Delaware (State or Other Jurisdiction of Incorporation) | 20-8908550 (I.R.S. Employer Identification Number) |
801 Crescent Centre Drive, Suite 600 Franklin, Tennessee (Address of Principal Executive Offices) | 37067 (Zip Code) |
Registrant's Telephone Number, Including Area Code: (615) 771-5700 |
Large accelerated filer ¨ | Accelerated Filer x | Non-accelerated filer (Do not check if a smaller reporting company) ¨ | Smaller reporting company ¨ |
Item 1. | Financial Statements |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | 57.8 | 36.1 | ||
Accounts receivable, net | 124.3 | 106.6 | ||
Inventories, net | 204.8 | 195.8 | ||
Taxes receivable | 5.3 | 2.0 | ||
Prepaid expenses | 5.4 | 8.9 | ||
Other current assets | 15.1 | 18.9 | ||
Total current assets | 412.7 | 368.3 | ||
Property, plant and equipment, net | 690.5 | 694.5 | ||
Goodwill | 137.6 | 137.6 | ||
Other intangible assets, net | 58.2 | 61.2 | ||
Other assets | 94.3 | 96.1 | ||
Total assets | 1,393.3 | 1,357.7 | ||
LIABILITIES AND EQUITY | ||||
Current liabilities: | ||||
Accounts payable | 103.1 | 107.2 | ||
Accrued liabilities | 63.9 | 58.8 | ||
Derivative liabilities, net | 8.0 | 1.8 | ||
Deferred tax liabilities | 12.5 | 16.8 | ||
Current portion of long-term debt | 4.9 | 3.3 | ||
Total current liabilities | 192.4 | 187.9 | ||
Long-term debt, net | 645.2 | 592.4 | ||
Long-term derivative liabilities, net | 0.4 | 0.1 | ||
Pension and other post-retirement benefit ("OPEB") liabilities | 185.9 | 187.2 | ||
Other long-term liabilities | 50.6 | 52.3 | ||
Long-term deferred tax liabilities | 179.9 | 183.5 | ||
Common stock subject to redemption (0.2 shares at December 31, 2012) | — | 2.0 | ||
Shareholders’ equity: | ||||
Preferred stock (25.0 shares authorized, $0.01 par value; no shares issued and outstanding at June 30, 2013 and December 31, 2012) | — | — | ||
Common stock (200.0 shares authorized; $0.01 par value; 67.9 shares issued and outstanding at June 30, 2013; 67.7 shares issued and outstanding at December 31, 2012, including 0.2 shares subject to redemption at December 31, 2012) | 0.7 | 0.7 | ||
Capital in excess of par value | 237.1 | 233.4 | ||
Retained earnings | 0.7 | 17.9 | ||
Accumulated other comprehensive loss | (105.6 | ) | (105.7 | ) |
Total shareholders’ equity | 132.9 | 146.3 | ||
Non-controlling interest | 6.0 | 6.0 | ||
Total equity | 138.9 | 152.3 | ||
Total liabilities and equity | 1,393.3 | 1,357.7 |
Three months ended June 30, | Six Months Ended June 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
$ | $ | $ | $ | |||||||||
Sales | 352.0 | 371.7 | 690.4 | 725.2 | ||||||||
Operating costs and expenses: | ||||||||||||
Cost of sales | 334.2 | 331.9 | 639.8 | 636.1 | ||||||||
Selling, general and administrative expenses | 21.5 | 14.8 | 46.1 | 40.5 | ||||||||
Total operating costs and expenses | 355.7 | 346.7 | 685.9 | 676.6 | ||||||||
Operating income (loss) | (3.7 | ) | 25.0 | 4.5 | 48.6 | |||||||
Other (income) expense: | ||||||||||||
Interest expense, net | 12.2 | 8.8 | 22.3 | 15.3 | ||||||||
(Gain) loss on hedging activities, net | 3.0 | (22.4 | ) | (2.4 | ) | (37.1 | ) | |||||
Debt refinancing expense | — | — | 2.5 | 8.1 | ||||||||
Total other (income) expense, net | 15.2 | (13.6 | ) | 22.4 | (13.7 | ) | ||||||
Income (loss) before income taxes | (18.9 | ) | 38.6 | (17.9 | ) | 62.3 | ||||||
Income tax expense (benefit) | (6.6 | ) | 13.3 | (6.2 | ) | 20.8 | ||||||
Net income (loss) | (12.3 | ) | 25.3 | (11.7 | ) | 41.5 | ||||||
Net income (loss) per common share: | ||||||||||||
Basic | $ | (0.18 | ) | $ | 0.38 | $ | (0.17 | ) | $ | 0.62 | ||
Diluted | $ | (0.18 | ) | $ | 0.36 | $ | (0.17 | ) | $ | 0.60 | ||
Weighted-average common shares outstanding: | ||||||||||||
Basic | 67.91 | 67.46 | 67.85 | 67.40 | ||||||||
Diluted | 67.91 | 69.33 | 67.85 | 69.09 | ||||||||
Cash dividends declared per common share | $ | 0.04 | $ | 0.04 | $ | 0.08 | $ | 1.33 |
Three months ended June 30, | Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Net income (loss) | (12.3 | ) | 25.3 | (11.7 | ) | 41.5 | ||
Other comprehensive income (loss): | ||||||||
Reclassification of pension and OPEB amounts realized in net income (loss) | 3.5 | 2.8 | 7.0 | 5.7 | ||||
Unrealized gain (loss) on derivatives | — | 0.4 | — | (3.4 | ) | |||
Reclassification of derivative amounts realized in net income (loss) | — | (22.3 | ) | (6.4 | ) | (39.0 | ) | |
Total other comprehensive income (loss), before tax | 3.5 | (19.1 | ) | 0.6 | (36.7 | ) | ||
Income taxes related to components of other comprehensive loss | (1.3 | ) | 7.0 | (0.5 | ) | 13.3 | ||
Total other comprehensive income (loss), net of tax | 2.2 | (12.1 | ) | 0.1 | (23.4 | ) | ||
Total comprehensive income (loss) | (10.1 | ) | 13.2 | (11.6 | ) | 18.1 |
Preferred stock | Common stock | Capital in excess of par value | Retained earnings | Accumulated other comprehensive loss | Non-controlling interest | Total equity | ||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||
Balance, December 31, 2011 | — | 0.7 | 231.9 | 63.4 | (42.4 | ) | 6.0 | 259.6 | ||||||
Net income | — | — | — | 49.5 | — | — | 49.5 | |||||||
Other comprehensive loss | — | — | — | — | (63.3 | ) | — | (63.3 | ) | |||||
Issuance of common shares for share-based payment arrangements, net of shares tendered for taxes | — | — | 0.2 | — | — | — | 0.2 | |||||||
Stock compensation expense related to equity-based awards | — | — | 4.6 | — | — | — | 4.6 | |||||||
Excess taxes related to share-based payment arrangements | — | — | (0.1 | ) | — | — | — | (0.1 | ) | |||||
Vesting of awards, share-based plans | — | — | (0.1 | ) | 0.1 | — | — | — | ||||||
Dividends to shareholders @ $1.41 per share | — | — | — | (95.1 | ) | — | — | (95.1 | ) | |||||
Distribution to share-based award holders @ $1.25 per share | — | — | (3.1 | ) | — | — | — | (3.1 | ) | |||||
Balance, December 31, 2012 | — | 0.7 | 233.4 | 17.9 | (105.7 | ) | 6.0 | 152.3 | ||||||
Net loss | — | — | — | (11.7 | ) | — | — | (11.7 | ) | |||||
Other comprehensive income | — | — | — | — | 0.1 | — | 0.1 | |||||||
Shares tendered for taxes, share-based payment arrangements, net of proceeds from issuance of common shares | — | — | (0.2 | ) | — | — | — | (0.2 | ) | |||||
Stock compensation expense related to equity-based awards | — | — | 2.1 | — | — | — | 2.1 | |||||||
Excess taxes related to share-based payment arrangements | — | — | (0.3 | ) | — | — | — | (0.3 | ) | |||||
Vesting of awards, share-based plans | — | — | 0.1 | (0.1 | ) | — | — | — | ||||||
Reclassified common shares | — | — | 2.0 | — | — | — | 2.0 | |||||||
Dividends to shareholders @ $0.08 per share | — | — | — | (5.4 | ) | — | — | (5.4 | ) | |||||
Balance, June 30, 2013 | — | 0.7 | 237.1 | 0.7 | (105.6 | ) | 6.0 | 138.9 |
Six Months Ended June 30, | ||||
2013 | 2012 | |||
$ | $ | |||
OPERATING ACTIVITIES | ||||
Net income (loss) | (11.7 | ) | 41.5 | |
Adjustments to reconcile net income (loss) to cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 46.6 | 46.6 | ||
Non-cash interest expense | 1.3 | 1.4 | ||
Last in, first out and lower of cost or market inventory adjustments | 2.2 | (4.3 | ) | |
(Gain) loss on disposal of assets | 0.6 | (2.6 | ) | |
Gain on hedging activities, excluding cash settlements | (4.9 | ) | (61.0 | ) |
Debt refinancing expense | 2.5 | 8.1 | ||
Deferred income taxes | (8.4 | ) | 0.1 | |
Share-based compensation expense | 2.2 | 3.0 | ||
Changes in other assets | (2.3 | ) | (3.4 | ) |
Changes in pension, other post-retirement and other long-term liabilities | 4.2 | 1.1 | ||
Changes in current operating assets and liabilities: | ||||
Accounts receivable, net | (17.7 | ) | (29.0 | ) |
Inventories, net | (11.0 | ) | (8.7 | ) |
Taxes receivable and taxes payable | (3.7 | ) | (4.2 | ) |
Other current assets | 11.8 | 22.2 | ||
Accounts payable | (2.1 | ) | 4.5 | |
Accrued liabilities | 5.1 | (33.6 | ) | |
Cash provided by (used in) operating activities | 14.7 | (18.3 | ) | |
INVESTING ACTIVITIES | ||||
Capital expenditures | (39.5 | ) | (41.9 | ) |
Proceeds from sale of property, plant and equipment | 0.8 | 4.8 | ||
Cash used in investing activities | (38.7 | ) | (37.1 | ) |
FINANCING ACTIVITIES | ||||
Shares tendered for taxes, share-based payment arrangements, net of proceeds from issuance of common shares | (0.2 | ) | (0.1 | ) |
Dividends paid to shareholders | (5.4 | ) | (89.5 | ) |
Distributions paid to share-based award holders | — | (3.1 | ) | |
Repayments of long-term debt | (277.6 | ) | (154.0 | ) |
Borrowings on long-term debt, net | 331.8 | 322.6 | ||
Payments of financing costs | (2.9 | ) | (12.6 | ) |
Cash provided by financing activities | 45.7 | 63.3 | ||
Change in cash and cash equivalents | 21.7 | 7.9 | ||
Cash and cash equivalents, beginning of period | 36.1 | 42.7 | ||
Cash and cash equivalents, end of period | 57.8 | 50.6 |
• | Bauxite – Our bauxite mining operation in St. Ann, Jamaica ("St. Ann") mines and produces the bauxite used for alumina production at our alumina refinery. St. Ann sells the remaining bauxite to a third party. |
• | Alumina – Our alumina refinery in Gramercy, Louisiana ("Gramercy") chemically refines and converts bauxite into alumina, which is the principal raw material used in the production of primary aluminum. The Gramercy refinery is the source for the majority of our aluminum smelter’s alumina requirements. Gramercy sells the remaining alumina production in the form of smelter grade alumina and alumina hydrate, or chemical-grade alumina, to third parties. |
• | Primary Aluminum – Our aluminum smelter in New Madrid, Missouri ("New Madrid") produces value-added aluminum products in several forms, including billet, rod, high purity sow and foundry. The Primary Aluminum segment also produces commodity grade sow. |
• | Flat-Rolled Products – Our rolling mills produce rolled aluminum products such as finstock and container stock. |
• | Corporate – Reflects costs of corporate operations. |
Three months ended June 30, 2013 | ||||||||||||||
Bauxite | Alumina | Primary Aluminum | Flat-Rolled Products | Corporate | Eliminations | Consolidated | ||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||
Sales: | ||||||||||||||
External customers | 10.9 | 51.4 | 136.5 | 153.2 | — | — | 352.0 | |||||||
Intersegment | 19.2 | 35.7 | 20.1 | — | — | (75.0 | ) | — | ||||||
Total sales | 30.1 | 87.1 | 156.6 | 153.2 | — | (75.0 | ) | 352.0 | ||||||
Capital expenditures | 6.4 | 3.8 | 7.3 | 2.8 | 0.3 | — | 20.6 | |||||||
Reconciliation of segment profit (loss) to operating income (loss): | ||||||||||||||
Segment profit (loss) | 0.7 | 2.8 | 13.9 | 14.2 | (8.1 | ) | 1.5 | 25.0 | ||||||
Depreciation and amortization | (3.0 | ) | (5.3 | ) | (10.1 | ) | (4.7 | ) | (0.3 | ) | — | (23.4 | ) | |
Last in, first out and lower of cost or market inventory adjustments | — | — | (1.3 | ) | 0.2 | — | (0.3 | ) | (1.4 | ) | ||||
(Gain) loss on disposal of assets | — | 0.4 | — | (1.2 | ) | — | — | (0.8 | ) | |||||
Non-cash pension, accretion and stock compensation | 0.1 | (0.3 | ) | (1.7 | ) | (1.6 | ) | (1.4 | ) | — | (4.9 | ) | ||
Relocation and severance | — | (0.1 | ) | (0.2 | ) | (0.1 | ) | (0.1 | ) | — | (0.5 | ) | ||
Consulting fees | — | — | — | — | (0.1 | ) | — | (0.1 | ) | |||||
Cash settlements on hedging transactions | — | — | 0.6 | 2.5 | — | — | 3.1 | |||||||
Other, net | (0.1 | ) | (0.1 | ) | — | — | 0.1 | (0.6 | ) | (0.7 | ) | |||
Operating income (loss) | (2.3 | ) | (2.6 | ) | 1.2 | 9.3 | (9.9 | ) | 0.6 | (3.7 | ) | |||
Interest expense, net | 12.2 | |||||||||||||
Loss on hedging activities, net | 3.0 | |||||||||||||
Total other expense, net | 15.2 | |||||||||||||
Loss before income taxes | (18.9 | ) |
Three months ended June 30, 2012 | ||||||||||||||
Bauxite | Alumina | Primary Aluminum | Flat-Rolled Products | Corporate | Eliminations | Consolidated | ||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||
Sales: | ||||||||||||||
External customers | 13.0 | 55.9 | 143.9 | 158.9 | — | — | 371.7 | |||||||
Intersegment | 19.3 | 37.3 | 18.3 | — | — | (74.9 | ) | — | ||||||
Total sales | 32.3 | 93.2 | 162.2 | 158.9 | — | (74.9 | ) | 371.7 | ||||||
Capital expenditures | 2.7 | 3.9 | 8.0 | 4.9 | 0.8 | — | 20.3 | |||||||
Reconciliation of segment profit (loss) to operating income (loss): | ||||||||||||||
Segment profit (loss) | 1.4 | 13.7 | 23.1 | 14.6 | (6.3 | ) | 2.6 | 49.1 | ||||||
Depreciation and amortization | (2.2 | ) | (5.3 | ) | (11.1 | ) | (4.8 | ) | (0.3 | ) | — | (23.7 | ) | |
Last in, first out and lower of cost or market inventory adjustments | — | — | 1.0 | (1.6 | ) | — | — | (0.6 | ) | |||||
(Gain) loss on disposal of assets | — | — | (1.1 | ) | 4.3 | — | — | 3.2 | ||||||
Non-cash pension, accretion and stock compensation | (0.1 | ) | (0.2 | ) | (1.3 | ) | (1.1 | ) | (1.3 | ) | — | (4.0 | ) | |
Relocation and severance | — | — | — | (0.1 | ) | (0.1 | ) | — | (0.2 | ) | ||||
Cash settlements on hedging transactions | — | — | 0.5 | 2.8 | — | — | 3.3 | |||||||
Other, net | — | (0.3 | ) | 0.1 | 0.1 | — | (2.0 | ) | (2.1 | ) | ||||
Operating income (loss) | (0.9 | ) | 7.9 | 11.2 | 14.2 | (8.0 | ) | 0.6 | 25.0 | |||||
Interest expense, net | 8.8 | |||||||||||||
Gain on hedging activities, net | (22.4 | ) | ||||||||||||
Total other income, net | (13.6 | ) | ||||||||||||
Income before income taxes | 38.6 |
Six Months Ended June 30, 2013 | ||||||||||||||
Bauxite | Alumina | Primary Aluminum | Flat-Rolled Products | Corporate | Eliminations | Consolidated | ||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||
Sales: | ||||||||||||||
External customers | 22.7 | 93.4 | 275.2 | 299.1 | — | — | 690.4 | |||||||
Intersegment | 42.9 | 79.8 | 42.6 | — | — | (165.3 | ) | — | ||||||
Total sales | 65.6 | 173.2 | 317.8 | 299.1 | — | (165.3 | ) | 690.4 | ||||||
Capital expenditures | 7.2 | 8.9 | 15.7 | 6.2 | 1.5 | — | 39.5 | |||||||
Reconciliation of segment profit (loss) to operating income (loss): | ||||||||||||||
Segment profit (loss) | 4.9 | 6.9 | 38.1 | 28.0 | (16.8 | ) | 0.2 | 61.3 | ||||||
Depreciation and amortization | (5.0 | ) | (10.6 | ) | (21.2 | ) | (9.3 | ) | (0.5 | ) | — | (46.6 | ) | |
Last in, first out and lower of cost or market inventory adjustments | — | — | 0.4 | (2.3 | ) | — | (0.3 | ) | (2.2 | ) | ||||
(Gain) loss on disposal of assets | — | 0.5 | 0.1 | (1.2 | ) | — | — | (0.6 | ) | |||||
Non-cash pension, accretion and stock compensation | 0.1 | (0.5 | ) | (3.5 | ) | (2.9 | ) | (2.8 | ) | — | (9.6 | ) | ||
Relocation and severance | — | (0.2 | ) | (0.4 | ) | (0.1 | ) | (0.4 | ) | — | (1.1 | ) | ||
Consulting fees | — | — | — | — | (0.4 | ) | — | (0.4 | ) | |||||
Cash settlements on hedging transactions | — | — | 0.7 | 3.0 | — | — | 3.7 | |||||||
Other, net | (0.1 | ) | (0.2 | ) | — | (0.1 | ) | 0.1 | 0.3 | — | ||||
Operating income (loss) | (0.1 | ) | (4.1 | ) | 14.2 | 15.1 | (20.8 | ) | 0.2 | 4.5 | ||||
Interest expense, net | 22.3 | |||||||||||||
Gain on hedging activities, net | (2.4 | ) | ||||||||||||
Debt refinancing expense | 2.5 | |||||||||||||
Total other income, net | 22.4 | |||||||||||||
Loss before income taxes | (17.9 | ) |
Six Months Ended June 30, 2012 | ||||||||||||||
Bauxite | Alumina | Primary Aluminum | Flat-Rolled Products | Corporate | Eliminations | Consolidated | ||||||||
$ | $ | $ | $ | $ | $ | $ | ||||||||
Sales: | ||||||||||||||
External customers | 23.7 | 113.5 | 284.0 | 304.0 | — | — | 725.2 | |||||||
Intersegment | 41.8 | 74.2 | 40.1 | — | — | (156.1 | ) | — | ||||||
Total sales | 65.5 | 187.7 | 324.1 | 304.0 | — | (156.1 | ) | 725.2 | ||||||
Capital expenditures | 4.0 | 8.2 | 20.7 | 7.7 | 1.3 | — | 41.9 | |||||||
Reconciliation of segment profit (loss) to operating income (loss): | ||||||||||||||
Segment profit (loss) | 3.6 | 27.4 | 48.8 | 29.1 | (15.0 | ) | (0.2 | ) | 93.7 | |||||
Depreciation and amortization | (4.2 | ) | (10.5 | ) | (21.9 | ) | (9.3 | ) | (0.7 | ) | — | (46.6 | ) | |
Last in, first out and lower of cost or market inventory adjustments | — | — | 4.4 | 0.4 | — | (0.5 | ) | 4.3 | ||||||
(Gain) loss on disposal of assets | — | — | (1.6 | ) | 4.2 | — | — | 2.6 | ||||||
Non-cash pension, accretion and stock compensation | (0.1 | ) | (0.4 | ) | (2.7 | ) | (2.4 | ) | (3.5 | ) | — | (9.1 | ) | |
Relocation and severance | — | — | (0.2 | ) | (0.1 | ) | (0.1 | ) | — | (0.4 | ) | |||
Consulting fees | — | — | — | — | (0.5 | ) | — | (0.5 | ) | |||||
Cash settlements on hedging transactions | — | — | 0.5 | 4.0 | — | — | 4.5 | |||||||
Other, net | — | (0.4 | ) | 0.1 | 0.1 | (0.2 | ) | 0.5 | 0.1 | |||||
Operating income (loss) | (0.7 | ) | 16.1 | 27.4 | 26.0 | (20.0 | ) | (0.2 | ) | 48.6 | ||||
Interest expense, net | 15.3 | |||||||||||||
Gain on hedging activities, net | (37.1 | ) | ||||||||||||
Debt refinancing expense | 8.1 | |||||||||||||
Total other income, net | (13.7 | ) | ||||||||||||
Income before income taxes | 62.3 |
June 30, 2013 | December 31, 2012 | |||
Segment assets: | $ | $ | ||
Bauxite | 151.1 | 154.3 | ||
Alumina | 236.5 | 238.0 | ||
Primary Aluminum | 540.2 | 534.2 | ||
Flat-Rolled Products | 381.0 | 374.2 | ||
Corporate | 111.9 | 84.0 | ||
Eliminations | (27.4 | ) | (27.0 | ) |
Total assets | 1,393.3 | 1,357.7 |
Three months ended June 30, | Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Depreciation of property, plant and equipment | 20.7 | 20.9 | 41.3 | 41.1 | ||||
Amortization of intangible assets | 1.5 | 1.5 | 3.0 | 3.0 | ||||
Amortization of other long-term assets | 1.2 | 1.3 | 2.3 | 2.5 | ||||
Total depreciation and amortization | 23.4 | 23.7 | 46.6 | 46.6 |
Six Months Ended June 30, | ||||
2013 | 2012 | |||
$ | $ | |||
Interest paid | 17.1 | 15.1 | ||
U.S. Federal and state income taxes paid, net of refunds received | 6.0 | 25.1 |
Unrealized net actuarial gain (loss), prior service cost and other related to pension and OPEB | Accumulated tax benefit (expense) related to unrealized net actuarial gain/loss, prior service cost and other related to pension and OPEB | Unrealized gain (loss) on derivatives | Accumulated tax benefit (expense) related to unrealized gain or loss on derivatives | Total, net of tax | ||||||
$ | $ | $ | $ | $ | ||||||
Balance, December 31, 2011 | (163.8 | ) | 61.2 | 94.1 | (33.9 | ) | (42.4 | ) | ||
Amounts recorded to AOCI for the period | (24.3 | ) | 9.6 | (3.5 | ) | 1.3 | (16.9 | ) | ||
Reclassification of amounts realized in net income (loss) | 11.9 | (4.7 | ) | (84.2 | ) | 30.6 | (46.4 | ) | ||
Balance, December 31, 2012 | (176.2 | ) | 66.1 | 6.4 | (2.0 | ) | (105.7 | ) | ||
Reclassification of amounts realized in net income (loss) | 7.0 | (2.5 | ) | (6.4 | ) | 2.0 | 0.1 | |||
Balance, June 30, 2013 | (169.2 | ) | 63.6 | — | — | (105.6 | ) |
Details about accumulated other comprehensive income (loss) components | Amount reclassified from accumulated other comprehensive income (loss) | Affected line item in the unaudited consolidated statements of operations | |||||||
Three months ended June 30, | Six Months Ended June 30, | ||||||||
2013 | 2012 | 2013 | 2012 | ||||||
$ | $ | $ | $ | ||||||
Selling, general and administrative expenses ("SGA") | |||||||||
Actuarial gain/loss | 0.7 | 0.6 | 1.4 | 1.2 | (1) | ||||
Prior service costs | — | — | 0.1 | — | (1) | ||||
Total pension amounts reclassified into SGA | 0.7 | 0.6 | 1.5 | 1.2 | Selling, general and administrative expenses | ||||
Cost of Sales ("COS") | |||||||||
Actuarial gain/loss | 2.5 | 2.1 | 5.0 | 4.3 | (1) | ||||
Prior service costs | 0.3 | 0.1 | 0.5 | 0.2 | (1) | ||||
Total pension amounts reclassified into COS | 2.8 | 2.2 | 5.5 | 4.5 | Cost of sales | ||||
Reclassification of pension and OPEB amounts realized in net income | 3.5 | 2.8 | 7.0 | 5.7 | |||||
Income taxes related to reclassifications of pension and OPEB amounts | (1.3 | ) | (1.0 | ) | (2.5 | ) | (2.1 | ) | Income tax expense (benefit) |
Reclassification of pension and OPEB amounts realized in net income, net of tax | 2.2 | 1.8 | 4.5 | 3.6 | Net income (loss) | ||||
Reclassification of derivative amounts realized in net income | — | (22.3 | ) | (6.4 | ) | (39.0 | ) | (Gain) loss on hedging activities, net | |
Income taxes related to reclassifications of derivative amounts | — | 8.1 | 2.0 | 14.2 | Income tax expense (benefit) | ||||
Reclassification of derivative amounts realized in net income, net of tax | — | (14.2 | ) | (4.4 | ) | (24.8 | ) | Net income (loss) |
(1) | These accumulated other comprehensive income components are included in the computation of net periodic pension cost shown in Note 10, "Pensions and Other Post-Retirement Benefits." |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Cash | 15.8 | 26.1 | ||
Money market funds | 42.0 | 10.0 | ||
Total cash and cash equivalents | 57.8 | 36.1 |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Trade | 124.4 | 106.8 | ||
Allowance for doubtful accounts | (0.1 | ) | (0.2 | ) |
Total accounts receivable, net | 124.3 | 106.6 |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Current foreign deferred tax asset | 2.6 | 2.6 | ||
Employee loans receivable, net | 1.9 | 2.0 | ||
Current derivative assets (see Note 11, "Derivative Financial Instruments") | 7.4 | 2.6 | ||
Other current assets | 3.2 | 11.7 | ||
Total other current assets | 15.1 | 18.9 |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Deferred financing costs, net of amortization | 8.7 | 9.3 | ||
Cash surrender value of life insurance | 27.1 | 26.3 | ||
Pension asset (see Note 10, "Pensions and Other Post-Retirement Benefits") | 10.0 | 9.7 | ||
Restricted cash (see Note 9, "Asset Retirement and Other Obligations") | 13.0 | 12.8 | ||
Supplies | 10.7 | 13.0 | ||
Prepaid Jamaican income taxes | 12.7 | 12.7 | ||
Derivative asset | 0.4 | 0.1 | ||
Other | 11.7 | 12.2 | ||
Total other assets | 94.3 | 96.1 |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Compensation and benefits | 20.1 | 17.4 | ||
Workers’ compensation | 5.6 | 5.7 | ||
Other operating expenses | 15.7 | 15.6 | ||
Accrued interest | 6.6 | 2.0 | ||
Asset retirement obligations (see Note 9, "Asset Retirement and Other Obligations") | 1.9 | 2.4 | ||
Land obligation (see Note 9, "Asset Retirement and Other Obligations") | 4.6 | 4.9 | ||
Reclamation obligation (see Note 9, "Asset Retirement and Other Obligations") | 1.3 | 2.5 | ||
Environmental remediation obligations (see Note 7, "Commitments and Contingencies") | 2.0 | 2.0 | ||
Obligations to the Government of Jamaica (see Note 17, "Non-Controlling Interest") | 5.2 | 5.3 | ||
Pension and OPEB liabilities (see Note 10, "Pensions and Other Post-Retirement Benefits") | 0.9 | 0.9 | ||
Restricted stock unit ("RSU") liability awards (see Note 13, "Share-Based Payments") | — | 0.1 | ||
Total accrued liabilities | 63.9 | 58.8 |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Reserve for uncertain tax positions | 0.6 | 0.8 | ||
Workers’ compensation | 15.1 | 15.0 | ||
Asset retirement obligations (see Note 9, "Asset Retirement and Other Obligations") | 14.2 | 13.4 | ||
Land obligation (see Note 9, "Asset Retirement and Other Obligations") | 8.4 | 9.2 | ||
Environmental remediation obligations (see Note 7, "Commitments and Contingencies") | 1.0 | 1.2 | ||
Deferred compensation and other | 11.3 | 12.7 | ||
Total other long-term liabilities | 50.6 | 52.3 |
June 30, 2013 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
$ | $ | $ | $ | |||||
Cash equivalents | 42.0 | — | — | 42.0 | ||||
Derivative assets | — | 6.4 | 1.4 | 7.8 | ||||
Derivative liabilities | — | (8.4 | ) | — | (8.4 | ) | ||
Total | 42.0 | (2.0 | ) | 1.4 | 41.4 |
December 31, 2012 | ||||||||
Level 1 | Level 2 | Level 3 | Total | |||||
$ | $ | $ | $ | |||||
Cash equivalents | 10.0 | — | — | 10.0 | ||||
Derivative assets | — | 3.1 | 1.1 | 4.2 | ||||
Derivative liabilities | — | (3.4 | ) | — | (3.4 | ) | ||
RSU liability awards | (0.1 | ) | — | — | (0.1 | ) | ||
Total | 9.9 | (0.3 | ) | 1.1 | 10.7 |
Six Months Ended June 30, 2013 | ||
$ | ||
Fair value, beginning of year | 1.1 | |
Purchases | 0.5 | |
Changes in fair value | 0.4 | |
Settlements | (0.6 | ) |
Fair value, end of year | 1.4 |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Raw materials, at cost | 76.7 | 63.5 | ||
Work-in-process, at cost | 58.1 | 58.9 | ||
Finished goods, at cost | 23.5 | 29.5 | ||
Total inventories, at cost | 158.3 | 151.9 | ||
Last in first out adjustment | 22.7 | 15.7 | ||
Lower of cost or market reserve | (17.6 | ) | (7.1 | ) |
Inventories, at lower of cost or market | 163.4 | 160.5 | ||
Supplies | 41.4 | 35.3 | ||
Total inventories, net | 204.8 | 195.8 |
Estimated useful lives in years | June 30, 2013 | December 31, 2012 | |||||
$ | $ | ||||||
Land | 51.0 | 50.4 | |||||
Buildings and improvements | 10 | — | 47 | 161.5 | 151.0 | ||
Machinery and equipment | 3 | — | 50 | 894.5 | 876.9 | ||
Construction in progress | 46.7 | 48.2 | |||||
Property, plant and equipment, at cost | 1,153.7 | 1,126.5 | |||||
Accumulated depreciation | (463.2 | ) | (432.0 | ) | |||
Total property, plant and equipment, net | 690.5 | 694.5 |
7. | COMMITMENTS AND CONTINGENCIES |
• | An agreement at St. Ann with the UTASP representing supervisory and technical salaried workers will expire in December 2013. |
• | The agreement at St. Ann with the BITU expired in December 2012. This contract covered a small portion of our St. Ann workforce. We are expecting to receive a claim for a new contract in August 2013. |
• | An agreement at St. Ann with the UAWU, covering supervisory and technical workers, expired in April 2013. We received a claim for a new contract in June 2013 and expect to start negotiations in August 2013. |
• | The agreement at Gramercy with the USWA will expire in September 2015. |
• | An agreement at New Madrid with the USWA will expire in August 2017. |
• | An agreement at our Salisbury rolling mill with the USWA will expire in November 2016. |
• | The agreement in place with the IAMAW at our Newport rolling mill extends through May 2014. |
June 30, 2013 | December 31, 2012 | |||||||||||
Carrying value | Fair value | Interest rate | Carrying value | Fair value | Interest rate | |||||||
$ | $ | % | $ | $ | % | |||||||
AcquisitionCo Notes, net (1) | 172.9 | 162.4 | 11.00 | % | 275.3 | 258.8 | 4.52 | % | ||||
Term B Loan, net | 477.2 | 477.2 | 5.75 | % | 320.4 | 320.4 | 5.75 | % | ||||
Revolver | — | — | — | — | ||||||||
Total debt, net | 650.1 | 595.7 | ||||||||||
Less: Current portion | (4.9 | ) | (3.3 | ) | ||||||||
Long-term debt, net | 645.2 | 592.4 |
(1) | We refer to the Senior Unsecured Notes due 2019 issued by Noranda AcquisitionCo ("AcquisitionCo Notes due 2019") outstanding at June 30, 2013 and Senior Floating Rate Notes due 2015 issued by Noranda AcquisitionCo ("AcquisitionCo Notes due 2015") outstanding at December 31, 2012 collectively as the "AcquisitionCo Notes." |
Six Months Ended June 30, 2013 | ||
$ | ||
Balance, beginning of period | 2.5 | |
Additional liabilities incurred | 1.1 | |
Liabilities settled | (2.3 | ) |
Accretion | — | |
Balance, end of period | 1.3 |
Six Months Ended June 30, 2013 | ||
$ | ||
Balance, beginning of period | 14.1 | |
Additional liabilities incurred | — | |
Liabilities settled | (0.3 | ) |
Revisions to the obligation | (0.8 | ) |
Balance, end of period | 13.0 |
Six Months Ended June 30, 2013 | ||
$ | ||
Balance, beginning of period | 15.8 | |
Additional liabilities incurred | 0.5 | |
Liabilities settled | (0.7 | ) |
Accretion | 0.5 | |
Balance, end of period | 16.1 |
Noranda Pension Plans | St. Ann Pension Plans | |||||||
Three months ended June 30, | Three months ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Service cost | 3.9 | 3.5 | 0.2 | 0.2 | ||||
Interest cost | 4.5 | 4.4 | 0.4 | 0.4 | ||||
Expected return on plan assets | (5.1 | ) | (4.8 | ) | (0.7 | ) | (0.6 | ) |
Recognized actuarial loss | 3.2 | 2.7 | — | — | ||||
Amortization of prior service cost | 0.3 | 0.1 | — | — | ||||
Net periodic cost | 6.8 | 5.9 | (0.1 | ) | — |
Noranda Pension Plans | St. Ann Pension Plans | |||||||
Six Months Ended June 30, | Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Service cost | 7.7 | 6.6 | 0.3 | 0.4 | ||||
Interest cost | 9.0 | 8.9 | 0.8 | 0.8 | ||||
Expected return on plan assets | (10.2 | ) | (9.5 | ) | (1.2 | ) | (1.1 | ) |
Recognized actuarial loss | 6.4 | 5.5 | — | — | ||||
Amortization of prior service cost | 0.6 | 0.2 | — | — | ||||
Net periodic cost | 13.5 | 11.7 | (0.1 | ) | 0.1 |
Noranda OPEB Plans | St. Ann OPEB Plans | |||||||
Three months ended June 30, | Three months ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Service cost | 0.2 | 0.1 | 0.1 | 0.1 | ||||
Interest cost | 0.1 | 0.2 | 0.1 | 0.1 | ||||
Net periodic cost | 0.3 | 0.3 | 0.2 | 0.2 |
Noranda OPEB Plans | St. Ann OPEB Plans | |||||||
Six Months Ended June 30, | Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Service cost | 0.3 | 0.2 | 0.1 | 0.2 | ||||
Interest cost | 0.3 | 0.3 | 0.2 | 0.2 | ||||
Net periodic cost | 0.6 | 0.5 | 0.3 | 0.4 |
Average price per pound | Pounds | |||
Year | $ | (in millions) | ||
2013 | 1.04 | 36.9 | ||
2014 | 1.01 | 31.1 |
Average hedged price per pound | Pounds hedged | |||
Year | $ | (in millions) | ||
2013 | 0.92 | 48.6 | ||
2014 | 0.89 | 33.6 |
Average hedged price per pound | Pounds hedged | |||
Year | $ | (in millions) | ||
2013 | 0.11 | 45.7 | ||
2014 | 0.12 | 29.1 |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Fixed-price aluminum customer contracts | 6.4 | (0.8 | ) | |
Variable-price aluminum offset swaps and other | (8.4 | ) | 0.5 | |
Variable-price MWP contracts | 1.4 | 1.1 | ||
Total | (0.6 | ) | 0.8 |
As of June 30, 2013 | ||||||||||
Counterparty | Gross derivative assets offset | Amount offset | Net derivative assets offset | Derivative assets not offset | Derivative assets, net | |||||
$ | $ | $ | $ | $ | ||||||
Other counterparties | — | — | — | 7.4 | 7.4 | |||||
Total current derivative assets | — | — | — | 7.4 | 7.4 | |||||
Other counterparties | — | — | — | 0.4 | 0.4 | |||||
Total long-term derivative assets | — | — | — | 0.4 | 0.4 |
As of June 30, 2013 | ||||||||||
Counterparty | Gross derivative liabilities offset | Amount offset | Net derivative liabilities offset | Derivative liabilities not offset | Derivative liabilities, net | |||||
$ | $ | $ | $ | $ | ||||||
Merrill Lynch master netting arrangement | (7.7 | ) | — | (7.7 | ) | (7.7 | ) | |||
Other master netting arrangement | (0.3 | ) | — | (0.3 | ) | — | (0.3 | ) | ||
Total current derivative liabilities | (8.0 | ) | — | (8.0 | ) | — | (8.0 | ) | ||
Merrill Lynch master netting arrangement | (0.4 | ) | — | (0.4 | ) | — | (0.4 | ) | ||
Total long-term derivative liabilities | (0.4 | ) | — | (0.4 | ) | — | (0.4 | ) |
As of December 31, 2012 | ||||||||||
Counterparty | Gross derivative assets offset | Amount offset | Net derivative assets offset | Derivative assets not offset | Derivative assets, net | |||||
$ | $ | $ | $ | $ | ||||||
Merrill Lynch master netting arrangement | 2.0 | (1.5 | ) | 0.5 | — | 0.5 | ||||
Other counterparties | — | — | — | 2.1 | 2.1 | |||||
Total current derivative assets | 2.0 | (1.5 | ) | 0.5 | 2.1 | 2.6 | ||||
Merrill Lynch master netting arrangement | — | — | — | 0.1 | 0.1 | |||||
Total long-term derivative assets | — | — | — | 0.1 | 0.1 |
As of December 31, 2012 | ||||||||||
Counterparty | Gross derivative liabilities offset | Amount offset | Net derivative liabilities offset | Derivative liabilities not offset | Derivative liabilities, net | |||||
$ | $ | $ | $ | $ | ||||||
Merrill Lynch master netting arrangement | (1.5 | ) | 1.5 | — | — | — | ||||
Other counterparties | — | — | — | (1.8 | ) | (1.8 | ) | |||
Total current derivative liabilities | (1.5 | ) | 1.5 | — | (1.8 | ) | (1.8 | ) | ||
Other counterparties | — | — | — | (0.1 | ) | (0.1 | ) | |||
Total long-term derivative liabilities | — | — | — | (0.1 | ) | (0.1 | ) |
• | Fixed-price aluminum swaps. We discontinued hedge accounting for all our aluminum fixed price sale swaps on January 29, 2009. At that date, amounts were frozen in AOCI to be reclassified into earnings in the period the hedged sales occur, or until we determined that the original forecasted sales were no longer probable of occurring. During the six months ended June 30, 2013, we reclassified the remaining $6.4 million of gains into earnings, which is reflected in gain on hedging activities, net in the unaudited consolidated statement of operations. |
Derivatives qualified as hedges | Derivatives not qualified as hedges | |||||
Amount reclassified from AOCI | Change in fair value | Total (gain) loss on hedging activities | ||||
$ | $ | $ | ||||
Three months ended June 30, 2013 | ||||||
Fixed-price aluminum customer contracts | — | (2.0 | ) | (2.0 | ) | |
Variable-price aluminum offset swaps and other | — | 5.0 | 5.0 | |||
Total | — | 3.0 | 3.0 | |||
Three months ended June 30, 2012 | ||||||
Fixed-price aluminum swaps | (29.2 | ) | — | (29.2 | ) | |
Fixed-price aluminum customer contracts | — | (3.8 | ) | (3.8 | ) | |
Variable-price aluminum offset swaps and other | — | 7.1 | 7.1 | |||
Natural gas swaps | 6.9 | (0.8 | ) | 6.1 | ||
Natural gas fixed-price contract | — | (2.6 | ) | (2.6 | ) | |
Total | (22.3 | ) | (0.1 | ) | (22.4 | ) |
Six Months Ended June 30, 2013 | ||||||
Fixed-price aluminum swaps | (6.4 | ) | — | (6.4 | ) | |
Fixed-price aluminum customer contracts | — | (7.2 | ) | (7.2 | ) | |
Variable-price aluminum offset swaps and other | — | 11.2 | 11.2 | |||
Total | (6.4 | ) | 4.0 | (2.4 | ) | |
Six Months Ended June 30, 2012 | ||||||
Fixed-price aluminum swaps | (52.2 | ) | — | (52.2 | ) | |
Fixed-price aluminum customer contracts | — | (3.2 | ) | (3.2 | ) | |
Variable-price aluminum offset swaps and other | — | 4.1 | 4.1 | |||
Natural gas swaps | 13.2 | 1.2 | 14.4 | |||
Natural gas fixed-price contract | — | (0.2 | ) | (0.2 | ) | |
Total | (39.0 | ) | 1.9 | (37.1 | ) |
Declaration date | Per share dividend amount | Date paid | Total cash payment | |
$/share | $ in millions | |||
February 20, 2013 | 0.04 | March 27, 2013 | 2.7 | |
April 24, 2013 | 0.04 | May 29, 2013 | 2.7 |
Three months ended June 30, | Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Stock options | — | 0.1 | 0.1 | 0.3 | ||||
Restricted stock and restricted stock unit equity awards | 1.2 | 0.7 | 2.1 | 2.5 | ||||
Restricted stock unit liability awards | — | — | — | 0.2 | ||||
Total stock compensation expense | 1.2 | 0.8 | 2.2 | 3.0 |
Employee options and non-employee director options | Investor director provider options | |||||||||||
Common shares | Weighted-average exercise price | Intrinsic value (in millions) | Common shares | Weighted-average exercise price | Intrinsic value (in millions) | |||||||
$ | $ | $ | $ | |||||||||
Outstanding, December 31, 2012 | 1,307,989 | 1.89 | 5.7 | 140,000 | 9.00 | — | ||||||
Exercised | (104,640 | ) | 1.60 | 0.2 | — | — | — | |||||
Forfeited | (7,000 | ) | 1.14 | — | — | — | — | |||||
Outstanding, June 30, 2013 | 1,196,349 | 1.92 | 1.9 | 140,000 | 9.00 | — | ||||||
Fully vested and exercisable, June 30, 2013 (weighted-average remaining contractual term of 4.6 years and 4.3 years, respectively) | 974,578 | 2.10 | 1.4 | 140,000 | 9.00 | — |
Service-vesting restricted stock and RSUs | Performance-vesting RSUs with grant date | Performance-vesting restricted stock (with market condition) with grant date | Performance-vesting restricted stock and RSUs without grant date | |||||||||||
Awards | Weighted-average grant date fair value | Awards | Weighted-average grant date fair value | Awards | Weighted-average grant date fair value | Awards | ||||||||
# | $ | # | $ | # | $ | # | ||||||||
Non-vested, December 31, 2012 | 747,937 | 12.48 | 294,336 | 5.22 | — | — | 526,327 | |||||||
Granted | 457,524 | 4.20 | — | — | 188,000 | 2.13 | 512,988 | |||||||
Dividend equivalent units granted | 13,935 | 4.27 | 5,453 | 4.28 | 1,769 | 4.25 | 14,624 | |||||||
Vested (aggregate intrinsic value of $0.9 million) | (219,873 | ) | 12.21 | — | — | — | — | — | ||||||
Forfeited | (20,930 | ) | 12.79 | (4,479 | ) | 6.05 | — | — | (6,277 | ) | ||||
Non-vested, June 30, 2013 (aggregate intrinsic value of $8.1 million) | 978,593 | 8.54 | 295,310 | 5.19 | 189,769 | 2.15 | 1,047,662 |
RSUs | ||
# | ||
Non-vested, December 31, 2012 | 25,344 | |
Granted | 20,000 | |
Dividend equivalent units granted | 381 | |
Vested | (20,656 | ) |
Forfeited | (5,069 | ) |
Non-vested, June 30, 2013 | 20,000 |
Three months ended June 30, | Six Months Ended June 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Net income (loss) | $ | (12.3 | ) | $ | 25.3 | $ | (11.7 | ) | $ | 41.5 | ||
Weighted-average common shares outstanding: | ||||||||||||
Basic | 67.91 | 67.46 | 67.85 | 67.40 | ||||||||
Effect of dilutive securities | — | 1.87 | — | 1.69 | ||||||||
Diluted | 67.91 | 69.33 | 67.85 | 69.09 | ||||||||
Net income (loss) per common share: | ||||||||||||
Basic | $ | (0.18 | ) | $ | 0.38 | $ | (0.17 | ) | $ | 0.62 | ||
Diluted | $ | (0.18 | ) | $ | 0.36 | $ | (0.17 | ) | $ | 0.60 |
Three months ended June 30, | Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
Antidilutive securities | 2.48 | 0.65 | 1.57 | 0.40 |
Three months ended June 30, | Six Months Ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | $ | $ | |||||
Berry Plastics Corporation | 2.3 | 2.4 | 4.2 | 4.7 | ||||
Metals USA Holdings Corp.(1) | 0.9 | 3.3 | 4.2 | 5.7 |
(1) | Sales to Metals USA Holding Corp. include the period in which Metals USA Holdings Corp was affiliated with Apollo through April 12, 2013. |
June 30, 2013 | December 31, 2012 | |||
$ | $ | |||
Berry Plastics Corporation | 0.6 | 0.4 | ||
Metals USA Holdings Corp. (1) | — | 1.0 |
(1) | As of April 12, 2013 Metals USA Holding Corp. was no longer affiliated with Apollo, therefore accounts receivable for Metals USA Holding Corp. as of June 30, 2013 are not disclosed as related party accounts receivable. |
June 30, 2013 | December 31, 2012 | |||||||||||
NJBP balances | Impact of Eliminations | Impact on consolidated statements | NJBP balances | Impact of Eliminations | Impact on consolidated statements | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Cash and cash equivalents | 0.9 | — | 0.9 | 1.7 | — | 1.7 | ||||||
Accounts receivable, net | 13.7 | (13.7 | ) | — | 15.4 | (15.4 | ) | — | ||||
Inventories, net (consisting of maintenance supplies, inventory and fuel) | 19.2 | — | 19.2 | 12.6 | — | 12.6 | ||||||
Other current assets | 1.4 | — | 1.4 | 1.6 | — | 1.6 | ||||||
Property, plant and equipment, net | 42.8 | — | 42.8 | 40.1 | — | 40.1 | ||||||
Other assets | 4.3 | — | 4.3 | 5.0 | — | 5.0 | ||||||
Accounts payable | (65.0 | ) | 53.3 | (11.7 | ) | (58.3 | ) | 49.2 | (9.1 | ) | ||
Accrued liabilities | (4.1 | ) | — | (4.1 | ) | (3.8 | ) | — | (3.8 | ) | ||
Environmental, land and reclamation liabilities | (1.2 | ) | — | (1.2 | ) | (2.4 | ) | — | (2.4 | ) | ||
Non-controlling interest | (6.0 | ) | — | (6.0 | ) | (6.0 | ) | — | (6.0 | ) | ||
St. Ann’s net investment and advances to NJBP | 6.0 | 39.6 | 45.6 | 5.9 | 33.8 | 39.7 |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 0.2 | 54.7 | 0.6 | 2.3 | — | 57.8 | ||||||
Accounts receivable, net: | ||||||||||||
Trade | — | 0.1 | 120.2 | 4.0 | — | 124.3 | ||||||
Affiliates | 19.6 | 11.9 | 0.3 | 7.6 | (39.4 | ) | — | |||||
Inventories, net | — | — | 171.3 | 33.8 | (0.3 | ) | 204.8 | |||||
Taxes receivable | 4.6 | — | 1.0 | (0.3 | ) | — | 5.3 | |||||
Prepaid expenses | 0.2 | — | 4.5 | 0.7 | — | 5.4 | ||||||
Other current assets | — | — | 8.4 | 6.7 | — | 15.1 | ||||||
Total current assets | 24.6 | 66.7 | 306.3 | 54.8 | (39.7 | ) | 412.7 | |||||
Investments in affiliates | 333.5 | 1,518.4 | — | — | (1,851.9 | ) | — | |||||
Advances due from affiliates | — | 125.0 | 686.1 | 63.5 | (874.6 | ) | — | |||||
Property, plant and equipment, net | — | — | 625.5 | 65.0 | — | 690.5 | ||||||
Goodwill | — | — | 137.6 | — | — | 137.6 | ||||||
Other intangible assets, net | — | — | 58.2 | — | — | 58.2 | ||||||
Other assets | — | 8.7 | 54.3 | 31.3 | — | 94.3 | ||||||
Total assets | 358.1 | 1,718.8 | 1,868.0 | 214.6 | (2,766.2 | ) | 1,393.3 | |||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable: | ||||||||||||
Trade | — | 0.1 | 90.9 | 12.1 | — | 103.1 | ||||||
Affiliates | — | 19.6 | 7.5 | 12.3 | (39.4 | ) | — | |||||
Accrued liabilities | — | 6.6 | 35.1 | 22.2 | — | 63.9 | ||||||
Derivative liabilities, net | — | — | 8.0 | — | — | 8.0 | ||||||
Deferred tax liabilities | (0.3 | ) | (3.1 | ) | 15.9 | — | — | 12.5 | ||||
Current portion of long-term debt | — | 4.9 | — | — | — | 4.9 | ||||||
Total current liabilities | (0.3 | ) | 28.1 | 157.4 | 46.6 | (39.4 | ) | 192.4 | ||||
Long-term debt, net | — | 645.2 | — | — | — | 645.2 | ||||||
Long-term derivative liabilities, net | — | — | 0.4 | — | — | 0.4 | ||||||
Pension and other post-retirement liabilities | — | — | 180.1 | 5.8 | — | 185.9 | ||||||
Other long-term liabilities | — | — | 36.5 | 14.1 | — | 50.6 | ||||||
Advances due to affiliates | 189.1 | 685.5 | — | — | (874.6 | ) | — | |||||
Long-term deferred tax liabilities | 36.4 | 26.5 | 114.7 | 2.6 | (0.3 | ) | 179.9 | |||||
Shareholders’ equity: | ||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||
Common stock | 0.7 | — | — | — | — | 0.7 | ||||||
Capital in excess of par value | 237.1 | 352.1 | 1,199.7 | 83.7 | (1,635.5 | ) | 237.1 | |||||
Retained earnings (accumulated deficit) | 0.7 | 87.0 | 285.5 | 55.1 | (427.6 | ) | 0.7 | |||||
Accumulated other comprehensive income (loss) | (105.6 | ) | (105.6 | ) | (106.3 | ) | 0.7 | 211.2 | (105.6 | ) | ||
Total shareholders' equity | 132.9 | 333.5 | 1,378.9 | 139.5 | (1,851.9 | ) | 132.9 | |||||
Non-controlling interest | — | — | — | 6.0 | — | 6.0 | ||||||
Total equity | 132.9 | 333.5 | 1,378.9 | 145.5 | (1,851.9 | ) | 138.9 | |||||
Total liabilities and equity | 358.1 | 1,718.8 | 1,868.0 | 214.6 | (2,766.2 | ) | 1,393.3 |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
ASSETS | ||||||||||||
Current assets: | ||||||||||||
Cash and cash equivalents | 0.5 | 27.9 | 3.3 | 4.4 | — | 36.1 | ||||||
Accounts receivable, net: | ||||||||||||
Trade | — | — | 101.6 | 5.0 | — | 106.6 | ||||||
Affiliates | 19.4 | 11.9 | 0.3 | 9.9 | (41.5 | ) | — | |||||
Inventories, net | — | — | 169.1 | 27.2 | (0.5 | ) | 195.8 | |||||
Taxes receivable | 1.7 | — | 0.6 | (0.3 | ) | — | 2.0 | |||||
Prepaid expenses | 0.2 | — | 7.1 | 1.6 | — | 8.9 | ||||||
Other current assets | — | — | 4.9 | 14.0 | — | 18.9 | ||||||
Total current assets | 21.8 | 39.8 | 286.9 | 61.8 | (42.0 | ) | 368.3 | |||||
Investments in affiliates | 347.0 | 1,509.0 | — | — | (1,856.0 | ) | — | |||||
Advances due from affiliates | — | 119.8 | 682.1 | 63.5 | (865.4 | ) | — | |||||
Property, plant and equipment, net | — | — | 633.2 | 61.3 | — | 694.5 | ||||||
Goodwill | — | — | 137.6 | — | — | 137.6 | ||||||
Other intangible assets, net | — | — | 61.2 | — | — | 61.2 | ||||||
Other assets | — | 9.3 | 55.6 | 31.2 | — | 96.1 | ||||||
Total assets | 368.8 | 1,677.9 | 1,856.6 | 217.8 | (2,763.4 | ) | 1,357.7 | |||||
LIABILITIES AND EQUITY | ||||||||||||
Current liabilities: | ||||||||||||
Accounts payable: | ||||||||||||
Trade | — | — | 97.5 | 9.7 | — | 107.2 | ||||||
Affiliates | — | 19.4 | 9.9 | 12.2 | (41.5 | ) | — | |||||
Accrued liabilities | — | 2.0 | 30.4 | 26.4 | — | 58.8 | ||||||
Derivative liabilities net | — | — | 1.8 | — | — | 1.8 | ||||||
Deferred tax liabilities | 0.1 | — | 16.7 | — | — | 16.8 | ||||||
Current portion of long-term debt | — | 3.3 | — | — | — | 3.3 | ||||||
Total current liabilities | 0.1 | 24.7 | 156.3 | 48.3 | (41.5 | ) | 187.9 | |||||
Long-term debt | — | 592.4 | — | — | — | 592.4 | ||||||
Long-term derivative liabilities, net | — | — | 0.1 | — | — | 0.1 | ||||||
Pension and other post-retirement liabilities | — | — | 181.5 | 5.7 | — | 187.2 | ||||||
Other long-term liabilities | — | — | 36.7 | 15.6 | — | 52.3 | ||||||
Advances due to affiliates | 183.7 | 681.7 | — | — | (865.4 | ) | — | |||||
Long-term deferred tax liabilities | 36.7 | 32.1 | 112.6 | 2.6 | (0.5 | ) | 183.5 | |||||
Common stock subject to redemption | 2.0 | — | — | — | — | 2.0 | ||||||
Shareholders’ equity: | ||||||||||||
Preferred stock | — | — | — | — | — | — | ||||||
Common stock | 0.7 | — | — | — | — | 0.7 | ||||||
Capital in excess of par value | 233.4 | 352.1 | 1,199.7 | 83.7 | (1,635.5 | ) | 233.4 | |||||
Retained earnings (accumulated deficit) | 17.9 | 100.6 | 276.1 | 55.2 | (431.9 | ) | 17.9 | |||||
Accumulated other comprehensive income (loss) | (105.7 | ) | (105.7 | ) | (106.4 | ) | 0.7 | 211.4 | (105.7 | ) | ||
Total shareholders’ equity | 146.3 | 347.0 | 1,369.4 | 139.6 | (1,856.0 | ) | 146.3 | |||||
Non-controlling interest | — | — | — | 6.0 | — | 6.0 | ||||||
Total equity | 146.3 | 347.0 | 1,369.4 | 145.6 | (1,856.0 | ) | 152.3 | |||||
Total liabilities and equity | 368.8 | 1,677.9 | 1,856.6 | 217.8 | (2,763.4 | ) | 1,357.7 |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Sales | — | — | 341.2 | 30.0 | (19.2 | ) | 352.0 | |||||
Operating costs and expenses: | ||||||||||||
Cost of sales | — | — | 323.9 | 29.5 | (19.2 | ) | 334.2 | |||||
Selling, general and administrative expenses | 1.5 | 0.5 | 16.6 | 2.9 | — | 21.5 | ||||||
Total operating costs and expenses | 1.5 | 0.5 | 340.5 | 32.4 | (19.2 | ) | 355.7 | |||||
Operating income (loss) | (1.5 | ) | (0.5 | ) | 0.7 | (2.4 | ) | — | (3.7 | ) | ||
Other (income) expense: | ||||||||||||
Interest expense (income), net | (0.1 | ) | 12.2 | 0.1 | — | — | 12.2 | |||||
Gain on hedging activities, net | — | — | 3.0 | — | — | 3.0 | ||||||
Debt refinancing expense | — | — | — | — | — | — | ||||||
Total other (income) expense, net | (0.1 | ) | 12.2 | 3.1 | — | — | 15.2 | |||||
Income (loss) before income taxes | (1.4 | ) | (12.7 | ) | (2.4 | ) | (2.4 | ) | — | (18.9 | ) | |
Income tax (benefit) expense | (0.5 | ) | (4.2 | ) | (0.5 | ) | (1.4 | ) | — | (6.6 | ) | |
Equity in net income (loss) of subsidiaries | (11.4 | ) | (2.9 | ) | — | — | 14.3 | — | ||||
Net income (loss) | (12.3 | ) | (11.4 | ) | (1.9 | ) | (1.0 | ) | 14.3 | (12.3 | ) | |
Other comprehensive income (loss) | 2.2 | 2.2 | 2.2 | — | (4.4 | ) | 2.2 | |||||
Total comprehensive income (loss) | (10.1 | ) | (9.2 | ) | 0.3 | (1.0 | ) | 9.9 | (10.1 | ) |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Sales | — | — | 358.7 | 32.3 | (19.3 | ) | 371.7 | |||||
Operating costs and expenses: | ||||||||||||
Cost of sales | — | — | 320.9 | 30.3 | (19.3 | ) | 331.9 | |||||
Selling, general and administrative expenses | 1.3 | 0.1 | 10.5 | 2.9 | — | 14.8 | ||||||
Total operating costs and expenses | 1.3 | 0.1 | 331.4 | 33.2 | (19.3 | ) | 346.7 | |||||
Operating income (loss) | (1.3 | ) | (0.1 | ) | 27.3 | (0.9 | ) | — | 25.0 | |||
Other (income) expense: | ||||||||||||
Interest expense (income), net | (0.2 | ) | 8.9 | 0.1 | — | — | 8.8 | |||||
Gain on hedging activities, net | — | — | (22.4 | ) | — | — | (22.4 | ) | ||||
Debt refinancing expense | — | — | — | — | — | — | ||||||
Total other (income) expense, net | (0.2 | ) | 8.9 | (22.3 | ) | — | — | (13.6 | ) | |||
Income (loss) before income taxes | (1.1 | ) | (9.0 | ) | 49.6 | (0.9 | ) | — | 38.6 | |||
Income tax (benefit) expense | (0.4 | ) | (3.2 | ) | 17.2 | (0.3 | ) | — | 13.3 | |||
Equity in net income of subsidiaries | 26.0 | 31.8 | — | — | (57.8 | ) | — | |||||
Net income | 25.3 | 26.0 | 32.4 | (0.6 | ) | (57.8 | ) | 25.3 | ||||
Other comprehensive income (loss) | (12.1 | ) | (12.1 | ) | (12.1 | ) | — | 24.2 | (12.1 | ) | ||
Total comprehensive income (loss) | 13.2 | 13.9 | 20.3 | (0.6 | ) | (33.6 | ) | 13.2 |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Sales | — | — | 667.7 | 65.6 | (42.9 | ) | 690.4 | |||||
Operating costs and expenses: | ||||||||||||
Cost of sales | — | — | 623.2 | 59.5 | (42.9 | ) | 639.8 | |||||
Selling, general and administrative expenses | 2.8 | 0.9 | 36.2 | 6.2 | — | 46.1 | ||||||
Total operating costs and expenses | 2.8 | 0.9 | 659.4 | 65.7 | (42.9 | ) | 685.9 | |||||
Operating income (loss) | (2.8 | ) | (0.9 | ) | 8.3 | (0.1 | ) | — | 4.5 | |||
Other (income) expense: | ||||||||||||
Interest expense (income), net | (0.2 | ) | 22.4 | 0.1 | — | — | 22.3 | |||||
Gain on hedging activities, net | — | — | (2.4 | ) | — | — | (2.4 | ) | ||||
Debt refinancing expense | — | 2.5 | — | — | — | 2.5 | ||||||
Total other (income) expense, net | (0.2 | ) | 24.9 | (2.3 | ) | — | — | 22.4 | ||||
Income (loss) before income taxes | (2.6 | ) | (25.8 | ) | 10.6 | (0.1 | ) | — | (17.9 | ) | ||
Income tax (benefit) expense | (0.8 | ) | (8.6 | ) | 4.2 | (1.0 | ) | — | (6.2 | ) | ||
Equity in net income of subsidiaries | (9.9 | ) | 7.3 | — | — | 2.6 | — | |||||
Net income | (11.7 | ) | (9.9 | ) | 6.4 | 0.9 | 2.6 | (11.7 | ) | |||
Other comprehensive income (loss) | 0.1 | 0.1 | 0.1 | — | (0.2 | ) | 0.1 | |||||
Total comprehensive income (loss) | (11.6 | ) | (9.8 | ) | 6.5 | 0.9 | 2.4 | (11.6 | ) |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Sales | — | — | 701.5 | 65.5 | (41.8 | ) | 725.2 | |||||
Operating costs and expenses: | ||||||||||||
Cost of sales | — | — | 618.0 | 59.9 | (41.8 | ) | 636.1 | |||||
Selling, general and administrative expenses | 3.8 | 0.7 | 29.7 | 6.3 | — | 40.5 | ||||||
Total operating costs and expenses | 3.8 | 0.7 | 647.7 | 66.2 | (41.8 | ) | 676.6 | |||||
Operating income (loss) | (3.8 | ) | (0.7 | ) | 53.8 | (0.7 | ) | — | 48.6 | |||
Other (income) expense: | ||||||||||||
Interest expense (income), net | (0.2 | ) | 15.4 | 0.1 | — | — | 15.3 | |||||
Gain on hedging activities, net | — | — | (37.1 | ) | — | — | (37.1 | ) | ||||
Debt refinancing expense | — | 8.1 | — | — | — | 8.1 | ||||||
Total other (income) expense, net | (0.2 | ) | 23.5 | (37.0 | ) | — | — | (13.7 | ) | |||
Income (loss) before income taxes | (3.6 | ) | (24.2 | ) | 90.8 | (0.7 | ) | — | 62.3 | |||
Income tax (benefit) expense | (1.1 | ) | (8.2 | ) | 30.3 | (0.2 | ) | — | 20.8 | |||
Equity in net income of subsidiaries | 44.0 | 60.0 | — | — | (104.0 | ) | — | |||||
Net income | 41.5 | 44.0 | 60.5 | (0.5 | ) | (104.0 | ) | 41.5 | ||||
Other comprehensive income (loss) | (23.4 | ) | (23.4 | ) | (23.4 | ) | — | 46.8 | (23.4 | ) | ||
Total comprehensive income (loss) | 18.1 | 20.6 | 37.1 | (0.5 | ) | (57.2 | ) | 18.1 |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
OPERATING ACTIVITIES | ||||||||||||
Cash provided by (used in) operating activities | (0.5 | ) | (18.7 | ) | 28.8 | 5.1 | — | 14.7 | ||||
INVESTING ACTIVITIES | ||||||||||||
Capital expenditures | — | — | (32.3 | ) | (7.2 | ) | — | (39.5 | ) | |||
Proceeds from sale of property, plant and equipment | — | — | 0.8 | — | — | 0.8 | ||||||
Cash used in investing activities | — | — | (31.5 | ) | (7.2 | ) | — | (38.7 | ) | |||
FINANCING ACTIVITIES | ||||||||||||
Shares tendered for taxes, share-based payment arrangements, net of proceeds from issuance of common shares | (0.2 | ) | — | — | — | — | (0.2 | ) | ||||
Dividends paid to shareholders | (5.4 | ) | — | — | — | — | (5.4 | ) | ||||
Distributions paid to optionholders | — | — | — | — | — | — | ||||||
Repayments of long-term debt | — | (277.6 | ) | — | — | — | (277.6 | ) | ||||
Borrowings on long-term debt, net | — | 331.8 | — | — | — | 331.8 | ||||||
Payments of financing costs | — | (2.9 | ) | — | — | — | (2.9 | ) | ||||
Excess tax benefit related to share-based payment arrangements | — | — | — | — | — | — | ||||||
Distribution (to parent) from subsidiary | 5.8 | (5.8 | ) | — | — | — | — | |||||
Cash provided by (used in) financing activities | 0.2 | 45.5 | — | — | — | 45.7 | ||||||
Change in cash and cash equivalents | (0.3 | ) | 26.8 | (2.7 | ) | (2.1 | ) | — | 21.7 | |||
Cash and cash equivalents, beginning of period | 0.5 | 27.9 | 3.3 | 4.4 | — | 36.1 | ||||||
Cash and cash equivalents, end of period | 0.2 | 54.7 | 0.6 | 2.3 | — | 57.8 |
Parent guarantor (Noranda HoldCo) | Issuer (Noranda AcquisitionCo) | Subsidiary guarantors | Subsidiary non-guarantors | Eliminations | Consolidated | |||||||
$ | $ | $ | $ | $ | $ | |||||||
OPERATING ACTIVITIES | ||||||||||||
Cash provided by (used in) operating activities | 0.2 | (51.2 | ) | 31.1 | 1.6 | — | (18.3 | ) | ||||
INVESTING ACTIVITIES | ||||||||||||
Capital expenditures | — | — | (37.9 | ) | (4.0 | ) | — | (41.9 | ) | |||
Proceeds from sale of property, plant and equipment | — | — | 4.8 | — | — | 4.8 | ||||||
Cash used in investing activities | — | — | (33.1 | ) | (4.0 | ) | — | (37.1 | ) | |||
FINANCING ACTIVITIES | ||||||||||||
Shares tendered for taxes, share-based payment arrangements, net of proceeds from issuance of common shares | (0.1 | ) | — | — | — | — | (0.1 | ) | ||||
Dividends paid to shareholders | (89.5 | ) | — | — | — | — | (89.5 | ) | ||||
Distributions paid to share-based award holders | (3.1 | ) | — | — | — | — | (3.1 | ) | ||||
Repayments of long-term debt | — | (154.0 | ) | — | — | — | (154.0 | ) | ||||
Borrowings on long-term debt | — | 322.6 | — | — | — | 322.6 | ||||||
Payments of financing costs | — | (12.6 | ) | — | — | — | (12.6 | ) | ||||
Excess tax benefit related to share-based payment arrangements | — | — | — | — | — | — | ||||||
Distribution (to parent) from subsidiary | 89.9 | (89.9 | ) | — | — | — | — | |||||
Cash provided by (used in) financing activities | (2.8 | ) | 66.1 | — | — | — | 63.3 | |||||
Change in cash and cash equivalents | (2.6 | ) | 14.9 | (2.0 | ) | (2.4 | ) | — | 7.9 | |||
Cash and cash equivalents, beginning of period | 3.3 | 31.3 | 3.3 | 4.8 | — | 42.7 | ||||||
Cash and cash equivalents, end of period | 0.7 | 46.2 | 1.3 | 2.4 | — | 50.6 |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations |
• | The average realized Midwest Transaction Price decreased to $0.95 in second quarter 2013 from $1.01 in second quarter 2012. |
• | Integrated primary aluminum net cash cost ("Net Cash Cost") increased to $0.83 per pound shipped in second quarter 2013 compared to $0.73 per pound shipped in second quarter 2012, mainly reflecting the combined effect of higher natural gas prices and lower LME-indexed alumina prices on external shipments in the Alumina segment, and higher electricity prices in the Primary Aluminum segment. |
Inventory item | Sensitivity | Increase (decrease) in pre-tax income ($ in millions) | |
Primary Aluminum segment: | |||
Carbon-based products | 10% increase in price | (2.3 | ) |
Alumina | $0.10 increase in LME per pound | (2.2 | ) |
Flat-Rolled Products segment: | |||
Metal | $0.10 increase in LME per pound | (5.3 | ) |
Three months ended June 30, | Six Months Ended June 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
$ | $ | $ | $ | |||||||||
Statements of operations data: | ||||||||||||
Sales | 352.0 | 371.7 | 690.4 | 725.2 | ||||||||
Operating costs and expenses: | ||||||||||||
Cost of sales | 334.2 | 331.9 | 639.8 | 636.1 | ||||||||
Selling, general and administrative expenses | 21.5 | 14.8 | 46.1 | 40.5 | ||||||||
Total operating costs and expenses | 355.7 | 346.7 | 685.9 | 676.6 | ||||||||
Operating income (loss) | (3.7 | ) | 25.0 | 4.5 | 48.6 | |||||||
Other (income) expense: | ||||||||||||
Interest expense, net | 12.2 | 8.8 | 22.3 | 15.3 | ||||||||
(Gain) loss on hedging activities, net | 3.0 | (22.4 | ) | (2.4 | ) | (37.1 | ) | |||||
Debt refinancing expense | — | — | 2.5 | 8.1 | ||||||||
Total other (income) expense, net | 15.2 | (13.6 | ) | 22.4 | (13.7 | ) | ||||||
Income (loss) before income taxes | (18.9 | ) | 38.6 | (17.9 | ) | 62.3 | ||||||
Income tax expense (benefit) | (6.6 | ) | 13.3 | (6.2 | ) | 20.8 | ||||||
Net income (loss) | (12.3 | ) | 25.3 | (11.7 | ) | 41.5 | ||||||
Net income (loss) per common share: | ||||||||||||
Basic | $ | (0.18 | ) | $ | 0.38 | $ | (0.17 | ) | $ | 0.62 | ||
Diluted | $ | (0.18 | ) | $ | 0.36 | $ | (0.17 | ) | $ | 0.60 | ||
Weighted-average common shares outstanding: | ||||||||||||
Basic | 67.91 | 67.46 | 67.85 | 67.40 | ||||||||
Diluted | 67.91 | 69.33 | 67.85 | 69.09 | ||||||||
Cash dividends declared per common share | $ | 0.04 | $ | 0.04 | $ | 0.08 | $ | 1.33 | ||||
External sales by segment: | ||||||||||||
Bauxite | 10.9 | 13.0 | 22.7 | 23.7 | ||||||||
Alumina | 51.4 | 55.9 | 93.4 | 113.5 | ||||||||
Primary Aluminum | 136.5 | 143.9 | 275.2 | 284.0 | ||||||||
Flat-Rolled Products | 153.2 | 158.9 | 299.1 | 304.0 | ||||||||
Total | 352.0 | 371.7 | 690.4 | 725.2 | ||||||||
Segment profit (loss): | ||||||||||||
Bauxite | 0.7 | 1.4 | 4.9 | 3.6 | ||||||||
Alumina | 2.8 | 13.7 | 6.9 | 27.4 | ||||||||
Primary Aluminum | 13.9 | 23.1 | 38.1 | 48.8 | ||||||||
Flat-Rolled Products | 14.2 | 14.6 | 28.0 | 29.1 | ||||||||
Corporate | (8.1 | ) | (6.3 | ) | (16.8 | ) | (15.0 | ) | ||||
Eliminations | 1.5 | 2.6 | 0.2 | (0.2 | ) | |||||||
Total | 25.0 | 49.1 | 61.3 | 93.7 | ||||||||
Financial and other data: | ||||||||||||
Average realized Midwest transaction price (per pound) | $ | 0.95 | $ | 1.01 | $ | 0.99 | $ | 1.03 | ||||
Net Cash Cost (per pound shipped) | $ | 0.83 | $ | 0.73 | $ | 0.82 | $ | 0.76 | ||||
Shipments: | ||||||||||||
Third party shipments: | ||||||||||||
Bauxite (kMts) | 457.1 | 562.2 | 963.1 | 1,010.8 | ||||||||
Alumina (kMts) | 163.2 | 163.0 | 288.2 | 328.3 | ||||||||
Primary Aluminum (pounds, in millions) | 126.4 | 127.6 | 245.9 | 249.1 | ||||||||
Flat-Rolled Products (pounds, in millions) | 102.1 | 101.8 | 195.9 | 195.2 | ||||||||
Intersegment shipments: | ||||||||||||
Bauxite (kMts) | 692.4 | 600.1 | 1,395.4 | 1,296.5 | ||||||||
Alumina (kMts) | 134.0 | 125.7 | 285.0 | 248.6 | ||||||||
Primary Aluminum (pounds, in millions) | 21.6 | 18.6 | 43.9 | 39.3 |
• | Our average realized MWTP for the three months ended June 30, 2013 was $0.95 per pound, compared to $1.01 per pound in the three months ended June 30, 2012. While realized prices for primary aluminum were lower, this was partially offset by a price increase on fabricated rod and billet effective at the beginning of 2013. |
• | Lower external shipments from the Primary Aluminum segment decreased external sales by $1.4 million in the three months ended June 30, 2013 compared to the three months ended June 30, 2012. |
Three months ended June 30, | ||||
2013 | 2012 | |||
$ | $ | |||
Increase (decrease) to net income | ||||
Special items: | ||||
Gain on sale of idle mill equipment | — | 4.5 | ||
Modification of stock options | — | 0.1 | ||
Gain (loss) on hedging activities | (3.0 | ) | 22.4 | |
Total special items (pre-tax) | (3.0 | ) | 27.0 |
• | The average realized MWTP decreased 5.9% in the three months ended June 30, 2013 compared to the three months ended June 30, 2012. The net impact of higher fabrication premiums and lower average realized MWTP decreased Primary Aluminum segment revenue by approximately $7.6 million in the three months ended June 30, 2013 compared to the three months ended June 30, 2012. |
• | A 1.2% increase in total primary aluminum shipments increased segment revenue by approximately $2.0 million comparing second quarter 2013 to second quarter 2012. |
• | Our average realized MWTP for the six months ended June 30, 2013 was $0.99 per pound, compared to $1.03 per pound during the six months ended June 30, 2012. |
• | The 1.3% decrease in external shipments from the Primary Aluminum segment decreased external sales by $3.6 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012. |
Six Months Ended June 30, | ||||
2013 | 2012 | |||
$ | $ | |||
Increase (decrease) to net income | ||||
Special items: | ||||
Transaction costs (1) | (2.5 | ) | (8.6 | ) |
Modification of stock options (2) | — | (1.1 | ) | |
Gain on sale of idle mill equipment | — | 4.5 | ||
Gain on hedging activities | 2.4 | 37.1 | ||
Total special items (pre-tax) | (0.1 | ) | 31.9 |
(1) | Includes, for the six months ended June 30, 2013, debt refinancing expense representing the write-off of deferred financing fees and third party fees related to the AcquisitionCo Notes due 2015. Includes, for the six months ended June 30, 2012, $8.1 million of costs related to the 2012 Refinancing and the tender offer, including creditor and third-party fees as well as the write-off of deferred financing fees. This amount also includes $0.5 million of costs related to the public secondary offering of 10 million shares of our common stock by Apollo. |
(2) | During the six months ended June 30, 2012, holders of stock options, service-vesting restricted stock and restricted stock units were paid cash for the $1.25 per share supplemental dividend. We accelerated $1.2 million of share-based payment compensation expense in connection with this award modification. Share-based payment compensation cost related to the modified awards of $0.4 million would have been recognized ratably throughout second, third and fourth quarter 2012 had the modification not occurred. |
• | The average realized MWTP decreased 3.9% in the six months ended June 30, 2013 compared to the six months ended June 30, 2012. The net impact of higher fabrication premiums and lower average realized MWTP decreased Primary Aluminum segment revenue by approximately $7.9 million in the six months ended June 30, 2013 compared to the six months ended June 30, 2012. |
• | A 0.5% increase in total primary aluminum shipments increased segment revenue by approximately $1.6 million comparing the six months ended June 30, 2013 to the six months ended June 30, 2012. |
• | At June 30, 2013, we had $57.8 million of cash and cash equivalents. |
• | In the six months ended June 30, 2013, operating activities provided $14.7 million of cash. |
• | At June 30, 2013, the Revolver was undrawn and we had $34.6 million in outstanding letters of credit. Availability under the Revolver is subject to a calculated borrowing base. Because our Revolver Fixed-Charge Coverage Ratio was less than 1.0 to 1.0 as of June 30, 2013, we are effectively required to maintain at least $20.0 million of available borrowing capacity under our Revolver. This restriction will be removed when the ratio meets the required threshold. Our effective borrowing capacity was $143.1 million, calculated as of June 30, 2013. |
Six Months Ended June 30, | ||||
2013 | 2012 | |||
$ | $ | |||
Cash provided by (used in) operating activities | 14.7 | (18.3 | ) | |
Cash used in investing activities | (38.7 | ) | (37.1 | ) |
Cash provided by financing activities | 45.7 | 63.3 | ||
Change in cash and cash equivalents | 21.7 | 7.9 |
Six Months Ended June 30, | ||||||
(in millions) | 2013 | 2012 | ||||
$ | $ | |||||
Segment profit | $ | 61.3 | $ | 93.7 | ||
Gas hedges | — | (20.1 | ) | |||
Prepaid expenses and other | 7.3 | (18.5 | ) | |||
Interest paid | (17.1 | ) | (15.1 | ) | ||
Taxes paid | (6.0 | ) | (25.1 | ) | ||
Operating working capital | (30.8 | ) | (33.2 | ) | ||
Cash provided by (used in) operating activities | $ | 14.7 | $ | (18.3 | ) |
Requirements | Actual as of | |||
June 30, 2013 | December 31, 2012 | |||
AcquisitionCo Notes (1) | Fixed Charge Coverage Ratio | Minimum 2.0 to 1.0 | 1.6 to 1.0 | 2.8 to 1.0 |
Revolver (2) | Revolver Fixed Charge Coverage Ratio | Minimum 1.0 to 1.0 | -- | -- |
Term B Loan and Revolver (3) | Total Net Senior First Lien Secured Leverage Ratio | Maximum 2.25 to 1.0 | 4.9 to 1.0 | 2.9 to 1.0 |
(1) | For Noranda AcquisitionCo, fixed charges on a pro forma basis (giving effect to debt repayments) for the four quarters ended June 30, 2013 and the year ended December 31, 2012 were $52.5 million and $35.2 million, respectively. |
(2) | As defined in the credit agreement governing our Revolver, fixed charges for the four quarters ended June 30, 2013 and the year ended December 31, 2012 were $42.3 million and $33.6 million, respectively. For the four quarters ended June 30, 2013 and the year ended December 31, 2012, our Revolver Fixed-Charge Coverage Ratio was less than 1.0 to 1.0. |
(3) | As used in calculating this ratio, "senior first-lien secured net debt" means the amount outstanding under the Term B Loan and the Revolver and any debt secured by a first priority lien on assets of Noranda AcquisitionCo and/or any of its subsidiaries, less "unrestricted cash" and "permitted investments" (as defined under our Senior Secured Credit Facilities) up to a cap of $100.0 million. At June 30, 2013 and December 31, 2012, senior first lien secured debt was $480.3 million and $322.6 million, respectively, and unrestricted cash and permitted investments were $57.6 million and $35.8 million, respectively, resulting in senior first lien secured net debt of $422.7 million and $286.8 million, respectively. |
Three months ended June 30, | Six Months Ended June 30, | Twelve months ended | ||||||||||
2013 | 2012 | 2013 | 2012 | June 30, 2013 | December 31, 2012 | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Adjusted EBITDA | 25.0 | 38.6 | 61.3 | 73.6 | 84.6 | 96.9 | ||||||
Last in, first out and lower of cost or market inventory adjustments (a) | (1.5 | ) | (0.6 | ) | (2.3 | ) | 4.3 | 3.1 | 9.7 | |||
Gain (loss) on disposal of assets | (0.9 | ) | 3.2 | (0.7 | ) | 2.6 | 1.7 | 5.0 | ||||
Non-cash pension, accretion and stock compensation | (4.9 | ) | (4.0 | ) | (9.6 | ) | (9.1 | ) | (18.0 | ) | (17.5 | ) |
Relocation and severance | (0.5 | ) | (0.2 | ) | (1.1 | ) | (0.4 | ) | (1.6 | ) | (0.9 | ) |
Consulting fees | (0.1 | ) | — | (0.4 | ) | (0.5 | ) | (0.6 | ) | (0.7 | ) | |
Debt refinancing expense | — | — | (2.5 | ) | (8.1 | ) | (2.5 | ) | (8.1 | ) | ||
Non-cash derivative gains (b) | 0.1 | 36.2 | 6.1 | 61.7 | 71.1 | 126.7 | ||||||
Other, net | (0.5 | ) | (2.1 | ) | 0.2 | 0.1 | (4.8 | ) | (4.9 | ) | ||
Depreciation and amortization | (23.4 | ) | (23.7 | ) | (46.6 | ) | (46.6 | ) | (98.5 | ) | (98.5 | ) |
Interest expense, net | (12.2 | ) | (8.8 | ) | (22.3 | ) | (15.3 | ) | (40.1 | ) | (33.1 | ) |
Income tax | 6.6 | (13.3 | ) | 6.2 | (20.8 | ) | 1.9 | (25.1 | ) | |||
Net income (loss) | (12.3 | ) | 25.3 | (11.7 | ) | 41.5 | (3.7 | ) | 49.5 |
(a) | Our New Madrid smelter and our rolling mills use the LIFO method of inventory accounting for financial reporting and tax purposes. This adjustment restates net income to the FIFO method by eliminating LIFO expenses related to inventories held at the New Madrid smelter and the rolling mills. Product inventories at Gramercy and St. Ann and supplies inventories at New Madrid are stated at lower of weighted-average cost or market, and are not subject to the LIFO adjustment. We also reduce inventories to the lower of cost (adjusted for purchase accounting) or market value. |
(b) | 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. Cash settlements (received) or paid, except settlements on hedge terminations, related to our derivatives are included in Adjusted EBITDA and are shown in the table below: |
Three months ended June 30, | Six Months Ended June 30, | Twelve months ended | ||||||||||
2013 | 2012 | 2013 | 2012 | June 30, 2013 | December 31, 2012 | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Variable price aluminum offset swaps and other | 3.0 | 3.3 | 3.7 | 4.5 | 6.9 | 7.7 | ||||||
Natural gas swaps | — | 10.5 | — | 20.1 | 17.7 | 37.8 | ||||||
Total | 3.0 | 13.8 | 3.7 | 24.6 | 24.6 | 45.5 |
Three months ended June 30, | Six Months Ended June 30, | Twelve months ended | ||||||||||
2013 | 2012 | 2013 | 2012 | June 30, 2013 | December 31, 2012 | |||||||
$ | $ | $ | $ | $ | $ | |||||||
Adjusted EBITDA | 25.0 | 38.6 | 61.3 | 73.6 | 84.6 | 96.9 | ||||||
Stock compensation expense | 1.2 | 0.8 | 2.2 | 3.0 | 4.0 | 4.8 | ||||||
Changes in other assets | (0.9 | ) | (2.0 | ) | (2.3 | ) | (3.4 | ) | (9.2 | ) | (10.3 | ) |
Changes in pension, other post-retirement liabilities and other long-term liabilities | 3.5 | 2.4 | 4.2 | 1.1 | 7.8 | 4.7 | ||||||
Changes in current operating assets and liabilities | 8.5 | (17.6 | ) | (17.6 | ) | (48.8 | ) | 36.6 | 5.4 | |||
Changes in current income taxes | (3.3 | ) | (10.9 | ) | (2.2 | ) | (20.7 | ) | (9.0 | ) | (27.5 | ) |
Changes in accrued interest | (11.6 | ) | (8.1 | ) | (21.0 | ) | (13.9 | ) | (37.4 | ) | (30.3 | ) |
Non-cash pension, accretion and stock compensation | (4.9 | ) | (4.0 | ) | (9.6 | ) | (9.1 | ) | (18.0 | ) | (17.5 | ) |
Restructuring, relocation and severance | (0.5 | ) | (0.2 | ) | (1.1 | ) | (0.4 | ) | (1.6 | ) | (0.9 | ) |
Consulting and sponsor fees | (0.1 | ) | — | (0.4 | ) | (0.5 | ) | (0.6 | ) | (0.7 | ) | |
Other, net | (0.1 | ) | (0.9 | ) | 1.2 | 0.8 | (5.3 | ) | (5.7 | ) | ||
Cash flow provided by (used in) operating activities | 16.8 | (1.9 | ) | 14.7 | (18.3 | ) | 51.9 | 18.9 |
Item 4. | Controls and Procedures |
Item 1. | Legal Proceedings |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. | Defaults upon Senior Securities |
Item 4. | Mine Safety Disclosures |
Item 6. | Exhibits |
NORANDA ALUMINUM HOLDING CORPORATION | |
July 30, 2013 | /S/ ROBERT B. MAHONEY |
Robert B. Mahoney Chief Financial Officer (Principal Financial and Accounting Officer) |
Exhibit number | Description |
2.1 | Stock Purchase Agreement, dated April 10, 2007, by and among Noranda Aluminum Acquisition Corporation, Noranda Finance, Inc. and Xstrata (Schweiz) A.G. (incorporated by reference to Exhibit 2.1 of Noranda Aluminum Holding Corporation’s Registration Statement on Form S-4 filed on January 31, 2008) |
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) |
4.1 | Indenture, dated as of March 8, 2013, by and among Noranda Aluminum Acquisition Corporation, the guarantors named therein, and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Company's quarterly report on Form 10-Q filed on April 29, 2013) |
10.1 | Incremental Amendment No. 1 to Credit Agreement, dated as of March 8, 2013, by and among Noranda Aluminum Acquisition Corporation, Bank of America, N.A., as Incremental Term Lender, Bank of America, N.A., as Administrative Agent for the Lenders and the Lenders party thereto (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q filed on April 29, 2013) |
10.2 | Incremental Amendment No. 2 to Credit Agreement, dated as of May 29, 2013, by and among Noranda Aluminum Acquisition Corporation, Bank of America, N.A., as Incremental Term Lender and Administrative Agent for the Lenders |
10.3 | ABL Incremental Assumption Agreement No. 1, dated as of May 15, 2013, among Noranda Aluminum Acquisition Corporation, each of its Subsidiaries identified therein, Bank of America, N.A., as Incremental Revolver Facility Lender and Administrative Agent |
10.4 | Letter Agreement, dated July 23, 2013 between Noranda Aluminum Holding Corporation and Robert B. Mahoney (incorporated by reference to Exhibit 99.1 of the Noranda Aluminum Holding Corporation's Current Report on Form 8-K filed on July 24, 2013) |
12.1 | Computation of Ratio of Earnings to Fixed Charges |
31.1 | Chief Executive Officer Certification |
31.2 | Chief Financial Officer Certification |
32.1 | Certification of Chief Executive Officer and Chief Financial Officer |
95.1 | Mine Safety Disclosures |
101. INS | XBRL Instance Document |
101. SCH | XBRL Taxonomy Extension Schema Document |
101. CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101. DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101. LAB | XBRL Taxonomy Extension Label Linkbase Document |
101. PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
Date | Amount of Term B Borrowings to Be Repaid |
June 30, 2013 | $1,215,840.70 |
September 30, 2013 | $1,215,840.70 |
December 31, 2013 | $1,215,840.70 |
March 31, 2014 | $1,215,840.70 |
June 30, 2014 | $1,215,840.70 |
September 30, 2014 | $1,215,840.70 |
December 31, 2014 | $1,215,840.70 |
March 31, 2015 | $1,215,840.70 |
June 30, 2015 | $1,215,840.70 |
September 30, 2015 | $1,215,840.70 |
December 31, 2015 | $1,215,840.70 |
March 31, 2016 | $1,215,840.70 |
June 30, 2016 | $1,215,840.70 |
September 30, 2016 | $1,215,840.70 |
December 31, 2016 | $1,215,840.70 |
March 31, 2017 | $1,215,840.70 |
June 30, 2017 | $1,215,840.70 |
September 30, 2017 | $1,215,840.70 |
December 31, 2017 | $1,215,840.70 |
March 31, 2018 | $1,215,840.70 |
June 30, 2018 | $1,215,840.70 |
September 30, 2018 | $1,215,840.70 |
December 31, 2018 | $1,215,840.70 |
Term B Facility Maturity Date | $453,508,585.83 or such lesser amount as shall be outstanding on the Term B Facility Maturity Date |
BORROWER: | NORANDA ALUMINUM ACQUISITION CORPORATION By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer |
ADMINISTRATIVE AGENT: | BANK OF AMERICA, N.A. By: /s/ Joseph L. Corah Name: Joseph L. Corah Title: Director |
INCREMENTAL TERM LENDER: | BANK OF AMERICA, N.A. By: /s/ Joseph L. Corah Name: Joseph L. Corah Title: Director |
NORANDA ALUMINUM HOLDING CORPORATION By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer | |||
NORANDA INTERMEDIATE HOLDING CORPORATION By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer | |||
NORANDA ALUMINIUM, INC. By: /s/ Mark J. Walker Name: Mark J. Walker Title: Treasurer | |||
NORANDAL USA, INC. By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer | |||
GRAMERCY ALUMINA HOLDINGS INC. By: /s/ Mark J. Walker Name: Mark J. Walker Title: Treasurer | |||
GRAMERCY ALUMINA HOLDINGS II, INC. By: /s/ Gail E. Lehman Name: Gail E. Lehman Title: Secretary | |||
NORANDA ALUMINA LLC By: /s/ Gail E. Lehman Name: Gail E. Lehman Title: Secretary |
Incremental Term Lender | Amount | Upfront Fee |
Bank of America, N.A. | $50,000,000 | $500,000 |
BORROWERS: | NORANDA ALUMINUM ACQUISITION CORPORATION By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer |
NORANDA INTERMEDIATE HOLDING CORPORATION By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer | |
NORANDA ALUMINUM, INC. By: /s/ Mark J. Walker Name: Mark J. Walker Title: Treasurer | |
NORANDAL USA, INC. By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer | |
GRAMERCY ALUMINA HOLDINGS INC. By: /s/ Mark J. Walker Name: Mark J. Walker Title: Treasurer |
GRAMERCY ALUMINA HOLDINGS II, INC. By: /s/ Gail E. Lehman Name: Gail E. Lehman Title: Secretary | |
NORANDA ALUMINA LLC By: /s/ Gail E. Lehman Name: Gail E. Lehman Title: Secretary |
ADMINISTRATIVE AGENT: | BANK OF AMERICA, N.A. By: /s/ Steven L. Hipsman Name: Steven L. Hipsman Title: Senior Vice President |
INCREMENTAL REVOLVING FACILITY LENDER: | BANK OF AMERICA, N.A. By: /s/ Steven L. Hipsman Name: Steven L. Hipsman Title: Senior Vice President |
NORANDA ALUMINUM HOLDING CORPORATION By: /s/ Robert B. Mahoney Name: Robert B. Mahoney Title: Chief Financial Officer |
Borrowers: | Noranda Aluminum Acquisition Corporation Norandal USA, Inc. Noranda Aluminum, Inc. Noranda Alumnina LLC Noranda Intermediate Holding Corporation Gramercy Alumina Holdings II, Inc. Gramercy Alumina Holdings, Inc. |
Incremental Revolving Facility Lender: | Bank of America, N.A. |
Type of Incremental Revolving Facility Commitments: | Other Revolving Loans |
Effective Date: | May 15, 2013 |
Amount: | $15,000,000 |
Amortization: | None |
Upfront Fee: | As separately agreed between the Company and the Incremental Revolving Facility Lender |
Final Maturity Date: | Same as the Revolving Facility Maturity Date |
Interest Rate on Other Revolving Loans Made Pursuant to First ABL Incremental Agreement | For the account of the Incremental Revolving Facility Lender, an amount equal to (i) at the Borrowers’ election, Adjusted Eurodollar Rate or the Base Rate plus (ii) 1.50% per annum plus (iii) the “Applicable Margin” that would apply to other Revolving Facility Loans (it being understood, for the avoidance of doubt, that the Borrowing Base in any such determination shall include an amount equal to the Incremental Availability) |
Unutilized Commitment Fee: | For the account of the Incremental Revolving Facility Lender, an amount equal to 0.375% per annum multiplied by the actual daily amount by which the Incremental Revolving Facility Commitments exceeds the Outstanding Amount of Other Revolving Loans made pursuant to the First ABL Incremental Agreement; payable at the times and in the manner as otherwise specified with respect to other Revolving Facility Loans in Section 2.12(a) of the ABL Credit Agreement |
Ranking: | Pari passu in right of payment and of security with the Revolving Facility Loans (subject to Section 8.03 of the ABL Credit Agreement, and to the ‘FILO Mechanics’ section specified below) |
FILO Mechanics: | 1. Borrowings under the ABL Credit Agreement on or after the ABL Incremental Effective Date shall consist only of Other Revolving Loans made pursuant to the First ABL Incremental Agreement until the Outstanding Amount of such Other Revolving Loans equals the lesser of the (i) Incremental Revolving Facility Commitments and (ii) Incremental Availability 2. No Other Revolving Loans made pursuant to the First ABL Incremental Agreement may be prepaid until the aggregate principal amount of Revolving Facility Loans (other than such Other Revolving Loans) equals $0 |
Three months ended June 30, | Six months ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | |||||||
Computation of earnings: | ||||||||
Income (loss) before income taxes | (18.9 | ) | 38.6 | (17.9 | ) | 62.3 | ||
Plus: fixed charges | 13.2 | 9.4 | 24.1 | 16.7 | ||||
Less: capitalized interest | (0.5 | ) | (0.2 | ) | (0.8 | ) | (0.6 | ) |
Earnings | (6.2 | ) | 47.8 | 5.4 | 78.4 | |||
Computation of fixed charges | ||||||||
Interest expense, net | 12.2 | 8.8 | 22.3 | 15.3 | ||||
Capitalized interest | 0.5 | 0.2 | 0.8 | 0.6 | ||||
Interest portion of operating lease expense | 0.5 | 0.4 | 1.0 | 0.8 | ||||
Fixed charges | 13.2 | 9.4 | 24.1 | 16.7 | ||||
Ratio of earnings to fixed charges | (a) | 5.1 | 0.2 | 4.7 | ||||
(a) Ratio is less than one; earnings are inadequate to cover fixed charges. The dollar amount of the coverage deficiency for the affected period is presented below. | ||||||||
Three months ended June 30, | Six months ended June 30, | |||||||
2013 | 2012 | 2013 | 2012 | |||||
$ | $ | |||||||
Coverage deficiency - earnings to fixed charges | 19.4 | — | — | — |
1. | I have reviewed this Quarterly Report on Form 10‑Q for the period ended June 30, 2013 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 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 |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on 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. |
July 30, 2013 | /s/ Layle K. Smith | |
Layle K. Smith | ||
Chief Executive Officer |
1. | I have reviewed this Quarterly Report on Form 10‑Q for the period ended June 30, 2013 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report 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 |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on 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. |
July 30, 2013 | /s / Robert B. Mahoney | |
Robert B. Mahoney | ||
Chief Financial Officer |
(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. |
July 30, 2013 | /s/ Layle K. Smith | |
Layle K. Smith | ||
Chief Executive Officer | ||
July 30, 2013 | /s/ Robert B. Mahoney | |
Robert B. Mahoney | ||
Chief Financial Officer |
S&S Issued Section 104 S&S Citations 1(#) | Section104(b) Orders 2 (#) | Section104(d) Citations and Orders 3 (#) | Section110(b)(2) Violations 4 (#) | Section107(a) Orders 5 (#) | Total Dollar Value of MSHA Assess-ments Proposed ($ in millions) | Total Number of Mining Related Fatalities (#) | Received Notice of Pattern of Violations Under Section 104 (yes/no) | Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no) | Legal Actions Pending as of Last Day of Period (#) | Legal Actions Initiated During Period (#) | Legal Actions Resolved During Period (#) | ||||||
2013 | 4 | — | — | — | — | — | — | No | No | 3 | 3 | 4 |
(1) | Represents the total number of citations issued under section 104 of the Mine Act, for violations of mandatory health or safety standards that could significantly and substantially contribute to a serious injury if left unabated. |
(2) | Represents the total number of orders issued under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period prescribed by the MSHA. |
(3) | Represents the total number of citations and orders issued under section 104(d) of the Mine Act for unwarrantable failure to comply with mandatory health or safety standards. |
(4) | Represents the total number of flagrant violations identified under section 110(b)(2) of the Mine Act. |
(5) | Represents the total number of imminent danger orders issued under section 107(a) of the Mine Act. This results in an order of immediate withdrawal from the area of the mine affected by the condition until the MSHA determines that the violation has been abated. |
Shareholders' Equity Shareholders Equity (Narrative) (Details) (USD $)
In Millions, except Share data, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
Mar. 03, 2008
|
---|---|---|---|
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount, Net of Dividends | $ 7.0 | ||
Common stock, shares subject to redemption | 0 | 200,000 | 200,000 |
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Per Share Value, Amount | $ 10.00 | ||
Common stock subject to redemption | 0 | 2.0 | |
Financial Instruments Subject to Mandatory Redemption, Settlement Terms, Share Value, Amount | 7.5 | ||
Common Stock [Member]
|
|||
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items] | |||
Common stock subject to redemption | $ 2.0 |
Share-Based Payments (Narrative) (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | 12 Months Ended | 6 Months Ended | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 30, 2013
|
Jun. 30, 2012
|
Jun. 30, 2013
|
Jun. 30, 2012
|
Dec. 31, 2012
|
Jun. 30, 2013
Regular Quarterly Dividend [Member]
|
Mar. 31, 2013
Regular Quarterly Dividend [Member]
|
Jun. 30, 2013
Share-Based Award Holders [Member]
Supplemental Dividend [Member]
|
Jun. 30, 2012
Share-Based Award Holders [Member]
Supplemental Dividend [Member]
|
Dec. 31, 2012
Share-Based Award Holders [Member]
Supplemental Dividend [Member]
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Dec. 31, 2012
Restricted Stock [Member]
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Jun. 30, 2013
Service Vesting Awards [Member]
Restricted Stock Units (RSUs) [Member]
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Dec. 31, 2012
Service Vesting Awards [Member]
Restricted Stock Units (RSUs) [Member]
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Jun. 30, 2013
Employee And Non Employee Director [Member]
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Dec. 31, 2012
Employee And Non Employee Director [Member]
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Jun. 30, 2013
Employee And Non Employee Director [Member]
Performance Vesting Awards Target [Member]
Restricted Stock Units (RSUs) [Member]
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Jun. 30, 2013
Employee And Non Employee Director [Member]
Performance Vesting Awards Target [Member]
Performance Shares [Member]
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Jun. 30, 2013
Employee And Non Employee Director [Member]
Service Vesting Awards [Member]
Restricted Stock Units (RSUs) [Member]
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Jun. 30, 2013
Investor Director Provider [Member]
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Dec. 31, 2012
Investor Director Provider [Member]
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Share-based compensation disclosure [Line Items] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price | $ 1.92 | $ 1.89 | $ 9.00 | $ 9.00 | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ 0 | $ 512,988.00 | $ 4.20 | |||||||||||||||||
Estimated forfeiture rate | 0.00% | |||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights | P3Y | |||||||||||||||||||
Percentage to vest on first anniversary of grant date | 25.00% | |||||||||||||||||||
Percentage to vest on second anniversary of grant date | 25.00% | |||||||||||||||||||
Percentage to vest on third anniversary of grant date | 50.00% | |||||||||||||||||||
Common Stock, Dividends, Per Share, Cash Paid | $ 0.08 | $ 0.04 | $ 0.04 | $ 0.00 | $ 1.25 | $ 1.25 | ||||||||||||||
Share-based compensation expense | $ 1.2 | $ 0.8 | $ 2.2 | $ 3.0 | ||||||||||||||||
Number of Full-Time Employees Included in Investor Director Provider Group | 4 | |||||||||||||||||||
Unrecognized stock compensation expense related to non-vested share-based awards | 5.6 | 5.6 | ||||||||||||||||||
Weighted-average period when unrecognized stock compensation expense will be recognized | 1 year 3 months | |||||||||||||||||||
Restricted stock unit liability awards, current | 0 | 0 | 0.1 | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Total Fair Value | $ 0.1 |
Asset Retirement and Other Obligations (Footnote)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Asset Retirement and Other Obligations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reclamation, land and asset retirement obligations disclosure | ASSET RETIREMENT AND OTHER OBLIGATIONS Reclamation Obligation St. Ann has an obligation to rehabilitate land disturbed by St. Ann's Bauxite mining operations. Our reclamation obligations activity at St. Ann follows (in millions):
Land Obligation In cases where land to be mined is privately owned, St. Ann acquires the right to mine either through a purchase of the land or by compensating the owner for disturbing the owner's surface rights. In the case of a purchase of the land, the consideration is typically cash and or a commitment to resettle the owner to another area ("St. Ann Land Obligation"). Additional consideration is paid for crops, homes, and other structures that may exist on the land but which may be destroyed or damaged by the mining activities. Our St. Ann Land Obligation activity follows (in millions):
Asset Retirement Obligations Our asset retirement obligations 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 wastes from its refining process. Asset retirement obligations are estimated based on cash flows discounted at a credit-adjusted risk-free rate. Our asset retirement obligations activity follows (in millions):
As of June 30, 2013 and December 31, 2012, we had $9.2 million of restricted cash in an escrow account as security for the payment of red mud lake closure obligations that will arise under state environmental laws if we were to cease operations at the Gramercy facility. This amount is included in other assets in the accompanying unaudited consolidated balance sheets. The remaining restricted cash in other assets relates primarily to funds for workers’ compensation claims. Environmental Remediation Obligations In addition to our asset retirement obligations, we have identified certain environmental conditions requiring remedial action or ongoing monitoring at the Gramercy refinery. As of both June 30, 2013 and December 31, 2012, we had undiscounted liabilities of $2.0 million in accrued liabilities and had $1.0 million and $1.2 million, respectively, in other long-term liabilities for remediation of Gramercy’s known environmental conditions. Monitoring costs are expensed as incurred. No other responsible parties are involved in any ongoing environmental remediation activities. |
Supplemental Financial Statement Information Supplemental Financial Statement Information (Schedule of Accrued Liabilities) (Details) (USD $)
In Millions, unless otherwise specified |
6 Months Ended | |
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Jun. 30, 2013
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Dec. 31, 2012
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Supplemental Financial Statement Information [Abstract] | ||
Document Period End Date | Jun. 30, 2013 | |
Compensation and benefits | $ 20.1 | $ 17.4 |
Workers' compensation, current | 5.6 | 5.7 |
Accrued other operating expenses, current | 15.7 | 15.6 |
Accrued interest | 6.6 | 2.0 |
Asset retirement obligations, current | 1.9 | 2.4 |
Land obligation, current | 4.6 | 4.9 |
Reclamation obligation, current | 1.3 | 2.5 |
Environmental remediation obligation, current | 2.0 | 2.0 |
Obligations to the Government | 5.2 | 5.3 |
Pension and other post-retirement liabilities, current | 0.9 | 0.9 |
Restricted stock unit liability awards, current | 0 | 0.1 |
Total accrued liabilities | $ 63.9 | $ 58.8 |
Segments (Footnote)
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments disclosure | SEGMENTS We manage and operate our business segments based on the markets we serve and the products we produce. Segment profit (in which certain items, primarily non-recurring costs or non-cash expenses, are not allocated to the segments and in which certain items, primarily the income statement effects of current period cash settlements of hedges, are allocated to the segments) is a measure used by management as a basis for resource allocation. Our five reportable segments are Bauxite, Alumina, Primary Aluminum, Flat-Rolled Products and Corporate.
The accounting policies of the segments are the same as those described in Note 1, "Accounting Policies". The following tables present operating and asset information for our reportable segments (in millions):
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Related Party Transactions (Footnote)
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6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Related Party Transactions [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related party transactions disclosure | RELATED PARTY TRANSACTIONS We sell flat-rolled products to two customers that are affiliated with Apollo. On April 12, 2013 one of those customers, Metals USA Holdings Corp., was acquired by Reliance Steel & Aluminum Co., a public company not affiliated with Apollo. Sales to these companies were as follows (in millions):
Accounts receivable from these related parties were as follows (in millions):
In connection with the 2012 Refinancing, we paid $0.7 million in fees to Apollo Global Securities, LLC, an affiliate of Apollo that participated in the arrangement and structuring of the 2012 Refinancing. Fees were paid to Apollo Global Securities, LLC in connection with the 2013 Refinancing were immaterial. |
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