NHB”), a 100%-owned subsidiary of Noranda AcquisitionCo, is not a guarantor of the senior secured credit facilities, and is therefore not a guarantor of the AcquisitionCo Notes. St. Ann is also not a guarantor of the AcquisitionCo Notes, as St. Ann is a foreign subsidiary.

As of December 31, 2009, NHB held an investment in HoldCo Notes totaling $105.7 million. During second quarter 2010, NHB delivered to Noranda HoldCo all of its investment in HoldCo Notes, which Noranda HoldCo immediately retired.

The following unaudited consolidating financial statements present separately the financial condition and results of operations and cash flows (condensed) for Noranda HoldCo (as parent guarantor), Noranda AcquisitionCo (as the issuer), the subsidiary guarantors, the subsidiary non-guarantors (NHB and St. Ann) and eliminations. These unaudited consolidating financial statements have been prepared and presented in accordance with SEC Regulation S-X Rule 3-10 “Financial Statements of Guarantors and Issuers of Guaranteed Securities Registered or Being Registered”.

The accounting policies used in the preparation of these unaudited consolidating financial statements are consistent with those found elsewhere in the unaudited condensed consolidated financial statements. Intercompany transactions have been presented gross in the following unaudited consolidating financial statements; however these transactions eliminate in consolidation.

30

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

NORANDA ALUMINUM HOLDING CORPORATION

Consolidating Balance Sheet

December 31, 2009

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantors		Eliminations		Consolidated
	$		$		$		$		$		$
Current assets:
Cash and cash equivalents	21,444		140,520		4,266		1,006		—		167,236
Accounts receivable, net:
Trade	—		—		82,068		3,462		—		85,530
Affiliates	—		5,909		—		10,346		(16,255	)	—
Interest due from affiliates	—		—		—		1,417		(1,417	)	—
Inventories	—		—		155,665		26,691		—		182,356
Derivative assets, net	—		—		68,755		—		—		68,755
Taxes receivable	—		—		1,053		(323	)	—		730
Prepaid expenses	169		—		24,414		11,834		1		36,418
Other current assets	—		2,000		1,991		9,811		6		13,808
Total current assets	21,613		148,429		338,212		64,244		(17,665	)	554,833
Investments in affiliates	278,770		1,291,423		—		105,740		(1,675,933	)	—
Advances due from affiliates	—		2,941		267,202		5,216		(275,359	)	—
Property, plant and equipment, net	—		—		692,621		52,877		—		745,498
Goodwill	—		—		137,570		—		—		137,570
Other intangible assets, net	—		—		79,047		—		—		79,047
Long-term derivative assets, net	—		—		95,509		—		—		95,509
Other assets	550		17,309		57,783		9,489		—		85,131
Total assets	300,933		1,460,102		1,667,944		237,566		(1,968,957	)	1,697,588
Current liabilities:
Accounts payable
Trade	33		2,000		64,378		3,501		—		69,912
Affiliates	—		—		10,347		5,908		(16,255	)	—
Accrued liabilities	—		—		45,713		16,248		—		61,961
Accrued interest:
Third parties	—		167		—		—		—		167
Affiliates	1,417		—		—		—		(1,417	)	—
Deferred tax liabilities	(6,481	)	(16,160	)	45,377		4,596		(21	)	27,311
Current portion of long-term debt	—		7,500		—		—		—		7,500
Total current liabilities	(5,031	)	(6,493	)	165,815		30,253		(17,693	)	166,851
Long-term debt, net	221,418		880,569		—		—		(157,821	)	944,166
Pension and OPEB liabilities	—		—		100,130		6,263		—		106,393
Other long-term liabilities	653		2,394		40,073		12,512		—		55,632
Advances due to affiliates	2,940		272,417		2		—		(275,359	)	—
Deferred tax liabilities	863		32,445		255,074		3,966		38,034		330,382
Common stock subject to redemption	2,000		—		—		—		—		2,000
Shareholders’ equity:
Common stock	436		—		—		—		—		436
Capital in excess of par value	16,123		216,606		1,199,712		83,683		(1,500,001	)	16,123
Accumulated deficit	(136,172	)	(135,539	)	(240,594	)	44,918		392,264		(75,123	)
Accumulated other comprehensive income	197,703		197,703		147,732		49,971		(448,381	)	144,728
Total Noranda shareholders’ equity	78,090		278,770		1,106,850		178,572		(1,556,118	)	86,164
Noncontrolling interest	—		—		—		6,000		—		6,000
Total shareholders’ equity	78,090		278,770		1,106,850		184,572		(1,556,118	)	92,164
Total liabilities and shareholders’ equity	300,933		1,460,102		1,667,944		237,566		(1,968,957	)	1,697,588

31

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

NORANDA ALUMINUM HOLDING CORPORATION

Consolidating Balance Sheet

June 30, 2010

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantors		Eliminations		Consolidated
	$		$		$		$		$		$
Current assets:
Cash and cash equivalents	7,082		18,956		3,359		2,281		—		31,678
Accounts receivable, net:
Trade	—		—		115,190		3,425		—		118,615
Affiliates	21,105		7,250		785		8,387		(37,527	)	—
Inventories	—		—		156,286		30,725		(849	)	186,162
Taxes receivable	18,915		16,336		(24,906	)	(1,978	)	912		9,279
Prepaid assets	188		—		4,093		11,573		1		15,855
Other current assets	—		—		7,955		6,635		6		14,596
Total current assets	47,290		42,542		262,762		61,048		(37,457	)	376,185
Investments in affiliates	220,226		1,244,865		—		—		(1,465,091	)	—
Advances due from affiliates	—		19,351		494,720		63,524		(577,595	)	—
Property, plant and equipment, net	—		—		673,397		50,939		—		724,336
Goodwill	—		—		137,570		—		—		137,570
Other intangible assets, net	—		—		76,019		—		—		76,019
Other assets	—		13,878		58,892		14,848		—		87,618
Total assets	267,516		1,320,636		1,703,360		190,359		(2,080,143	)	1,401,728
Current liabilities:
Accounts payable:
Trade	251		—		80,766		8,616		—		89,633
Affiliates	—		21,105		8,386		8,036		(37,527	)	—
Accrued liabilities	—		—		41,364		13,159		—		54,523
Accrued interest	—		894		—		—		—		894
Derivative liabilities, net	—		—		26,136		—		—		26,136
Deferred tax liabilities	(16,704	)	(45,378	)	75,130		4,596		(1,652	)	15,992
Total current liabilities	(16,453	)	(23,379	)	231,782		34,407		(39,179	)	187,178
Long-term debt, net	—		553,713		—		—		—		553,713
Long-term derivative liabilities, net	—		—		22,471		—		—		22,471
Pension and OPEB liabilities	—		—		105,634		6,653		—		112,287
Other long-term liabilities	79		2,446		39,221		12,374		—		54,120
Advances due to affiliates	77,660		499,931		—		4		(577,595	)	—
Deferred tax liabilities	57,477		67,699		195,916		392		(4,278	)	317,206
Common stock subject to redemption	2,000		—		—		—		—		2,000
Shareholders’ equity:
Preferred stock	—		—		—		—		—		—
Common stock	551		—		—		—		—		551
Capital in excess of par value	102,890		229,605		1,199,713		83,683		(1,513,001	)	102,890
Accumulated deficit	(68,305	)	(120,996	)	(205,998	)	49,850		277,144		(68,305	)
Accumulated other comprehensive income	111,617		111,617		114,621		(3,004	)	(223,234	)	111,617
Total Noranda shareholders’ equity	146,753		220,226		1,108,336		130,529		(1,459,091	)	146,753
Noncontrolling interest	—		—		—		6,000		—		6,000
Total shareholders’ equity	146,753		220,226		1,108,336		136,529		(1,459,091	)	152,753
Total liabilities and shareholders’ equity	267,516		1,320,636		1,703,360		190,359		(2,080,143	)	1,401,728

32

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

NORANDA ALUMINUM HOLDING CORPORATION

Consolidating Statement of Operations

Three months ended June 30, 2009

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantor		Eliminations	Consolidated
	$		$		$		$		$	$
Sales	—		—		157,679		—		—	157,679
Operating costs and expenses:
Cost of sales	—		—		163,745		—		—	163,745
Selling, general and administrative expenses	716		949		9,045		7		—	10,717
Excess insurance proceeds	—		—		(29,185	)	—		—	(29,185	)
	716		949		143,605		7		—	145,277
Operating income (loss)	(716	)	(949	)	14,074		(7	)	—	12,402
Other expenses (income)
Interest expense (income), net	5,073		14,012		(2,076	)	(2,909	)	—	14,100
Gain on hedging activities, net	—		—		(53,198	)	—		—	(53,198	)
Gain on early extinguishment of debt	(530	)	(11,912	)	—		—		—	(12,442	)
Equity in net income of unconsolidated subsidiaries	—		—		34,051		—		—	34,051
Total other (income) expenses	4,543		2,100		(21,223	)	(2,909	)	—	(17,489	)
Income (loss) before income taxes	(5,259	)	(3,049	)	35,297		2,902		—	29,891
Income tax expense (benefit)	1,009		340		36,974		3,694		—	42,017
Equity in net income of subsidiaries	(5,858	)	(2,469	)	—		—		8,327	—
Net income (loss) for the period	(12,126	)	(5,858	)	(1,677	)	(792	)	8,327	(12,126	)

NORANDA ALUMINUM HOLDING CORPORATION

Consolidating Statement of Operations

Three months ended June 30, 2010

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantors		Eliminations		Consolidated
	$		$		$		$		$		$
Sales	—		—		324,679		27,653		(17,427	)	334,905
Operating costs and expenses:
Cost of sales	—		—		285,925		22,475		(17,427	)	290,973
Selling, general and administrative expenses	4,106		17,966		14,561		6,497		—		43,130
	4,106		17,966		300,486		28,972		(17,427	)	334,103
Operating income (loss)	(4,106	)	(17,966	)	24,193		(1,319	)	—		802
Other (income) expenses
Interest expense (income), net	2,271		7,591		62		(1,385	)	—		8,539
Gain on hedging activities, net	—		—		(20,519	)	—		—		(20,519	)
Loss on debt repurchase	960		1,548		—		—		—		2,508
Total other (income) expenses	3,231		9,139		(20,457	)	(1,385	)	—		(9,472	)
Income (loss) before income taxes	(7,337	)	(27,105	)	44,650		66		—		10,274
Income tax expense (benefit)	(2,201	)	(8,862	)	14,421		43		—		3,401
Equity in net income of subsidiaries	12,009		30,252		—		—		(42,261	)	—
Net income (loss) for the period	6,873		12,009		30,229		23		(42,261	)	6,873

33

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

NORANDA ALUMINUM HOLDING CORPORATION

Consolidating Statement of Operations

Six months ended June 30, 2009

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantor		Eliminations	Consolidated
	$		$		$		$		$	$
Sales	—		—		321,994		—		—	321,994
Operating costs and expenses:
Cost of sales	—		—		348,064		—		—	348,064
Selling, general and administrative expenses	1,632		1,455		29,849		7		—	32,943
Goodwill and other intangible asset impairment	—		—		43,000		—		—	43,000
Excess insurance proceeds	—		—		(29,185	)	—		—	(29,185	)
	1,632		1,455		391,728		7		—	394,822
Operating loss	(1,632	)	(1,455	)	(69,734	)	(7	)	—	(72,828	)
Other expenses (income)
Interest expense (income), net	9,588		27,621		170		(7,405	)	—	29,974
Gain on hedging activities, net	—		—		(98,326	)	—		—	(98,326	)
Gain on debt repurchase	(11,009	)	(153,641	)	—		—		—	(164,650	)
Equity in net income of unconsolidated subsidiaries	—		—		78,101		—		—	78,101
Total other (income) expenses	(1,421	)	(126,020	)	(20,055	)	(7,405	)	—	(154,901	)
Income (loss) before income taxes	(211	)	124,565		(49,679	)	7,398		—	82,073
Income tax expense	3,171		14,408		28,139		4,202		—	49,920
Equity in net income of subsidiaries	35,535		(74,622	)	—		—		39,087	—
Net income (loss) for the period	32,153		35,535		(77,818	)	3,196		39,087	32,153

NORANDA ALUMINUM HOLDING CORPORATION

Consolidating Statement of Operations

Six months ended June 30, 2010

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantors		Eliminations		Consolidated
	$		$		$		$		$		$
Sales	—		—		611,310		55,208		(30,104	)	636,414
Operating costs and expenses:
Cost of sales	—		—		543,817		42,186		(30,104	)	555,899
Selling, general and administrative expenses	4,837		18,486		38,977		9,831		—		72,131
	4,837		18,486		582,794		52,017		(30,104	)	628,030
Operating income (loss)	(4,837	)	(18,486	)	28,516		3,191		—		8,384
Other (income) expenses
Interest expense (income), net	6,173		15,573		166		(4,126	)	—		17,786
Gain on hedging activities, net	—		—		(22,282	)	—		—		(22,282	)
Loss on debt repurchase	960		1,652		—		—		—		2,612
Total other (income) expenses	7,133		17,225		(22,116	)	(4,126	)	—		(1,884	)
Income (loss) before income taxes	(11,970	)	(35,711	)	50,632		7,317		—		10,268
Income tax expense (benefit)	(3,603	)	(11,642	)	16,310		2,385		—		3,450
Equity in net income of subsidiaries	15,185		39,254		—		—		(54,439	)	—
Net income (loss) for the period	6,818		15,185		34,322		4,932		(54,439	)	6,818

34

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

NORANDA ALUMINUM HOLDING CORPORATION

Condensed Consolidating Statement of Cash Flows

Six months ended June 30, 2009

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda  HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantors		Eliminations		Consolidated
	$		$		$		$		$		$
OPERATING ACTIVITIES
Cash provided by (used in) operating activities	(3,861	)	86,630		25,569		487		(695	)	108,130
INVESTING ACTIVITIES
Capital expenditures	—		—		(22,360	)	—		—		(22,360	)
Purchase of debt	—		—		—		(34,212	)	34,212		—
Proceeds from insurance related to capital expenditures	—		—		7,161		—		—		7,161
Cash provided by (used in) investing activities	—		—		(15,199	)	(34,212	)	34,212		(15,199	)
FINANCING ACTIVITIES
Proceeds from issuance of shares	41		—		—		—		—		41
Repurchase of shares	(90	)	—		—		—		—		(90	)
Repayment of debt	—		(24,500	)	—		—		—		(24,500	)
Repurchase of debt	(2,673	)	(34,650	)	—		—		(33,517	)	(70,840	)
Intercompany advances	3,049		(3,808	)	—		759		—		—
Capital contribution (to subsidiary) from parent	—		(33,000	)	—		33,000		—		—
Distribution (to parent from subsidiary)	980		(980	)	—		—		—		—
Cash provided by (used in) financing activities	1,307		(96,938	)	—		33,759		(33,517	)	(95,389	)
Change in cash and cash equivalents	(2,554	)	(10,308	)	10,370		34		—		(2,458	)
Cash and cash equivalents, beginning of period	24,101		159,994		621		—		—		184,716
Cash and cash equivalents, end of period	21,547		149,686		10,991		34		—		182,258

35

NORANDA ALUMINUM HOLDING CORPORATION

Notes to Unaudited Condensed Consolidated Financial Statements—(Continued)

NORANDA ALUMINUM HOLDING CORPORATION

Condensed Consolidating Statement of Cash Flows

Six months ended June 30, 2010

(dollars expressed in thousands)

(unaudited)

	Parent guarantor (Noranda HoldCo)		Issuer (Noranda AcquisitionCo)		Subsidiary guarantors		Subsidiary non-guarantors		Eliminations	Consolidated
	$		$		$		$		$	$
OPERATING ACTIVITIES
Cash provided by (used in) operating activities	(31,842	)	222,781		23,829		4,186		—	218,954
INVESTING ACTIVITIES
Capital expenditures	—		—		(24,864	)	(2,946	)	—	(27,810	)
Proceeds from sale of property, plant and equipment	—		—		128		35		—	163
Cash used in investing activities	—		—		(24,736	)	(2,911	)	—	(27,647	)
FINANCING ACTIVITIES
Proceeds from issuance of shares	82,929		—		—		—		—	82,929
Repayments on revolving credit facility	—		(215,930	)	—		—		—	(215,930	)
Repurchase of shares	(16	)	—		—		—		—	(16	)
Repayment of long-term debt	(66,348	)	(127,500	)	—		—		—	(193,848	)
Distribution (to parent from subsidiary)	915		(915	)	—		—		—	—
Cash provided by (used in) financing activities	17,480		(344,345	)	—		—		—	(326,865	)
Change in cash and cash equivalents	(14,362	)	(121,564	)	(907	)	1,275		—	(135,558	)
Cash and cash equivalents, beginning of period	21,444		140,520		4,266		1,006		—	167,236
Cash and cash equivalents, end of period	7,082		18,956		3,359		2,281		—	31,678

36

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

Unless otherwise specified or unless the context otherwise requires, references to (i) “Noranda HoldCo” refer only to Noranda Aluminum Holding Corporation, excluding its subsidiaries; (ii) “AcquisitionCo” refer only to Noranda Aluminum Acquisition Corporation, the wholly owned direct subsidiary of Noranda HoldCo, excluding its subsidiaries; (iii) “the Company,” “Noranda,” “we,” “us” and “our” refer collectively to Noranda HoldCo and its subsidiaries; and (iv) “Apollo” collectively refers to Apollo Management, L.P. and its affiliates.

We are a vertically integrated producer of value-added primary aluminum products and high quality rolled aluminum coils. We have two businesses: our upstream business and downstream business. Our upstream business consists of three reportable segments: primary aluminum products, alumina refining, and bauxite. These three segments are closely integrated and consist of an aluminum smelter near New Madrid, Missouri, which we refer to as “New Madrid,” and supporting operations at our bauxite mining operations in St. Ann, Jamaica (Noranda Bauxite Limited, or “St. Ann”) and our alumina refinery in Gramercy, Louisiana (Noranda Alumina, LLC, or “Gramercy”). New Madrid has annual production capacity of approximately 580 million pounds (263,000 metric tonnes), which represented more than 15% of total 2009 U.S. primary aluminum production, based on statistics from the Aluminum Association. Our flat rolled products segment, or downstream business, is one of the largest aluminum foil producers in North America and consists of four rolling mill facilities with a combined maximum annual production capacity of 410 to 495 million pounds, depending on production mix. Our corporate segment consists of our corporate expenses.

Our second quarter 2010 results reflect these significant events:

• Demand conditions remained strong during second quarter 2010, particularly across the majority of product groups in our flat rolled products segment, for billet in the primary aluminum products segment, and for chemical grade alumina product in the alumina segment. In the primary aluminum products segment, we saw improved demand for rod during second quarter 2010, following some weakness for that product in the previous quarter.

• Although realized pricing was strong in second quarter 2010 compared to second quarter 2009, during second quarter 2010, the London Metal Exchange (“LME”) aluminum price fell from $1.06 per lb at the beginning of the quarter to $0.87 per lb at the end of the quarter. Industry analysts generally attribute the price decline to worries over the debt burden of certain European economies, a mixed picture on the strength of the U.S. recovery, and fears of more monetary tightening in China.

• Rising aluminum prices and Midwest premiums, stronger demand in the flat rolled products segment, and the impact of our New Madrid smelter being fully operational throughout second quarter 2010 had a favorable impact on second quarter 2010 operating results compared to second quarter 2009.

• For the six months ended June 30, 2010, operating cash flow was $219.0 million, including $164.6 million of proceeds from hedge terminations. For the six months ended June 30, 2009, our operating activities generated $108.1 million of cash flows, including $70.1 million of proceeds from hedge terminations.

• For the second quarter 2010, our program which includes productivity improvement and cost reduction initiatives (which we refer to as “CORE”), contributed over $15.0 million in cost reduction, capital avoidance, and cash generation.

• In May, 2010, we completed our IPO of 11,500,000 shares of common stock at a public offering price of $8.00 per share (NYSE: NOR). We used the $82.9 million net offering proceeds, together with $95.9 million of proceeds from terminating our remaining fixed-price aluminum sale swaps, to repurchase the remaining $66.3 million principal amount of our outstanding HoldCo Notes and to repay $110.0 million of our term B loan principal.

• Electricity is the largest cost component at our New Madrid smelter and is a key factor to our long-term competitive position in the primary aluminum business. We have a power purchase agreement with AmerenUE (“Ameren”) pursuant to which we have agreed to purchase substantially all of New Madrid’s electricity through May 2020. Our current rate structure with Ameren consists of two components: a base rate and a fuel adjustment clause. On June 21, 2010, the MoPSC ruled on the power rate case filed by Ameren on July 24, 2009. The MoPSC’s ruling resulted in no substantive change to base power rate for the Company’s aluminum smelter in New Madrid. In June 2010, we received notice of a fuel adjustment totaling approximately $0.5 million per month from June 2010 through September 2010. It is reasonably possible that we will have additional fuel charges after September, although the amount of such charges, if any, cannot be estimated.

37

• On June 24, 2010 we finalized a definitive amendment to the establishment agreement with the GOJ, pursuant to the agreement reached at the end of 2009 setting the fiscal regime structure for St. Ann’s bauxite mining operations through December 31, 2014.

• In connection with a decision to contract the substantial portion of our bauxite mining to third party contractors, on April 21, 2010, we announced a workforce reduction in our Jamaican bauxite mining operations. The workforce restructuring plan reduced headcount by approximately 160 employees through a combination of voluntary retirement packages and involuntary terminations. These actions resulted in $3.0 million of pre-tax charges recorded in second quarter 2010.

• Upon completion of our initial public offering in second quarter 2010, as permitted by the terms of that management agreement, Apollo terminated the agreement and received $12.5 million in accelerated management fees due upon termination of the management agreement.

Forward-looking Statements

This report contains “forward-looking statements” which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as “believes,” “expects,” “may,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions that relate to our strategy, plans or intentions. All statements we make relating to our estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to our expectations regarding future industry trends are forward-looking statements. In addition, we, through our senior management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. These forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those that we expected. We derive many of our forward-looking statements from our operating budgets and forecasts, which are based upon many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. All forward-looking statements herein are based upon information available to us on the date of this report.

Important factors that could cause actual results to differ materially from our expectations, which we refer to as cautionary statements, are disclosed herein under “Item 1A. Risk Factors”, including, without limitation, in conjunction with the forward-looking statements included in this report. All forward-looking information in this report and subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. In light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this report may not in fact occur. Accordingly, investors should not place undue reliance on those statements. We undertake 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.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”). Preparation of these statements requires management to make significant judgments and estimates. Some accounting policies have a significant impact on amounts reported in these financial statements. Our financial position and/or results of operations may be materially different when reported under different conditions or when using different assumptions in the application of such policies. In the event estimates or assumptions prove to be different from actual amounts, adjustments are made in subsequent periods to reflect more current information. The preparation of interim financial statements involves the use of certain estimates that are consistent with those used in the preparation of our annual financial statements. See Note 1, “Accounting Policies” of the notes to our consolidated financial statements for the fiscal year ended December 31, 2009 included in our Annual Report on Form 10-K, filed March 2, 2010 and our Form 8-K filed with the SEC on April 26, 2010 to reflect the effects of a change in segments and a two-for-one stock split, for a discussion of our critical accounting policies. Hereinafter, “Note” refers to the notes to the condensed consolidated financial statements elsewhere in this report unless the context otherwise requires.

38

Results of Operations

	Three months ended June 30,				Six months ended June 30,
	2009		2010		2009		2010
	$		$		$		$
Statements of Operations Data (in millions) (1):
Sales	157.7		334.9		322.0		636.4
Operating costs and expenses:
Cost of sales	163.8		291.0		348.1		555.9
Selling, general and administrative expenses	10.7		43.1		32.9		72.1
Goodwill and other intangible asset impairment	—		—		43.0		—
Excess insurance proceeds	(29.2	)	—		(29.2	)	—
	145.3		334.1		394.8		628.0
Operating income (loss)	12.4		0.8		(72.8	)	8.4
Other expenses (income)
Interest expense, net	14.1		8.5		30.0		17.8
Gain on hedging activities, net	(53.2	)	(20.5	)	(98.3	)	(22.3	)
Equity in net loss of investments in affiliates	34.0		—		78.1		—
(Gain) loss on debt repurchase	(12.4	)	2.5		(164.7	)	2.6
Income before income taxes	29.9		10.3		82.1		10.3
Income tax expense	42.0		3.4		49.9		3.5
Net income (loss) for the period	(12.1	)	6.9		32.2		6.8
Net income (loss) per share
Basic	(0.28	)	0.14		0.74		0.15
Diluted	(0.28	)	0.14		0.74		0.14
Weighted-average shares outstanding (in millions)
Basic	43.49		49.09		43.49		46.44
Diluted	43.49		50.10		43.49		47.08
Sales by segment (in millions):
Bauxite	—		27.7		—		55.2
Alumina refining	—		95.9		—		187.5
Primary aluminum products	70.5		161.6		145.8		295.1
Flat rolled products	97.8		140.8		195.1		266.6
Eliminations	(10.6	)	(91.1	)	(18.9	)	(168.0	)
Total	157.7		334.9		322.0		636.4
Operating income(1) (in millions):
Bauxite	—		(1.3	)	—		3.2
Alumina refining	—		14.0		—		14.2
Primary aluminum products	10.5		10.9		(25.5	)	21.5
Flat rolled products	9.9		6.0		(30.9	)	7.9
Corporate	(7.9	)	(28.8	)	(16.4	)	(38.5	)
Total	12.4		0.8		(72.8	)	8.4
Financial and other data:
Average realized Midwest transaction price per pound(2)	0.71		1.04		0.70		1.04
Integrated net cash cost for primary aluminum products (per pound shipped)(3)	0.67		0.66		0.76		0.69
Shipments:
Third party shipments:
Bauxite (kMts)	—		333.2		—		822.2
Alumina refining (kMts)	—		170.4		—		342.6
Primary aluminum products (pounds, in millions)	68.7		113.1		145.3		208.2
Flat rolled products (pounds, in millions)	79.2		91.9		150.9		175.7
Intersegment shipments:
Bauxite (kMts)	—		726.3		—		1,254.3
Alumina (kMts)	—		127.9		—		229.2
Primary aluminum products (pounds, in millions)	15.4		33.4		27.6		59.1

(1) Figures may not add due to rounding.

39

(2) The price for primary aluminum products consists of two components: the price quoted for primary aluminum ingot by the London Metal Exchange (“LME”) and the Midwest transaction premium, a premium to LME price reflecting domestic market dynamics as well as the cost of shipping and warehousing. As a significant portion of our value-added products are sold at the prior month’s MWTP plus a fabrication premium, we calculate a “realized” MWTP which reflects the specific pricing of sale transactions in each period.

(3) Unit integrated net cash cost for primary aluminum products per pound represents our integrated net cash cost of producing commodity grade aluminum as priced on the LME plus the Midwest premium. We have provided unit integrated net cash cost for primary aluminum products per pound shipped because we believe it provides investors with additional information to measure our operating performance. Using this metric, investors are able to assess the prevailing LME price plus Midwest premium per pound versus our unit integrated net cash cost per pound shipped. Unit integrated net cash cost per pound is positively or negatively impacted by changes in LME price, third party bauxite and alumina prices, production and sales volumes, natural gas and oil related costs, seasonality in our electrical contract rates, and increases or decreases in other production related costs. Unit integrated net cash cost 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 our industry. Unit integrated net cash cost per pound shipped has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results under U.S. GAAP.

The following table summarizes the unit integrated net cash cost for primary aluminum for the periods presented:

	Three months ended June 30,		Six months ended June 30,
	2009	2010	2009	2010
	$	$	$	$
Total upstream integrated net cash cost (in millions)	55.9	96.4	131.8	183.9
Total primary aluminum shipments (pounds in millions)	84.1	146.5	172.9	267.3
Net upstream integrated net cash cost for primary aluminum	0.67	0.66	0.76	0.69

The following table reconciles cost of sales to the integrated net cash cost for primary aluminum for the periods presented:

	Three months ended June 30,				Six months ended June 30,
	2009		2010		2009		2010
(in millions)	$		$		$		$
Bauxite cost of sales	—		22.5		—		42.2
Alumina refining cost of sales	—		80.4		—		168.0
Primary aluminum products cost of sales	89.2		146.1		190.3		261.6
Flat rolled products cost of sales	85.2		133.0		176.6		252.1
Intersegment cost of sales	(10.6	)	(91.0	)	(18.8	)	(168.0	)
Total cost of sales	163.8		291.0		348.1		555.9
Primary aluminum products cost of sales	89.2		146.1		190.3		261.6
LIFO and lower of cost or market adjustments(a )	1.4		(6.8	)	1.4		(6.5	)
Fabrication premium(b )	(7.8	)	(9.7	)	(15.6	)	(17.6	)
Depreciation and amortization expense	(14.7	)	(11.2	)	(33.8	)	(23.4	)
Alumina and bauxite impact( c)	(4.6	)	(26.9	)	(7.9	)	(38.1	)
Selling, general and administrative expenses( d)	(0.2	)	3.9		7.1		7.4
Other(e)	(7.4	)	1.0		(9.7	)	0.5
Total upstream integrated net cash cost of primary aluminum products	55.9		96.4		131.8		183.9

(a) Reflects the conversion from last-in, first-out (“LIFO”) to first-in, first-out (“FIFO”) method of inventory costing, including removing the effects of adjustments to reflect the lower of cost or market value.

(b) Our value-added products, such as billet, rod and foundry, earn a fabrication premium over the MWTP. To allow comparison of our upstream per unit costs to the MWTP, we net the fabrication premium in determining upstream integrated net cash cost for primary aluminum.

(c) Our upstream business is fully integrated from bauxite mined by St. Ann to alumina produced by Gramercy to primary aluminum metal manufactured by our aluminum smelter in New Madrid, Missouri. To reflect the underlying economics of the vertically integrated upstream business, this adjustment reflects the favorable impact that third-party joint venture sales have on our integrated net cash cost for primary aluminum, as well as post-integration intercompany alumina cost of sales eliminations.

(d) Represents certain selling, general and administrative expenses which management believes are a component of integrated net cash cost for primary aluminum, but which are not included in cost of goods.

(e) Reflects various other cost adjustments, such as the elimination of the effects of any intercompany profit in inventory, derivative cash settlements and non-cash pension and accretion.

40

Discussion of Operating Results

The following discussion of the historical results of operations is presented for the three and six months ended June 30, 2009 and June 30, 2010.

You should read the following discussion of our results of operations and financial condition in conjunction with the unaudited condensed consolidated financial statements and related notes included elsewhere herein.

Three months ended June 30, 2009 compared to three months ended June 30, 2010.

Sales

Sales in the three months ended June 30, 2010 were $334.9 million compared to $157.7 million in the three months ended June 30, 2009.

Sales to external customers from our primary aluminum products segment were $128.0 million, up from $59.8 million reported in three months ended June 30, 2009, driven primarily by the increase in LME prices, higher volumes of value-added shipments related to increased end-market demand and higher sow volumes related to the New Madrid power outage in the prior year.

• The increase in pricing, due to a 46.5% increase in realized MWTP, impacted external revenues by $29.6 million. In the three months ended June 30, 2009 and the three months ended June 30, 2010, average realized MWTP per pound was $0.71 and $1.04, respectively.

• Total primary aluminum shipments for the three months ended June 30, 2010 increased to 146.5 million pounds or 74.2% compared to the three months ended June 30, 2009.

• Intersegment shipments to our flat rolled products segment increased 18.0 million pounds to 33.4 million pounds as a result of the New Madrid smelter becoming fully operational during first quarter 2010.

• External primary aluminum shipments increased to 113.1 million pounds in the three months ended June 30, 2010 from 68.7 million pounds in the three months ended June 30, 2009. This 64.6% increase in external shipments resulted in higher external revenues of $38.6 million and is largely the result of the New Madrid smelter becoming fully operational during first quarter 2010. Shipments of value-added products in the three months ended June 30, 2010 increased 67.3% compared to the three months ended June 30, 2009. This higher volume was driven by increased end-market demand and increased demand for higher purity products.

Sales in our flat rolled products segment were $140.8 million, up from $97.8 million during the three months ended June 30, 2009, primarily due to the increase in LME prices, as well as higher shipments to external customers.

• Rising LME prices contributed $27.3 million to the sales increase. Additionally, fabrication premiums were slightly higher during the three months ended June 30, 2010 compared the same 2009 period.

• Higher shipment volumes increased revenues by $15.7 million. Shipment volumes from our flat rolled products segment increased 16.0% to 91.9 million pounds primarily due to higher end-market demand.

Sales to external customers from our alumina refining and bauxite segments for the three months ended June 30, 2010 were $55.8 million and $10.2 million, respectively. There were no such sales in the prior year as we did not acquire the remaining 50% interests until the third quarter of 2009. Intercompany shipments from the alumina refining and bauxite segments for the quarter ended June 30, 2010 were 127.9 million kMts and 726.3 million kMts, respectively.

Cost of sales

• Cost of sales for the three months ended June 30, 2010 was $291.0 million compared to $163.8 million in the three months ended June 30, 2009. The increase in cost of sales is mainly the result of higher shipment volumes for value-added products to external customers, as well as increased LME prices, which is reflected in the pass-through nature of the downstream business. Total cost of sales in the primary aluminum products segment increased to $146.1 million in second quarter 2010 from $89.2 million in second quarter 2009. The increase relates to several factors, including a 74.2% increase in total shipments of primary aluminum due to the factors referenced in the discussion of sales, offset by (i) decreased depreciation expense related to certain fixed assets which became fully-depreciated in second quarter 2009, and (ii) a reduction in our integrated net cash cost to produce primary aluminum from $0.76 per pound in the first six months of 2009, to $0.66 per pound in second quarter 2010.

41

• Flat rolled products segment cost of sales increased to $133.0 million in second quarter 2010 from $85.2 million in second quarter 2009. The increase related principally to the increase in the LME aluminum price, since much of that segment’s product cost represents the pass-through cost of metal.

• Cost of sales in the bauxite and alumina refining segments, before the effects of intercompany eliminations, totaled $22.5 million and $80.4 million, respectively during second quarter 2010. These two segments principally reflect the cost of sales for St. Ann and Gramercy, respectively, of which we became sole owners on August 31, 2009, and have no corresponding costs for second quarter 2009.

The production outage at New Madrid negatively impacted our integrated net cash cost of primary aluminum in 2009. Although insurance proceeds covered the costs and losses associated with our outage and returning the smelter to operation, our coverage did compensate us for inefficiencies associated with operating our integrated upstream business significantly below capacity. We estimate that due to lost production volume in 2009 from the smelter outage, which caused a loss of efficiency and fixed cost absorption, our integrated net cash cost of primary aluminum for the year ended December 31, 2009 of $0.77 per pound was negatively impacted by $0.05 per pound.

During second quarter 2010, the integrated net cash cost of primary aluminum was approximately $0.66 per pound. The decrease in integrated net cash cost reflects efficiencies gained from the smelter becoming fully operational during first quarter 2010 (average operating capacity during second quarter 2009 was 51.2%), as well as the impact of third party alumina and bauxite sales, and productivity savings from our CORE productivity program. Intercompany transfer prices for alumina in 2010 are indexed to LME, whereas 2009 transfer prices were at cost. Gramercy’s costs to produce alumina in 2009 were higher than 2010 due to inefficiencies related to operating at less than 60% of capacity.

Selling, general and administrative expenses

Selling, general and administrative expenses in the three months ended June 30, 2010 were $43.1 million compared to $10.7 million in the three months ended June 30, 2009. The increase relates primarily to (i) $5.2 million of costs associated with the inclusion of Gramercy and St. Ann since the completion of the Joint Venture Transaction; whereby we became sole owner of Gramercy and St. Ann on August 31. 2009, (ii) a $12.5 million expense to terminate our management consulting agreement with Apollo, upon completion of our initial public offering, (iii) $6.0 million in increased consulting costs and professional fees which were primarily transaction-related legal fees (iv) increases in stock compensation expense of $3.2 million related to a change in vesting of certain stock options in connection with the IPO and (v) $3.0 million of restructuring costs associated with our decision to move to contract mining at our bauxite mine

Goodwill and other intangible asset impairment

We recorded a $43.0 million impairment charge in our flat rolled products segment in the three months ended June 30, 2009. We evaluate Goodwill for impairment annually in the fourth quarter, or more often upon the occurrence of certain triggering events. No goodwill impairment was necessary for the three months ended June 30, 2010.

Excess insurance proceeds

We reached an insurance settlement with our primary insurance carrier in the three months ended June 30, 2009. The expected settlement proceeds of $49.1 million were allocated to cost of sales and selling, general and administrative expenses to the extent losses were realized and eligible for recovery under our insurance policies. The line item titled “Excess insurance proceeds” reflects the residual after applying the total expected proceeds recognized against losses incurred through June 30, 2009. This amount is not intended to represent a gain on the insurance claim, but only a timing difference between proceeds recognized and claim-related costs incurred.

Operating income

Operating income in the three months ended June 30, 2010 was $0.8 million compared to $12.4 million in the three months ended June 30, 2009. Operating income in second quarter 2010 compared to second quarter 2009 was impacted significantly by the effects of certain special items listed below. Additionally, the increase in operating income relates to quarter-over-quarter sales margin (sales minus cost of sales) improvements of $50.0 million, offset in part by $32.4 million increase in selling, general and administrative expenses.

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Special items during the three months ended June 30, 2009 and 2010 are outlined below (in millions):

	Three months ended June 30,
	2009	2010
	Increase (decrease) to operating income
	$	$
Special items:
Insurance recoveries in excess of cost and losses	29.2	—
Management agreement termination	—	(12.5	)
Modification of stock options	—	(3.2	)
Other transaction related legal costs	—	(5.2	)
Restructuring, primarily related to contract mining	—	(3.2	)
LIFO and LCM	2.2	(9.9	)
Total	31.4	(34.0	)

Sales margin for the three months ended June 30, 2010 was $43.9 million compared to a $6.1 million loss in the three months ended June 30, 2009. This increase resulted from the increase in realized MWTP coupled with efficiencies gained in bringing the smelter back to full production.

Selling, general and administrative expenses were $43.1 million in the three months ended June 30, 2010 compared to $10.7 million in the three months ended June 30, 2009, due to increased costs associated with the Joint Venture Transaction, the payment to terminate the consulting agreement with Apollo, increased stock compensation costs and restructuring costs related to contract mining.

Interest expense, net

Interest expense in the three months ended June 30, 2010 was $8.5 million compared to $14.1 million in the three months ended June 30, 2009, a decrease of $5.6 million. Decreased interest expense is related to lower average debt outstanding on the term B loan and revolving credit facility and repurchases of the AcquisitionCo Notes and HoldCo Notes.

Gain on hedging activities, net

Gain on hedging activities was $20.5 million in the three months ended June 30, 2010 compared to $53.2 million in the three months ended June 30, 2009. For the three months ended June 30, 2010, the amount reclassified from accumulated other comprehensive income to earnings was $20.7 million from aluminum and natural gas hedges compared to $69.9 million in the three months ended June 30, 2009.

Equity in net loss of investments in affiliates

We had no equity in net income of investments in affiliates for the three months ended June 30, 2010, compared to a loss of $34.0 million for the three months ended June 30, 2009. Such prior year loss related to impairment write-downs of our equity investments. Following the Joint Venture Transaction, which occurred in August 2009, we no longer account for any subsidiaries using the equity method of accounting.

(Gain) loss on debt repurchase

During second quarter, 2010, we repaid $110.0 million of our term B loan principal and the remaining $66.3 million principal balance of our outstanding HoldCo Notes using proceeds from the IPO and from the termination of our remaining fixed-price aluminum sale swaps. These debt repayments resulted in a loss on debt repurchase of $2.5 million due to the accelerated amortization of the debt discount and deferred financing costs upon repayment of the obligations. During second quarter, 2009, we repurchased $58.5 million aggregate principal amount of outstanding HoldCo Notes, AcquisitionCo Notes, term B loan and revolving credit facility for a price of $44.8 million plus fees, resulting in a $12.4 million gain.

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Income before income taxes

Income before income taxes was $10.3 million in the three months ended June 30, 2010 compared to a $29.9 million in the three months ended June 30, 2009. The special items outlined below significantly impacted the comparability of our pre-tax income:

Special items during the three months ended June 30, 2009 and 2010 are outlined below (in millions):

	Three months ended June 30,
	2009		2010
	Increase (decrease) to pre-tax income
	$		$
Special items:
Insurance recoveries in excess of cost and losses	29.2		—
Management agreement termination	—		(12.5	)
Modification of stock options	—		(3.2	)
Other transaction related legal costs	—		(5.2	)
Restructuring, primarily related to contract mining	—		(3.2	)
Gain (loss) on debt repurchase	12.4		(2.5	)
Impairment of equity method investment	(35.0	)	—
Gain on hedging activities	53.2		20.5
LIFO and LCM	2.2		(9.9	)
Total	62.0		(16.0	)

Income tax expense (benefit)

Income tax expense was $3.4 million in the three months ended June 30, 2010, compared to $42.0 million in the three months ended June 30, 2009. The provision for income taxes resulted in an effective tax rate of 33.1% for the three months ended June 30, 2010, compared with an effective tax rate of 140.6% for the three months ended June 30, 2009. The effective tax rate for the three months ended June 30, 2010 was primarily impacted by state income taxes, the Internal Revenue Code Section 199 manufacturing deduction and accrued interest related to unrecognized tax benefits.

The effective tax rate for the three months ended June 30, 2009 was primarily impacted by goodwill impairment, state income taxes, and equity method investee income. For the three months ending June 30, 2009, we determined that our annual ordinary income for the year ending December 31, 2009 could not be reliably estimated because we expected near break-even operations and had a significant permanent difference (i.e. goodwill impairment) such that a minor change in our estimated ordinary income could result in a material change in the estimated annual effective tax rate. As a result, we determined that the actual effective tax rate for the period ending June 30, 2009 was the best estimate of the annual effective tax rate.

Net income (loss)

Net income (loss) increased from a $12.1 million net loss in the three months ended June 30, 2009 to income of $6.9 million in the three months ended June 30, 2010. This increase was the result of the net effect of the items described above.

Six months ended June 30, 2009 compared to six months ended June 30, 2010.

Sales

Sales in the six months ended June 30, 2009 were $322.0 million compared to $636.4 million in the six months ended June 30, 2010, an increase of 97.6%.

Sales to external customers from our primary aluminum products segment were $235.0 million, an 85.2% increase from the $126.9 million reported in the six months ended June 30, 2009, driven primarily by the increase in LME prices, higher volumes of value-added shipments related to increased end-market demand and higher sow volumes related to the New Madrid power outage in the prior year.

• The increase in pricing, due to a 48.6% increase in realized MWTP, impacted external revenues by $31.7 million. In the six months ended June 30, 2010 and June 30, 2009, average realized MWTP per pound was $1.04 and $0.70, respectively.

• Total primary aluminum shipments for the six months ended June 30, 2010 increased 94.4 million pounds to 267.3 million pounds or 54.6% compared to the six months ended June 30, 2009.

• Intersegment shipments to our flat rolled products segment increased 31.5 million pounds to 59.1 million pounds, as a result of the New Madrid smelter becoming fully operational during first quarter 2010.

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• External primary aluminum shipments increased to 208.2 million pounds in the six months ended June 30, 2010 from 145.3 million pounds in the six months ended June 30, 2009. This 43.3% increase in external shipments resulted in higher external revenues of $136.2 million and is largely the result of the New Madrid smelter becoming fully operational during first quarter 2010. Shipments of value-added products totaled 205.8 million pounds in the six months ended June 30, 2010 and represented a 48.4% increase compared to the six months ended June 30, 2009. This higher volume was driven by increased end-market demand and increased demand for higher purity products.

Sales in our flat rolled products segment were $266.6 million, an increase of 36.7%, compared to $195.1 million for the six months ended June 30, 2009, primarily due to the increase in LME prices, as well as higher shipments to external customers.

• Rising LME prices contributed $50.9 million to the sales increase. Fabrication premiums were relatively unchanged.

• Higher shipment volumes increased revenues by $118.5 million. Shipment volumes from our flat rolled products segment increased 16.4% to 175.7 million pounds primarily due to higher end-market demand.

Sales to external customers from our alumina refining and bauxite segments for the six months ended June 30, 2010 were $109.7 million and $25.1 million, respectively. Intercompany shipments from the alumina refining and bauxite segments for the first six months ended June 30, 2010 were 229.2 million kMts and 1,254.3 million kMts, respectively. There were no such sales in 2009.

Cost of sales

• Cost of sales for the six months ended June 30, 2010 was $555.9 million compared to $348.1 million in the six months ended June 30, 2009. The increase in cost of sales is mainly the result of higher shipment volumes for value-added products to external customers, as well as increased LME prices, which is reflected in the pass-through nature of the downstream business. Total cost of sales in the primary aluminum products segment increased to $261.6 million in the first half of 2010 from $190.3 million in the first half of 2009. The increase relates to several factors, including a 54.6% increase in total shipments of primary aluminum due to the factors referenced in the discussion of sales, offset by (i) decreased depreciation expense related to certain fixed assets which became fully-depreciated in the first half of 2009, and (ii) a significant reduction in our integrated net cash cost to produce primary aluminum of $0.69 per pound in the first half of 2010, compared to $0.76 per pound in the first half of 2009. This decrease in integrated net cash cost reflects efficiencies gained from bringing the smelter back to full capacity during the first half of 2010 (average operating capacity during the first half of 2009 was 50.9% versus 94.1% in the first half of 2010), as well as reduced raw materials inputs, mainly alumina. Intercompany transfer prices for alumina for 2010 is indexed to LME, whereas 2009 transfer prices were at cost.

• Flat rolled products segment cost of sales increased to $252.1 million in the first half of 2010 from $176.6 million in the first half of 2009. The increase related principally to the increase in the LME aluminum price, since much of that segment’s product cost represents the pass-through cost of metal.

• Cost of sales in the bauxite and alumina refining segments, before the effects of intercompany eliminations, totaled $42.2 million and $168.0 million, respectively during the first half of 2010. These two segments principally reflect the cost of sales for St. Ann and Gramercy, respectively, of which we became sole owners on August 31, 2009, and have no corresponding costs for the first half of 2009.

The production outage at New Madrid negatively impacted our integrated net cash cost of primary aluminum in 2009. Although insurance proceeds covered the costs and losses associated with our outage and returning the smelter to operation, our coverage did not make us whole for inefficiencies associated with operating our integrated upstream business significantly below capacity. We estimate that due to lost production volume in 2009 from the smelter outage, which caused a loss of efficiency and fixed cost absorption, our integrated net cash cost of primary aluminum for the year ended December 31, 2009 of $0.77 per pound was negatively impacted by $0.05 per pound. During the first half of 2010, the integrated net cash cost of primary aluminum was approximately $0.69 per pound.

Selling, general and administrative expenses

Selling, general and administrative expenses in the six months ended June 30, 2010 were $72.1 million compared to $32.9 million in the six months ended June 30, 2009. This reflects (i) $11.0 million of increased costs from the inclusions of St. Ann and Gramercy since the Joint Venture Transaction, (ii) $7.8 million of costs related to our workforce and contract mining restructuring plans, (iii) $12.5 million related to the termination of the Apollo management agreement, (iv) $3.2 million in increased stock compensation costs associated with accelerated vesting in connection with the IPO, and (v) $6.1 million of increased consulting costs and professional fees, which were primarily transaction-related legal fees.

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Goodwill and other intangible asset impairment

We recorded a $43.0 million goodwill impairment charge in our flat rolled products segment in six months ended June 30, 2009. We evaluate goodwill for impairment annually in the fourth quarter, or more often upon the occurrence of certain triggering events. No goodwill impairment was recorded during six months ended June 30, 2009.

Excess insurance proceeds

We reached an insurance settlement with our primary insurance carrier in the six months ended June 30, 2009. The expected settlement proceeds of $49.1 million were allocated to cost of sales and selling, general and administrative expenses to the extent losses were realized and eligible for recovery under our insurance policies. The line item titled “Excess insurance proceeds” reflects the residual after applying the total expected proceeds recognized against losses incurred through June 30, 2009. This amount is not intended to represent a gain on the insurance claim, but only a timing difference between proceeds recognized and claim-related costs incurred.

Operating income (loss)

Operating income (loss) in the six months ended June 30, 2010 was income of $8.4 million compared to an operating loss of $72.8 million in the six months ended June 30, 2009. Operating income in the first half of 2010 compared to the first half of 2009 was impacted significantly by the effects of certain special items listed below. Additionally, the increase in operating income relates to sales margin improvements of $106.6 million, offset in part by $39.2 million increase in selling, general and administrative expenses.

Special items during the six months ended June 30, 22009 and 2010 are outline below (in millions):

	Six months ended June 30,
	2009		2010
	Increase (decrease) to operating income
	$		$
Special items:
Insurance recoveries in excess of costs and losses	29.2		—
Management agreement termination			(12.5	)
Modification of stock options	—		(3.2	)
Other transaction related legal costs	—		(5.4	)
Restructuring	—		(7.8	)
Goodwill and other intangible asset impairment	(43.0	)	—
LIFO and LCM	6.6		(9.0	)
Total	(7.2	)	(37.9	)

Sales margin for the six months ended June 30, 2010 was $80.5 million compared to a $26.1 million loss in the six months ended June 30, 2009. This $106.6 million increase resulted from the impact of a 48.6% increase in realized MWTP coupled with efficiencies gained in bringing the smelter back to full production.

Selling, general and administrative expenses were $72.1 million in the six months ended June 30, 2010 compared to $32.9 million in the six months ended June 30, 2009 as a result of (i) increased costs associated with the Joint Venture Transaction (ii) costs related to our February 2010 restructuring (iii) costs associated with moving to contract mining at our St. Ann bauxite mine, (iv) the termination of the Apollo management agreement (v) increased stock compensation costs and (v) increased legal and professional fees.

Interest expense, net

Interest expense in the six months ended June 30, 2010 was $17.8 million compared to $30.0 million in the six months ended June 30, 2009, a decrease of $12.2 million. Decreased interest expense is related to lower average debt outstanding on the term B loan and revolving credit facility and repurchases of the AcquisitionCo Notes and HoldCo Notes.

Gain on hedging activities, net

Gain on hedging activities was $22.3 million in the six months ended June 30, 2010 compared to $98.3 million in the six months ended June 30, 2009. For the six months ended June 30, 2010, the amount reclassified from accumulated other comprehensive income to earnings was $37.2 million, from aluminum and natural gas hedges, compared to $125.7 million in the six months ended June 30, 2009.

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Equity in net loss of investments in affiliates

We had no equity in net income of investments in affiliates for the six months ended June 30, 2010, compared to a loss of $78.1 million for the six months ended June 30, 2009 related primarily to impairment write-downs of our equity investments. Following the Joint Venture Transaction, which occurred in August 2009, we no longer account for any subsidiaries using the equity method of accounting.

(Gain) loss on debt repurchase

During the six months ended June 30, 2010, we repaid $127.5 million, $66.3 million and $215.9 million of outstanding principal balances on the term B loan, HoldCo Notes, and revolving credit facility, respectively. We used net proceeds from our completed IPO and the termination of fixed-price aluminum swaps to repay $176.3 million of aggregate principal amount of the Company’s outstanding HoldCo Notes and term B loan at par, and proceeds from April 2010 hedge terminations to repay $10.0 million principal amount of the term B loan. The debt repayments resulted in a loss on debt repurchase of $2.6 million due to the accelerated amortization of the debt discount and deferred financing costs upon repayment of the obligations. During the six months ended June 30, 2009, we repurchased or repaid $264.2 million aggregate principal amount of outstanding HoldCo Notes, AcquisitionCo Notes, term B loan and revolving credit facility for a price of $96.2 million, resulting in a $164.7 million gain.

Income (loss) before income taxes

Income before income taxes was $10.3 million in the six months ended June 30, 2010 compared to $82.1 million in the six months ended June 30, 2009. The special items outlined below significantly impacted the comparability of our pre-tax income:

Special items during the six months ended June 30, 2009 and 2010 are outline below (in millions):

	Six months ended June 30,
	2009		2010
	Increase (decrease) to pre-tax income
	$		$
Special items:
Insurance recoveries in excess of costs and losses	29.2		—
Management agreement termination	—		(12.5	)
Modification of stock options	—		(3.2	)
Other transaction related legal costs	—		(5.4	)
Restructuring	—		(7.8	)
Gain (loss) on debt repurchase	164.7		(2.6	)
Impairment of equity method investment	(80.3	)	—
Goodwill and other intangible asset impairment	(43.0	)	—
Gain on hedging activities	98.3		22.3
LIFO and LCM	6.6		(9.0	)
Total	175.5		(18.2	)

Income tax expense (benefit)

Income tax expense was $3.5 million in the six months ended June 30, 2010, compared to an income tax expense of $49.9 million in the six months ended June 30, 2009. The effective tax rate for the six months ended June 30, 2010 was primarily impacted by state income taxes, the Internal Revenue Code Section 199 manufacturing deduction, and accrued interest related to unrecognized tax benefits.

The effective tax rate for the six months ended June 30, 2009 was primarily impacted by goodwill impairment, state income taxes, and equity method investee income. For the six months ended June 30, 2009, we determined that our annual ordinary income for the year ending December 31, 2009 could not be reliably estimated because we expected near break-even operations and had a significant permanent difference (i.e. goodwill impairment) such that a minor change in our estimated ordinary income could result in a material change in the estimated annual effective tax rate. As a result, we determined that the actual effective tax rate for the period ending June 30, 2009 was the best estimate of the annual effective tax rate.

Net income

Net income was $6.8 million in the six months ended June 30, 2010 compared to $32.2 million in the six months ended June 30, 2009. This decrease was the net effect of the items described above.

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Liquidity and Capital Resources

Our primary sources of liquidity are cash provided by operating activities, available borrowings under our revolving credit facility and available cash balances. For the six months ended June 30, 2010, cash provided by operating activities amounted to $219.0 million. At June 30, 2010 we had cash and cash equivalents of $31.7 million. Of our revolving credit facility’s (“the facility”) $242.7 million borrowing capacity, we had no amounts outstanding, although we had outstanding letters of credit of $27.5 million, resulting in $215.2 million available for borrowing under the facility at June 30, 2010.

We incurred substantial indebtedness in connection with our 2007 acquisition by Apollo. As of June 30, 2010, we have reduced our total indebtedness to $553.7 million.

Our debt facilities are rated as follows (in thousands):

	Outstanding balance at June 30, 2010	Ratings at July 15, 2010
(in millions)	$	Moody’s(1)	S&P(2)
Noranda AcquisitionCo:
Senior Floating Rate Notes due 2015	353.1	B3	CCC+
Term B loan due 2014	200.6	Ba3	B+
Revolving credit facility	—	Ba3	B+
Total debt	553.7

(1) On May 14, 2010, Moody’s Investors Service upgraded Noranda’s Corporate Family Rating and Probability of Default Rating to B2 from B3. Moody’s classifies Noranda’s rating outlook as “Positive”. Moody’s issue level ratings for Noranda were revised as follows: Noranda AcquisitionCo senior secured revolver and senior secured term loan ratings were moved to Ba3 from B1 and its senior unsecured notes due 2014 rating was moved to B3 from Caa1.

(2) On June 11, 2010, Standard & Poor’s upgraded Noranda’s Corporate rating to B and revised Noranda’s rating outlook to “Positive”. S&P’s issue level ratings for Noranda were revised as follows: Noranda AcquisitionCo senior secured revolver and senior secured term loan ratings were moved to B+ from B and its senior unsecured notes rating was upgraded to CCC+ from CCC.

The following table sets forth consolidated cash flow information for the periods indicated:

	Six months ended June 30,
	2009		2010
(in millions)	$		$
Cash provided by operating activities	108.1		219.0
Cash used in investing activities	(15.2	)	(27.6	)
Cash used in financing activities	(95.4	)	(326.9	)
Net change in cash and cash equivalents	(2.5	)	(135.5	)

Operating Activities

Cash provided by operating activities in the six months ended June 30, 2010 reflected $164.6 million of proceeds from hedge terminations under our hedge settlement agreement with Merrill Lynch, offset by $20.8 million from increases in working capital due to the increased level of volume and the smelter becoming fully operational. Additionally, we made a $10.0 million tax prepayment in connection with the finalization of the GOJ agreement.

Investing Activities

Capital expenditures amounted to $27.8 million through June 30, 2010 and $22.4 million in the comparable 2009 period. During the global economic contraction, we reduced our capital expenditures to maintenance activities and costs associated with bringing the smelter back to full capacity. Of our capital spending in the six months ended June 30, 2009, $7.2 million was related to the New Madrid restart, all of which was funded with insurance proceeds. Though we have not finalized plans or entered into contractual commitments, we are evaluating projects at our New Madrid smelter that will increase our annual metal production by approximately 30 million pounds per annum to 610 million pounds by 2012 and contribute to a reduction in our future average integrated net cash cost per pound of aluminum produced.

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Financing Activities

During the six months ended June 30, 2010 our financing cash flows mainly reflected debt reduction. Through June 30, 2010 we used available cash balances, $82.9 million of IPO proceeds and $164.6 million of proceeds from our remaining hedge terminations to repay $215.9 million of our revolving credit facility, $127.5 million of term B loan borrowings and $66.3 million principal balance of our HoldCo Notes.

On May 15, 2010, AcquisitionCo and HoldCo issued $9.1 million and $2.3 million in AcquisitionCo Notes and HoldCo Notes, respectively as payment for PIK interest due May 15, 2010. Additionally, we have made a permitted election under the indentures governing our AcquisitionCo Notes, to pay all interest due hereunder on Nov 15, 2010, entirely in kind.

Covenant Compliance and Financial Ratios

Certain covenants contained in the credit agreement governing our senior secured credit facilities and the indentures governing our notes restrict our ability to take certain actions (including incurring additional secured or unsecured debt, expanding borrowings under existing term loan facilities, paying dividends, engaging in mergers, acquisitions and certain other investments, and retaining proceeds from asset sales) if we are unable to meet defined ratios: the Adjusted EBITDA to fixed charges (“fixed-charge coverage ratio”) and the net senior secured debt to Adjusted EBITDA (“leverage ratio”). In addition, upon the occurrence of certain events, such as a change of control, we could be required to repay or refinance our indebtedness.

Further, the interest rates we pay under our senior secured credit facilities are determined in part by the Net Senior Secured Leverage Ratio. Furthermore, our ability to take certain actions, including paying dividends and making acquisitions and certain other investments, depends on the amounts available for such actions under the covenants, which amounts accumulate with reference to our Adjusted EBITDA on a quarterly basis. Adjusted EBITDA is computed on a trailing four quarter basis and the minimum or maximum amounts generally required by those covenants and our performance against those minimum or maximum levels are summarized below:

The minimum or maximum ratio levels set forth in our covenants as conditions to or undertaking certain actions and our actual performance are summarized below:

	Financial Ratio Relevant to Covenants	Threshold	Actual
			December  31, 2009(1)	June  30, 2010(1)
Noranda HoldCo:
Senior Floating Rate Notes fixed charge coverage ratio(2)	Fixed Charge Coverage Ratio	Minimum 1.75 to 1	1.6 to 1	—
Noranda AcquisitionCo:
Senior Floating Rate Notes fixed charge coverage ratio( 3)	Fixed Charge Coverage Ratio	Minimum 2.0 to 1	2.1 to 1	4.6 to 1
Term B loan and revolving credit facility leverage ratio(4 )	Net Senior Secured Leverage Ratio	Maximum 3.0 to  1(4)	3.5 to 1	0.9 to 1

(1) For purposes of measuring Adjusted EBITDA in order to compute the ratios, pro forma effect is given to the Joint Venture Transaction as if it had occurred at the beginning of the trailing four-quarter period. Fixed charges are the sum of consolidated interest expenses and all cash dividend payments in respect of preferred stock. In measuring interest expense for the ratio, pro forma effect is given to any repayment or issuance of debt as if such transaction occurred at the beginning of the trailing four-quarter period. For Noranda HoldCo and Noranda AcquisitionCo, the pro forma impact of the Joint Venture Transaction on Adjusted EBITDA for the four quarters ended December 31, 2009 and June 30, 2010 was $15.6 million and $4.4 million, respectively.

(2) During second quarter 2010, we repurchased all outstanding HoldCo Notes; therefore ratio as of June 30, 2010 is not included. For Noranda HoldCo, fixed charges on a pro forma basis (giving effect to debt repayments) for the four quarters ended December 31, 2009 were $72.0 million.

(3) For Noranda AcquisitionCo, fixed charges on a pro forma basis (giving effect to debt repayments) for the four quarters ended December 31, 2009 and June 30, 2010 were $53.9 million and $43.1 million, respectively.

(4) As used in calculating this ratio, “senior secured net debt” means the amount outstanding under our term B loan and the revolving credit facility, plus other first-lien secured debt (of which we have none as of December 31, 2009 and June 30, 2010), less “unrestricted cash” and “permitted investments” (as defined under our senior secured credit facilities). At December 31, 2009, senior secured debt was $544.0 million and unrestricted cash and permitted investments aggregated $145.8 million, resulting in senior secured net debt of $398.2 million. At June 30, 2010, senior secured debt was $200.6 million and unrestricted cash and permitted investments aggregated $24.6 million, resulting in senior secured net debt of $176.0 million.

Our debt instruments contain no financial “maintenance” covenants. Under our debt instruments, “Adjusted EBITDA” means net income before income taxes, net interest expense and depreciation and amortization, adjusted to eliminate related party management fees, certain charges resulting from the use of purchase accounting and specified other non-cash items of income or expense. For covenant compliance calculations, Adjusted EBITDA is computed on a trailing four-quarter basis.

Adjusted EBITDA is not a measure of financial performance under GAAP, and may not be comparable to similarly titled measures used by other companies in our industry. Adjusted EBITDA should not be considered in isolation from or as an alternative

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to net income, income from continuing operations, operating income or any other performance measures derived in accordance with GAAP. Adjusted EBITDA has limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under 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, our working capital needs; and does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our 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 our Adjusted EBITDA as an alternative to operating or net income, determined in accordance with GAAP, as an indicator of our operating performance, or as an alternative to cash flows from operating activities, determined in accordance with GAAP, as an indicator of our cash flows or as a measure of liquidity.

The following table reconciles net income to Adjusted EBITDA for the periods presented. All of the following adjustments are in accordance with the credit agreement governing our term B loan and the indentures governing our notes.

(in millions)	Twelve months ended December 31, 2009		Last twelve months ended June 30, 2010		Six months ended June 30, 2009		Six months ended June 30, 2010		Three months ended June 30,  2009		Three months ended June 30,  2010
	$		$		$		$		$		$
Net income (loss) for the period	101.4		76.0		32.2		6.8		(12.1	)	6.9
Income tax expense	58.6		12.2		49.9		3.5		42.0		3.4
Interest expense, net	53.6		41.4		30.0		17.8		14.1		8.5
Depreciation and amortization	86.6		97.3		40.5		51.2		15.1		25.1
Joint Venture EBITDA(a)	8.0		0.7		7.3		—		3.6		—
LIFO adjustment(b)	26.0		16.8		8.8		(0.4	)	4.9		0.3
LCM adjustment(c)	(43.4	)	(18.6	)	(15.4	)	9.4		(7.1	)	9.6
(Gain) loss on debt repurchase	(211.2	)	(43.9	)	(164.7	)	2.6		(12.5	)	2.5
New Madrid power outage(d)	(30.6	)	(13.3	)	(17.3	)	—		(16.5	)	—
Charges related to termination of derivatives	17.9		15.2		11.7		9.0		3.1		4.9
Non-cash hedging gains, net(e)	(86.1	)	(11.0	)	(81.3	)	(6.2	)	(44.4	)	(14.9	)
Goodwill and other intangible asset impairment	108.0		65.0		43.0		—		—		—
Joint Venture impairment	80.3		—		80.3		—		35.0		—
Gain on business combination	(120.3	)	(120.3	)	—		—		—		—
Purchase accounting(f)	8.9		6.9		—		(2.0	)	—		—
Other items, net(g)	40.6		68.5		16.2		44.1		8.4		32.5
Adjusted EBITDA	98.3		192.9		41.2		135.8		33.6		78.8

50

The following table reconciles cash flow from operating activities to Adjusted EBITDA for the periods presented:

(in millions)	Twelve months ended December 31, 2009		Last twelve months ended June 30, 2010		Six months ended June 30, 2009		Six months ended June 30, 2010
	$		$		$		$
Cash flow from operating activities	220.4		331.3		108.1		219.0
Loss on disposal of property, plant and equipment	(9.3	)	(7.7	)	(3.5	)	(1.9	)
Gain on hedging activities	68.9		3.2		70.2		4.5
Settlements from hedge terminations, net	(120.8	)	(215.3	)	(70.1	)	(164.6	)
Insurance proceeds applied to capital expenditures	11.5		4.3		7.2		—
Equity in net income of investments in affiliates	0.7		(1.5	)	2.2		—
Stock compensation expense	(1.5	)	(4.8	)	(0.7	)	(4.0	)
Changes in deferred charges and other assets	(0.8	)	9.9		(3.0	)	7.7
Changes in pension and other long-term liabilities	2.9		2.7		(4.1	)	(4.3	)
Changes in asset and liabilities, net	(21.2	)	(11.2	)	10.8		20.8
Income tax expense (benefit)	0.9		13.2		(12.2	)	0.1
Interest expense, net	12.1		10.4		6.3		4.6
Joint Venture EBITDA(a)	8.0		0.7		7.3		—
LIFO adjustment(b)	26.0		16.8		8.8		(0.4	)
LCM adjustment(c)	(43.4	)	(18.6	)	(15.4	)	9.4
New Madrid power outage(d)	(30.6	)	(13.3	)	(17.3	)	—
Non-cash hedging gains(e)	(86.1	)	(11.0	)	(81.3	)	(6.2	)
Charges related to termination of derivatives	17.9		15.2		11.7		9.0
Purchase accounting(f)	8.9		6.9		—		(2.0	)
Insurance proceeds applied to depreciation expense	(6.8	)	(6.8	)	—		—
Other items, net(g)	40.6		68.5		16.2		44.1
Adjusted EBITDA	98.3		192.9		41.2		135.8

(a) Prior to the Joint Venture Transaction at August 31, 2009 our reported Adjusted EBITDA includes 50% of the net income of Gramercy and St. Ann, based on transfer prices that are generally in excess of the actual costs incurred by the joint venture operations. To reflect the underlying economics of the vertically integrated upstream business, this adjustment eliminates depreciation and amortization, interest and tax components of equity.

(b) Our New Madrid smelter and rolling mills use the LIFO method of inventory accounting for financial reporting and tax purposes. This adjustment restates pre-tax income to the FIFO method by eliminating LIFO expenses related to inventory held at the New Madrid smelter and rolling mills. Inventories at St. Ann and Gramercy are stated at lower of weighted average cost or market, and are not subject to the LIFO adjustment.

(c) Reflects adjustments to reduce inventory to the lower of cost (adjusted for purchase accounting) or market value.

(d) Represents the portion of the insurance settlement used for claim-related capital expenditures.

(e) We use 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, but does not affect the following cash settlements (received)/ paid (in millions):

	Twelve months ended December 31, 2009		Last twelve months ended June 30, 2010		Six months ended June 30, 2009		Six months ended June 30, 2010		Three months ended June 30,  2009		Three months ended June 30,  2010
	$		$		$		$		$		$
Aluminum swaps—fixed-price	(93.1	)	(50.1	)	(67.2	)	(24.2	)	(32.9	)	(10.2	)
Aluminum swaps—variable-price	23.8		4.5		19.0		(0.3	)	7.7		0.2
Natural gas swaps	31.8		26.9		15.3		10.4		8.6		6.4
Interest rate swaps	11.9		12.8		4.7		5.6		4.7		5.6
Total	(25.6	)	(5.9	)	(28.2	)	(8.5	)	(11.9	)	2.0

The previous table presents cash settlements net of early termination discounts totaling $17.9 million in 2009 and $9.0 million to date in 2010.

(f) Represents the impact from inventory step-ups and other adjustments arising from adjusting assets acquired and liabilities assumed in the Joint Venture Transaction to their fair values.

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(g) Other items, net, consist of the following (in millions):

	Twelve months ended December 31, 2009		Last twelve months ended June 30, 2010	Six months ended June 30, 2009	Six months ended June 30, 2010	Three months ended June 30,  2009		Three months ended June 30,  2010
	$		$	$	$	$		$
Sponsor fees	2.0		14.5	1.0	13.5	0.5		13.0
Pension expense-non cash portion	8.1		9.0	3.7	4.6	2.1		1.8
Employee compensation items	1.8		5.0	1.0	4.2	0.4		3.8
Loss on disposal of property, plant and equipment	7.3		7.5	1.7	1.9	(0.7	)	0.4
Interest rate swap	11.9		12.8	4.7	5.6	4.7		5.6
Consulting and non-recurring fees	5.6		8.1	2.7	5.2	0.7		4.1
Restructuring	(0.2	)	7.6	—	7.8	(0.2	)	3.2
Other	4.1		4.0	1.4	1.3	0.9		0.6
Total	40.6		68.5	16.2	44.1	8.4		32.5

52

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Aluminum

Our primary aluminum products typically earn the LME price plus a Midwest premium. Because aluminum is a global commodity, we have experienced and expect to continue to be subject to volatile primary aluminum prices. See Note 17, “Derivative Financial Instruments” for a summary of derivatives related to hedging our exposure to fluctuations in aluminum prices.

Natural Gas

We purchase natural gas to meet our production requirements. These purchases expose us to the risk of changing market prices. See Note 17, “Derivative Financial Instruments” for a summary of outstanding derivatives related to hedging our exposure to fluctuations in natural gas prices.

Interest Rates

We have floating-rate debt, which is subject to variations in interest rates. See Note 17, “Derivative Financial Instruments” for a summarys of derivatives related to hedging our exposure to fluctuations in interest rates.

Non-Performance Risk

Merrill Lynch is the counterparty for a substantial portion of our derivatives. All swap arrangements with Merrill Lynch are part of a master arrangement which is subject to the same guarantee and security provisions as the senior secured credit facilities. The master arrangement does not require us to post collateral, nor are we subject to margin requirements. While management may alter our hedging strategies in the future based on their view of actual forecasted prices, there are no plans in place that would require us to post additional collateral or become subject to margin requirements under the master agreement with Merrill Lynch.

We have also entered into variable-priced aluminum swaps with counterparties other than Merrill Lynch. To the extent those swap contracts are in an asset position for us, management believes there is minimal counterparty risk because these counterparties are backed by the LME. From time-to-time, these contracts may be in a liability position for us. The swap agreements may require that we establish margin accounts in favor of the broker. When applicable, these margin account balances are netted in the settlement of swap liability. There were no margin account balances at December 31, 2009 or June 30, 2010.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of June 30, 2010. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of such period, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

54

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There are no material changes from the description of our legal proceedings previously disclosed in our Form 10-K filed on March 2, 2010.

Item 1A. Risk Factors

There have been no material changes from the risk factors previously disclosed in our Form 10-K filed on March 2, 2010, as updated by our 10-Q filed May 5, 2010.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds from Registered Sales

On May 13, 2010, our registration statement (File No. 333-150760) was declared effective for our initial public offering, pursuant to which we registered the offering and sale of 11,500,000 shares of common stock (including the underwriters’ right to purchase up to an additional 1,500,000 shares to cover over-allotments) at a public offering price of $8.00 per share. We completed our IPO on May 19, 2010. Aggregate gross offering proceeds were $92.0 million. The representatives for the underwriters were Merrill Lynch, Pierce, Fenner & Smith Incorporated; Morgan Stanley & Co. Incorporated; Credit Suisse Securities (US) LLC; Goldman, Sachs & Co; UBS Securities LLC.

There have been no material changes in the planned use of proceeds from our initial public offering from that described in the prospectus dated May 13, 2010 and filed with the SEC on May 14, 2010 The net proceeds from the offering, after underwriting discounts and commission of $5.6 million, and additional offering-related fees and expenses of $3.5 million, were $82.9 million. We used the net proceeds, together with $95.9 million of proceeds from settling all our outstanding fixed-price aluminum hedges, to repurchase all outstanding Holdco Notes, of which $66.3 million was remaining, and to repay $110.0 million principal amount outstanding under the term B loan. The remaining $2.5 million was used for general corporate purposes.

Item 3. Defaults upon Senior Securities

None.

Item 4. (Removed and Reserved)

Item 5. Other Information

None.

Item 6. Exhibits

3.1	Amended and Restated Certificate of Incorporation of Noranda Aluminum Holding Corporation (incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-8 (File No. 333-166947), filed on May 19, 2010).
3.2	Amended and Restated By-Laws of Noranda Aluminum Holding Corporation (incorporated by reference to Exhibit 4.2 of the Company’s Registration Statement on Form S-8 (File No. 333-166947), filed on May 19, 2010).
10.1	Third Amended and Restated 2007 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on April 21, 2010).
10.2	2010 Incentive Award Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on May 10, 2010).
10.3	Senior Executive Bonus Plan (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on May 10, 2010).
10.4	Amended and Restated Securityholders Agreement, by and among Noranda Aluminum Holding Corporation and the other Holders that are parties thereto, dated as of May 19, 2010 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on May 19, 2010).
10.5†	Amended Establishment Agreement, dated as of June 24, 2010, between the Government of Jamaica and Noranda Bauxite Limited
31.1	Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.
31.2	Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) Promulgated Under the Securities Exchange Act of 1934, as amended.
32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

† Certain portions of this document have been omitted pursuant to a confidential treatment request.

55

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on our behalf by the undersigned thereunto duly authorized.

	NORANDA ALUMINUM HOLDING CORPORATION
Date: July 30, 2010	/s/    ROBERT B. MAHONEY
	Robert B. Mahoney Chief Financial Officer

56

EX-10.5

EHXIBIT 10.5

AMENDMENT TO

ESTABLISHMENT AGREEMENT

This Amendment to Establishment Agreement (the “Amendment”) is made as of the 24^th day of June, 2010 between THE GOVERNMENT OF JAMAICA acting through the Minister of Finance and Planning and the Minister of Mining and Energy (hereinafter called the “Government”) and ST. ANN BAUXITE LIMITED, a company organized and existing under the laws of Jamaica and now known as NORANDA BAUXITE LIMITED (hereinafter called “St. Ann Bauxite”).

W I T N E S S E T H:

WHEREAS

(1) The Government and St. Ann Bauxite are parties to an Establishment Agreement dated the 30th day of September 2004 (the “Establishment Agreement”);

(2) On September 30, 2004 St. Ann Bauxite was beneficially owned 50% by Century Aluminum Company and 50% by Noranda Aluminum, Inc.;

(3) Pursuant to a Securities Purchase Agreement dated as of 3^rd August 2009 by and among Century Louisiana Inc, Century Bermuda I Limited, Century Aluminum Company, NSA General Partnership, St. Ann Bauxite Holdings Limited, Gramercy Alumina Holdings Inc., Gramercy Alumina Holdings II Inc., St. Ann Bauxite and Noranda Aluminum Acquisition Corporation (the “Purchase Agreement”), with effect on August 31, 2009, Century Aluminum Company sold and transferred its beneficial interests in St. Ann Bauxite to Noranda Aluminum, Inc.;

NOW, THEREFORE, it is hereby mutually agreed as hereinafter set forth:

ARTICLE I

DEFINITIONS

1.01 Certain Defined Terms

In this Amendment, unless the context otherwise requires, words, symbols and expressions that are defined in the Establishment Agreement shall have the meanings herein as respectively assigned in the Establishment Agreement.

ARTICLE II

AMENDMENTS TO THE ESTABLISHMENT AGREEMENT

2.01 Amendments to Article I

Article 1.01 of the Establishment Agreement is hereby amended so that, as amended, the following definitions shall read in their entirety as follows:

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“ “Affiliate” means any Person that directly or indirectly by whatever means controls, is controlled by, is under common control with the Person in question, and in the case of each of St. Ann Bauxite and the Partnership, shall include Noranda Aluminum, Inc. and its subsidiaries (including Gramercy Alumina LLC).”

“ “Implementing Documents” means each and all of those agreements, leases and other documents, forms of which are set forth in Exhibits A through H to this Agreement, and the Undertaking of Noranda Aluminum, Inc. dated August 31, 2009.”

2.02 Amendment to Article 10

Section (b) of Article 10.01 of the Establishment Agreement is hereby amended so that as amended, it shall read in its entirety as follows:

“If, at any time, world-wide market conditions require a reduction in bauxite or alumina production by St. Ann Bauxite or Noranda Aluminum, Inc. in any calendar year, then, after written notice to that effect from St. Ann Bauxite or Noranda Aluminum, Inc. is given to the Government, the parties will promptly begin discussions concerning the minimum tonnage to be established by the Government and made applicable to the Partnership for such year, taking into account Jamaica’s actual share of the supply of bauxite or alumina for the Noranda Aluminum, Inc. system, as applicable, from all sources.”

2.03 Amendment to Article 14

Article 14.02 of the Establishment Agreement is hereby amended so that as amended, it shall read in its entirety as follows:

“Notices.

All notices and other communications given pursuant to this Agreement shall be in writing and shall be personally delivered or mailed, postage prepaid, by registered mail or by certified mail return receipt requested (airmail if from one country to another), or sent by reputable international overnight courier service, addressed as follows:

If to the Government:	Permanent Secretary
	Ministry of Energy and Mining
	36 Trafalgar Road
	Kingston 10, Jamaica

with copy to:	Financial Secretary
	Ministry of Finance and Public Service

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30 National Heroes Circle

Kingston 4 Jamaica

Managing Director

Jamaica Bauxite Mining Limited

36 Trafalgar Road

Kingston 10, Jamaica

If to St. Ann Bauxite:	Noranda Bauxite Limited
	Discovery Bay
	Jamaica W.I.
	Attn: General Manager

with copy to:	Noranda Aluminum, Inc.
	Five Corporate Centre
	801 Crescent Centre Drive
	Suite 600
	Franklin, TN 37067
	Attn: President

or to such other address as a party may from time to time notify the others. Any notice or other communication personally delivered or send by overnight courier shall be deemed to have been effectively given at the time of delivery, and any notice mailed as aforesaid shall be deemed to have been effectively given on the seventh (7th) day after the date of posting if being sent to an address within the same country and if being sent to another country, on the fourteenth (14th) day after the date of posting.”

ARTICLE III

AMENDMENTS TO FISCAL REGIME

3.01 With effect from January 1, 2009 Articles V, VI, VII and VIII are hereby amended so that, as amended, they shall read in their entirety as follows:

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ARTICLE V

“INCOME TAX

5.01 Tax Rate; Application.

(a) St. Ann Bauxite shall be subject to income tax and shall make provisional and final payment of any amounts owed in accordance with the Income Tax Act of Jamaica, save and except as otherwise provided in this Article V.

(b) The fiscal regime in this Agreement is agreed to on the basis that the maximum rate of income tax applicable to St. Ann Bauxite shall be 33 1/3%.

(c) The Partnership shall not be treated as a taxpayer or as having profits subject to income tax.

(d) St. Ann Bauxite shall submit certified copies of financial statements, balance sheets and operating statements of the Partnership for each calendar year to the Commissioner responsible for Income Tax within sixty (60) days after the end of such calendar year.

5.02 Sales Revenue.

(a) For the purpose of arriving at taxable income, (i) St. Ann Bauxite’s revenues from sales and shipments of bauxite to customers that are not Affiliates of St. Ann Bauxite shall be recognized at the actual contract price for such sales; and (ii) St. Ann Bauxite’s revenues from sales and shipments of bauxite to customers that are Affiliates of St. Ann Bauxite shall be recognized at the market price for such sales (the “Market Price”).

(b) For purposes of clause (ii) of Section 5.02(a) above and in the special circumstances, the parties have agreed that the Market Price for sales of bauxite up until January 1, 2010 shall be deemed to be US$[***] per dry MT. From January 1, 2010, the parties have agreed that the Market Price for sales of bauxite for each year shall be [***]% of the average Trombetas contract price ([***] point) of the two 6-month periods—January 1 to June 30 and July 1 to December—reported by CRU, or its successor plus a temporary premium of US$[***] per dry MT. Until the CRU report for the current 6-month period is published, the Market Price will be computed provisionally using the most recent 6-month CRU price available at that time, the parties will negotiate in good faith to agree on the applicable Market Price for periods after December 31, 2014. Until the Market Price for periods after December 31, 2014 is determined, such Market Price shall be deemed to be [***]% of the annual average Trombetas contract price ([***] point) reported by CRU or its successor.

5.03 Expenses.

For the purpose of arriving at taxable income for any calendar year, St. Ann Bauxite’s deductible expenses shall be the total of (a) (i) all of its operating costs for mining and related purposes , including all direct land acquisition, rental, mining, reclamation, resettlement, transportation, railroading, processing, drying, shipping and administrative costs, plus (ii) initial and annual allowances determined

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in accordance with the First Schedule to the Income Tax Act, for that year, which amounts in this clause (a) shall include the total amount of mining charges charged to St. Ann Bauxite by the Partnership under the Mining Agreement (including the Land Lease Fees component thereof but excluding depreciation) and Provided That, where the assets were acquired by St. Ann Bauxite’s predecessor prior to January 1, 2003, the net book value as at January 1, 2003 should be used or the actual acquisition costs where those assets were re-valued; and (b) all other costs, charges and expenses incurred in connection with St. Ann Bauxite’s bauxite mining and related activities, which shall be deemed to include, but shall not be limited to, bauxite royalties, the asset usage fee under Section 17.03 of the Partnership Deed, demurrage, and such management fees and other expenses incurred in respect of services provided by Affiliates of St. Ann Bauxite, but subject to the proviso in Section 8.05 of the Management Agreement.

The Government agrees that for purposes of the Income Tax Act, Production Levy (as described in Article 6 below) shall be a deductible expense in ascertaining the chargeable income of St. Ann Bauxite.

5.04 Form of Payment of Taxes.

The income tax payable by St. Ann Bauxite in Jamaica shall be payable in United States dollars to such bank or banks in the United States of America or Jamaica as may be designated by the Government, and accordingly all books, records and statements, including computations for income tax, shall be kept and made in United States dollars and shall be open to inspection by the Commissioner responsible for Income Tax.

It is agreed that St. Ann Bauxite will make non-refundable non-assignable income tax payments of US$10,000,000 on or before June 30, 2010 and US$4,000,000 on or before April 1, 2011. The payments will be credited against St. Ann Bauxite’s actual income tax liability arising in each calendar year of assessment at the rate of US$2,000,000 for 2010 and US$3,000,000 for each of the years 2011 to 2014. In the event that such credit exceeds the actual income tax liability in any year of assessment, the balance of such credit, along with any credit amounts carried over from a previous year, shall be added to the amount to be credited during the succeeding year of assessment. Any credit remaining in the year of assessment 2015 shall be applied at the rate of US$3,000,000 per annum until it is extinguished.

5.05 Tax on Dividends and other Payments.

Notwithstanding any other provision in this Article V, no withholding tax of any nature will be required on dividends or other branch profit remittances by St. Ann Bauxite to the recipient thereof to the extent such dividends or other remittances are not taxable by the jurisdiction where such recipient is domiciled or resident.

5.06 Connected Persons.

(a) Any St. Ann Bauxite connected person (as defined in the Income Tax Act) which engages in any transactions or dealings with St. Ann Bauxite or the Partnership which give rise to business profits in Jamaica shall not be subject to any Jamaican income tax so long as such connected person does not have a permanent establishment (as defined in any of the Treaties referred to in Section 5.06(b) below) in Jamaica.

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(b) For the purpose of this Agreement, the term “business profits” shall have the same meaning as that contained in Article 7 of the Double Taxation Treaty between Jamaica and the United States of America dated December 29, 1981, as in effect for taxable years beginning on or after January 1, 1982 (hereinafter referred to as the “U.S. Treaty”).

(c) Notwithstanding the preceding Section 5.06(b), both parties agree that in no event shall the occurrence of any acts, transactions or dealings by or on behalf of a St. Ann Bauxite connected person in pursuance of this Agreement or any Implementing Document, while the fiscal provisions of this Agreement are in effect, solely by themselves cause any such St. Ann Bauxite connected person to be treated as having a permanent establishment in Jamaica.

5.07 Double Taxation.

In the event of double taxation arising from actions by Jamaica or any other jurisdiction with respect to any of the matters covered by this Agreement, then St. Ann Bauxite may, subject to the provisions of any applicable income tax treaty which includes provisions for relief from double taxation, request a review and discussion of the action giving rise to such double taxation and the Government shall take such reasonable action as the parties hereto may deem proper and appropriate in the circumstances to endeavour to avoid or reduce such double taxation. Nothing contained in this Section shall expressly or by implication create any obligation on the part of the Government to waive, reduce or remit in whole or in part any tax provisions which St. Ann Bauxite shall have paid or shall be liable to pay under the fiscal regime provisions of this Agreement.

ARTICLE VI

PRODUCTION LEVY

6.01 Production Levy.

(a) St. Ann Bauxite will pay to the Government an extraction tax to be known as the bauxite production levy (the “Production Levy”) in respect of its share of all bauxite or laterite extracted or won from the St. Ann Mining Lease in each calendar year, but for administrative convenience, the amount of Production Levy payable shall be determined on the basis of the bauxite actually shipped (i.e. exported) expressed in MT as hereinafter provided for the calendar year. To the extent that bauxite mined is transferred or sold to the Government, Production Levy shall be paid by the party on whose behalf the bauxite is actually being shipped (exported). The Production Levy payable by St. Ann Bauxite shall be calculated and paid in United States Dollars.

(b) As used in this Section 6.01:

(1) The term “Bauxite Shipments” shall mean the bauxite actually shipped in such calendar year expressed in MT determined by using methods verifiable to the Government.

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(2) The term “LMEP” shall mean the average of the three months seller price for 99.7 percent purity aluminum in United States Dollars per MT quoted by the London Metal Exchange as published in Metal Bulletin under the caption “Metal Bulletin (month) Averages” in the section “London Metal Exchange high, low and average (month) (days)” in the column “(month) Average” for the calendar year in question. In the absence of an LMEP, St. Ann Bauxite and the Government will negotiate toward agreeing on a mutually acceptable alternative pricing mechanism. In the event the parties fail to reach an agreement within sixty (60) days of either party having notified the other to enter into discussions to agree to an alternative pricing mechanism, then the Chairman of the London Metal Exchange in London, U.K. or his nominee shall be requested to select a suitable reference in lieu thereof and/or appropriate amendment to the terms of this Section 6.01(b)(ii). The decision of the Chairman or his nominee shall be final and binding on the parties.

(c) Production Levy Formula:

(1) The minimum Production Levy payable with respect to each calendar year that this Section 6.01 is in effect shall be an amount equal to US$[***] per Metric Ton of bauxite at an LMEP of US$[***] multiplied by Bauxite Shipments.

(2) The minimum Production Levy per MT of bauxite shall thereafter escalate from US$[***] per Metric Ton in direct proportion to increases in LMEP.

(d) St. Ann Bauxite shall have no obligation to pay any minimum amount of Production Levy with respect to any calendar year except as required pursuant to, and subject to the terms of this Section 6.01 with respect to actual Bauxite Shipments.

(e) Except as hereinafter provided, St. Ann Bauxite will pay the Production Levy on all bauxite and laterite extracted or won by St. Ann Bauxite in each calendar year in monthly installments within fifteen (15) days after the end of each calendar month. However, for administrative convenience, such Production Levy installments will be calculated (1) on the basis of total bauxite shipped by St. Ann Bauxite during the period from January 1 of each calendar year to the end of the month (during such calendar year) for which the payment is due, (2) using a provisional Production Levy rate equivalent to the basic rate referred to in the Bauxite (Production Levy) Act as gazetted from time to time, and (3) after subtracting the sum of all monthly installments of Production Levy previously paid with respect to such calendar year period.

(f) The quarterly statements of prices for primary aluminum required to be filed by St. Ann Bauxite under Section 4(2) of the Bauxite (Production Levy) Act, shall be prepared in aggregate form (reflecting gross sales revenues and tonnages) consistent with the definition of LMEP in Section 6.01(b)(ii) above.

6.02 (a) Notwithstanding the foregoing, St. Ann Bauxite agrees to make a minimum investment of US$165,613,000.00 between January 1, 2009 and December 31, 2014 and the Government agrees to grant to St. Ann Bauxite a 100% waiver of the payment of Production Levy in respect of the calendar year 2008. PROVIDED THAT if the minimum investment of US$165,613,000.00 is not made before December 31, 2014, the 2008 production levy in the amount of US$[***], which amount shall be deemed its total liability given the special circumstances herein, shall be paid on or

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before March 31, 2015. The investment programme anticipated for the period 2010 to 2014 is set out in Schedule 6.02(a) and it is agreed that any changes to the investment programme proposed by St. Ann Bauxite may be permitted in writing by the Government upon prior disclosure, notification and consultation about the proposed change, such permission not to be unreasonably withheld. Permission to change the investment programme is deemed to have been granted if no response in writing by the Government is given within sixty (60) days of receipt by the Government of the request.

(b) Notwithstanding clause 6.01 above, the Government agrees that, given the special circumstances herein, St. Ann Bauxite shall pay Production Levy at the rate of US$[***] per tonne during the calendar years 2009, 2010 and 2011.

(c) Notwithstanding clause 6.01 above, Government agrees that, given the special circumstances herein, St. Ann Bauxite shall pay Production Levy during the calendar years 2012, 2013 and 2014 at the rate of: US$[***] per tonne where the LMEP is under US$[***]; US$[***] per tonne where the LMEP is at US$[***] but under US$[***]; and US$[***] per tonne where the LMEP is at US$[***] or above.

6.03 The parties acknowledge that St. Ann Bauxite has paid US$15.5 million on December 31, 2009 in respect of its liabilities arising in accordance with clause 6.02(b). This payment will be credited to its actual liability arising in accordance with clause 6.02(b) until such credit is exhausted. It is agreed that the outstanding levy liability of US$4,661,000 will be deducted from the US$15.5 million payment.

ARTICLE VII

ROYALTIES

7.01 Royalties.

During the term hereof the total royalty payable under the Mining Act or the Mining Regulations, as amended from time to time, by St. Ann Bauxite to any Person for the mining of bauxite shall be at the rate of U.S. $0.50 per dry MT of bauxite shipped.

ARTICLE VIII

OTHER TAXES AND CHARGES

8.01 Other Taxes and Charges.

During the term of this Agreement, the Government shall indemnify and save St. Ann Bauxite harmless from any obligation to pay or liability for any further taxes or other government impositions of whatever kind or nature on, or in connection with, St. Ann Bauxite’s and the Partnership’s bauxite mining enterprise in Jamaica, either directly or indirectly, except that St. Ann Bauxite shall be liable to pay all taxes or other government impositions of whatever kind or nature, which are now or may hereafter be imposed and which are of general application in Jamaica and are not applied in a

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discriminatory manner to St. Ann Bauxite as a recognised bauxite producer, provided however that this provision shall not apply to those taxes or other government impositions for which specific and separate limitations are contained elsewhere in this Agreement.

Based on the adjustments made herein to the Fiscal Regime applicable to the period January 1, 2009 to December 31, 2014, save and except in respect of Property Tax, and taxes withheld by St. Ann Bauxite from payments to employees and contractors, it is agreed that the parties hereby release each other from all claims for additional taxes relating to the Fiscal Regime applicable up to December 31, 2009.

8.02 Property Tax.

(a) For the purposes of property tax, the valuation of lands containing minerals which belong to the Government by virtue of the Minerals (Vesting) Act or any other present or future Act shall not take into account the presence of the said minerals.

(b) Neither St. Ann Bauxite nor the Partnership shall be liable to pay a higher rate of property tax on lands owned by St. Ann Bauxite or the Partnership or leased to either of them, nor shall the value of any property so owned or occupied by either of them for the purposes of its bauxite mining operations be assessed on a basis different from that used for other land owners engaged in industrial or commercial operations.

(c) The Partners or the Partnership shall be liable to pay such property taxes, rates and other outgoings in respect of the Lands that, under applicable law, are payable with respect to periods during which they or it are in possession thereof.

8.03 Customs Duties and Other Similar Impost.

(a) No tonnage tax, consumption duty, customs duty or other similar impost shall be payable by St. Ann Bauxite or the Partnership or, pursuant to Section 4(3) of the Encouragement Act by the holder of a contract with St. Ann Bauxite, in respect of any of the articles referred to in Sections 4 and 7 of the Encouragement Act, any items necessary for the repair, maintenance or restoration of those items specified in Part 1 of the Schedule to the said Act, during applicable periods mentioned in said Act, or in respect of any such articles or items imported during such period or any extension thereof; and

(b) No excise duty shall be payable by St. Ann Bauxite or the Partnership or, pursuant to Section 8(3) of the Encouragement Act by the holder of a contract with St. Ann Bauxite or the Partnership, on any of the articles referred to in Section 8 Subsections (1) and (3) of the said Act during the period described in Section 15.01(a) or any extension thereof.

(c) All documents used in connection with the importation into Jamaica of any of the articles referred to in Subsection 1 of Sections 4 and/or 7 of the Encouragement Act shall be exempt from additional Stamp Duty.

(d) St. Ann Bauxite shall pay and advance to the Government and its agencies all taxes, duties, charges or similar imposts, including but not limited to transfer taxes, stamp duty, and registration fees, which are payable under applicable laws in respect of its acquisition of Kaiser

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Bauxite’s undivided interest in the assets, property and in the Original Partnership under the terms of the Asset Purchase Agreement. St. Ann Bauxite will indemnify JBM against the payment of any such taxes, duties, charges or similar imposts which may be raised against it by virtue of being a member of the Original Partnership or the Partnership.

8.04 Consultation on Extension of Fiscal Regime.

The provisions of Articles V, VI, VII and VIII shall become effective as of the January 1, 2009 and shall govern the period from January 1, 2009 through December 31, 2014. As of July 1, 2014, St. Ann Bauxite or the Government shall have the option of proposing adjustments to the fiscal regime for periods commencing January 1, 2015 and the parties will enter into discussions in good faith. In the event that no agreement is reached prior to December 31, 2014, commencing January 1, 2015: (a) the provisions of Articles V, VII and VIII, as same may be amended from time to time by agreement between the parties, shall be extended; and (b), subject to there being a prior adjustment to the bauxite production levy charges applicable to bauxite and alumina producers operating in Jamaica, the provisions of Article VI shall be as follows:

“ARTICLE VI

PRODUCTION LEVY

6.01 Production Levy.

(a) St. Ann Bauxite will pay to the Government an extraction tax to be known as the bauxite production levy (the “Production Levy”) in respect of its share of all bauxite or laterite extracted or won from the St. Ann Mining Lease in each calendar year, but for administrative convenience, the amount of Production Levy payable shall be determined on the basis of the bauxite actually shipped (i.e. exported) expressed in MT as hereinafter provided for the calendar year. To the extent that bauxite mined is transferred or sold to the Government, Production Levy shall be paid by the party on whose behalf the bauxite is actually being shipped (exported). The Production Levy payable by St. Ann Bauxite shall be calculated and paid in U.S. Dollars.

(b) As used in this Section 6.01:

(1) The term “Bauxite Shipments” shall mean the bauxite actually shipped in such calendar year expressed in MT determined by using methods verifiable to the Government.

(2) The term “LMEP” shall mean the average of the three months seller price for 99.7 percent purity aluminum in U.S. Dollars per Metric Ton quoted by the London Metal Exchange as published in Metal Bulletin under the caption “Metal Bulletin (month) Averages” in the section “London Metal Exchange high, low and average (month) (days)” in the column “(month) Average” for the calendar year in question. In the absence of an LMEP, St. Ann Bauxite and the Government will negotiate toward agreeing on a mutually acceptable alternative pricing mechanism. In the event the parties fail to reach an agreement within sixty

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(60) days of either party having notified the other to enter into discussions to agree to an alternative pricing mechanism, then the Chairman of the London Metal Exchange in London, U.K. or his nominee shall be requested to select a suitable reference in lieu thereof and/or appropriate amendment to the terms of this Section 6.01(b)(ii). The decision of the Chairman or his nominee shall be final and binding on the parties.

(c) Production Levy Formula:

With effect from January 1, 2015:

(1) The Production Levy payable with respect to each calendar year that this Section 6.01 is in effect shall be an amount equal to the LMEP Price multiplied by Bauxite Shipments.

(2) The minimum Production Levy per MT is determined at an LMEP of US$[***] per Metric Ton and shall escalate from US$[***] per Metric Ton in direct proportion to increases in LMEP.

(d) St. Ann Bauxite shall have no obligation to pay any minimum amount of Production Levy with respect to any calendar year except as required pursuant to, and subject to the terms of this Section 6.01 with respect to actual Bauxite Shipments.

(e) Except as hereinafter provided, St. Ann Bauxite will pay the Production Levy on all bauxite and laterite extracted or won by St. Ann Bauxite in each calendar year in monthly installments within fifteen (15) days after the end of each calendar month. However, for administrative convenience, such Production Levy installments will be calculated (1) on the basis of total bauxite shipped by St. Ann Bauxite during the period from January 1 of each calendar year to the end of the month (during such calendar year) for which the payment is due, (2) using a provisional Production Levy rate equivalent to the basic rate referred to in the Bauxite (Production Levy) Act as gazetted from time to time, and (3) after subtracting the sum of all monthly installments of Production Levy previously paid with respect to such calendar year period.

(f) The quarterly statements of prices for primary aluminium required to be filed by St. Ann Bauxite under Section 4(2) of the Bauxite (Production Levy) Act, shall be prepared in aggregate form (reflecting gross sales revenues and tonnages) consistent with the definition of LMEP in Section 6.01(b)(ii) above.”

ARTICLE IV

EFFECTIVENESS

4.01 Effective Dates

(a) Except as otherwise specified herein, the Amendments shall take effect from the 1^st day of September 2009.

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(b) Except as specifically modified by this Agreement, the Establishment Agreement shall remain in full force and effect in accordance with its terms, and from and after the Effective Dates of these Amendments. Unless the context otherwise requires, all references to the Establishment Agreement shall be to the Establishment Agreement as amended hereby.

ARTICLE V

MISCELLANEOUS

5.01 Reimbursable Expenses

The Parties agree that, in consideration of the foregoing, the outstanding obligations of the Commissioner of Lands to reimburse St. Ann Bauxite on behalf of the Original Partnership, as set out in clause 9.05 of the Agency Agreement, shall be deemed not to exceed US$4,300,000 and that no claim in excess of this amount shall be made by St. Ann Bauxite for GOJ Lands or other lands acquired in the name of the Commissioner of Lands by Kaiser Bauxite Company or Kaiser Jamaica Bauxite Company up to September 30, 2004, whether or not such expenses have been incurred as of the date hereof. The parties agree to review transactions giving rise to this obligation within sixty (60) days in order to determine: (a) the amount by which it can be reduced; and (b) processes which can be used for completing the transactions which would reduce the implementation costs.

5.02 Counterparts; Facsimiles

This Agreement may be executed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto were upon the same instrument. This Agreement shall become effective when each party to this Agreement shall have received counterparts hereof signed by the other party to this Agreement.

5.03 Governing Law

This Agreement shall be governed by, and construed in accordance with, Jamaican law.

SIGNED BY THE PARTIES HERETO on the day and year first above written.

NORANDA BAUXITE LIMITED		THE GOVERNMENT OF JAMAICA
By :	/S/    GAIL E. LEHMAN	By:	/S/    AUDLEY SHAW
Name:	Gail E. Lehman		Minister of Finance and Public Service
Title:	Secretary

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By:	/S/    ALAN K. BROWN	By:	/S/    JAMES ROBERTSON
Name:	Alan K. Brown		Minister of Energy and Mining
Title:	Director

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SCHEDULE 6.02(a)

Noranda Bauxite

Investment Program Estimate

US$000

2009

2010

2011

2012

2013

2014

Total

Capital Expenditures

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Land

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Haulroads

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Dredging

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Reclaimation

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Maintenance

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Contract Mining

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Public Relations/Community Outreach

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Training

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Productivity Excellence Program

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

Total

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

[***

]

$

165,613

* This list is meant to be representative sample of potential outcomes by line item. Actual results will vary, potentially substantially.

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY ASTERISKS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION

EX-31.1

Exhibit 31.1

CHIEF EXECUTIVE OFFICER CERTIFICATION

I, Layle K. Smith, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2010 of Noranda Aluminum Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2010	/s/ Layle K. Smith
	Layle K. Smith Chief Executive Officer

EX-31.2

Exhibit 31.2

CHIEF FINANCIAL OFFICER CERTIFICATION

I, Robert B. Mahoney, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2010 of Noranda Aluminum Holding Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our 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

c. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 30, 2010	/s/ Robert B. Mahoney
	Robert B. Mahoney Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

AND CHIEF FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Noranda Aluminum Holding Corporation (the “Company”) on Form 10-Q for the period ended June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Layle K. Smith, as Chief Executive Officer of the Company, and Robert B. Mahoney, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 30, 2010	/s/ Layle K. Smith
	Layle K. Smith Chief Executive Officer
Date: July 30, 2010	/s/ Robert B. Mahoney
	Robert B. Mahoney Chief Financial Officer