Delaware (State or other jurisdiction of incorporation or organization) | 13-3070826 (IRS Employer Identification No.) |
One South Wacker Drive Suite 1000 Chicago, Illinois (Address of principal executive offices) | 60606 (Zip Code) |
Large accelerated filer | o | Accelerated filer | x |
Non-accelerated filer (Do not check if a smaller reporting company) | o | Smaller reporting company | o |
TABLE OF CONTENTS | |
Page | |
CENTURY ALUMINUM COMPANY | |||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
NET SALES: | |||||||||||||||
Related parties | $ | 290,283 | $ | 513,681 | $ | 570,660 | $ | 1,089,410 | |||||||
Third-party customers | 36,471 | 9,810 | 74,948 | 21,992 | |||||||||||
Total net sales | 326,754 | 523,491 | 645,608 | 1,111,402 | |||||||||||
Cost of goods sold | 321,172 | 515,149 | 643,078 | 1,008,965 | |||||||||||
Gross profit | 5,582 | 8,342 | 2,530 | 102,437 | |||||||||||
Selling, general and administrative expenses | 9,945 | 10,012 | 19,570 | 21,983 | |||||||||||
Ravenswood impairment | — | 30,850 | — | 30,850 | |||||||||||
Other operating expense - net | 578 | 2,601 | 1,459 | 4,680 | |||||||||||
Operating income (loss) | (4,941 | ) | (35,121 | ) | (18,499 | ) | 44,924 | ||||||||
Interest expense | (5,497 | ) | (5,573 | ) | (10,990 | ) | (11,124 | ) | |||||||
Interest income | 171 | 61 | 285 | 203 | |||||||||||
Net gain on forward and derivative contracts | 353 | 566 | 706 | 919 | |||||||||||
Unrealized gain on fair value of contingent consideration | — | 10,287 | — | 16,814 | |||||||||||
Other income (expense) - net | (299 | ) | 93 | (305 | ) | 1,147 | |||||||||
Income (loss) before income taxes and equity in earnings of joint ventures | (10,213 | ) | (29,687 | ) | (28,803 | ) | 52,883 | ||||||||
Income tax benefit (expense) | 319 | (5,065 | ) | 2,389 | (14,366 | ) | |||||||||
Income (loss) before equity in earnings of joint ventures | (9,894 | ) | (34,752 | ) | (26,414 | ) | 38,517 | ||||||||
Equity in earnings of joint ventures | 379 | 855 | 736 | 1,365 | |||||||||||
Net income (loss) | $ | (9,515 | ) | $ | (33,897 | ) | $ | (25,678 | ) | $ | 39,882 | ||||
Net income (loss) allocated to common stockholders | $ | (9,515 | ) | $ | (33,897 | ) | $ | (25,678 | ) | $ | 36,628 | ||||
EARNINGS (LOSS) PER COMMON SHARE: | |||||||||||||||
Basic | $ | (0.11 | ) | $ | (0.39 | ) | $ | (0.29 | ) | $ | 0.42 | ||||
Diluted | (0.11 | ) | (0.39 | ) | (0.29 | ) | 0.41 | ||||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | |||||||||||||||
Basic | 87,060 | 86,873 | 87,050 | 87,838 | |||||||||||
Diluted | 87,060 | 86,873 | 87,050 | 88,495 |
CENTURY ALUMINUM COMPANY | |||||||||||||||
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
(in thousands) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Comprehensive income (loss): | |||||||||||||||
Net income (loss) | $ | (9,515 | ) | $ | (33,897 | ) | $ | (25,678 | ) | $ | 39,882 | ||||
Other comprehensive income (loss) before income tax effect: | |||||||||||||||
Net gain on foreign currency cash flow hedges reclassified as income | (47 | ) | (46 | ) | (93 | ) | (93 | ) | |||||||
Defined benefit plans and other postretirement benefits: | |||||||||||||||
Net gain arising during the period | — | 16,260 | — | 16,260 | |||||||||||
Prior service benefit arising during the period | — | 1,782 | — | 1,782 | |||||||||||
Amortization of prior service benefit during the period | (667 | ) | (931 | ) | (1,334 | ) | (1,867 | ) | |||||||
Amortization of actuarial net loss during the period | 1,920 | 2,679 | 3,839 | 4,123 | |||||||||||
Other comprehensive income before income tax effect | 1,206 | 19,744 | 2,412 | 20,205 | |||||||||||
Income tax effect | (382 | ) | (382 | ) | (765 | ) | (765 | ) | |||||||
Other comprehensive income | 824 | 19,362 | 1,647 | 19,440 | |||||||||||
Total comprehensive income (loss) | $ | (8,691 | ) | $ | (14,535 | ) | $ | (24,031 | ) | $ | 59,322 |
CENTURY ALUMINUM COMPANY | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands) | |||||||
(Unaudited) | |||||||
June 30, 2016 | December 31, 2015 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 129,384 | $ | 115,393 | |||
Restricted cash | 2,669 | 791 | |||||
Accounts receivable - net | 14,304 | 9,475 | |||||
Due from affiliates | 14,511 | 17,417 | |||||
Inventories | 231,832 | 231,872 | |||||
Prepaid and other current assets | 27,953 | 42,412 | |||||
Assets held for sale | 29,695 | 30,697 | |||||
Total current assets | 450,348 | 448,057 | |||||
Property, plant and equipment - net | 1,197,604 | 1,232,256 | |||||
Other assets | 71,636 | 72,155 | |||||
TOTAL | $ | 1,719,588 | $ | 1,752,468 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
LIABILITIES: | |||||||
Accounts payable, trade | $ | 89,303 | $ | 90,489 | |||
Due to affiliates | 9,662 | 10,045 | |||||
Accrued and other current liabilities | 48,479 | 48,822 | |||||
Accrued employee benefits costs | 10,006 | 10,148 | |||||
Industrial revenue bonds | 7,815 | 7,815 | |||||
Total current liabilities | 165,265 | 167,319 | |||||
Senior notes payable | 247,484 | 247,278 | |||||
Accrued pension benefits costs - less current portion | 42,935 | 43,999 | |||||
Accrued postretirement benefits costs - less current portion | 125,903 | 125,999 | |||||
Other liabilities | 53,102 | 53,009 | |||||
Deferred taxes | 90,464 | 96,994 | |||||
Total noncurrent liabilities | 559,888 | 567,279 | |||||
COMMITMENTS AND CONTINGENCIES (NOTE 11) | |||||||
SHAREHOLDERS’ EQUITY: | |||||||
Preferred stock (Note 7) | 1 | 1 | |||||
Common stock (Note 7) | 942 | 942 | |||||
Additional paid-in capital | 2,514,227 | 2,513,631 | |||||
Treasury stock, at cost | (86,276 | ) | (86,276 | ) | |||
Accumulated other comprehensive loss | (111,003 | ) | (112,650 | ) | |||
Accumulated deficit | (1,323,456 | ) | (1,297,778 | ) | |||
Total shareholders’ equity | 994,435 | 1,017,870 | |||||
TOTAL | $ | 1,719,588 | $ | 1,752,468 |
CENTURY ALUMINUM COMPANY | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in thousands) | |||||||
(Unaudited) | |||||||
Six months ended June 30, | |||||||
2016 | 2015 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income (loss) | $ | (25,678 | ) | $ | 39,882 | ||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||||||
Unrealized gain on fair value of contingent consideration | — | (16,814 | ) | ||||
Unrealized gain on E.ON contingent obligation | (706 | ) | (706 | ) | |||
Lower of cost or market inventory adjustment | (871 | ) | 25,689 | ||||
Depreciation and amortization | 42,504 | 36,409 | |||||
Ravenswood impairment | — | 30,850 | |||||
Pension and other postretirement benefits | 1,345 | (262 | ) | ||||
Deferred income taxes | (6,513 | ) | 4,984 | ||||
Stock-based compensation | 596 | 894 | |||||
Equity in earnings of joint ventures | (736 | ) | (1,365 | ) | |||
Change in operating assets and liabilities: | |||||||
Accounts receivable - net | (4,829 | ) | 66,359 | ||||
Due from affiliates | 2,906 | (20,807 | ) | ||||
Inventories | 2,471 | (60,631 | ) | ||||
Prepaid and other current assets | 12,516 | 3,819 | |||||
Accounts payable, trade | (1,019 | ) | (34,087 | ) | |||
Due to affiliates | 1,560 | 41,406 | |||||
Accrued and other current liabilities | (485 | ) | (13,592 | ) | |||
Pension contribution - Mt. Holly | — | (34,595 | ) | ||||
Other - net | 542 | (6,592 | ) | ||||
Net cash provided by operating activities | 23,603 | 60,841 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Purchase of property, plant and equipment | (7,734 | ) | (31,368 | ) | |||
Purchase of remaining interest in Mt. Holly smelter | — | 11,313 | |||||
Proceeds from sale of property, plant and equipment | — | 14 | |||||
Restricted and other cash deposits | (1,878 | ) | (282 | ) | |||
Net cash used in investing activities | (9,612 | ) | (20,323 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Borrowings under revolving credit facilities | 595 | 1,010 | |||||
Repayments under revolving credit facilities | (595 | ) | (1,010 | ) | |||
Repurchase of common stock | — | (36,352 | ) | ||||
Net cash used in financing activities | — | (36,352 | ) | ||||
CHANGE IN CASH AND CASH EQUIVALENTS | 13,991 | 4,166 | |||||
Cash and cash equivalents, beginning of period | 115,393 | 163,242 | |||||
Cash and cash equivalents, end of period | $ | 129,384 | $ | 167,408 |
1. | General |
2. | Related party transactions |
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Net sales to Glencore | $ | 290,283 | $ | 513,681 | $ | 570,660 | $ | 1,089,410 | |||||
Purchases from Glencore | 50,177 | 133,642 | 94,190 | 241,456 | |||||||||
Purchases from BHH | 2,715 | 13,434 | 5,098 | 28,253 |
3. | Ravenswood impairment |
4. | Business acquisitions |
Purchase price | $ | 67,500 | |
Contingent consideration | 13,780 | ||
Economic, working capital and other closing adjustments | (13,513 | ) | |
Total consideration | $ | 67,767 |
5. | Fair value measurements |
Overview of Century’s valuation methodology | ||
Level | Significant inputs | |
Cash equivalents | 1 | Quoted market prices |
Trust assets (1) | 1 | Quoted market prices |
Surety bonds | 1 | Quoted market prices |
E.ON contingent obligation | 3 | Quoted LME forward market, management’s estimates of the LME forward market prices for periods beyond the quoted periods and management’s estimate of future level of operations |
(1) | Trust assets are currently invested in money market funds. These trust assets are held to fund the non-qualified supplemental executive pension benefit obligations for certain of our officers. The trust has sole authority to invest the funds in secure interest producing investments consisting of short-term securities issued or guaranteed by the United States government or cash and cash equivalents. |
Recurring Fair Value Measurements | As of June 30, 2016 | |||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||
ASSETS: | ||||||||||||
Cash equivalents | $ | 121,683 | $ | — | $ | — | $ | 121,683 | ||||
Trust assets | 4,101 | — | — | 4,101 | ||||||||
Surety bonds | 1,874 | — | — | 1,874 | ||||||||
TOTAL | $ | 127,658 | $ | — | $ | — | $ | 127,658 | ||||
LIABILITIES: | ||||||||||||
E.ON contingent obligation - net | $ | — | $ | — | $ | — | $ | — | ||||
TOTAL | $ | — | $ | — | $ | — | $ | — |
Recurring Fair Value Measurements | As of December 31, 2015 | |||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||
ASSETS: | ||||||||||||
Cash equivalents | $ | 102,675 | $ | — | $ | — | $ | 102,675 | ||||
Trust assets | 5,226 | — | — | 5,226 | ||||||||
Surety bonds | 1,870 | — | — | 1,870 | ||||||||
TOTAL | $ | 109,771 | $ | — | $ | — | $ | 109,771 | ||||
LIABILITIES: | ||||||||||||
E.ON contingent obligation – net | $ | — | $ | — | $ | — | $ | — | ||||
TOTAL | $ | — | $ | — | $ | — | $ | — |
6. | Earnings (loss) per share |
For the three months ended June 30, | |||||||||||||||||
2016 | 2015 | ||||||||||||||||
Loss | Shares (000) | Per-Share | Loss | Shares (000) | Per-Share | ||||||||||||
Net loss | $ | (9,515 | ) | $ | (33,897 | ) | |||||||||||
Amount allocated to common stockholders | 100.00 | % | 100.00 | % | |||||||||||||
Basic EPS: | |||||||||||||||||
Net loss allocated to common stockholders | (9,515 | ) | 87,060 | $ | (0.11 | ) | (33,897 | ) | 86,873 | $ | (0.39 | ) | |||||
Effect of Dilutive Securities: | |||||||||||||||||
Share-based compensation plans | — | — | — | — | |||||||||||||
Diluted EPS: | |||||||||||||||||
Net loss allocated to common stockholders | $ | (9,515 | ) | 87,060 | $ | (0.11 | ) | $ | (33,897 | ) | 86,873 | $ | (0.39 | ) |
For the six months ended June 30, | |||||||||||||||||
2016 | 2015 | ||||||||||||||||
Loss | Shares (000) | Per-Share | Income | Shares (000) | Per-Share | ||||||||||||
Net income (loss) | $ | (25,678 | ) | $ | 39,882 | ||||||||||||
Amount allocated to common stockholders | 100.00 | % | 91.84 | % | |||||||||||||
Basic EPS: | |||||||||||||||||
Net income (loss) allocated to common stockholders | (25,678 | ) | 87,050 | $ | (0.29 | ) | 36,628 | 87,838 | $ | 0.42 | |||||||
Effect of Dilutive Securities: | |||||||||||||||||
Share-based compensation plans | — | — | — | 657 | |||||||||||||
Diluted EPS: | |||||||||||||||||
Net income (loss) allocated to common stockholders | $ | (25,678 | ) | 87,050 | $ | (0.29 | ) | $ | 36,628 | 88,495 | $ | 0.41 |
Securities excluded from the calculation of diluted EPS: | Three months ended June 30, | Six months ended June 30, | ||||||
2016 | 2015 | 2016 | 2015 | |||||
Stock options (1) | 372,902 | 543,171 | 277,617 | 332,766 | ||||
Service-based share awards (1) | 1,427,194 | 691,773 | 1,010,856 | — |
(1) | In periods when we report a net loss, all share-based compensation awards are excluded from the calculation of diluted weighted average shares outstanding because of their antidilutive effect on earnings (loss) per share. In periods when we report net income, certain share-based compensation awards may be excluded from the calculation of diluted EPS if the exercise price was greater than the average market price of the underlying common stock. |
Common and Preferred Stock Activity: | Preferred stock | Common stock | |||||
(in shares) | Series A convertible | Treasury | Outstanding | ||||
Beginning balance as of December 31, 2015 | 76,539 | 7,186,521 | 87,038,050 | ||||
Repurchase of common stock | — | — | — | ||||
Conversion of convertible preferred stock | (161 | ) | — | 16,109 | |||
Issuance for share-based compensation plans | — | — | 21,428 | ||||
Ending balance as of June 30, 2016 | 76,378 | 7,186,521 | 87,075,587 | ||||
Beginning balance as of December 31, 2014 | 78,141 | 4,786,521 | 89,064,582 | ||||
Repurchase of common stock | — | 2,400,000 | (2,400,000 | ) | |||
Conversion of convertible preferred stock | (1,014 | ) | — | 101,327 | |||
Issuance for share-based compensation plans | — | — | 135,043 | ||||
Ending balance as of June 30, 2015 | 77,127 | 7,186,521 | 86,900,952 |
8. | Income taxes |
9. | Inventories |
Inventories consist of the following: | June 30, 2016 | December 31, 2015 | ||||
Raw materials | $ | 64,377 | $ | 52,121 | ||
Work-in-process | 30,848 | 34,025 | ||||
Finished goods | 19,817 | 15,988 | ||||
Operating and other supplies | 116,790 | 129,738 | ||||
Total inventories | $ | 231,832 | $ | 231,872 |
10. | Debt |
June 30, 2016 | December 31, 2015 | |||||
Debt classified as current liabilities: | ||||||
Hancock County industrial revenue bonds ("IRBs") due 2028, interest payable quarterly (variable interest rates (not to exceed 12%)) (1) | $ | 7,815 | $ | 7,815 | ||
Debt classified as non-current liabilities: | ||||||
7.5% senior secured notes due June 1, 2021, net of debt discount of $2,516 and $2,722, respectively, interest payable semiannually | 247,484 | 247,278 | ||||
Total | $ | 255,299 | $ | 255,093 |
(1) | The IRBs are classified as current liabilities because they are remarketed weekly and could be required to be repaid upon demand if there is a failed remarketing. The IRB interest rate at June 30, 2016 was 0.61%. |
June 30, 2016 | |||
Credit facility maximum amount | $ | 150,000 | |
Borrowing availability | 93,037 | ||
Outstanding letters of credit issued | 54,005 | ||
Outstanding borrowings | — | ||
Borrowing availability, net of outstanding letters of credit and borrowings | 39,032 |
June 30, 2016 | |||
Credit facility maximum amount | $ | 50,000 | |
Borrowing availability | 50,000 | ||
Outstanding borrowings | — | ||
Borrowing availability, net of borrowings | 50,000 |
11. | Commitments and contingencies |
12. | Components of accumulated other comprehensive loss |
June 30, 2016 | December 31, 2015 | |||||
Defined benefit plan liabilities | $ | (119,405 | ) | $ | (121,910 | ) |
Unrealized loss on financial instruments | (1,528 | ) | (1,435 | ) | ||
Other comprehensive loss before income tax effect | (120,933 | ) | (123,345 | ) | ||
Income tax effect (1) | 9,930 | 10,695 | ||||
Accumulated other comprehensive loss | $ | (111,003 | ) | $ | (112,650 | ) |
June 30, 2016 | December 31, 2015 | |||||
Defined benefit plan liabilities | $ | 10,461 | $ | 11,243 | ||
Unrealized loss on financial instruments | (531 | ) | (548 | ) |
Defined benefit plan and other postretirement liabilities | Unrealized loss on financial instruments | Total, net of tax | |||||||
Balance, April 1, 2016 | $ | (109,806 | ) | $ | (2,021 | ) | $ | (111,827 | ) |
Net amount reclassified to net loss | 862 | (38 | ) | 824 | |||||
Balance, June 30, 2016 | $ | (108,944 | ) | $ | (2,059 | ) | $ | (111,003 | ) |
Balance, April 1, 2015 | $ | (115,735 | ) | $ | (1,869 | ) | $ | (117,604 | ) |
Other comprehensive income before reclassifications (1) | 18,042 | — | 18,042 | ||||||
Net amount reclassified to net loss | 1,358 | (38 | ) | 1,320 | |||||
Balance, June 30, 2015 | $ | (96,335 | ) | $ | (1,907 | ) | $ | (98,242 | ) |
Balance, December 31, 2015 | $ | (110,667 | ) | $ | (1,983 | ) | $ | (112,650 | ) |
Net amount reclassified to net loss | 1,723 | (76 | ) | 1,647 | |||||
Balance, June 30, 2016 | $ | (108,944 | ) | $ | (2,059 | ) | $ | (111,003 | ) |
Balance, December 31, 2014 | $ | (115,852 | ) | $ | (1,830 | ) | $ | (117,682 | ) |
Other comprehensive income before reclassifications (1) | 18,042 | — | 18,042 | ||||||
Net amount reclassified to net income | 1,475 | (77 | ) | 1,398 | |||||
Balance, June 30, 2015 | $ | (96,335 | ) | $ | (1,907 | ) | $ | (98,242 | ) |
For the three months ended June 30, | For the six months ended June 30, | ||||||||||||
AOCL Components | Location | 2016 | 2015 | 2016 | 2015 | ||||||||
Defined benefit plan and other postretirement liabilities | Cost of goods sold | $ | 778 | $ | 1,612 | $ | 1,555 | $ | 1,753 | ||||
Selling, general and administrative expenses | 125 | 136 | 250 | 503 | |||||||||
Other operating expense, net | 350 | — | 700 | — | |||||||||
Income tax expense | (391 | ) | (390 | ) | (782 | ) | (781 | ) | |||||
Net of tax | $ | 862 | $ | 1,358 | $ | 1,723 | $ | 1,475 | |||||
Unrealized loss on financial instruments | Cost of goods sold | $ | (47 | ) | $ | (46 | ) | $ | (93 | ) | $ | (93 | ) |
Income tax benefit | 9 | 8 | 17 | 16 | |||||||||
Net of tax | $ | (38 | ) | $ | (38 | ) | $ | (76 | ) | $ | (77 | ) |
13. | Components of net periodic benefit cost |
Pension Benefits | |||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Service cost | $ | 1,270 | $ | 1,509 | $ | 2,540 | $ | 3,213 | |||||
Interest cost | 3,482 | 3,267 | 6,962 | 6,655 | |||||||||
Expected return on plan assets | (4,816 | ) | (5,269 | ) | (9,632 | ) | (10,763 | ) | |||||
Amortization of prior service costs | 28 | 30 | 56 | 55 | |||||||||
Amortization of net loss | 1,041 | 1,405 | 2,084 | 2,024 | |||||||||
Curtailment | — | (12 | ) | — | (12 | ) | |||||||
Net periodic benefit cost | $ | 1,005 | $ | 930 | $ | 2,010 | $ | 1,172 |
Other Postretirement Benefits ("OPEB") | |||||||||||||
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||
Service cost | $ | 330 | $ | 487 | $ | 660 | $ | 1,049 | |||||
Interest cost | 1,439 | 1,390 | 2,895 | 2,981 | |||||||||
Amortization of prior service cost | (695 | ) | (961 | ) | (1,390 | ) | (1,922 | ) | |||||
Amortization of net loss | 879 | 1,234 | 1,755 | 2,099 | |||||||||
Net periodic benefit cost | $ | 1,953 | $ | 2,150 | $ | 3,920 | $ | 4,207 |
14. | Supplemental cash flow information |
Six months ended June 30, | ||||||
2016 | 2015 | |||||
Cash paid for: | ||||||
Interest | $ | 9,701 | $ | 9,388 | ||
Income taxes | 6,316 | 12,581 | ||||
Non-cash investing activities: | ||||||
Accrued capital costs | $ | 179 | $ | 2,570 |
15. | Condensed consolidating financial information |
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
For the three months ended June 30, 2016 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
NET SALES: | ||||||||||||||||||||
Related parties | $ | — | $ | 169,640 | $ | 144,557 | $ | (23,914 | ) | $ | 290,283 | |||||||||
Third-party customers | — | 36,462 | 9 | — | 36,471 | |||||||||||||||
Total net sales | — | 206,102 | 144,566 | (23,914 | ) | 326,754 | ||||||||||||||
Cost of goods sold | — | 211,586 | 133,390 | (23,804 | ) | 321,172 | ||||||||||||||
Gross profit (loss) | — | (5,484 | ) | 11,176 | (110 | ) | 5,582 | |||||||||||||
Selling, general and administrative expenses | 8,261 | — | 1,684 | — | 9,945 | |||||||||||||||
Other operating expense - net | — | — | 578 | — | 578 | |||||||||||||||
Operating income (loss) | (8,261 | ) | (5,484 | ) | 8,914 | (110 | ) | (4,941 | ) | |||||||||||
Interest expense - third parties | (5,070 | ) | (383 | ) | (44 | ) | — | (5,497 | ) | |||||||||||
Interest income (expense) - affiliates | 9,727 | 1,997 | (11,724 | ) | — | — | ||||||||||||||
Interest income - third parties | 38 | 9 | 124 | — | 171 | |||||||||||||||
Net gain on forward and derivative contracts | — | 353 | — | — | 353 | |||||||||||||||
Other income (expense) - net | (137 | ) | 21 | (183 | ) | — | (299 | ) | ||||||||||||
Loss before income taxes and equity in earnings (loss) of joint ventures | (3,703 | ) | (3,487 | ) | (2,913 | ) | (110 | ) | (10,213 | ) | ||||||||||
Income tax benefit (expense) | 848 | — | (529 | ) | — | 319 | ||||||||||||||
Loss before equity in earnings (loss) of joint ventures | (2,855 | ) | (3,487 | ) | (3,442 | ) | (110 | ) | (9,894 | ) | ||||||||||
Equity in earnings (loss) of joint ventures | (6,660 | ) | — | 379 | 6,660 | 379 | ||||||||||||||
Net loss | $ | (9,515 | ) | $ | (3,487 | ) | $ | (3,063 | ) | $ | 6,550 | $ | (9,515 | ) | ||||||
Other comprehensive income before income tax effect | 1,206 | 777 | 304 | (1,081 | ) | 1,206 | ||||||||||||||
Income tax effect | (382 | ) | — | 9 | (9 | ) | (382 | ) | ||||||||||||
Other comprehensive income | 824 | 777 | 313 | (1,090 | ) | 824 | ||||||||||||||
Total comprehensive loss | $ | (8,691 | ) | $ | (2,710 | ) | $ | (2,750 | ) | $ | 5,460 | $ | (8,691 | ) |
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
For the three months ended June 30, 2015 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
NET SALES: | ||||||||||||||||||||
Related parties | $ | — | $ | 365,008 | $ | 162,000 | $ | (13,327 | ) | $ | 513,681 | |||||||||
Third-party customers | — | 9,100 | 12 | 698 | 9,810 | |||||||||||||||
Total net sales | — | 374,108 | 162,012 | (12,629 | ) | 523,491 | ||||||||||||||
Cost of goods sold | — | 386,581 | 141,464 | (12,896 | ) | 515,149 | ||||||||||||||
Gross profit (loss) | — | (12,473 | ) | 20,548 | 267 | 8,342 | ||||||||||||||
Selling, general and administrative expenses | 9,531 | 770 | 711 | (1,000 | ) | 10,012 | ||||||||||||||
Ravenswood impairment | — | — | 30,850 | — | 30,850 | |||||||||||||||
Other operating expense - net | — | — | 2,601 | — | 2,601 | |||||||||||||||
Operating loss | (9,531 | ) | (13,243 | ) | (13,614 | ) | 1,267 | (35,121 | ) | |||||||||||
Interest expense - third parties | (5,128 | ) | (399 | ) | (46 | ) | — | (5,573 | ) | |||||||||||
Interest income (expense) - affiliates | 8,853 | 1,843 | (10,696 | ) | — | — | ||||||||||||||
Interest income - third parties | 18 | — | 43 | — | 61 | |||||||||||||||
Net gain on forward and derivative contracts | 177 | 353 | 36 | — | 566 | |||||||||||||||
Unrealized gain on fair value of contingent consideration | — | 10,287 | — | — | 10,287 | |||||||||||||||
Other income (expense) - net | 382 | 295 | (584 | ) | — | 93 | ||||||||||||||
Income (loss) before income taxes and equity in earnings of joint ventures | (5,229 | ) | (864 | ) | (24,861 | ) | 1,267 | (29,687 | ) | |||||||||||
Income tax expense | (2,889 | ) | — | (1,963 | ) | (213 | ) | (5,065 | ) | |||||||||||
Income (loss) before equity in earnings of joint ventures | (8,118 | ) | (864 | ) | (26,824 | ) | 1,054 | (34,752 | ) | |||||||||||
Equity in earnings of joint ventures | (25,779 | ) | — | 855 | 25,779 | 855 | ||||||||||||||
Net income (loss) | $ | (33,897 | ) | $ | (864 | ) | $ | (25,969 | ) | $ | 26,833 | $ | (33,897 | ) | ||||||
Other comprehensive income before income tax effect | 19,744 | 12,789 | 1,715 | (14,504 | ) | 19,744 | ||||||||||||||
Income tax effect | (382 | ) | — | 9 | (9 | ) | (382 | ) | ||||||||||||
Other comprehensive income | 19,362 | 12,789 | 1,724 | (14,513 | ) | 19,362 | ||||||||||||||
Total comprehensive income (loss) | $ | (14,535 | ) | $ | 11,925 | $ | (24,245 | ) | $ | 12,320 | $ | (14,535 | ) |
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
For the six months ended June 30, 2016 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
NET SALES: | ||||||||||||||||||||
Related parties | $ | — | $ | 331,760 | $ | 286,211 | $ | (47,311 | ) | $ | 570,660 | |||||||||
Third-party customers | — | 74,930 | 18 | — | 74,948 | |||||||||||||||
Total net sales | — | 406,690 | 286,229 | (47,311 | ) | 645,608 | ||||||||||||||
Cost of goods sold | — | 421,159 | 269,694 | (47,775 | ) | 643,078 | ||||||||||||||
Gross profit (loss) | — | (14,469 | ) | 16,535 | 464 | 2,530 | ||||||||||||||
Selling, general and administrative expenses | 16,560 | — | 3,010 | — | 19,570 | |||||||||||||||
Other operating expense - net | — | — | 1,459 | — | 1,459 | |||||||||||||||
Operating income (loss) | (16,560 | ) | (14,469 | ) | 12,066 | 464 | (18,499 | ) | ||||||||||||
Interest expense - third parties | (10,135 | ) | (765 | ) | (90 | ) | — | (10,990 | ) | |||||||||||
Interest income (expense) - affiliates | 19,275 | 3,954 | (23,229 | ) | — | — | ||||||||||||||
Interest income - third parties | 75 | 9 | 201 | — | 285 | |||||||||||||||
Net gain on forward and derivative contracts | — | 706 | — | — | 706 | |||||||||||||||
Other income (expense) - net | 634 | 15 | (954 | ) | — | (305 | ) | |||||||||||||
Loss before income taxes and equity in earnings (loss) of joint ventures | (6,711 | ) | (10,550 | ) | (12,006 | ) | 464 | (28,803 | ) | |||||||||||
Income tax benefit | 1,468 | — | 921 | — | 2,389 | |||||||||||||||
Loss before equity in earnings (loss) of joint ventures | (5,243 | ) | (10,550 | ) | (11,085 | ) | 464 | (26,414 | ) | |||||||||||
Equity in earnings (loss) of joint ventures | (20,435 | ) | — | 736 | 20,435 | 736 | ||||||||||||||
Net loss | $ | (25,678 | ) | $ | (10,550 | ) | $ | (10,349 | ) | $ | 20,899 | $ | (25,678 | ) | ||||||
Other comprehensive income before income tax effect | 2,412 | 1,555 | 607 | (2,162 | ) | 2,412 | ||||||||||||||
Income tax effect | (765 | ) | — | 17 | (17 | ) | (765 | ) | ||||||||||||
Other comprehensive income | 1,647 | 1,555 | 624 | (2,179 | ) | 1,647 | ||||||||||||||
Total comprehensive loss | $ | (24,031 | ) | $ | (8,995 | ) | $ | (9,725 | ) | $ | 18,720 | $ | (24,031 | ) |
Condensed Consolidating Statements of Comprehensive Income (Loss) | ||||||||||||||||||||
For the six months ended June 30, 2015 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
NET SALES: | ||||||||||||||||||||
Related parties | $ | — | $ | 768,072 | $ | 335,779 | $ | (14,441 | ) | $ | 1,089,410 | |||||||||
Third-party customers | — | 21,974 | 18 | — | 21,992 | |||||||||||||||
Total net sales | — | 790,046 | 335,797 | (14,441 | ) | 1,111,402 | ||||||||||||||
Cost of goods sold | — | 748,883 | 277,492 | (17,410 | ) | 1,008,965 | ||||||||||||||
Gross profit | — | 41,163 | 58,305 | 2,969 | 102,437 | |||||||||||||||
Selling, general and administrative expenses | 20,368 | (174 | ) | 1,789 | — | 21,983 | ||||||||||||||
Ravenswood impairment | — | — | 30,850 | — | 30,850 | |||||||||||||||
Other operating expense - net | — | — | 4,680 | — | 4,680 | |||||||||||||||
Operating income (loss) | (20,368 | ) | 41,337 | 20,986 | 2,969 | 44,924 | ||||||||||||||
Interest expense - third parties | (10,237 | ) | (795 | ) | (92 | ) | — | (11,124 | ) | |||||||||||
Interest income (expense) - affiliates | 19,079 | 3,630 | (22,709 | ) | — | — | ||||||||||||||
Interest income - third parties | 33 | 4 | 166 | — | 203 | |||||||||||||||
Net gain on forward and derivative contracts | 177 | 706 | 36 | — | 919 | |||||||||||||||
Unrealized gain on fair value of contingent consideration | — | 16,814 | — | — | 16,814 | |||||||||||||||
Other income (expense) - net | 919 | (189 | ) | 2,147 | (1,730 | ) | 1,147 | |||||||||||||
Income (loss) before income taxes and equity in earnings of joint ventures | (10,397 | ) | 61,507 | 534 | 1,239 | 52,883 | ||||||||||||||
Income tax expense | (3,188 | ) | — | (11,015 | ) | (163 | ) | (14,366 | ) | |||||||||||
Income (loss) before equity in earnings of joint ventures | (13,585 | ) | 61,507 | (10,481 | ) | 1,076 | 38,517 | |||||||||||||
Equity in earnings of joint ventures | 53,467 | — | 1,365 | (53,467 | ) | 1,365 | ||||||||||||||
Net income (loss) | $ | 39,882 | $ | 61,507 | $ | (9,116 | ) | $ | (52,391 | ) | $ | 39,882 | ||||||||
Other comprehensive income before income tax effect | 20,205 | 12,822 | 1,960 | (14,782 | ) | 20,205 | ||||||||||||||
Income tax effect | (765 | ) | — | 17 | (17 | ) | (765 | ) | ||||||||||||
Other comprehensive income | 19,440 | 12,822 | 1,977 | (14,799 | ) | 19,440 | ||||||||||||||
Total comprehensive income (loss) | $ | 59,322 | $ | 74,329 | $ | (7,139 | ) | $ | (67,190 | ) | $ | 59,322 |
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
As of June 30, 2016 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
Cash & cash equivalents | $ | 47,316 | $ | (278 | ) | $ | 82,346 | $ | — | $ | 129,384 | |||||||||
Restricted cash | — | 795 | 1,874 | — | 2,669 | |||||||||||||||
Accounts receivable - net | 374 | 13,473 | 457 | — | 14,304 | |||||||||||||||
Due from affiliates | 138 | 12,604 | 1,769 | — | 14,511 | |||||||||||||||
Inventories | 180 | 146,841 | 87,890 | (3,079 | ) | 231,832 | ||||||||||||||
Prepaid and other current assets | 6,383 | 4,699 | 16,871 | — | 27,953 | |||||||||||||||
Assets held for sale | — | — | 29,695 | — | 29,695 | |||||||||||||||
Total current assets | 54,391 | 178,134 | 220,902 | (3,079 | ) | 450,348 | ||||||||||||||
Property, plant and equipment - net | 8,532 | 343,026 | 846,046 | — | 1,197,604 | |||||||||||||||
Investment in subsidiaries | 574,884 | — | — | (574,884 | ) | — | ||||||||||||||
Due from affiliates - less current portion | 635,612 | 4,277 | — | (639,889 | ) | — | ||||||||||||||
Other assets | 29,094 | 18,288 | 16,836 | 7,418 | 71,636 | |||||||||||||||
TOTAL | $ | 1,302,513 | $ | 543,725 | $ | 1,083,784 | $ | (1,210,434 | ) | $ | 1,719,588 | |||||||||
Accounts payable, trade | $ | 1,099 | $ | 51,612 | $ | 36,592 | $ | — | $ | 89,303 | ||||||||||
Due to affiliates | 200 | 4,478 | 4,984 | — | 9,662 | |||||||||||||||
Accrued and other current liabilities | 10,731 | 14,107 | 23,641 | — | 48,479 | |||||||||||||||
Accrued employee benefits costs | 1,824 | 7,502 | 680 | — | 10,006 | |||||||||||||||
Industrial revenue bonds | — | 7,815 | — | — | 7,815 | |||||||||||||||
Total current liabilities | 13,854 | 85,514 | 65,897 | — | 165,265 | |||||||||||||||
Senior notes payable | 247,484 | — | — | — | 247,484 | |||||||||||||||
Accrued pension benefits costs cost - less current portion | 39,300 | (10,964 | ) | 14,599 | — | 42,935 | ||||||||||||||
Accrued postretirement benefits costs - less current portion | 5,030 | 119,282 | 1,591 | — | 125,903 | |||||||||||||||
Other liabilities | 2,482 | 31,484 | 11,718 | 7,418 | 53,102 | |||||||||||||||
Intercompany loan | — | 27,995 | 615,044 | (643,039 | ) | — | ||||||||||||||
Deferred taxes | — | — | 90,464 | — | 90,464 | |||||||||||||||
Total noncurrent liabilities | 294,296 | 167,797 | 733,416 | (635,621 | ) | 559,888 | ||||||||||||||
Series A Preferred stock | 1 | — | — | — | 1 | |||||||||||||||
Common stock | 942 | 1 | 228,423 | (228,424 | ) | 942 | ||||||||||||||
Additional paid-in capital | 2,514,227 | 297,899 | 2,075,657 | (2,373,556 | ) | 2,514,227 | ||||||||||||||
Treasury stock, at cost | (86,276 | ) | — | — | — | (86,276 | ) | |||||||||||||
Accumulated other comprehensive loss | (13,657 | ) | (58,471 | ) | (38,875 | ) | — | (111,003 | ) | |||||||||||
Accumulated deficit | (1,420,874 | ) | 50,985 | (1,980,734 | ) | 2,027,167 | (1,323,456 | ) | ||||||||||||
Total shareholder's equity | 994,363 | 290,414 | 284,471 | (574,813 | ) | 994,435 | ||||||||||||||
TOTAL | $ | 1,302,513 | $ | 543,725 | $ | 1,083,784 | $ | (1,210,434 | ) | $ | 1,719,588 |
Condensed Consolidating Balance Sheet | ||||||||||||||||||||
As of December 31, 2015 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
Cash & cash equivalents | $ | 58,421 | $ | (3,647 | ) | $ | 60,619 | $ | — | $ | 115,393 | |||||||||
Restricted cash | — | 791 | — | — | 791 | |||||||||||||||
Accounts receivable - net | 104 | 8,891 | 480 | — | 9,475 | |||||||||||||||
Due from affiliates | 13 | 14,493 | 2,911 | — | 17,417 | |||||||||||||||
Inventories | 180 | 148,280 | 85,937 | (2,525 | ) | 231,872 | ||||||||||||||
Prepaid and other current assets | 7,713 | 16,242 | 18,457 | — | 42,412 | |||||||||||||||
Assets held for sale | — | — | 30,697 | — | 30,697 | |||||||||||||||
Total current assets | 66,431 | 185,050 | 199,101 | (2,525 | ) | 448,057 | ||||||||||||||
Property, plant and equipment - net | 9,188 | 361,626 | 861,442 | — | 1,232,256 | |||||||||||||||
Investment in subsidiaries | 593,604 | — | — | (593,604 | ) | — | ||||||||||||||
Due from affiliates - less current portion | 632,170 | — | — | (632,170 | ) | — | ||||||||||||||
Other assets | 29,536 | 19,153 | 16,047 | 7,419 | 72,155 | |||||||||||||||
TOTAL | $ | 1,330,929 | $ | 565,829 | $ | 1,076,590 | $ | (1,220,880 | ) | $ | 1,752,468 | |||||||||
Accounts payable, trade | $ | 2,380 | $ | 53,145 | $ | 34,964 | $ | — | $ | 90,489 | ||||||||||
Due to affiliates | 2,143 | 7,167 | 735 | — | 10,045 | |||||||||||||||
Accrued and other current liabilities | 11,247 | 14,759 | 22,816 | — | 48,822 | |||||||||||||||
Accrued employee benefits costs | 1,824 | 7,644 | 680 | — | 10,148 | |||||||||||||||
Industrial revenue bonds | — | 7,815 | — | — | 7,815 | |||||||||||||||
Total current liabilities | 17,594 | 90,530 | 59,195 | — | 167,319 | |||||||||||||||
Senior notes payable | 247,278 | — | — | — | 247,278 | |||||||||||||||
Accrued pension benefits costs cost - less current portion | 39,831 | (11,021 | ) | 15,189 | — | 43,999 | ||||||||||||||
Accrued postretirement benefits costs - less current portion | 4,524 | 119,911 | 1,564 | — | 125,999 | |||||||||||||||
Other liabilities | 3,307 | 30,505 | 11,779 | 7,418 | 53,009 | |||||||||||||||
Intercompany loan | — | 124,518 | 509,652 | (634,170 | ) | — | ||||||||||||||
Deferred taxes | — | — | 96,994 | — | 96,994 | |||||||||||||||
Total noncurrent liabilities | 294,940 | 263,913 | 635,178 | (626,752 | ) | 567,279 | ||||||||||||||
Series A Preferred stock | 1 | — | — | — | 1 | |||||||||||||||
Common stock | 942 | — | 224,424 | (224,424 | ) | 942 | ||||||||||||||
Additional paid-in capital | 2,513,631 | 191,023 | 2,038,138 | (2,229,161 | ) | 2,513,631 | ||||||||||||||
Treasury stock, at cost | (86,276 | ) | — | — | — | (86,276 | ) | |||||||||||||
Accumulated other comprehensive loss | (13,125 | ) | (60,026 | ) | (39,499 | ) | — | (112,650 | ) | |||||||||||
Accumulated deficit | (1,396,778 | ) | 80,389 | (1,840,846 | ) | 1,859,457 | (1,297,778 | ) | ||||||||||||
Total shareholder's equity | 1,018,395 | 211,386 | 382,217 | (594,128 | ) | 1,017,870 | ||||||||||||||
TOTAL | $ | 1,330,929 | $ | 565,829 | $ | 1,076,590 | $ | (1,220,880 | ) | $ | 1,752,468 |
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||||||
For the six months ended June 30, 2016 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | (11,105 | ) | $ | 18,847 | $ | 11,268 | $ | 4,593 | $ | 23,603 | |||||||||
Purchase of property, plant and equipment | — | (2,697 | ) | (5,037 | ) | — | (7,734 | ) | ||||||||||||
Restricted and other cash deposits | — | (4 | ) | (1,874 | ) | — | (1,878 | ) | ||||||||||||
Intercompany transactions | — | — | — | — | — | |||||||||||||||
Net cash used in investing activities | — | (2,701 | ) | (6,911 | ) | — | (9,612 | ) | ||||||||||||
Borrowings under revolving credit facilities | 595 | — | — | — | 595 | |||||||||||||||
Repayments under revolving credit facilities | (595 | ) | — | — | — | (595 | ) | |||||||||||||
Intercompany transactions | — | (12,777 | ) | 17,370 | (4,593 | ) | — | |||||||||||||
Net cash provided by (used in) financing activities | — | (12,777 | ) | 17,370 | (4,593 | ) | — | |||||||||||||
CHANGE IN CASH AND CASH EQUIVALENTS | (11,105 | ) | 3,369 | 21,727 | — | 13,991 | ||||||||||||||
Cash and cash equivalents, beginning of period | 58,421 | (3,647 | ) | 60,619 | — | 115,393 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 47,316 | $ | (278 | ) | $ | 82,346 | $ | — | $ | 129,384 |
Condensed Consolidating Statement of Cash Flows | ||||||||||||||||||||
For the six months ended June 30, 2015 | ||||||||||||||||||||
The Company | Combined Guarantor Subsidiaries | Combined Non-Guarantor Subsidiaries | Consolidating Adjustments | Total Consolidated | ||||||||||||||||
Net cash provided by (used in) operating activities | $ | 94,607 | $ | 29,810 | $ | (167,271 | ) | $ | 103,695 | $ | 60,841 | |||||||||
Purchase of property, plant and equipment | (3,514 | ) | (14,564 | ) | (13,290 | ) | — | (31,368 | ) | |||||||||||
Purchase of remaining interest in Mt. Holly smelter | — | 11,313 | — | — | 11,313 | |||||||||||||||
Proceeds from sale of property, plant and equipment | — | 14 | — | — | 14 | |||||||||||||||
Restricted and other cash deposits | — | (162 | ) | (120 | ) | — | (282 | ) | ||||||||||||
Net cash used in investing activities | (3,514 | ) | (3,399 | ) | (13,410 | ) | — | (20,323 | ) | |||||||||||
Borrowings under revolving credit facilities | 1,010 | — | — | — | 1,010 | |||||||||||||||
Repayments under revolving credit facilities | (1,010 | ) | — | — | — | (1,010 | ) | |||||||||||||
Repurchase of common stock | (36,352 | ) | — | — | — | (36,352 | ) | |||||||||||||
Intercompany transactions | — | (25,885 | ) | 129,580 | (103,695 | ) | — | |||||||||||||
Net cash provided by (used in) financing activities | (36,352 | ) | (25,885 | ) | 129,580 | (103,695 | ) | (36,352 | ) | |||||||||||
CHANGE IN CASH AND CASH EQUIVALENTS | 54,741 | 526 | (51,101 | ) | — | 4,166 | ||||||||||||||
Cash and cash equivalents, beginning of period | 70,683 | (1,187 | ) | 93,746 | — | 163,242 | ||||||||||||||
Cash and cash equivalents, end of period | $ | 125,424 | $ | (661 | ) | $ | 42,645 | $ | — | $ | 167,408 |
• | Future global and local financial and economic conditions; |
• | Our assessment of the aluminum market and aluminum prices (including premiums); |
• | The future financial and operating performance of the Company, its subsidiaries and its projects; |
• | Future earnings, operating results and liquidity; |
• | Future inventory, production, sales, cash costs and capital expenditures; |
• | Future impairment charges or restructuring costs; |
• | Our business objectives, plans, strategies and initiatives, including our ability to achieve productivity improvements or cost reductions; |
• | Our plans and expectations with respect to the sale of assets related to our Ravenswood, West Virginia smelter, and the curtailment and/or future operation of our other domestic assets, including our Hawesville, Mt. Holly and Sebree smelters; |
• | Our ability to procure alumina, carbon products and other raw materials and our assessment of pricing and costs and other terms relating thereto; |
• | Access to existing or future financing arrangements; |
• | Our ability to repay debt in the future, including the E.ON contingent obligation; |
• | Estimates of our pension and other postretirement liabilities and future payments, property plant and equipment impairment, environmental liabilities and other contingent liabilities and contractual commitments; |
• | Our ability to successfully manage transmission issues and wholesale market power price risk and to control or reduce power costs; |
• | Our assessment of power pricing and our ability to successfully obtain and/or implement long-term competitive power arrangements for our operations and projects; |
• | Our ability to successfully produce value-added products at our smelters; |
• | Future construction investment and development, including the Helguvik Project and our expansion project at Grundartangi, including our ability to secure sufficient amounts of power, future capital expenditures, the costs of completion or cancellation, timing, production capacity and sources of funding; |
• | Our ability to derive benefits from acquisitions, and to successfully integrate these operations with the rest of our business; |
• | The anticipated impact of recent accounting pronouncements or changes in accounting principles; |
• | Our anticipated tax liabilities, benefits or refunds including the realization of U.S. and certain foreign deferred tax assets; |
• | Our assessment of the ultimate outcome of outstanding litigation and environmental matters and liabilities relating thereto; and |
• | The effect of future laws and regulations. |
• | the price of primary aluminum, which is based on the LME, or other exchanges, regional delivery premiums and any value-added product premiums; |
• | the cost of goods sold, the principal components of which are electrical power, alumina, carbon products and labor, which in aggregate exceed 75% of our cost of goods sold; and |
• | our production volume. |
Three months ended June 30, | Six months ended June 30, | |||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||
(In thousands, except per share data) | ||||||||||||
NET SALES: | ||||||||||||
Related parties | $ | 290,283 | $ | 513,681 | $ | 570,660 | $ | 1,089,410 | ||||
Third-party customers | 36,471 | 9,810 | 74,948 | 21,992 | ||||||||
Total net sales | $ | 326,754 | $ | 523,491 | $ | 645,608 | $ | 1,111,402 | ||||
Gross profit | $ | 5,582 | $ | 8,342 | $ | 2,530 | $ | 102,437 | ||||
Net income (loss) | $ | (9,515 | ) | $ | (33,897 | ) | $ | (25,678 | ) | $ | 39,882 | |
EARNINGS (LOSS) PER COMMON SHARE: | ||||||||||||
Basic | $ | (0.11 | ) | $ | (0.39 | ) | $ | (0.29 | ) | $ | 0.42 | |
Diluted | (0.11 | ) | (0.39 | ) | (0.29 | ) | 0.41 |
SHIPMENTS - PRIMARY ALUMINUM | ||||||||||||||||||||
Direct (1) | Toll | |||||||||||||||||||
United States | Iceland | Iceland | ||||||||||||||||||
Tonnes | Sales $ (000) | Tonnes | Sales $ (000) | Tonnes | Sales $ (000) | |||||||||||||||
2016 | ||||||||||||||||||||
2nd Quarter | 106,974 | $ | 204,173 | 54,968 | $ | 92,707 | 23,625 | $ | 27,944 | |||||||||||
1st Quarter | 105,089 | 194,826 | 55,030 | 92,151 | 22,500 | 26,115 | ||||||||||||||
Total | 212,063 | $ | 398,999 | 109,998 | $ | 184,858 | 46,125 | $ | 54,059 | |||||||||||
2015 | ||||||||||||||||||||
2nd Quarter | 157,373 | $ | 371,898 | 50,056 | $ | 110,083 | 26,521 | $ | 37,858 | |||||||||||
1st Quarter | 169,306 | 421,141 | 45,967 | 112,662 | 29,985 | 46,617 | ||||||||||||||
Total | 326,679 | $ | 793,039 | 96,023 | $ | 222,745 | 56,506 | $ | 84,475 | |||||||||||
(1) | Excludes scrap aluminum sales. |
Net sales (in millions) | 2016 | 2015 | $ Difference | % Difference | |||||||
Three months ended June 30, | $ | 326.8 | $ | 523.5 | $ | (196.7 | ) | (37.6 | )% | ||
Six months ended June 30, | $ | 645.6 | $ | 1,111.4 | $ | (465.8 | ) | (41.9 | )% |
Gross profit (loss) (in millions) | 2016 | 2015 | $ Difference | % Difference | |||||||
Three months ended June 30, | $ | 5.6 | $ | 8.3 | $ | (2.7 | ) | (32.5 | )% | ||
Six months ended June 30, | $ | 2.5 | $ | 102.4 | $ | (99.9 | ) | (97.6 | )% |
Selling, general and administrative expenses (in millions) | 2016 | 2015 | $ Difference | % Difference | |||||||
Three months ended June 30, | $ | 9.9 | $ | 10.0 | $ | (0.1 | ) | (1.0 | )% | ||
Six months ended June 30, | $ | 19.6 | $ | 22.0 | $ | (2.4 | ) | (10.9 | )% |
Ravenswood impairment (in millions) | 2016 | 2015 | $ Difference | % Difference | |||||||
Three months ended June 30, | $ | — | $ | 30.9 | $ | (30.9 | ) | (100.0 | )% | ||
Six months ended June 30, | $ | — | $ | 30.9 | $ | (30.9 | ) | (100.0 | )% |
Unrealized gain on fair value of contingent consideration (in millions) | 2016 | 2015 | $ Difference | % Difference | |||||||
Three months ended June 30, | $ | — | $ | 10.3 | $ | (10.3 | ) | (100.0 | )% | ||
Six months ended June 30, | $ | — | $ | 16.8 | $ | (16.8 | ) | (100.0 | )% |
Income tax benefit (expense) (in millions) | 2016 | 2015 | $ Difference | % Difference | |||||||
Three months ended June 30, | $ | 0.3 | $ | (5.1 | ) | $ | 5.4 | 105.9 | % | ||
Six months ended June 30, | $ | 2.4 | $ | (14.4 | ) | $ | 16.8 | 116.7 | % |
Six months ended June 30, | ||||||
2016 | 2015 | |||||
(in thousands) | ||||||
Net cash provided by operating activities | $ | 23,603 | $ | 60,841 | ||
Net cash used in investing activities | (9,612 | ) | (20,323 | ) | ||
Net cash used in financing activities | — | (36,352 | ) | |||
Change in cash and cash equivalents | $ | 13,991 | $ | 4,166 |
Electrical power price sensitivity by location: | ||||||||||||
Hawesville (1) | Sebree | Mt. Holly (1) | Total | |||||||||
Expected average load (in megawatts ("MW")) | 482 | 385 | 400 | 1,267 | ||||||||
Quarterly estimated electrical power usage (in megawatt hours ("MWh")) | 1,055,580 | 843,150 | 876,000 | 2,774,730 | ||||||||
Quarterly cost impact of an increase or decrease of $1 per MWh (in thousands) | $ | 1,100 | $ | 800 | $ | 900 | $ | 2,800 | ||||
Annual expected electrical power usage (in MWh) | 4,222,320 | 3,372,600 | 3,504,000 | 11,098,920 | ||||||||
Annual cost impact of an increase or decrease of $1 per MWh (in thousands) | $ | 4,200 | $ | 3,400 | $ | 3,500 | $ | 11,100 |
Exhibit Number | Description of Exhibit | Incorporated by Reference | Filed Herewith | ||
Form | File No. | Filing Date | |||
31.1 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer | X | |||
31.2 | Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer | X | |||
32.1* | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer | X | |||
32.2* | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Financial Officer | X | |||
101.INS | XBRL Instance Document | X | |||
101.SCH | XBRL Taxonomy Extension Schema | X | |||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | X | |||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | X | |||
101.LAB | XBRL Taxonomy Extension Label Linkbase | X | |||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | X |
Century Aluminum Company | ||||
Date: | August 5, 2016 | By: | /s/ RICK T. DILLON | |
Rick T. Dillon | ||||
Executive Vice President and Chief Financial Officer (Principal Financial Officer) | ||||
Date: | August 5, 2016 | By: | /s/ STEPHEN K. HEYROTH | |
Stephen K. Heyroth | ||||
Vice President and Chief Accounting Officer (Principal Accounting Officer) |
1) | I have reviewed this quarterly report on Form 10-Q of Century Aluminum Company; |
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(s) 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 5, 2016 | |
/s/ MICHAEL A. BLESS | ||
Name: Michael A. Bless | ||
Title: President and Chief Executive Officer (Principal Executive Officer) |
1) | I have reviewed this quarterly report on Form 10-Q of Century Aluminum Company; |
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(s) 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(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: | August 5, 2016 | |
/s/ RICK T. DILLON | ||
Name: Rick T. Dillon | ||
Title: Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
1. | This 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ MICHAEL A. BLESS | ||
By: | Michael A. Bless | |
Title: | President and Chief Executive Officer (Principal Executive Officer) | |
Date: | August 5, 2016 |
1. | This 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 this Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ RICK T. DILLON | ||
By: | Rick T. Dillon | |
Title: | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | |
Date: | August 5, 2016 |
Document And Entity Information - shares |
6 Months Ended | |
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Jun. 30, 2016 |
Jul. 28, 2016 |
|
Document and Entity Information [Abstract] | ||
Entity Registrant Name | CENTURY ALUMINUM CO | |
Entity Central Index Key | 0000949157 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 87,075,587 |
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
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NET SALES: | ||||
Related parties | $ 290,283 | $ 513,681 | $ 570,660 | $ 1,089,410 |
Third-party customers | 36,471 | 9,810 | 74,948 | 21,992 |
Total net sales | 326,754 | 523,491 | 645,608 | 1,111,402 |
Cost of goods sold | 321,172 | 515,149 | 643,078 | 1,008,965 |
Gross profit | 5,582 | 8,342 | 2,530 | 102,437 |
Selling, general and administrative expenses | 9,945 | 10,012 | 19,570 | 21,983 |
Ravenswood impairment | 0 | 30,850 | 0 | 30,850 |
Other operating expense - net | 578 | 2,601 | 1,459 | 4,680 |
Operating income (loss) | (4,941) | (35,121) | (18,499) | 44,924 |
Interest expense | (5,497) | (5,573) | (10,990) | (11,124) |
Interest income | 171 | 61 | 285 | 203 |
Net gain on forward and derivative contracts | 353 | 566 | 706 | 919 |
Unrealized gain on fair value of contingent consideration | 0 | 10,287 | 0 | 16,814 |
Other income (expense) - net | (299) | 93 | (305) | 1,147 |
Income (loss) before income taxes and equity in earnings of joint ventures | (10,213) | (29,687) | (28,803) | 52,883 |
Income tax benefit (expense) | 319 | (5,065) | 2,389 | (14,366) |
Income (loss) before equity in earnings of joint ventures | (9,894) | (34,752) | (26,414) | 38,517 |
Equity in earnings of joint ventures | 379 | 855 | 736 | 1,365 |
Net income (loss) | (9,515) | (33,897) | (25,678) | 39,882 |
Net income (loss) allocated to common stockholders | $ (9,515) | $ (33,897) | $ (25,678) | $ 36,628 |
EARNINGS (LOSS) PER COMMON SHARE: | ||||
Basic (in dollars per share) | $ (0.11) | $ (0.39) | $ (0.29) | $ 0.42 |
Diluted (in dollars per share) | $ (0.11) | $ (0.39) | $ (0.29) | $ 0.41 |
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||
Basic (shares) | 87,060 | 86,873 | 87,050 | 87,838 |
Diluted (shares) | 87,060 | 86,873 | 87,050 | 88,495 |
General |
6 Months Ended |
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Jun. 30, 2016 | |
General [Abstract] | |
General | General The accompanying unaudited interim consolidated financial statements of Century Aluminum Company should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2015. In management’s opinion, the unaudited interim consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented. Operating results for the first six months of 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. Throughout this Form 10-Q, and unless expressly stated otherwise or as the context otherwise requires, "Century Aluminum," "Century," the "Company", "we," "us," "our" and "ours" refer to Century Aluminum Company and its consolidated subsidiaries. |
Related party transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related party transactions | Related party transactions Our significant related party transactions occurring during the three and six months ended June 30, 2016 and 2015 are described below. We believe that all of the transactions with our related parties were at prices that approximate market. Glencore ownership As of June 30, 2016, Glencore plc and its affiliates (together "Glencore") owned 42.9% of Century’s outstanding common stock and all of our outstanding Series A Convertible Preferred stock. Through its ownership of our common and preferred stock, Glencore has an overall 47.5% economic ownership in Century Aluminum. Sales to Glencore We entered into an agreement with Glencore pursuant to which we agreed to sell, and Glencore agreed to purchase, substantially all of our primary aluminum production in North America for 2015 and 2016 on a take-or-pay basis at prices determined by reference to the Midwest Transaction Price plus additional negotiated product premiums. The current term of the agreement continues through December 31, 2016. In addition, we have agreed to sell approximately 24,500 tonnes of molten aluminum to Glencore during 2017 at prices based on the Midwest Transaction Price. We sell primary aluminum produced at our Grundartangi, Iceland smelter ("Grundartangi") under a long-term sales contract through 2017 with Glencore at prices based on the London Metal Exchange ("LME") price for primary aluminum plus the European Duty Paid premium and any applicable product premiums. We also received tolling fees from Glencore under tolling agreements that provide for delivery of primary aluminum produced at our Grundartangi facility through June 2016. The fee paid by Glencore under these tolling agreements was based on the LME price for primary aluminum plus a portion of the European Duty Paid premium. Glencore purchases the aluminum we produce for resale. Purchases from Glencore We purchase alumina from Glencore under a long-term supply agreement and on a spot basis. Glencore has agreed to supply us with alumina under a long-term supply agreement through 2017 at prices indexed to the LME price of primary aluminum or based on a published alumina index. In 2015 and 2016 our purchases from Glencore have been based on a published alumina index. Transactions with Baise Haohai Carbon Co., Ltd. ("BHH") We own a 40% stake in BHH, a joint venture that owns a carbon anode and cathode facility located in the Guangxi Zhuang Autonomous Region of south China. We purchase carbon anodes from BHH. In the fourth quarter of 2015, we completed the construction of a second furnace at our carbon anode facility in Vlissingen, Netherlands. This investment increased our capacity to produce carbon anodes and significantly reduced the quantity of carbon anodes that we source from BHH. As a result, in the fourth quarter of 2015, we made the decision to pursue an exit from our investment in BHH and recorded an $11,584 impairment loss. Summary A summary of the aforementioned significant related party transactions for the three and six months ended June 30, 2016 and 2015 is as follows:
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Ravenswood impairment |
6 Months Ended |
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Jun. 30, 2016 | |
Asset Impairment Charges [Abstract] | |
Ravenswood impairment | Ravenswood impairment On July 27, 2015, we announced the immediate and permanent closure of our Ravenswood, West Virginia aluminum smelter ("Ravenswood"). Ravenswood has been idled since February 2009. The decision to permanently close Ravenswood was based on the inability to secure a competitive power contract for the smelter, compounded by challenging aluminum market conditions largely driven by increased exports of aluminum from China. At June 30, 2015, we recorded an impairment charge of $30,850 related to Ravenswood. We classified the estimated salvage value of the property, plant and equipment within Level 3 of the fair value hierarchy as its fair value was determined based on recent comparable transactions with inputs that are not readily observable in the market. |
Business acquisitions |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||
Business acquisitions | Business acquisitions Acquisition of Mt. Holly aluminum smelter On October 23, 2014, our wholly-owned subsidiary, Berkeley Aluminum Inc. ("Berkeley") entered into a stock purchase agreement (the "Stock Purchase Agreement") with Alumax Inc. ("Alumax"), a wholly-owned subsidiary of Alcoa Inc. ("Alcoa"), pursuant to which Berkeley acquired all of the issued and outstanding shares of Alumax of South Carolina, Inc. ("Alumax of SC") and thereby acquired Alcoa’s 50.3% stake in Mt. Holly. Berkeley had previously owned 49.7% of Mt. Holly. Immediately following the consummation of the transaction on December 1, 2014, Berkeley merged with and into Alumax of SC with Alumax of SC surviving and changing its name to Century Aluminum of South Carolina, Inc. ("CASC"). Following the consummation of the transaction, CASC owned 100% of Mt. Holly. Mt. Holly, located in Goose Creek, South Carolina, employed approximately 600 people and had an annual production capacity of 231,000 tonnes of primary aluminum as of the acquisition date. Pursuant to the terms of the Stock Purchase Agreement, Berkeley acquired all of the issued and outstanding shares of capital stock of Alumax of SC for $67,500 in cash subject to a contingent earn-out payment, working capital and other similar adjustments. The acquisition was funded with available cash on hand. We accounted for this transaction as a step acquisition and this resulted in a non-cash pre-tax gain of $15,955 at closing. Acquisition-related costs for Mt. Holly of $1,539 were expensed to selling, general and administrative expenses in the period that they were incurred. The following table summarizes all of the elements of purchase consideration for the transaction as of December 1, 2014.
We received payments from Alcoa of $2,400 at closing which was primarily for post-employment benefits, $11,313 for economic and working capital adjustments in April 2015 and $12,500 in settlement of the contingent consideration in March 2016. We recognized gains on contingent consideration of $10,287 and $16,814, respectively, during the three and six month periods ended June 30, 2015. The total net cash consideration paid to Alcoa after final resolution of all post-closing adjustments, including the earn-out provision, was $41,487. The Consolidated Statements of Cash Flows for the six months ended June 30, 2015 was revised to reclassify cash flows out of investing activities and into operating activities for the funding of the Mt. Holly pension plan and certain alumina purchases in April 2015. |
Fair value measurements |
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Fair value measurements | Fair value measurements The following section describes the valuation methodology used to measure our financial assets and liabilities that were accounted for at fair value and are categorized based on the fair value hierarchy described in Accounting Standards Codification ("ASC") 820, "Fair Value Measurements and Disclosures."
Our fair value measurements include the consideration of market risks that other market participants might consider in pricing the particular asset or liability, specifically non-performance risk and counterparty credit risk. Considerations of the non-performance risk and counterparty credit risk are used to establish the appropriate risk-adjusted discount rates used in our fair value measurements. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and the placement within the fair value hierarchy levels. There were no transfers between Level 1 and 2 during the periods presented. There were no transfers into or out of Level 3 during the periods presented. It is our policy to recognize transfers into and transfers out of Level 3 as of the date of the event or change in circumstances that caused the transfer. The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis by the level of input within the ASC 820 fair value hierarchy.
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Earnings (loss) per share |
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Earnings (loss) per share | Earnings (loss) per share Basic earnings (loss) per share ("EPS") amounts are calculated by dividing net income (loss) allocated to common stockholders by the weighted average number of common shares outstanding. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive common shares. The following table shows the basic and diluted earnings (loss) per share for the three and six months ended June 30, 2016 and 2015:
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Shareholders' equity |
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Shareholders' equity | Shareholders’ equity Common Stock As of June 30, 2016 and December 31, 2015, we had 195,000,000 shares of common stock, $0.01 cent par value per share, authorized under our Restated Certificate of Incorporation, of which 94,262,108 shares were issued and 87,075,587 shares were outstanding at June 30, 2016; 94,224,571 shares were issued and 87,038,050 shares were outstanding at December 31, 2015. The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock which are currently outstanding, including our Series A Convertible Preferred Stock, or which we may designate and issue in the future. Stock Repurchase Program In 2011, our Board of Directors approved a $60,000 common stock repurchase program which was expanded in 2015 to $130,000. Through December 31, 2015 we had repurchased 7,186,521 shares of common stock for an aggregate purchase price of $86,276. There have been no share repurchases since April 2015 and we have $43,724 remaining under the repurchase program authorization. The repurchase program may be expanded, suspended or discontinued by our Board, in its sole discretion, at any time. Shares of common stock repurchased are recorded at cost as treasury stock and result in a reduction of shareholders’ equity in the consolidated balance sheets. From time to time, treasury shares may be reissued and we use an average cost method for determining the cost for reissued treasury shares. The difference between the cost of the shares and the reissuance price is added to or deducted from additional paid-in capital. Preferred Stock As of June 30, 2016 and December 31, 2015 we had 5,000,000 shares of preferred stock, $0.01 cent par value per share, authorized under our Restated Certificate of Incorporation. In 2008, we issued 160,000 shares of our Series A Convertible Preferred Stock, all of which is held by Glencore, and at June 30, 2016 and December 31, 2015, 76,378 and 76,539 shares were outstanding, respectively. The issuance of common stock under our stock incentive programs, debt exchange transactions and any stock offering that excludes Glencore participation triggers anti-dilution provisions of the preferred stock agreement and results in the automatic conversion of Series A Convertible Preferred Stock shares into shares of common stock. The conversion of preferred to common shares is 100 shares of common for each share of preferred stock. Our Series A Convertible Preferred Stock has a par value of $0.01 per share. Our Board of Directors may issue preferred stock in one or more series and determine for each series the dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms and the number of shares constituting that series, as well as the designation thereof. Depending upon the terms of preferred stock established by our Board of Directors, any or all of the preferred stock could have preference over the common stock with respect to dividends and other distributions and upon the liquidation of Century. In addition, issuance of any shares of preferred stock with voting powers may dilute the voting power of the outstanding common stock. The Common and Preferred Stock Activity table below contains additional information about preferred stock conversions during the six months ended June 30, 2016 and 2015.
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Income taxes |
6 Months Ended |
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Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes We recorded an income tax benefit for the three and six months ended June 30, 2016 of $319 and $2,389, respectively, which primarily consisted of foreign income taxes. Our U.S. and certain foreign deferred tax assets, net of deferred tax liabilities, are subject to a valuation allowance. We recorded income tax expense for the three and six months ended June 30, 2015 of $5,065 and $14,366, respectively which primarily consisted of foreign and state income taxes. Our income tax benefit or expense is based on an annual effective tax rate forecast, including estimates and assumptions that could change during the year. The application of the requirements for accounting for income taxes in interim periods, after consideration of our valuation allowance, causes a significant variation in the typical relationship between income tax expense and pretax accounting income. As of June 30, 2016, all of Century's U.S. and certain foreign deferred tax assets, net of deferred tax liabilities, continue to be subject to a valuation allowance. |
Inventories |
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Inventories | Inventories
Inventories are stated at the lower of cost or market using the first-in, first-out method. |
Debt |
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Debt | Debt
U.S. Revolving Credit Facility We and certain of our direct and indirect domestic subsidiaries are party to a senior secured revolving credit facility, dated May 24, 2013, as amended, with a syndicate of lenders which provides for borrowings of up to $150,000 in the aggregate, including up to $110,000 under a letter of credit sub-facility (the "U.S. revolving credit facility"). Our U.S. revolving credit facility matures in June 2020. Any letters of credit issued and outstanding under the U.S. revolving credit facility reduce our borrowing availability on a dollar-for-dollar basis. The availability of funds under the U.S. revolving credit facility is limited by a specified borrowing base consisting of accounts receivable, inventory and qualified cash deposits of the borrowers which meet the eligibility criteria. Status of our U.S. revolving credit facility:
Iceland Revolving Credit Facility We have also entered into, through our wholly-owned subsidiary Nordural Grundartangi ehf, a $50 million revolving credit facility, dated November 27, 2013 (the "Iceland revolving credit facility"). The Iceland revolving credit facility was renewed in April 2016 with the term extended through November 27, 2018. The availability of funds under the Iceland revolving credit facility is limited by a specified borrowing base consisting of inventory and accounts receivable of Grundartangi. Status of our Iceland revolving credit facility:
7.5% Notes due 2021 General. On June 4, 2013, we issued $250,000 of our 7.5% Notes due June 1, 2021 (the "2021 Notes") in a private offering exempt from the registration requirements of the Securities Act of 1933, as amended. The 2021 Notes were issued at a discount and bear interest at the rate of 7.5% per annum on the principal amount, payable semi-annually in arrears in cash on June 1st and December 1st of each year. Fair Value. Fair value for our 2021 Notes was based on the latest trading data available and was $230,938 and $169,220, as of June 30, 2016 and December 31, 2015, respectively. Although we use quoted market prices for identical debt instruments, the markets on which they trade are not considered to be active and are therefore considered Level 2 fair value measurements. |
Commitments and contingencies |
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Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | Commitments and contingencies Environmental Contingencies Based upon all available information, we believe our current environmental liabilities do not have, and are not likely to have, a material adverse effect on our financial condition, results of operations or liquidity. However, because of the inherent uncertainties in estimating environmental liabilities primarily due to unknown facts and circumstances and changing governmental regulations and legal standards regarding liability, there can be no assurance that future capital expenditures and costs for environmental compliance at currently or formerly owned or operated properties will not result in liabilities that may have a material adverse effect on our financial condition, results of operations or liquidity. It is our policy to accrue for costs associated with environmental assessments and remedial efforts when it becomes probable that a liability has been incurred and the costs can be reasonably estimated. The aggregate environmental-related accrued liabilities were $1,383 and $1,112 at June 30, 2016 and December 31, 2015, respectively. All accrued amounts have been recorded without giving effect to any possible future recoveries. Costs for ongoing environmental compliance, including maintenance and monitoring are expensed as incurred. In July 2006, we were named as a defendant, together with certain affiliates of Alcan Inc., in a lawsuit brought by Alcoa Inc. seeking to determine responsibility for certain environmental indemnity obligations related to the sale of a cast aluminum plate manufacturing facility located in Vernon, California, which we purchased from Alcoa Inc. in December 1998, and sold to Alcan Rolled Products-Ravenswood LLC in July 1999. The complaint also seeks costs and attorney fees. The matter was stayed by the court in 2008 to allow for the remediation of environmental areas at the site. On June 30, 2016 the court ordered the stay lifted and reopened the case. The matter is in a preliminary stage in the U.S. District Court for the District of Delaware, and we cannot predict the ultimate outcome of this action or estimate a range of possible losses related to this matter at this time. Matters relating to the St. Croix Alumina Refining Facility We are a party to a United States Environmental Protection Agency Administrative Order on Consent (the "Order") pursuant to which certain past and present owners of an alumina refining facility at St. Croix, Virgin Islands (the "St. Croix Alumina Refinery") have agreed to carry out a Hydrocarbon Recovery Plan to remove and manage hydrocarbons floating on groundwater underlying the facility. Pursuant to the Hydrocarbon Recovery Plan, recovered hydrocarbons and groundwater are delivered to the adjacent petroleum refinery where they are received and managed. In connection with the sale of the facility by Lockheed Martin Corporation ("Lockheed") to one of our affiliates, Virgin Islands Alumina Corporation ("Vialco"), in 1989, Lockheed, Vialco and Century entered into the Lockheed-Vialco Asset Purchase Agreement. The indemnity provisions contained in the Lockheed-Vialco Asset Purchase Agreement allocate responsibility for certain environmental matters. Lockheed has tendered indemnity to Vialco. We have likewise tendered indemnity to Lockheed. Through June 30, 2016, we have expended approximately $1,085 on the Hydrocarbon Recovery Plan. At this time, we are not able to estimate the amount of any future potential payments under this indemnification to comply with the Order, but we do not anticipate that any such amounts will have a material adverse effect on our financial condition, results of operations or liquidity, regardless of the final outcome. Vialco sold the St. Croix Alumina Refinery to St. Croix Alumina, LLC, a subsidiary of Alcoa, in 1995. In December 2010, Century was among several defendants named in a lawsuit filed by plaintiffs who either worked, resided or owned property in the area downwind from the St. Croix Alumina Refinery. In March 2011, Century was also named a defendant in a nearly identical suit brought by certain additional plaintiffs. The plaintiffs in both suits allege damages caused by the presence of red mud and other particulates coming from the alumina facility and are seeking unspecified monetary damages, costs and attorney fees as well as certain injunctive relief. We tendered indemnity and defense to St. Croix Alumina LLC and Alcoa Alumina & Chemical LLC under the terms of an acquisition agreement relating to the facility and have filed motions to dismiss plaintiffs’ claims. In August 2015, the Superior Court of the Virgin Islands, Division of St. Croix denied the motions to dismiss but ordered all plaintiffs to refile individual complaints. At this time, it is not possible to predict the ultimate outcome of or to estimate a range of possible losses for any of the foregoing actions relating to the St. Croix Alumina Refinery. Legal Contingencies In addition to the foregoing matters, we have pending against us or may be subject to various lawsuits, claims and proceedings related primarily to employment, commercial, stockholder, safety and health matters. While the results of such litigation matters and claims cannot be predicted with certainty, we believe that the final outcome of such matters will not have a material adverse impact on our financial condition, results of operations or liquidity. However, because of the nature and inherent uncertainties of litigation, should the outcome of these actions be unfavorable, our business, financial condition, results of operations and liquidity could be materially and adversely affected. In evaluating whether to accrue for losses associated with legal contingencies, it is our policy to take into consideration factors such as the facts and circumstances asserted, our historical experience with contingencies of a similar nature, the likelihood of our prevailing and the severity of any potential loss. For some matters, no accrual is established because we have assessed our risk of loss to be remote. Where the risk of loss is probable and the amount of the loss can be reasonably estimated, we record an accrual, either on an individual basis or with respect to a group of matters involving similar claims, based on the factors set forth above. When we have assessed that a loss associated with legal contingencies is reasonably possible, we determine if estimates of possible losses or ranges of possible losses are in excess of related accrued liabilities, if any. Based on current knowledge, management has ascertained estimates for losses that are reasonably possible and management does not believe that any reasonably possible outcomes in excess of our accruals, if any, either individually or in aggregate, would be material to our financial condition, results of operations or liquidity. We reevaluate and update our assessments and accruals as matters progress over time. Ravenswood Retiree Medical Benefits changes In November 2009, Century Aluminum of West Virginia ("CAWV") filed a class action complaint for declaratory judgment against the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union ("USW"), the USW’s local and certain CAWV retirees, individually and as class representatives, seeking a declaration of CAWV’s rights to modify/terminate retiree medical benefits. Later in November 2009, the USW and representatives of a retiree class filed a separate suit against CAWV, Century Aluminum Company, Century Aluminum Master Welfare Benefit Plan, and various John Does with respect to the foregoing. These actions, entitled Dewhurst, et al. v. Century Aluminum Co., et al., and Century Aluminum of West Virginia, Inc. v. United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO/CLC, et al., have been consolidated and venue has been set in the District Court for the Southern District of West Virginia. In September 2015, the trial court granted CAWV's motion for summary judgment of these actions. The trial court decision is currently being appealed by the USW to the Court of Appeals for the 4th Circuit. PBGC Settlement In April 2013, we entered into a settlement agreement with the Pension Benefit Guarantee Corporation ("PBGC") regarding an alleged "cessation of operations" at our Ravenswood facility as a result of the curtailment of operations at the facility and, pursuant to the agreement, we agreed to make additional contributions (above any minimum required contributions) to our defined benefit pension plans totaling approximately $17.4 million. The agreement permits us to defer payments during periods of lower primary aluminum prices relative to our cost of operations. We remeasure aluminum prices against our cost of operations on an annual basis based on our fourth quarter results. To the extent that we elect to defer one or more of these payments, we are required to provide the PBGC with acceptable security for any such deferred payments. We made contributions pursuant to this agreement of $1.1 million in March 2015 and $6.7 million in 2013. We did not make any contributions during 2014 and have not made any contributions in 2016 through June 30. The remaining contributions under this agreement are approximately $9.6 million. Power Commitments and Contingencies Hawesville Hawesville has a power supply arrangement with Kenergy and EDF Trading North America, LLC (“EDF") which provides market-based power to the Hawesville smelter. Under this arrangement, the power companies purchase power on the open market and pass it through to Hawesville at Midcontinent Independent System Operator ("MISO") pricing plus transmission and other costs. The power supply arrangement with Kenergy has an effective term through December 2023. The arrangement with EDF to act as our market participant with MISO has an effective term through May 2017, extending year to year thereafter unless a one year notice is given. Sebree Sebree has a power supply arrangement with Kenergy and EDF which provides market-based power to the Sebree smelter. Similar to the arrangement at Hawesville, the power companies purchase power on the open market and pass it through to Sebree at MISO pricing plus transmission and other costs. The power supply arrangement with Kenergy has an effective term through December 2023. The arrangement with EDF to act as our market participant with MISO has an effective term through May 2017, extending year to year thereafter unless a one year notice is given. Mt. Holly Mt. Holly has a power supply arrangement pursuant to which 25% of the Mt. Holly load is served from the South Carolina Public Service Authority’s ("Santee Cooper") generation at a standard cost-based industrial rate and 75% of the Mt. Holly load is sourced from a third party supplier from generation that is outside Santee Cooper’s service territory at market prices that are tied to natural gas prices. The agreement with Santee Cooper has a term through December 31, 2018 but can be terminated by CASC on 60 days' notice. Grundartangi Grundartangi has power purchase agreements with HS Orka hf ("HS"), Landsvirkjun and Orkuveita Reykjavikur ("OR") to provide power to its Grundartangi smelter. These power purchase agreements, which will expire on various dates from 2019 through 2036 (subject to extension), provide power at LME-based variable rates. Each power purchase agreement contains take-or-pay obligations with respect to a significant percentage of the total committed and available power under such agreement. Helguvik Nordural Helguvik ehf ("Helguvik") has power purchase agreements with HS and OR to provide power to the Helguvik project. These power purchase agreements provide power at LME-based variable rates and contain take-or-pay obligations with respect to a significant percentage of the total committed and available power under such agreements. The power purchase agreements contain certain conditions to HS’s and OR’s obligations. HS (with respect to all phases) and OR (with respect to all phases other than the first phase) have alleged that certain of these conditions have not been satisfied. The first stage of power under the OR power purchase agreement (approximately 47.5 MW) became available in the fourth quarter of 2011 and is currently being utilized at Grundartangi. In July 2014, HS commenced arbitration proceedings against Helguvik seeking, among other things, an order declaring, (i) that the conditions to the power contract have not been fulfilled and, (ii) that the power contract is therefore no longer valid. Arbitration hearings were held in April 2016 but the arbitral tribunal has yet to issue its decision. Other Commitments and Contingencies Labor Commitments The bargaining unit employees at our Grundartangi, Vlissingen, Hawesville, Sebree and Ravenswood facilities are represented by labor unions, representing 63% of our total workforce. Approximately 83% of Grundartangi’s work force is represented by five labor unions, governed by a labor agreement which is effective through December 31, 2019 that establishes wages and work rules for covered employees. 100% of Vlissingen's work force is represented by the Federation for the Metal and Electrical Industry ("FME") which negotiates working conditions with trade unions on behalf of its members. In March 2016, a new labor agreement was reached with the FME which is effective retroactively from May 1, 2015 to June 1, 2018. Approximately 53% of our U.S. based work force is represented by the USW. In June 2015, CAKY entered into a new collective bargaining agreement with the USW for its employees at the Hawesville smelter. The agreement is effective through April 1, 2020. Century Sebree, LLC has a collective bargaining agreement with the USW for its employees at the Sebree smelter that is effective through October 28, 2019. Our employees at Mt. Holly are not represented by a labor union. |
Components of accumulated other comprehensive loss |
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Components of accumulated other comprehensive loss | Components of accumulated other comprehensive loss
(1) The allocation of the income tax effect to the components of other comprehensive loss is as follows:
The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss ("AOCL"):
(1) The gain in other comprehensive income before reclassifications was due to a plan remeasurement related to labor negotiations, census and other actuarial adjustments. Reclassifications out of AOCL were included in the consolidated statements of operations as follows:
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Components of net periodic benefit cost |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost | Components of net periodic benefit cost
Employer contributions During the six months ended June 30, 2016, we made contributions of $901 to the qualified defined benefit and unqualified supplemental executive retirement benefits ("SERB") plans that we sponsor. |
Supplemental cash flow information |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental cash flow information | Supplemental cash flow information
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Condensed consolidating financial information |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed consolidating financial information | Condensed consolidating financial information Our 2021 Notes are guaranteed by each of our material existing and future domestic subsidiaries, except for Nordural US LLC and Century Aluminum Development LLC. The Guarantor Subsidiaries are 100% owned by Century. All guarantees are full and unconditional; all guarantees are joint and several. These notes are not guaranteed by our foreign subsidiaries (such foreign subsidiaries, Nordural US LLC and Century Aluminum Development LLC, collectively the “Non-Guarantor Subsidiaries”). We allocate corporate expenses or income to our subsidiaries and charge interest on certain intercompany balances. The following summarized condensed consolidating statements of comprehensive income (loss) for three and six months ended June 30, 2016 and 2015, condensed consolidating balance sheets as of June 30, 2016 and December 31, 2015 and the condensed consolidating statements of cash flows for the six months ended June 30, 2016 and 2015 present separate results for Century, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries, consolidating adjustments and total consolidated amounts. Although Century Aluminum West Virginia (which owns our curtailed Ravenswood smelter) has guaranteed our Notes due 2021, because we are in the process of selling substantially all of its assets, we have included its assets and results of operations in the columns under the caption Non-Guarantor Subsidiaries.
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Fair value measurements (Policies) |
6 Months Ended |
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Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Transfer, Policy | It is our policy to recognize transfers into and transfers out of Level 3 as of the date of the event or change in circumstances that caused the transfer. |
Related party transactions (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions | A summary of the aforementioned significant related party transactions for the three and six months ended June 30, 2016 and 2015 is as follows:
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Business acquisitions (Tables) |
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Jun. 30, 2016 | |||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||
Summary of consideration transferred | The following table summarizes all of the elements of purchase consideration for the transaction as of December 1, 2014.
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Fair value measurements (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of valuation methodology for assets and liabilities at fair value | The following section describes the valuation methodology used to measure our financial assets and liabilities that were accounted for at fair value and are categorized based on the fair value hierarchy described in Accounting Standards Codification ("ASC") 820, "Fair Value Measurements and Disclosures."
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Financial assets and liabilities at fair value on a recurring basis | The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis by the level of input within the ASC 820 fair value hierarchy.
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Earnings (loss) per share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basic and diluted earnings (loss) per share | The following table shows the basic and diluted earnings (loss) per share for the three and six months ended June 30, 2016 and 2015:
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Securities excluded from the calculation of diluted EPS |
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Shareholders' equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common and Preferred Stock Activity | The Common and Preferred Stock Activity table below contains additional information about preferred stock conversions during the six months ended June 30, 2016 and 2015.
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory, Net [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories |
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Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt |
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Schedule of Line of Credit Facilities | Status of our U.S. revolving credit facility:
Status of our Iceland revolving credit facility:
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Components of accumulated other comprehensive loss (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated balances for each component of AOCI |
(1) The allocation of the income tax effect to the components of other comprehensive loss is as follows:
The following table summarizes the changes in the accumulated balances for each component of accumulated other comprehensive loss ("AOCL"):
(1) The gain in other comprehensive income before reclassifications was due to a plan remeasurement related to labor negotiations, census and other actuarial adjustments. |
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Reclassification out of AOCI | Reclassifications out of AOCL were included in the consolidated statements of operations as follows:
|
Components of net periodic benefit cost (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of net periodic benefit cost [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net periodic benefit cost |
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Supplemental cash flow information (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental cash flow information |
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Condensed consolidating financial information (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed Consolidating Statements of Comprehensive Income (Loss) |
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Condensed Consolidating Balance Sheet |
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Condensed Consolidating Statement of Cash Flows |
|
Related party transactions - Summary of related party transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Related Party Transaction [Line Items] | ||||
Net sales to Glencore | $ 290,283 | $ 513,681 | $ 570,660 | $ 1,089,410 |
Glencore [Member] | ||||
Related Party Transaction [Line Items] | ||||
Net sales to Glencore | 290,283 | 513,681 | 570,660 | 1,089,410 |
Purchases from Glencore | 50,177 | 133,642 | 94,190 | 241,456 |
BHH [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases from BHH | $ 2,715 | $ 13,434 | $ 5,098 | $ 28,253 |
Related party transactions - Narrative (Details) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Dec. 31, 2015
USD ($)
|
Jun. 30, 2016
t
|
|
Glencore [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage by majority shareholder | 47.50% | |
BHH [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage | 40.00% | |
Impairment of equity method investment | $ | $ 11,584 | |
Agreement to Sell Molten Aluminum [Member] | Affiliated Entity [Member] | ||
Related Party Transaction [Line Items] | ||
Sales agreement, amount of agreement (tonnes) | t | 24,500 | |
Common Stock [Member] | Glencore [Member] | ||
Related Party Transaction [Line Items] | ||
Ownership percentage by majority shareholder | 42.90% |
Ravenswood impairment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Ravenswood impairment | $ 0 | $ 30,850 | $ 0 | $ 30,850 |
Ravenswood Aluminum Smelter [Member] | ||||
Impaired Assets to be Disposed of by Method Other than Sale [Line Items] | ||||
Ravenswood impairment | $ 30,850 |
Business acquisitions - Acquisition of Mt. Holly smelter narrative other units (Details) t in Thousands |
Dec. 01, 2014
employee
t
|
Nov. 30, 2014 |
---|---|---|
Mt. Holly Smelter [Member] | ||
Business Acquisition [Line Items] | ||
Remaining percentage acquired in step acquisition | 50.30% | |
Percentage of ownership after step acquisition | 100.00% | |
Employees | employee | 600 | |
Mt Holly primary aluminum capacity (tonnes) | t | 231 | |
Mt. Holly [Member] | Berkeley Aluminum Inc. [Member] | ||
Business Acquisition [Line Items] | ||
Ownership percentage | 49.70% |
Business acquisitions - Summary of consideration transferred (Details) - Mt. Holly Smelter [Member] $ in Thousands |
Dec. 01, 2014
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Purchase price | $ 67,500 |
Contingent consideration | 13,780 |
Economic, working capital and other closing adjustments | (13,513) |
Total consideration | $ 67,767 |
Business acquisitions - Acquisition of Mt. Holly smelter narrative (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|---|
Dec. 01, 2014 |
Mar. 31, 2016 |
Apr. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Business Acquisition [Line Items] | |||||||
Gains recognized on contingent consideration | $ 0 | $ 10,287,000 | $ 0 | $ 16,814,000 | |||
Total net consideration paid | $ 41,487 | ||||||
Mt. Holly Smelter [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Purchase price | 67,500,000 | ||||||
Non-cash pre-tax gain at closing | 15,955,000 | ||||||
Acquisition costs | 1,539,000 | ||||||
Consideration received for expected future post-employment benefits | $ 2,400,000 | ||||||
Consideration received for working capital adjustments | $ 11,313,000 | ||||||
Proceeds from acquisition - contingent consideration | $ 12,500,000 | ||||||
Gains recognized on contingent consideration | $ 10,287,000 | $ 16,814,000 |
Fair value measurements (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
ASSETS: | ||
Cash equivalents | $ 121,683 | $ 102,675 |
Trust assets | 4,101 | 5,226 |
Surety bonds | 1,874 | 1,870 |
TOTAL | 127,658 | 109,771 |
LIABILITIES: | ||
E.ON contingent obligation - net | 0 | 0 |
TOTAL | 0 | 0 |
Fair Value, Inputs, Level 1 [Member] | ||
ASSETS: | ||
Cash equivalents | 121,683 | 102,675 |
Trust assets | 4,101 | 5,226 |
Surety bonds | 1,874 | 1,870 |
TOTAL | 127,658 | 109,771 |
LIABILITIES: | ||
E.ON contingent obligation - net | 0 | 0 |
TOTAL | 0 | 0 |
Fair Value, Inputs, Level 2 [Member] | ||
ASSETS: | ||
Cash equivalents | 0 | 0 |
Trust assets | 0 | 0 |
Surety bonds | 0 | 0 |
TOTAL | 0 | 0 |
LIABILITIES: | ||
E.ON contingent obligation - net | 0 | 0 |
TOTAL | 0 | 0 |
Fair Value, Inputs, Level 3 [Member] | ||
ASSETS: | ||
Cash equivalents | 0 | 0 |
Trust assets | 0 | 0 |
Surety bonds | 0 | 0 |
TOTAL | 0 | 0 |
LIABILITIES: | ||
E.ON contingent obligation - net | 0 | 0 |
TOTAL | $ 0 | $ 0 |
Income taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ (319) | $ 5,065 | $ (2,389) | $ 14,366 |
Inventories (Details) - USD ($) $ in Thousands |
Jun. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory, Net [Abstract] | ||
Raw materials | $ 64,377 | $ 52,121 |
Work-in-process | 30,848 | 34,025 |
Finished goods | 19,817 | 15,988 |
Operating and other supplies | 116,790 | 129,738 |
Total inventories | $ 231,832 | $ 231,872 |
Debt (Details) - USD ($) $ in Thousands |
6 Months Ended | 12 Months Ended | |
---|---|---|---|
Jun. 30, 2016 |
Dec. 31, 2015 |
Jun. 04, 2013 |
|
Debt Instrument [Line Items] | |||
Industrial revenue bonds | $ 7,815 | $ 7,815 | |
Total debt | 255,299 | 255,093 | |
Long-term Debt [Member] | Senior secured notes due June 01, 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Secured secured notes | $ 247,484 | $ 247,278 | |
Maturity date | Jun. 01, 2021 | Jun. 01, 2021 | |
Stated interest rate, percentage | 7.50% | 7.50% | 7.50% |
Debt discount | $ 2,516 | $ 2,722 | |
Short-term Debt [Member] | Industrial revenue bonds due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Industrial revenue bonds | $ 7,815 | $ 7,815 | |
Maturity date | Apr. 01, 2028 | Apr. 01, 2028 | |
Stated interest rate, percentage | 0.61% | ||
Maximum [Member] | Short-term Debt [Member] | Industrial revenue bonds due 2028 [Member] | |||
Debt Instrument [Line Items] | |||
Effective interest rate, maximum | 12.00% | 12.00% |
Components of net periodic benefit cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Pension Benefits [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | $ 1,270 | $ 1,509 | $ 2,540 | $ 3,213 |
Interest cost | 3,482 | 3,267 | 6,962 | 6,655 |
Expected return on plan assets | (4,816) | (5,269) | (9,632) | (10,763) |
Amortization of prior service costs | 28 | 30 | 56 | 55 |
Amortization of net loss | 1,041 | 1,405 | 2,084 | 2,024 |
Curtailment | 0 | (12) | 0 | (12) |
Net periodic benefit cost | 1,005 | 930 | 2,010 | 1,172 |
Employer contributions | 901 | |||
Other Postretirement Benefits [Member] | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Service cost | 330 | 487 | 660 | 1,049 |
Interest cost | 1,439 | 1,390 | 2,895 | 2,981 |
Amortization of prior service costs | (695) | (961) | (1,390) | (1,922) |
Amortization of net loss | 879 | 1,234 | 1,755 | 2,099 |
Net periodic benefit cost | $ 1,953 | $ 2,150 | $ 3,920 | $ 4,207 |
Supplemental cash flow information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2016 |
Jun. 30, 2015 |
|
Cash paid for: | ||
Interest | $ 9,701 | $ 9,388 |
Income taxes | 6,316 | 12,581 |
Non-cash investing activities: | ||
Accrued capital costs | $ 179 | $ 2,570 |
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