|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring Fair Value Measurements
|
|
As of September 30, 2019
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
ASSETS:
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
15.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15.4
|
|
Trust assets (1)
|
|
0.7
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
Surety bonds
|
|
1.8
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
Derivative instruments
|
|
—
|
|
|
6.1
|
|
|
15.7
|
|
|
21.8
|
|
TOTAL
|
|
$
|
17.9
|
|
|
$
|
6.1
|
|
|
$
|
15.7
|
|
|
$
|
39.7
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
Contingent obligation – net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative instruments
|
|
—
|
|
|
3.8
|
|
|
1.5
|
|
|
5.3
|
|
TOTAL
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
1.5
|
|
|
$
|
5.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recurring Fair Value Measurements
|
|
As of December 31, 2018
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
ASSETS:
|
|
|
|
|
|
|
|
|
Cash equivalents
|
|
$
|
7.5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
7.5
|
|
Trust assets (1)
|
|
0.1
|
|
|
—
|
|
|
—
|
|
|
0.1
|
|
Surety bonds
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2.1
|
|
Derivative instruments
|
|
—
|
|
|
3.2
|
|
|
5.0
|
|
|
8.2
|
|
TOTAL
|
|
$
|
9.7
|
|
|
$
|
3.2
|
|
|
$
|
5.0
|
|
|
$
|
17.9
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
|
|
|
Contingent obligation – net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Derivative instruments
|
|
—
|
|
|
2.0
|
|
|
0.5
|
|
|
2.5
|
|
TOTAL
|
|
$
|
—
|
|
|
$
|
2.0
|
|
|
$
|
0.5
|
|
|
$
|
2.5
|
|
|
|
|
|
|
|
|
|
|
(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 following section describes the valuation techniques and inputs used for fair value measurements categorized within Level 2 or Level 3 of the fair value hierarchy:
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
Level 2 and Level 3 Fair Value Measurements:
|
Asset / Liability
|
|
Level
|
|
Valuation Techniques
|
|
Inputs
|
LME forward financial sales contracts - ST
|
|
2
|
|
Discounted cash flows
|
|
Quoted LME forward market
|
LME forward financial sales contracts - LT
|
|
3
|
|
Discounted cash flows
|
|
Quoted LME forward market, discount rate
|
MWP forward financial sales contracts
|
|
2
|
|
Discounted cash flows
|
|
Quoted MWP forward market
|
Fixed for floating swaps
|
|
2
|
|
Discounted cash flows
|
|
Quoted LME forward market, quoted MWP forward market
|
Nord Pool Power price swaps
|
|
2
|
|
Discounted cash flows
|
|
Quoted Nord Pool forward market
|
FX swaps
|
|
2
|
|
Discounted cash flows
|
|
Euro/USD forward exchange rate
|
Contingent obligation
|
|
3
|
|
Discounted cash flows
|
|
Quoted LME forward market, management’s estimates of the LME forward market prices for periods beyond the quoted periods, management’s estimates of future level of operations
|
Hawesville L4 power price swaps
|
|
3
|
|
Discounted cash flows
|
|
Quoted Indy hub forward market, management's estimates of the locational marginal prices during the terms of the contracts
|
|
|
6.
|
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 during the period. Diluted EPS amounts assume the issuance of common stock for all potentially dilutive securities.
The following table shows the basic and diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three months ended September 30,
|
|
2019
|
|
2018
|
|
Net Income (Loss)
|
|
Shares (in millions)
|
|
Per Share
|
|
Net Income (Loss)
|
|
Shares (in millions)
|
|
Per Share
|
Net income (loss)
|
$
|
(20.7
|
)
|
|
|
|
|
|
$
|
(20.3
|
)
|
|
|
|
|
Amount allocated to common stockholders
|
100.0
|
%
|
|
|
|
|
|
100.0
|
%
|
|
|
|
|
Basic and diluted EPS(1)
|
$
|
(20.7
|
)
|
|
88.9
|
|
|
$
|
(0.23
|
)
|
|
$
|
(20.3
|
)
|
|
87.6
|
|
|
$
|
(0.23
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the nine months ended September 30,
|
|
2019
|
|
2018
|
|
Net Income (Loss)
|
|
Shares (in millions)
|
|
Per Share
|
|
Net Income (Loss)
|
|
Shares
(in millions)
|
|
Per Share
|
Net income (loss)
|
$
|
(76.0
|
)
|
|
|
|
|
|
$
|
(1.2
|
)
|
|
|
|
|
Amount allocated to common stockholders
|
100.0
|
%
|
|
|
|
|
|
100.0
|
%
|
|
|
|
|
Basic and diluted EPS(1)
|
$
|
(76.0
|
)
|
|
88.6
|
|
|
$
|
(0.86
|
)
|
|
$
|
(1.2
|
)
|
|
87.6
|
|
|
$
|
(0.01
|
)
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
Securities excluded from the calculation of diluted EPS (in millions)(1):
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Share-based compensation
|
0.7
|
|
|
1.3
|
|
|
0.6
|
|
|
1.4
|
|
(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 anti-dilutive effect on earnings (loss) per share.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
Common Stock
As of September 30, 2019 and December 31, 2018, we had 195,000,000 shares of common stock, $0.01 par value per share, authorized under our Restated Certificate of Incorporation, of which 96,080,288 shares were issued and 88,893,767 shares were outstanding at September 30, 2019; 95,289,961 shares were issued and 88,103,440 shares were outstanding at December 31, 2018.
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.
Preferred Stock
As of September 30, 2019 and December 31, 2018, we had 5,000,000 shares of preferred stock, $0.01 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. At September 30, 2019 and December 31, 2018, there were 68,575 and 71,967 shares of Series A Convertible Preferred Stock outstanding, respectively, and held by Glencore.
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 stock for each share of preferred stock.
The Common and Preferred Stock table below contains additional information about preferred stock conversions during the nine months ended September 30, 2019 and 2018.
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
|
|
Common stock
|
Common and Preferred Stock Activity (in shares):
|
Series A convertible
|
|
Treasury
|
|
Outstanding
|
Beginning balance as of December 31, 2018
|
71,967
|
|
|
7,186,521
|
|
|
88,103,440
|
|
Conversion of convertible preferred stock
|
(3,392
|
)
|
|
—
|
|
|
339,166
|
|
Issuance for share-based compensation plans
|
—
|
|
|
—
|
|
|
451,161
|
|
Ending balance as of September 30, 2019
|
68,575
|
|
|
7,186,521
|
|
|
88,893,767
|
|
|
|
|
|
|
|
Beginning balance as of December 31, 2017
|
74,364
|
|
|
7,186,521
|
|
|
87,544,777
|
|
Conversion of convertible preferred stock
|
(272
|
)
|
|
—
|
|
|
27,263
|
|
Issuance for share-based compensation plans
|
—
|
|
|
—
|
|
|
36,266
|
|
Ending balance as of September 30, 2018
|
74,092
|
|
|
7,186,521
|
|
|
87,608,306
|
|
Stock Repurchase Program
In 2011, our Board of Directors authorized a $60.0 million common stock repurchase program and during the first quarter of 2015, our Board of Directors increased the size of the program by $70.0 million. Under the program, Century is authorized to repurchase up to $130.0 million of our outstanding shares of common stock, from time to time, on the open market at prevailing market prices, in block trades or otherwise. The timing and amount of any shares repurchased will be determined by our management based on its evaluation of market conditions, the trading price of our common stock and other factors. The stock repurchase program may be suspended or discontinued 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 as contributions to our employee benefit plans and for the conversion of convertible preferred stock. When shares are reissued, we use an average cost method for determining cost. The difference between the cost of the shares and the reissuance price is added to or deducted from additional paid-in capital.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
Through September 30, 2019, we had repurchased 7,186,521 shares of common stock for an aggregate purchase price of $86.3 million. We have made no share repurchases since April 2015 and we have $43.7 million remaining under the repurchase program authorization as of September 30, 2019.
We recorded an income tax benefit of $1.3 million and tax expense of $1.7 million for the three months ended September 30, 2019 and September 30, 2018, respectively. For the nine months ended September 30, 2019 and 2018, we recorded an income tax benefit of $5.7 million and tax expense of $3.0 million, respectively, which primarily consisted of tax impacts from foreign operations in each period.
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 accounting requirements for income taxes in interim periods, after consideration of our valuation allowance, causes a significant variation in the typical relationship between income tax expense/benefit and pre-tax accounting income/loss.
As of September 30, 2019, 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.
On December 22, 2017, the President of the United States signed into law tax reform legislation (informally known as the Tax Cuts and Jobs Act (the "Act" or "Tax Act")) that made significant changes to various areas of U.S. federal income tax law. On January 1, 2019, the Company adopted ASU 2018-02, "Income Statement-Reporting Comprehensive Income (Topic 220), Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income," which provides for the reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from the Tax Act. In accordance with the provisions of the ASU, $1.3 million of stranded tax effects related to the Tax Act were reclassified from accumulated other comprehensive loss to retained earnings in the first quarter of 2019. This reclassification includes the impact of the change in the federal corporate income tax rate and the related federal benefit of state taxes.
The Company’s accounting policy with respect to releasing income tax effects from accumulated other comprehensive income is to apply a security by security approach whereby the tax effects are measured based on the change in the unrealized gains or losses reflected in other comprehensive loss.
Inventories consist of the following:
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
Raw materials
|
$
|
88.4
|
|
|
$
|
100.7
|
|
Work-in-process
|
50.7
|
|
|
49.5
|
|
Finished goods
|
36.2
|
|
|
47.3
|
|
Operating and other supplies
|
147.0
|
|
|
146.3
|
|
Total inventories
|
$
|
322.3
|
|
|
$
|
343.8
|
|
Inventories are stated at the lower of cost or Net Realizable Value ("NRV") using the first-in, first-out ("FIFO") or the weighted average cost method.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
Debt classified as current liabilities:
|
|
|
|
Term loan - current portion(1), interest payable monthly
|
$
|
15.0
|
|
|
$
|
—
|
|
Hancock County industrial revenue bonds ("IRBs") due April 1, 2028, interest payable quarterly (variable interest rates (not to exceed 12%)) (2)
|
7.8
|
|
|
7.8
|
|
U.S. revolving credit facility (3)
|
0.4
|
|
|
23.3
|
|
Debt classified as non-current liabilities:
|
|
|
|
7.5% senior secured notes due June 1, 2021, net of debt discount of $1.0 million and $1.4 million, respectively, interest payable semiannually
|
249.0
|
|
|
248.6
|
|
Term loan - less current portion(1), interest payable monthly
|
25.0
|
|
|
—
|
|
Total
|
$
|
297.2
|
|
|
$
|
279.7
|
|
(1) See "Hawesville Term Loan" paragraph below. At September 30, 2019, the applicable interest rate was LIBOR of 2.16% plus margin of 5.375%.
(2) 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 September 30, 2019 was 1.77%.
(3) The U.S. revolving credit facility is classified as a current liability because we repay amounts outstanding and reborrow funds based on our working capital requirements. Borrowings bear interest at our option of either LIBOR or a base rate, plus, in each case, an applicable interest margin. At September 30, 2019, all outstanding borrowings were subject to a rate of 5.25%.
7.5% Notes due 2021
General. On June 4, 2013, we issued $250.0 million 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 $249.0 million and $247.9 million, as of September 30, 2019 and December 31, 2018, 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.
Hawesville Term Loan
On April 29, 2019, we entered into a loan agreement with Glencore pursuant to which the Company borrowed $40.0 million. Borrowings under the Hawesville Term Loan are being used to partially finance the second phase of the Hawesville restart project. The Hawesville Term Loan matures on December 31, 2021, and is to be repaid in twenty-four (24) equal monthly installments of principal, beginning on January 31, 2020. The Hawesville Term Loan bears interest, due monthly beginning at inception, at a floating rate equal to LIBOR plus 5.375% and is not secured by any collateral.
U.S. Revolving Credit Facility
We and certain of our direct and indirect domestic subsidiaries have a senior secured revolving credit facility with a syndicate of lenders (the "U.S. revolving credit facility"). The U.S. revolving credit facility provides for borrowings of up to $175.0 million in the aggregate, including up to $110.0 million under a letter of credit sub-facility, and also includes an uncommitted accordion feature whereby borrowers may increase the capacity of the U.S. revolving credit facility by up to $50.0 million, subject to agreement with the lenders.
The U.S. revolving credit facility matures on the earlier of May 2023 or six months before the stated maturity of our outstanding senior secured notes. Any letters of credit issued and outstanding under the U.S. revolving credit facility reduce our borrowing availability on a dollar-for-dollar basis. At September 30, 2019, there were $0.4 million in outstanding
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
borrowings under our U.S. revolving credit facility. Principal payments, if any, are due upon maturity of the U.S. revolving credit facility.
|
|
|
|
|
Status of our U.S. revolving credit facility:
|
September 30, 2019
|
Credit facility maximum amount
|
$
|
175.0
|
|
Borrowing availability
|
169.7
|
|
Outstanding letters of credit issued
|
41.7
|
|
Outstanding borrowings
|
0.4
|
|
Borrowing availability, net of outstanding letters of credit and borrowings
|
127.6
|
|
Iceland Revolving Credit Facility
Our wholly-owned subsidiary, Nordural Grundartangi ehf ("Grundartangi"), has a $50.0 million revolving credit facility agreement with Landsbankinn hf., dated November 2013, as amended (the "Iceland revolving credit facility"). Under the terms of the Iceland revolving credit facility, when Grundartangi borrows funds it will designate a repayment date, which may be any date prior to the maturity of the Iceland revolving credit facility. The Iceland revolving credit facility has a term through November 2022.
|
|
|
|
|
Status of our Iceland revolving credit facility:
|
September 30, 2019
|
Credit facility maximum amount
|
$
|
50.0
|
|
Borrowing availability
|
50.0
|
|
Outstanding letters of credit issued
|
—
|
|
Outstanding borrowings
|
—
|
|
Borrowing availability, net of borrowings
|
50.0
|
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
|
|
11.
|
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. 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.
Vernon
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 U.S. District Court for the District of Delaware ordered the stay lifted and reopened the case. Discovery was completed in the third quarter of 2019, and the matter is currently in the summary judgment phase. Trial is currently set to begin in March 2020. At this stage, we cannot predict the ultimate outcome of this action or estimate a range of reasonably possible losses related to this matter.
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. 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.
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. On February 28, 2018, plaintiffs in both cases filed a Motion for Voluntary Dismissal of Century without prejudice to refiling. At this time, it is not possible to predict the ultimate outcome of or to estimate a range of reasonably 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
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
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 ("CAWV Retirees"), 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.
On August 18, 2017, the District Court for the Southern District of West Virginia approved a settlement agreement in respect of these actions. Under the terms of the settlement agreement, CAWV agreed to make payments into a trust for the benefit of the CAWV Retirees in the aggregate amount of $23.0 million over the course of 10 years. Upon approval of the settlement, we paid $5.0 million to the aforementioned trust in September 2017 and recognized a gain of $5.5 million to arrive at the then net present value of the liability of $12.5 million. CAWV has agreed to pay the remaining amounts under the settlement agreement in annual increments of $2.0 million for nine years. As of September 30, 2019, $2.0 million had been recorded in other current liabilities and $8.5 million was recorded in other liabilities.
PBGC Settlement
In 2013, we entered into a settlement agreement with the Pension Benefit Guarantee Corporation ("PBGC") regarding an alleged "cessation of operations" at our Ravenswood facility. Pursuant to the terms of the agreement, we agreed to make additional contributions (above any minimum required contributions) to our defined benefit pension plans totaling approximately $17.4 million. Under certain circumstances, in periods of lower primary aluminum prices relative to our cost of operations, we are able to defer one or more of these payments provided that we provide the PBGC with acceptable security for such deferred payments. We did not make any contributions for the nine month periods ended September 30, 2019 and 2018. We have elected to defer certain payments under the PBGC agreement and have provided the PBGC with the appropriate security. 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 2020. Each of these agreements provide for automatic extension on a year-to-year basis unless a one-year notice is given.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
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 2020. Each of these agreements provides for automatic extension on a year-to-year basis 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 cost-based industrial rate and 75% of the Mt. Holly load is sourced from a supplier 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, 2020 and may be terminated by Mt. Holly on 120 days' notice. The agreement with the other power supplier has a term through December 31, 2020 and may be terminated by Mt. Holly on 60 days’ notice.
Grundartangi
Grundartangi has power purchase agreements for approximately 525 MW with HS Orka hf ("HS"), Landsvirkjun and Orkuveita Reykjavikur ("OR") to provide power to its Grundartangi smelter. These power purchase agreements expire on various dates from 2023 through 2036 (subject to extension). The power purchase agreements with HS and OR both provide power at LME-based variable rates for the duration of these agreements. The power purchase agreement with Landsvirkjun for 161 MW provides power at LME-based variable rates through October 2019 and at rates linked to the Nord Pool power market from November 2019 through the expiration of the agreement on December 31, 2023.
Helguvik
Nordural Helguvik ehf ("Helguvik") has a power purchase agreement with OR to provide a portion of the power requirements to the Helguvik project. The agreement would 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 agreement. The first phase of power under the OR purchase agreement (approximately 47.5 MW) became available in the fourth quarter of 2011 and is currently being utilized at Grundartangi. The agreement contains certain conditions to OR’s obligations with respect to the remaining phases and OR has alleged that certain of these conditions have not been satisfied.
Other Commitments and Contingencies
Labor Commitments
The bargaining unit employees at our Grundartangi, Vlissingen, Hawesville and Sebree facilities are represented by labor unions, representing approximately 65% of our total workforce.
Approximately 87% 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") by a labor agreement that is effective through December 1, 2020.
Approximately 56% of our U.S. based work force is represented by USW. The labor agreement for Hawesville employees is effective through April 1, 2020. Century Sebree's labor agreement with the USW for its employees is effective through October 28, 2023. Mt. Holly employees are not represented by a labor union.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
|
|
12.
|
Components of Accumulated Other Comprehensive Loss
|
|
|
|
|
|
|
|
|
|
Components of AOCL:
|
September 30, 2019
|
|
December 31, 2018
|
Defined benefit plan liabilities
|
$
|
(104.3
|
)
|
|
$
|
(107.3
|
)
|
Unrealized loss on financial instruments
|
2.3
|
|
|
2.5
|
|
Other comprehensive loss before income tax effect
|
(102.0
|
)
|
|
(104.8
|
)
|
Income tax effect (1)
|
4.0
|
|
|
6.1
|
|
Accumulated other comprehensive loss
|
$
|
(98.0
|
)
|
|
$
|
(98.7
|
)
|
(1) The allocation of the income tax effect to the components of other comprehensive loss is as follows:
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
Defined benefit plan liabilities
|
$
|
4.5
|
|
|
$
|
6.6
|
|
Unrealized loss on financial instruments
|
(0.5
|
)
|
|
(0.5
|
)
|
The following table summarizes the changes in the accumulated balances for each component of AOCL:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defined benefit plan and other postretirement liabilities
|
|
Unrealized gain (loss) on financial instruments
|
|
Total, net of tax
|
Balance, July 1, 2019
|
$
|
(100.7
|
)
|
|
$
|
2.0
|
|
|
$
|
(98.7
|
)
|
Net amount reclassified to net income (loss)
|
0.7
|
|
|
0.0
|
|
|
0.7
|
|
Balance, September 30, 2019
|
$
|
(100.0
|
)
|
|
$
|
2.0
|
|
|
$
|
(98.0
|
)
|
|
|
|
|
|
|
Balance, July 1, 2018
|
$
|
(90.8
|
)
|
|
$
|
2.1
|
|
|
$
|
(88.7
|
)
|
Net amount reclassified to net income (loss)
|
0.1
|
|
|
0.0
|
|
|
0.1
|
|
Balance, September 30, 2018
|
$
|
(90.7
|
)
|
|
$
|
2.1
|
|
|
$
|
(88.7
|
)
|
|
|
|
|
|
|
Balance, December 31, 2018
|
$
|
(100.7
|
)
|
|
$
|
2.0
|
|
|
$
|
(98.7
|
)
|
Impact of ASU 2018-02*
|
(1.3
|
)
|
|
—
|
|
|
(1.3
|
)
|
Net amount reclassified to net income (loss)
|
2.1
|
|
|
(0.1
|
)
|
|
2.0
|
|
Balance, September 30, 2019
|
$
|
(100.0
|
)
|
|
$
|
2.0
|
|
|
$
|
(98.0
|
)
|
|
|
|
|
|
|
Balance, January 1, 2018
|
$
|
(93.8
|
)
|
|
$
|
2.1
|
|
|
$
|
(91.7
|
)
|
Net amount reclassified to net income (loss)
|
3.2
|
|
|
(0.1
|
)
|
|
3.1
|
|
Balance, September 30, 2018
|
$
|
(90.7
|
)
|
|
$
|
2.1
|
|
|
$
|
(88.7
|
)
|
*ASU 2018-02. See Note 8. Income Taxes for further information regarding our adoption of ASU 2018-02.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
Reclassifications out of AOCL were included in the consolidated statements of operations as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
AOCL Components
|
|
Location
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Defined benefit plan and other postretirement liabilities
|
|
Cost of goods sold
|
|
$
|
0.8
|
|
|
$
|
0.5
|
|
|
$
|
1.7
|
|
|
$
|
3.9
|
|
|
|
Selling, general and administrative expenses
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(0.9
|
)
|
|
(0.9
|
)
|
|
|
Other operating expense, net
|
|
0.5
|
|
|
0.4
|
|
|
2.1
|
|
|
1.3
|
|
|
|
Income tax effect
|
|
(0.3
|
)
|
|
(0.4
|
)
|
|
(0.8
|
)
|
|
(1.1
|
)
|
|
|
Net of tax
|
|
$
|
0.7
|
|
|
$
|
0.1
|
|
|
$
|
2.1
|
|
|
$
|
3.2
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on financial instruments
|
|
Cost of goods sold
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
|
Income tax effect
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
0.0
|
|
|
|
Net of tax
|
|
$
|
0.0
|
|
|
$
|
0.0
|
|
|
$
|
(0.1
|
)
|
|
$
|
(0.1
|
)
|
|
|
13.
|
Components of Net Periodic Benefit Cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Service cost
|
$
|
1.0
|
|
|
$
|
1.1
|
|
|
$
|
2.5
|
|
|
$
|
3.2
|
|
Interest cost
|
3.3
|
|
|
3.1
|
|
|
10.0
|
|
|
9.2
|
|
Expected return on plan assets
|
(4.5
|
)
|
|
(5.3
|
)
|
|
(13.7
|
)
|
|
(15.8
|
)
|
Amortization of prior service costs
|
0.0
|
|
|
0.0
|
|
|
0.6
|
|
|
0.1
|
|
Amortization of net loss
|
1.6
|
|
|
1.3
|
|
|
4.9
|
|
|
3.9
|
|
Net periodic benefit cost
|
$
|
1.4
|
|
|
$
|
0.2
|
|
|
$
|
4.3
|
|
|
$
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Postretirement Benefits ("OPEB")
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Service cost
|
$
|
0.0
|
|
|
$
|
0.1
|
|
|
$
|
0.8
|
|
|
$
|
0.2
|
|
Interest cost
|
1.1
|
|
|
1.0
|
|
|
3.4
|
|
|
0.4
|
|
Amortization of prior service cost
|
(1.2
|
)
|
|
(1.8
|
)
|
|
(4.3
|
)
|
|
(5.1
|
)
|
Amortization of net loss
|
0.6
|
|
|
1.0
|
|
|
1.7
|
|
|
5.4
|
|
Net periodic benefit cost
|
$
|
0.5
|
|
|
$
|
0.3
|
|
|
$
|
1.6
|
|
|
$
|
0.9
|
|
As of September 30, 2019, we had an open position of 96,506 tonnes related to LME forward financial sales contracts, some of which are with Glencore, to fix the forward LME price. These contracts are expected to settle monthly, between November 2019 and December 2024. We also have an open position of 139,250 tonnes related to Midwest Premium ("MWP")
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
forward financial sales contracts to fix the forward MWP as of September 30, 2019. These contracts are expected to settle monthly through December 2020.
In 2019, we entered into financial contracts to fix the forward price for power related to the expected production of Line 4 at Hawesville for the period of January 2020 through December 2020 ("Hawesville L4 power price swaps") of 790,560 MWh. The Hawesville L4 power price swaps are expected to settle monthly during the term of the contract.
We have financial contracts with various counterparties to offset fixed price sales arrangements with certain of our customers (“fixed for floating swaps”) to remain exposed to the LME and MWP price. As of September 30, 2019, we had open positions related to such arrangements of 8,793 tonnes settling at various dates through December 2020.
In 2017, we entered into financial contracts to fix the forward price of approximately 4% of Grundartangi's total power requirements for the period November 2019 through December 2020 (“Nord Pool power price swaps”). As of September 30, 2019, we had an open position of 256,200 MWh related to the Nord Pool power price swaps. Because the Nord Pool power price swaps are settled in euros, we entered into financial contracts to hedge the risk of fluctuations associated with the euro ("FX swaps"). As of September 30, 2019, we had open positions related to the FX swaps for €5.6 million that settle monthly from November 2019 through December 2020.
The following table sets forth the Company's derivative assets and liabilities that were accounted for at fair value and not designated as cashflow hedges as of September 30, 2019 and December 31, 2018:
|
|
|
|
|
|
|
|
|
|
Asset Fair Value
|
|
September 30, 2019
|
|
December 31, 2018
|
Commodity contracts (1)
|
$
|
21.8
|
|
|
$
|
8.2
|
|
Foreign exchange contracts (2)
|
—
|
|
|
—
|
|
Total
|
$
|
21.8
|
|
|
$
|
8.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liability Fair Value
|
|
September 30, 2019
|
|
December 31, 2018
|
Commodity contracts (1)
|
$
|
4.4
|
|
|
$
|
2.2
|
|
Foreign exchange contracts (2)
|
0.9
|
|
|
0.3
|
|
Total
|
$
|
5.3
|
|
|
$
|
2.5
|
|
|
|
|
|
(1) Commodity contracts reflect our outstanding LME forward financial sales contracts, MWP forward financial sales contracts, Hawesville L4 power price swaps, fixed for floating swaps, and Nord Pool power price swaps.
(2) Foreign exchange contracts reflect our outstanding FX swaps.
The following table summarizes the net (loss) gain on forward and derivative contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30,
|
|
Nine months ended September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Commodity contracts(3)
|
$
|
10.6
|
|
|
$
|
1.0
|
|
|
$
|
11.2
|
|
|
$
|
3.0
|
|
Foreign exchange contracts
|
(0.3
|
)
|
|
(0.2
|
)
|
|
(0.5
|
)
|
|
(0.2
|
)
|
Total
|
$
|
10.3
|
|
|
$
|
0.8
|
|
|
$
|
10.7
|
|
|
$
|
2.8
|
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions, except share and per share amounts)
(Unaudited)
(3) For the three months ended September 30, 2019 and 2018, $1.9 million and $0.0 million of the net (loss) gain, respectively, was with Glencore. For the nine months ended September 30, 2019 and 2018, $2.7 million and $(0.1) million of the net (loss) gain, respectively, was with Glencore.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
15.
|
Condensed Consolidating Financial Information
|
Our 2021 Notes are guaranteed by each of our material existing and future domestic subsidiaries (the "Guarantor Subsidiaries"), except for Nordural US LLC, Century Aluminum Development LLC and Century Aluminum of West Virginia, Inc. 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, Century Aluminum Development LLC and Century Aluminum of West Virginia, Inc., 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 the three and nine months ended September 30, 2019 and 2018, condensed consolidating balance sheets as of September 30, 2019 and 2018 and the condensed consolidating statements of cash flows for the nine months ended September 30, 2019 and 2018 present separate results for Century, the Guarantor Subsidiaries, the Non-Guarantor Subsidiaries, consolidating adjustments and total consolidated amounts.
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statements of Comprehensive Income (Loss)
|
For the three months ended September 30, 2019
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
NET SALES:
|
|
|
|
|
|
|
|
|
|
Related parties
|
$
|
—
|
|
|
$
|
132.9
|
|
|
$
|
149.4
|
|
|
$
|
—
|
|
|
$
|
282.3
|
|
Other customers
|
—
|
|
|
144.2
|
|
|
11.5
|
|
|
—
|
|
|
155.7
|
|
Total net sales
|
—
|
|
|
277.1
|
|
|
160.9
|
|
|
—
|
|
|
438.0
|
|
Cost of goods sold
|
—
|
|
|
288.3
|
|
|
163.4
|
|
|
—
|
|
|
451.7
|
|
Gross profit (loss)
|
—
|
|
|
(11.2
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
(13.7
|
)
|
Selling, general and administrative expenses
|
11.3
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
11.6
|
|
Other operating (income) expense - net
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
(0.1
|
)
|
Operating income (loss)
|
(11.3
|
)
|
|
(11.2
|
)
|
|
(2.7
|
)
|
|
—
|
|
|
(25.2
|
)
|
Interest expense - term loan
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
Interest expense
|
(5.1
|
)
|
|
(0.4
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(5.6
|
)
|
Intercompany interest
|
8.8
|
|
|
2.6
|
|
|
(11.4
|
)
|
|
—
|
|
|
—
|
|
Interest income
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
|
0.2
|
|
Net gain (loss) on forward and derivative contracts
|
10.2
|
|
|
0.3
|
|
|
(0.2
|
)
|
|
—
|
|
|
10.3
|
|
Other income (expense) - net
|
0.1
|
|
|
(0.1
|
)
|
|
(0.9
|
)
|
|
—
|
|
|
(0.9
|
)
|
Income (loss) before income taxes and equity in earnings of joint ventures
|
2.0
|
|
|
(8.8
|
)
|
|
(15.2
|
)
|
|
—
|
|
|
(22.0
|
)
|
Income tax benefit (expense)
|
0.7
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
1.3
|
|
Income (loss) before equity in earnings of joint ventures
|
2.7
|
|
|
(8.8
|
)
|
|
(14.6
|
)
|
|
—
|
|
|
(20.7
|
)
|
Equity in earnings (loss) of joint ventures
|
(23.4
|
)
|
|
3.4
|
|
|
(0.1
|
)
|
|
20.1
|
|
|
—
|
|
Net income (loss)
|
(20.7
|
)
|
|
(5.4
|
)
|
|
(14.7
|
)
|
|
20.1
|
|
|
(20.7
|
)
|
Other comprehensive income before income tax effect
|
1.0
|
|
|
0.8
|
|
|
0.5
|
|
|
(1.3
|
)
|
|
1.0
|
|
Income tax effect
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
Other comprehensive income
|
0.7
|
|
|
0.8
|
|
|
0.5
|
|
|
(1.3
|
)
|
|
0.7
|
|
Total comprehensive income (loss)
|
$
|
(20.0
|
)
|
|
$
|
(4.6
|
)
|
|
$
|
(14.2
|
)
|
|
$
|
18.8
|
|
|
$
|
(20.0
|
)
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statements of Comprehensive Income (Loss)
|
For the three months ended September 30, 2018
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
NET SALES:
|
|
|
|
|
|
|
|
|
|
Related parties
|
$
|
—
|
|
|
$
|
110.8
|
|
|
$
|
194.5
|
|
|
$
|
—
|
|
|
$
|
305.3
|
|
Other customers
|
—
|
|
|
175.8
|
|
|
0.7
|
|
|
—
|
|
|
176.5
|
|
Total net sales
|
—
|
|
|
286.6
|
|
|
195.2
|
|
|
—
|
|
|
481.8
|
|
Cost of goods sold
|
—
|
|
|
301.5
|
|
|
192.1
|
|
|
—
|
|
|
493.6
|
|
Gross profit (loss)
|
—
|
|
|
(14.9
|
)
|
|
3.1
|
|
|
—
|
|
|
(11.8
|
)
|
Selling, general and administrative expenses
|
8.4
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
8.8
|
|
Helguvik (gains) losses
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
(4.5
|
)
|
Other operating (income) expense - net
|
—
|
|
|
—
|
|
|
(0.5
|
)
|
|
—
|
|
|
(0.5
|
)
|
Operating income (loss)
|
(8.4
|
)
|
|
(14.9
|
)
|
|
7.7
|
|
|
—
|
|
|
(15.6
|
)
|
Interest expense
|
(5.0
|
)
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(5.6
|
)
|
Intercompany interest
|
9.3
|
|
|
2.4
|
|
|
(11.7
|
)
|
|
—
|
|
|
—
|
|
Interest income
|
0.1
|
|
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.4
|
|
Net gain (loss) on forward and derivative contracts
|
(0.2
|
)
|
|
0.4
|
|
|
0.6
|
|
|
—
|
|
|
0.8
|
|
Other income (expense) - net
|
—
|
|
|
—
|
|
|
0.7
|
|
|
—
|
|
|
0.7
|
|
Income (loss) before income taxes and equity in earnings of joint ventures
|
(4.2
|
)
|
|
(12.5
|
)
|
|
(2.6
|
)
|
|
—
|
|
|
(19.3
|
)
|
Income tax (expense) benefit
|
0.5
|
|
|
—
|
|
|
(2.2
|
)
|
|
—
|
|
|
(1.7
|
)
|
Income (loss) before equity in earnings of joint ventures
|
(3.7
|
)
|
|
(12.5
|
)
|
|
(4.8
|
)
|
|
—
|
|
|
(21.0
|
)
|
Equity in earnings (loss) of joint ventures
|
(16.6
|
)
|
|
2.8
|
|
|
0.7
|
|
|
13.8
|
|
|
0.7
|
|
Net income (loss)
|
(20.3
|
)
|
|
(9.7
|
)
|
|
(4.1
|
)
|
|
13.8
|
|
|
(20.3
|
)
|
Other comprehensive income (loss) before income tax effect
|
0.5
|
|
|
0.5
|
|
|
0.4
|
|
|
(0.9
|
)
|
|
0.5
|
|
Income tax effect
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.4
|
)
|
Other comprehensive income
|
0.1
|
|
|
0.5
|
|
|
0.4
|
|
|
(0.9
|
)
|
|
0.1
|
|
Total comprehensive income (loss)
|
$
|
(20.2
|
)
|
|
$
|
(9.2
|
)
|
|
$
|
(3.7
|
)
|
|
$
|
12.9
|
|
|
$
|
(20.2
|
)
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statements of Comprehensive Income (Loss)
|
For the nine months ended September 30, 2019
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
NET SALES:
|
|
|
|
|
|
|
|
|
|
Related parties
|
$
|
—
|
|
|
$
|
432.8
|
|
|
$
|
465.9
|
|
|
$
|
—
|
|
|
$
|
898.7
|
|
Other customers
|
—
|
|
|
479.1
|
|
|
23.4
|
|
|
—
|
|
|
502.5
|
|
Total net sales
|
—
|
|
|
911.9
|
|
|
489.3
|
|
|
—
|
|
|
1,401.2
|
|
Cost of goods sold
|
—
|
|
|
921.5
|
|
|
510.3
|
|
|
—
|
|
|
1,431.8
|
|
Gross profit (loss)
|
—
|
|
|
(9.6
|
)
|
|
(21.0
|
)
|
|
—
|
|
|
(30.6
|
)
|
Selling, general and administrative expenses
|
36.9
|
|
|
—
|
|
|
1.3
|
|
|
—
|
|
|
38.2
|
|
Other operating (income) expense - net
|
—
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.4
|
|
Operating income (loss)
|
(36.9
|
)
|
|
(9.6
|
)
|
|
(22.7
|
)
|
|
—
|
|
|
(69.2
|
)
|
Interest expense - term loan
|
(1.3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.3
|
)
|
Interest expense
|
(15.9
|
)
|
|
(1.2
|
)
|
|
(0.2
|
)
|
|
—
|
|
|
(17.3
|
)
|
Intercompany interest
|
26.2
|
|
|
7.6
|
|
|
(33.8
|
)
|
|
—
|
|
|
—
|
|
Interest income
|
0.2
|
|
|
—
|
|
|
0.4
|
|
|
—
|
|
|
0.6
|
|
Net gain (loss) on forward and derivative contracts
|
10.3
|
|
|
1.0
|
|
|
(0.6
|
)
|
|
—
|
|
|
10.7
|
|
Other income (expense) - net
|
0.9
|
|
|
(2.0
|
)
|
|
(0.5
|
)
|
|
—
|
|
|
(1.6
|
)
|
Income (loss) before income taxes and equity in earnings of joint ventures
|
(16.5
|
)
|
|
(4.2
|
)
|
|
(57.4
|
)
|
|
—
|
|
|
(78.1
|
)
|
Income tax benefit (expense)
|
1.6
|
|
|
—
|
|
|
4.1
|
|
|
—
|
|
|
5.7
|
|
Income (loss) before equity in earnings of joint ventures
|
(14.9
|
)
|
|
(4.2
|
)
|
|
(53.3
|
)
|
|
—
|
|
|
(72.4
|
)
|
Loss on sale of BHH
|
—
|
|
|
—
|
|
|
(4.3
|
)
|
|
—
|
|
|
(4.3
|
)
|
Equity in earnings (loss) of joint ventures
|
(61.1
|
)
|
|
3.1
|
|
|
0.7
|
|
|
58.0
|
|
|
0.7
|
|
Net income (loss)
|
(76.0
|
)
|
|
(1.1
|
)
|
|
(56.9
|
)
|
|
58.0
|
|
|
(76.0
|
)
|
Other comprehensive income (loss) before income tax effect
|
2.8
|
|
|
1.6
|
|
|
2.0
|
|
|
(3.6
|
)
|
|
2.8
|
|
Income tax effect
|
(0.8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.8
|
)
|
Other comprehensive income
|
2.0
|
|
|
1.6
|
|
|
2.0
|
|
|
(3.6
|
)
|
|
2.0
|
|
Total comprehensive income (loss)
|
$
|
(74.0
|
)
|
|
$
|
0.5
|
|
|
$
|
(54.9
|
)
|
|
$
|
54.4
|
|
|
$
|
(74.0
|
)
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statements of Comprehensive Income (Loss)
|
For the nine months ended September 30, 2018
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
NET SALES:
|
|
|
|
|
|
|
|
|
|
Related parties
|
$
|
—
|
|
|
$
|
315.1
|
|
|
$
|
569.1
|
|
|
$
|
—
|
|
|
$
|
884.2
|
|
Other customers
|
—
|
|
|
519.1
|
|
|
3.0
|
|
|
—
|
|
|
522.1
|
|
Total net sales
|
—
|
|
|
834.2
|
|
|
572.1
|
|
|
—
|
|
|
1,406.3
|
|
Cost of goods sold
|
—
|
|
|
821.1
|
|
|
548.8
|
|
|
—
|
|
|
1,369.9
|
|
Gross profit
|
—
|
|
|
13.1
|
|
|
23.3
|
|
|
—
|
|
|
36.4
|
|
Selling, general and administrative expenses
|
29.8
|
|
|
—
|
|
|
1.7
|
|
|
—
|
|
|
31.5
|
|
Helguvik (gains) losses
|
—
|
|
|
—
|
|
|
(4.5
|
)
|
|
—
|
|
|
(4.5
|
)
|
Other operating expense - net
|
—
|
|
|
—
|
|
|
0.0
|
|
|
—
|
|
|
0.0
|
|
Operating income (loss)
|
(29.8
|
)
|
|
13.1
|
|
|
26.1
|
|
|
—
|
|
|
9.4
|
|
Interest expense
|
(15.4
|
)
|
|
(1.2
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(16.7
|
)
|
Intercompany interest
|
27.4
|
|
|
7.0
|
|
|
(34.4
|
)
|
|
—
|
|
|
—
|
|
Interest income
|
0.3
|
|
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.3
|
|
Net gain (loss) on forward and derivative contracts
|
(0.2
|
)
|
|
1.1
|
|
|
1.9
|
|
|
—
|
|
|
2.8
|
|
Other income (expense) - net
|
0.6
|
|
|
(0.2
|
)
|
|
1.4
|
|
|
—
|
|
|
1.8
|
|
Income (loss) before income taxes and equity in earnings of joint ventures
|
(17.1
|
)
|
|
19.8
|
|
|
(4.1
|
)
|
|
—
|
|
|
(1.4
|
)
|
Income tax benefit expense
|
0.7
|
|
|
—
|
|
|
(3.7
|
)
|
|
—
|
|
|
(3.0
|
)
|
Income (loss) before equity in earnings of joint ventures
|
(16.4
|
)
|
|
19.8
|
|
|
(7.8
|
)
|
|
—
|
|
|
(4.4
|
)
|
Equity in earnings (loss) of joint ventures
|
15.2
|
|
|
(0.3
|
)
|
|
3.2
|
|
|
(14.9
|
)
|
|
3.2
|
|
Net income (loss)
|
(1.2
|
)
|
|
19.5
|
|
|
(4.6
|
)
|
|
(14.9
|
)
|
|
(1.2
|
)
|
Other comprehensive income (loss) before income tax effect
|
4.2
|
|
|
3.9
|
|
|
1.2
|
|
|
(5.1
|
)
|
|
4.2
|
|
Income tax effect
|
(1.1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1.1
|
)
|
Other comprehensive income
|
3.1
|
|
|
3.9
|
|
|
1.2
|
|
|
(5.1
|
)
|
|
3.1
|
|
Total comprehensive income (loss)
|
$
|
1.9
|
|
|
$
|
23.4
|
|
|
$
|
(3.4
|
)
|
|
$
|
(20.0
|
)
|
|
$
|
1.9
|
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Balance Sheet
|
As of September 30, 2019
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
Cash & cash equivalents
|
$
|
1.5
|
|
|
$
|
—
|
|
|
$
|
21.0
|
|
|
$
|
—
|
|
|
$
|
22.5
|
|
Restricted cash
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
Accounts receivable - net
|
—
|
|
|
70.6
|
|
|
11.3
|
|
|
—
|
|
|
81.9
|
|
Due from affiliates
|
—
|
|
|
22.9
|
|
|
0.4
|
|
|
—
|
|
|
23.3
|
|
Inventories
|
—
|
|
|
199.0
|
|
|
123.3
|
|
|
—
|
|
|
322.3
|
|
Prepaid and other current assets
|
12.3
|
|
|
0.9
|
|
|
10.1
|
|
|
—
|
|
|
23.3
|
|
Total current assets
|
13.8
|
|
|
294.2
|
|
|
166.1
|
|
|
—
|
|
|
474.1
|
|
Property, plant and equipment - net
|
18.1
|
|
|
326.2
|
|
|
605.8
|
|
|
—
|
|
|
950.1
|
|
Investment in subsidiaries
|
625.1
|
|
|
57.7
|
|
|
—
|
|
|
(682.8
|
)
|
|
—
|
|
Leases - right of use assets
|
5.9
|
|
|
1.4
|
|
|
16.9
|
|
|
—
|
|
|
24.2
|
|
Due from affiliates - long term
|
742.2
|
|
|
526.6
|
|
|
5.3
|
|
|
(1,272.7
|
)
|
|
1.4
|
|
Other assets
|
35.4
|
|
|
4.2
|
|
|
2.4
|
|
|
—
|
|
|
42.0
|
|
TOTAL
|
$
|
1,440.5
|
|
|
$
|
1,210.3
|
|
|
$
|
796.5
|
|
|
$
|
(1,955.5
|
)
|
|
$
|
1,491.8
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable, trade
|
$
|
2.9
|
|
|
$
|
86.3
|
|
|
$
|
22.8
|
|
|
$
|
—
|
|
|
$
|
112.0
|
|
Due to affiliates
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Accrued and other current liabilities
|
26.7
|
|
|
25.1
|
|
|
14.3
|
|
|
—
|
|
|
66.1
|
|
Accrued employee benefits costs
|
1.9
|
|
|
8.3
|
|
|
0.8
|
|
|
—
|
|
|
11.0
|
|
Term loan - current
|
15.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15.0
|
|
Revolving credit facility
|
0.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.4
|
|
Industrial revenue bonds
|
—
|
|
|
7.8
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
Total current liabilities
|
46.9
|
|
|
127.5
|
|
|
37.9
|
|
|
—
|
|
|
212.3
|
|
Senior notes payable
|
249.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
249.0
|
|
Term loan - less current portion
|
25.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25.0
|
|
Accrued pension benefits costs - less current portion
|
22.3
|
|
|
20.7
|
|
|
5.4
|
|
|
—
|
|
|
48.4
|
|
Accrued postretirement benefits costs - less current portion
|
1.0
|
|
|
98.6
|
|
|
1.6
|
|
|
—
|
|
|
101.2
|
|
Due to affiliates - long term
|
395.2
|
|
|
295.4
|
|
|
582.1
|
|
|
(1,272.7
|
)
|
|
—
|
|
Other liabilities
|
5.9
|
|
|
22.0
|
|
|
17.5
|
|
|
—
|
|
|
45.4
|
|
Leases - right of use liabilities
|
5.6
|
|
|
0.2
|
|
|
16.1
|
|
|
—
|
|
|
21.9
|
|
Deferred taxes
|
(0.3
|
)
|
|
1.8
|
|
|
97.2
|
|
|
—
|
|
|
98.7
|
|
Total noncurrent liabilities
|
703.7
|
|
|
438.7
|
|
|
719.9
|
|
|
(1,272.7
|
)
|
|
589.6
|
|
Preferred stock
|
0.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.0
|
|
Common stock
|
1.0
|
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
1.0
|
|
Other shareholders' equity
|
688.9
|
|
|
644.1
|
|
|
38.6
|
|
|
(682.7
|
)
|
|
688.9
|
|
Total shareholders' equity
|
689.9
|
|
|
644.1
|
|
|
38.7
|
|
|
(682.8
|
)
|
|
689.9
|
|
TOTAL
|
$
|
1,440.5
|
|
|
$
|
1,210.3
|
|
|
$
|
796.5
|
|
|
$
|
(1,955.5
|
)
|
|
$
|
1,491.8
|
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Balance Sheet
|
As of December 31, 2018
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
Cash & cash equivalents
|
$
|
0.1
|
|
|
$
|
—
|
|
|
$
|
38.8
|
|
|
$
|
—
|
|
|
$
|
38.9
|
|
Restricted cash
|
—
|
|
|
0.8
|
|
|
—
|
|
|
—
|
|
|
0.8
|
|
Accounts receivable - net
|
0.5
|
|
|
81.8
|
|
|
0.2
|
|
|
—
|
|
|
82.5
|
|
Due from affiliates
|
—
|
|
|
13.1
|
|
|
9.6
|
|
|
—
|
|
|
22.7
|
|
Inventories
|
—
|
|
|
210.7
|
|
|
133.1
|
|
|
—
|
|
|
343.8
|
|
Prepaid and other current assets
|
6.4
|
|
|
3.4
|
|
|
8.2
|
|
|
—
|
|
|
18.0
|
|
Total current assets
|
7.0
|
|
|
309.8
|
|
|
189.9
|
|
|
—
|
|
|
506.7
|
|
Property, plant and equipment - net
|
20.6
|
|
|
320.7
|
|
|
626.0
|
|
|
—
|
|
|
967.3
|
|
Investment in subsidiaries
|
668.3
|
|
|
54.5
|
|
|
—
|
|
|
(722.8
|
)
|
|
—
|
|
Due from affiliates - long term
|
751.7
|
|
|
517.6
|
|
|
7.2
|
|
|
(1,276.5
|
)
|
|
—
|
|
Other assets
|
29.8
|
|
|
2.1
|
|
|
31.6
|
|
|
—
|
|
|
63.5
|
|
TOTAL
|
$
|
1,477.4
|
|
|
$
|
1,204.7
|
|
|
$
|
854.7
|
|
|
$
|
(1,999.3
|
)
|
|
$
|
1,537.5
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable, trade
|
$
|
3.7
|
|
|
$
|
84.1
|
|
|
$
|
31.6
|
|
|
$
|
—
|
|
|
$
|
119.4
|
|
Due to affiliates
|
—
|
|
|
—
|
|
|
10.3
|
|
|
—
|
|
|
10.3
|
|
Accrued and other current liabilities
|
15.8
|
|
|
22.8
|
|
|
13.9
|
|
|
—
|
|
|
52.5
|
|
Accrued employee benefits costs
|
1.9
|
|
|
8.3
|
|
|
0.8
|
|
|
—
|
|
|
11.0
|
|
Revolving credit facility
|
23.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23.3
|
|
Industrial revenue bonds
|
—
|
|
|
7.8
|
|
|
—
|
|
|
—
|
|
|
7.8
|
|
Total current liabilities
|
44.7
|
|
|
123.0
|
|
|
56.6
|
|
|
—
|
|
|
224.3
|
|
Senior notes payable
|
248.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248.6
|
|
Accrued pension benefits costs - less current portion
|
23.2
|
|
|
20.7
|
|
|
7.0
|
|
|
—
|
|
|
50.9
|
|
Accrued postretirement benefits costs - less current portion
|
0.7
|
|
|
98.9
|
|
|
1.6
|
|
|
—
|
|
|
101.2
|
|
Other liabilities
|
2.8
|
|
|
23.5
|
|
|
19.7
|
|
|
—
|
|
|
46.0
|
|
Due to affiliates - long term
|
395.4
|
|
|
307.6
|
|
|
573.5
|
|
|
(1,276.5
|
)
|
|
—
|
|
Deferred taxes
|
(0.2
|
)
|
|
1.8
|
|
|
102.7
|
|
|
—
|
|
|
104.3
|
|
Total noncurrent liabilities
|
670.5
|
|
|
452.5
|
|
|
704.5
|
|
|
(1,276.5
|
)
|
|
551.0
|
|
Preferred stock
|
0.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.0
|
|
Common stock
|
1.0
|
|
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|
1.0
|
|
Other shareholders' equity
|
761.2
|
|
|
629.2
|
|
|
93.5
|
|
|
(722.7
|
)
|
|
761.2
|
|
Total shareholders' equity
|
762.2
|
|
|
629.2
|
|
|
93.6
|
|
|
(722.8
|
)
|
|
762.2
|
|
TOTAL
|
$
|
1,477.4
|
|
|
$
|
1,204.7
|
|
|
$
|
854.7
|
|
|
$
|
(1,999.3
|
)
|
|
$
|
1,537.5
|
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows
|
For the nine months ended September 30, 2019
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
Net cash provided by (used in) operating activities
|
$
|
(57.1
|
)
|
|
$
|
45.0
|
|
|
$
|
7.7
|
|
|
$
|
—
|
|
|
$
|
(4.4
|
)
|
Purchase of property, plant and equipment
|
(0.6
|
)
|
|
(26.4
|
)
|
|
(12.9
|
)
|
|
—
|
|
|
(39.9
|
)
|
Proceeds from sale of joint venture
|
—
|
|
|
—
|
|
|
10.5
|
|
|
—
|
|
|
10.5
|
|
Intercompany transactions
|
(9.3
|
)
|
|
(52.6
|
)
|
|
2.0
|
|
|
59.9
|
|
|
—
|
|
Net cash provided by (used in) investing activities
|
(9.9
|
)
|
|
(79.0
|
)
|
|
(0.4
|
)
|
|
59.9
|
|
|
(29.4
|
)
|
Borrowings under term loan
|
40.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40.0
|
|
Borrowings under revolving credit facilities
|
295.1
|
|
|
—
|
|
|
19.5
|
|
|
—
|
|
|
314.6
|
|
Repayments under revolving credit facilities
|
(318.0
|
)
|
|
—
|
|
|
(19.5
|
)
|
|
—
|
|
|
(337.5
|
)
|
Other short term borrowings
|
3.4
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.4
|
|
Repayment on other short term borrowings
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
Issuance of common stock
|
0.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.3
|
|
Intercompany transactions
|
51.0
|
|
|
34.0
|
|
|
(25.1
|
)
|
|
(59.9
|
)
|
|
—
|
|
Net cash provided by (used in) financing activities
|
68.4
|
|
|
34.0
|
|
|
(25.1
|
)
|
|
(59.9
|
)
|
|
17.4
|
|
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
1.4
|
|
|
—
|
|
|
(17.8
|
)
|
|
—
|
|
|
(16.4
|
)
|
Cash, cash equivalents and restricted cash, beginning of period
|
0.1
|
|
|
0.8
|
|
|
38.8
|
|
|
—
|
|
|
39.7
|
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
1.5
|
|
|
$
|
0.8
|
|
|
$
|
21.0
|
|
|
$
|
—
|
|
|
$
|
23.3
|
|
CENTURY ALUMINUM COMPANY
Condensed Notes to the Consolidated Financial Statements (continued)
(amounts in millions)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidating Statement of Cash Flows
|
For the nine months ended September 30, 2018
|
|
The Company
|
|
Combined Guarantor Subsidiaries
|
|
Combined Non-Guarantor Subsidiaries
|
|
Consolidating Adjustments
|
|
Total Consolidated
|
Net cash provided by (used in) operating activities
|
$
|
(51.2
|
)
|
|
$
|
(0.5
|
)
|
|
$
|
(7.3
|
)
|
|
$
|
—
|
|
|
$
|
(59.0
|
)
|
Purchase of property, plant and equipment
|
(4.0
|
)
|
|
(38.9
|
)
|
|
(6.4
|
)
|
|
—
|
|
|
(49.3
|
)
|
Intercompany transactions
|
39.5
|
|
|
40.9
|
|
|
(0.4
|
)
|
|
(80.0
|
)
|
|
—
|
|
Net cash provided by (used in) investing activities
|
35.5
|
|
|
2.0
|
|
|
(6.8
|
)
|
|
(80.0
|
)
|
|
(49.3
|
)
|
Borrowings under revolving credit facilities
|
14.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14.3
|
|
Issuance of common stock
|
0.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.2
|
|
Intercompany transactions
|
(37.1
|
)
|
|
(1.7
|
)
|
|
(41.2
|
)
|
|
80.0
|
|
|
—
|
|
Net cash provided by (used in) financing activities
|
(22.6
|
)
|
|
(1.7
|
)
|
|
(41.2
|
)
|
|
80.0
|
|
|
14.5
|
|
CHANGE IN CASH, CASH EQUIVALENTS AND RESTRICTED CASH
|
(38.3
|
)
|
|
(0.2
|
)
|
|
(55.3
|
)
|
|
—
|
|
|
(93.8
|
)
|
Cash, cash equivalents and restricted cash, beginning of period
|
64.3
|
|
|
0.7
|
|
|
103.0
|
|
|
—
|
|
|
168.0
|
|
Cash, cash equivalents and restricted cash, end of period
|
$
|
26.0
|
|
|
$
|
0.5
|
|
|
$
|
47.7
|
|
|
$
|
—
|
|
|
$
|
74.2
|
|
FORWARD-LOOKING STATEMENTS
This quarterly report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are subject to the "safe harbor" created by section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934 (the "Exchange Act"), as amended. Forward-looking statements are statements about future events and are based on our current expectations. These forward-looking statements may be identified by the words “believe,” “expect,” “target,” “anticipate,” “intend,” “plan,” “seek,” “estimate,” “potential,” “project,” “scheduled,” “forecast” or words of similar meaning, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” or “may.”
Forward-looking statements in this quarterly report and in our other reports filed with the Securities and Exchange Commission (the "SEC"), for example, may include statements regarding:
|
|
•
|
The future financial and operating performance of the Company and its subsidiaries, including financial and operating estimates or projections from the restart of curtailed capacity, as a result of future raw material costs or otherwise;
|
|
|
•
|
Our assessment of the aluminum market and aluminum prices (including premiums);
|
|
|
•
|
Our assessment of alumina pricing and costs associated with our other key raw materials, including power;
|
|
|
•
|
Our ability to successfully manage market risk and to control or reduce costs;
|
|
|
•
|
Our plans and expectations with respect to future operations, including any plans and expectations to curtail or restart production;
|
|
|
•
|
Our plans and ability to bring our Hawesville smelter back to full production and expectations as to the costs and benefits associated with this project, including expected incremental production or EBITDA as well as benefits from investments in new technology and other production improvements;
|
|
|
•
|
Our ability to successfully obtain long-term competitive power arrangements for our operations, including at Mt. Holly;
|
|
|
•
|
Our assessment of global and local financial and economic conditions;
|
|
|
•
|
The impact of any Section 232 relief, including tariffs or other trade remedies, the extent to which any such remedies may be changed, including through exclusions or exemptions, and the duration of any trade remedy;
|
|
|
•
|
The impact of any new or changed law, regulation, including, without limitation, sanctions or other similar remedies or restrictions;
|
|
|
•
|
Our anticipated tax liabilities, benefits or refunds including the realization of U.S. and certain foreign deferred tax assets and liabilities;
|
|
|
•
|
Our expectations with respect to the future impact and benefits from the sale of our 40% interest in BHH;
|
|
|
•
|
Our ability to access existing or future financing arrangements and the terms of any such future financing arrangements;
|
|
|
•
|
Our ability to repay or refinance debt in the future;
|
|
|
•
|
Our ability to recover losses from our insurance;
|
|
|
•
|
Estimates of our pension and other postretirement liabilities, legal and environmental liabilities and other contingent liabilities;
|
|
|
•
|
Negotiations with labor unions; and
|
|
|
•
|
Our future business objectives, plans, strategies and initiatives, including our competitive position and prospects.
|
Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from future results expressed, projected or implied by those forward-looking statements. Important factors that could cause actual results and events to differ from those described in such forward-looking statements can be found in the risk factors and forward-looking statements cautionary language contained in our Annual Report on Form 10-K, quarterly reports on Form 10-Q and in other filings made with the SEC. Although we have attempted to identify those material factors that could cause actual results or events to differ from those described in such forward-looking statements, there may be other factors that could cause actual results or events to differ from those anticipated, estimated or intended. Many of these factors are beyond our ability to control or predict. Given these uncertainties, the reader is cautioned not to place undue reliance on our forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.