Third Quarter 2015
and Other Highlights
· Cash and cash
equivalents totaled $8.9 million and total available liquidity was
$112.7 million as of September 30, 2015
·
Excluding special items, loss per share was $3.87 loss versus a
$0.32 loss per share in third quarter 2014; reported loss per share
was $17.49 versus a $0.40 loss per share in the third quarter
2014
·
Average realized Midwest Transaction Price was $0.79 per pound,
compared to $0.95 per pound in second quarter 2015, and $1.08 per
pound in third quarter 2014
· Total
segment loss was $26.4 million versus total segment profit of
$19.4 million in second quarter 2015 and total segment profit
of $36.6 million in third quarter 2014
·
Primary segment goodwill was determined to be fully impaired
resulting in a non-cash write-off of $137.6 million
Franklin,
Tennessee - November 9, 2015 - Noranda Aluminum Holding
Corporation (NYSE: NOR) today reported results for third quarter
2015.
"Our third quarter results reflect
an extremely challenging aluminum price environment, to which we
responded with an intense focus on managing cash and available
liquidity," said Layle K. "Kip" Smith, Noranda's President and
Chief Executive Officer. "Aluminum prices are at their lowest
levels since the global financial crisis, which presents a
financial challenge to all aluminum producers, not just
Noranda.
"In this price environment, we are
working to stabilize operations at the aluminum smelter, reduce
operating costs across the integrated upstream platform, and
tightly manage our balance sheet to free up cash. We believe we are
taking the necessary actions to achieve sustainable operations and
targeted cost structure improvements. We expect these actions to
transform our cost structure so we can generate positive cash flow
even during the troughs of the aluminum pricing cycle."
Third Quarter
2015 Results
Sales were $309.5 million in third
quarter 2015, $332.7 million in second quarter 2015 and $361.4
million in third quarter 2014.
·
Sequentially (comparing
third quarter 2015 to second quarter 2015) sales decreased
$23.2 million, or 7.0%, primarily due to the lower average
Midwest transaction price and lower external shipments at Primary
partially offset by higher external shipments at Alumina.
·
In third quarter 2015,
the average realized Midwest transaction price ("MWTP") for
aluminum products was $0.79 per pound, which was the combination of
a $0.71 per pound LME aluminum price and a $0.08 per pound Midwest
premium. This compares to an average price of $0.95 per pound for
second quarter 2015 ($0.83 per pound LME component and $0.12 per
pound Midwest premium) and $1.08 per pound for third quarter 2014
($0.87 per pound component and $0.21 per pound Midwest
premium).
·
Year-over-year
(comparing third quarter 2015 to third quarter 2014) sales
decreased $51.9 million, or 14.4% primarily due to the lower
average Midwest transaction price and lower external shipments at
Primary partially offset by higher external shipments at
Alumina.
Total segment loss was
$26.4 million in third quarter 2015, compared to a
$19.4 million profit in second quarter 2015 and a
$36.6 million profit in third quarter 2014.
·
Sequentially, total
segment profit decreased $45.8 million. This decline was
primarily due to the lower average Midwest transaction price, the
negative impact of peak power costs at Primary and lower external
value-added shipments at Primary.
·
Year-over-year, segment
profit decreased $63.0 million. This decline was primarily due
to the lower average Midwest transaction price, the negative impact
from operating the smelter below capacity, lower external
value-added shipments at Primary, and an increase in the bauxite
production levy under an interim agreement with the
Government of Jamaica ("GOJ") related to the previously disclosed
production levy dispute, partially offset by lower natural gas
prices in Alumina and lower fuel costs in Bauxite.
Due primarily to the
continuing decline in MWTP, we determined that our Primary
segment's goodwill was fully impaired during the third quarter of
2015 and we recognized a $137.6 million non-cash impairment charge,
reducing the carrying amount to zero.
Reported net loss was
$175.1 million ($17.49 per share) in third quarter 2015 versus
a net loss of $25.4 million ($2.56 per share) in second
quarter 2015 and a net loss of $3.9 million ($0.40 loss per
share) in third quarter 2014. Excluding special items, net loss was
$38.7 million ($3.87 per diluted share) in third quarter
2015 versus a net loss of $17.2 million ($1.73 per share) in
second quarter 2015 and a net loss of $3.1 million ($0.32 loss
per share) in third quarter 2014.
Year-to-date 2015
Results
Sales were $987.8 million in the
first nine months of 2015 compared to $1,018.9 million in the first
nine months of 2014.
·
The year-to-date sales
decrease of $31.1 million is primarily due to lower external
shipments at Primary and lower average Midwest transaction price,
partially offset by higher external shipments at Alumina.
·
For the first nine
months of 2015, the average realized Midwest transaction price for
aluminum products was $0.93 per pound, which was the combination of
a $0.79 per pound LME aluminum price and a $0.14 per pound Midwest
premium. This compares to an average price of $1.00 per pound for
the first nine months of 2014 ($0.83 per pound LME component and
$0.17 per pound Midwest premium).
Total segment profit was $26.9
million in the first nine months of 2015 compared to $77.7 million
in the first nine months of 2014.
·
Segment profit decreased
$50.8 million primarily due to the lower Midwest transaction price
and the $0.04 increase in Net Cash Cost per pound in the integrated
upstream business, which includes $0.02 per pound due to the
additional Bauxite production levy under the interim agreement.
Reported net loss was $203.2
million ($20.46 per share) in the first nine months of 2015 versus
a $28.3 million net loss ($2.89 per share) in the first nine months
of 2014. Excluding special items, net loss was $62.7 million ($6.31
per share) in the first nine months of 2015 versus a $26.3 million
net loss ($2.68 loss per share) in the first nine months of
2014.
Segment
Information - Third quarter 2015 Results
|
|
Three months ended |
|
|
September
30,
2015 |
June 30,
2015 |
September 30,
2014 |
|
Key Primary Aluminum segment metrics: |
|
|
|
|
|
|
|
|
|
Average realized Midwest transaction price (per pound) |
$ |
0.79 |
|
$ |
0.95 |
|
$ |
1.08 |
|
| Net
Cash Cost (per pound shipped) |
$ |
1.06 |
|
$ |
0.87 |
|
$ |
0.90 |
|
| Total
primary aluminum shipments (pounds, in millions) |
134.0 |
|
128.3 |
|
140.8 |
|
|
Segment profit (loss) (in millions): |
|
|
|
| Total
integrated upstream business segment profit (loss) |
$ |
(35.6 |
) |
$ |
10.0 |
|
$ |
25.0 |
|
|
Flat-Rolled |
18.1 |
|
16.4 |
|
17.6 |
|
|
Corporate |
(8.9 |
) |
(7.0 |
) |
(6.0 |
) |
| Total
segment profit (loss) |
$ |
(26.4 |
) |
$ |
19.4 |
|
$ |
36.6 |
|
Bauxite
segment reported a $0.5 million profit in third quarter 2015,
a $3.1 million loss in second quarter 2015, and a
$1.5 million loss in third quarter 2014.
·
Sequentially, Bauxite
results primarily reflect a $2.9 million decrease in the
bauxite production levy. Under the interim agreement with the
GOJ related to the production levy dispute, we paid an additional
amount in second quarter 2015 as a retroactive payment for the
first quarter 2015 production levy.
·
Year-over year, Bauxite
results reflect lower fuel costs ($3.5 million), currency
benefit ($1.0 million) and lower demurrage fees, partially
offset by a $3.0 million increase in the bauxite production levy
under the interim agreement.
Alumina
segment reported a $2.2 million profit in third quarter 2015,
an $8.4 million profit in second quarter 2015, and a
$6.5 million profit in third quarter 2014.
·
Sequentially, the
$6.2 million decrease in segment profit primarily resulted
from lower prices for alumina and lower internal shipments
partially offset by higher external shipments.
·
Year-over-year, Alumina
results reflect a decrease of $4.3 million from lower prices for
alumina and lower internal shipments partially offset by lower
natural gas prices and higher external shipments.
Primary
segment reported a $38.8 million loss in third quarter 2015, a
$3.8 million profit in second quarter 2015, and a
$20.4 million profit in third quarter 2014.
·
The sequential decline
in Primary results is primarily due to the lower Midwest
transaction price, the negative impacts of peak power costs at
Primary, and lower external value-added shipments at Primary.
·
Year-over-year, the
decline in Primary results is primarily due to the lower Midwest
transaction price, the negative impact of higher costs associated
with operating the smelter below capacity as a result of process
instabilities and lower external shipments.
Net Integrated
Aluminum Cash Cost ("Net Cash Cost") was $1.06 per pound in
third quarter 2015, $0.87 per pound in second quarter 2015, and
$0.90 per pound in third quarter 2014.
·
Sequentially, Net Cash
Cost increased by $0.19 per pound, primarily due to the negative
impact of seasonal peak power rates at the smelter (7 cents per
pound), lower-of-cost-or-market and other pricing adjustments (6
cents per pound), and lower value-added shipments at Primary
following the August 2015 explosion at the smelter's casthouse (2
cents per pound). Relative to third quarter 2015, the Company
expects fourth quarter 2015 net cash cost to improve due to the
absence of peak power surcharges at the smelter (10 cents per
pound), and the absence of similar lower-of-cost-or-market and
other pricing adjustments.
·
Year-over-year, Net Cash
Cost increased $0.16 per pound, primarily due to the negative
impact of operating the smelter below capacity (8 cents per pound),
pricing adjustments (3 cents per pound) and lower value-added
shipments at Primary (2 cents per pound).
Flat-Rolled
profit was $18.1 million in third quarter 2015,
$16.4 million in second quarter 2015, and $17.6 million
in third quarter 2014.
·
Sequentially and year-over-year, Flat-Rolled results improved
primarily due to favorable operating performance at the
mills.
Corporate
expenses were $8.9 million in third quarter 2015,
$7.0 million in second quarter 2015, and $6.0 million in
third quarter 2014.
·
Sequentially and
year-over-year, corporate expenses increased primarily due to
accrual-related employee benefits costs and professional fees.
Liquidity and
Capital Resources
The MWTP declined to a post-global
financial crisis low of 75 cents per pound during the third week of
August 2015; although the MWTP recovered slightly to 78 cents per
pound at quarter-end, it subsequently declined to 75 cents as of
November 6, 2015. Aluminum prices at these levels challenge
the financial resources of substantially all aluminum producers,
not just Noranda. Recently, other aluminum producers operating in
the U.S. have announced the idling of facilities accounting for
over 700 million metric tonnes of annual aluminum production.
Although we have not announced similar action, we are regularly
evaluating whether such actions are necessary. In order to
mitigate the impact of these low aluminum prices on our financial
position, the Company is carefully managing working capital,
controlling discretionary spending and rationing capital
expenditures to increase internal cash resources.
On August 4, 2015, an explosion
occurred in the casthouse at the site of our New Madrid smelter
(within the Primary segment). Although the incident affected the
production of extrusion billet, it did not affect the production of
molten aluminum, and Primary was able to redirect the molten
aluminum output to other saleable products such as redraw rod and
aluminum ingot. The Company continues to estimate the financial
impact and insurance recoveries from this incident, and continues
to assess the extent of the damage and the measures required to
repair the facility and restore operations. The Company anticipates
that a substantial portion of the loss resulting from the incident
will be covered by its property and business interruption
insurance. As of September 30, 2015 $6.4 million was received from
Noranda's property insurance, $1.0 million of which was allocated
towards capital expenditures.
At September 30, 2015, the Company
had $8.9 million of cash and cash equivalents. As of September 30,
2015, available borrowing capacity under the Company's asset-based
revolving credit facility was $103.8 million, which is net of $44.2
million in outstanding letters of credit. The Company's total
available liquidity as of September 30, 2015 was $112.7 million, a
reduction of $46.4 million compared to total available liquidity of
$159.1 million as of June 30, 2015. The reduction reflects
the negative impact of lower operating results, which, are largely
due to lower aluminum prices. The reduction was mitigated in
part by the Company's efforts to manage working capital.
The table below summarizes the key
factors behind changes in the Company's cash positions for each
period:
|
|
Three months
ended |
|
(in millions) |
September 30,
2015 |
June 30,
2015 |
September 30,
2014 |
|
Segment profit (loss) |
$ |
(26.4 |
) |
$ |
19.4 |
|
$ |
36.6 |
|
|
Prepaid expenses and other. |
2.3 |
|
(4.7 |
) |
(4.6 |
) |
|
Interest paid |
(8.3 |
) |
(17.6 |
) |
(7.7 |
) |
| Taxes
paid |
(1.2 |
) |
(5.7 |
) |
(5.7 |
) |
|
Operating working capital |
20.6 |
|
17.1 |
|
2.8 |
|
| Cash
provided by (used in) operating activities |
(13.0 |
) |
8.5 |
|
21.4 |
|
| Cash
used for capital expenditures, net |
(10.9 |
) |
(19.4 |
) |
(28.8 |
) |
|
Proceeds from life insurance policies |
6.4 |
|
- |
|
- |
|
| Cash
used in investing activities |
(4.5 |
) |
(19.4 |
) |
(28.8 |
) |
| Cash
provided by (used in) financing activities |
1.9 |
|
11.9 |
|
(1.2 |
) |
| Change
in cash and cash equivalents |
$ |
(15.6 |
) |
$ |
1.0 |
|
$ |
(8.6 |
) |
NORANDA ALUMINUM
HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF
OPERATIONS
(dollars in millions, except per share data and
where noted)
(unaudited)
|
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
2015 |
2014 |
2015 |
2014 |
|
Sales |
$ |
309.5 |
|
$ |
361.4 |
|
$ |
987.8 |
|
$ |
1,018.9 |
|
|
Operating costs and expenses: |
|
|
|
|
| Cost
of sales |
336.0 |
|
335.5 |
|
971.5 |
|
962.9 |
|
|
Selling, general and administrative |
25.9 |
|
19.6 |
|
74.7 |
|
58.1 |
|
|
Goodwill and other intangibles impairment |
137.9 |
|
- |
|
137.9 |
|
- |
|
| Other
recoveries |
(8.7 |
) |
- |
|
(8.7 |
) |
- |
|
| Total
operating costs and expenses |
491.1 |
|
355.1 |
|
1,175.4 |
|
1,021.0 |
|
|
Operating income (loss) |
(181.6 |
) |
6.3 |
|
(187.6 |
) |
(2.1 |
) |
| Other
(income) expense: |
|
|
|
|
|
Interest expense, net |
13.0 |
|
12.6 |
|
39.4 |
|
37.7 |
|
| Loss
on derivatives |
7.3 |
|
(2.6 |
) |
10.5 |
|
(2.2 |
) |
| Total
other expense, net |
20.3 |
|
10.0 |
|
49.9 |
|
35.5 |
|
| Loss
before income taxes |
(201.9 |
) |
(3.7 |
) |
(237.5 |
) |
(37.6 |
) |
| Income
tax expense (benefit) |
(26.8 |
) |
0.2 |
|
(34.3 |
) |
(9.3 |
) |
| Net
loss |
$ |
(175.1 |
) |
$ |
(3.9 |
) |
$ |
(203.2 |
) |
$ |
(28.3 |
) |
| Net
loss per common share*: |
|
|
|
|
|
Basic |
$ |
(17.49 |
) |
$ |
(0.40 |
) |
$ |
(20.46 |
) |
$ |
(2.89 |
) |
|
Diluted |
$ |
(17.49 |
) |
$ |
(0.40 |
) |
$ |
(20.46 |
) |
$ |
(2.89 |
) |
|
Weighted-average common shares outstanding*: |
|
|
|
|
| Basic
(shares, in millions) |
10.01 |
|
9.84 |
|
9.93 |
|
9.80 |
|
|
Diluted (shares, in millions) |
10.01 |
|
9.84 |
|
9.93 |
|
9.80 |
|
| Cash
dividends declared per common share* |
$ |
- |
|
$ |
0.07 |
|
$ |
0.07 |
|
$ |
0.21 |
|
|
External sales by segment: |
|
|
|
|
|
Bauxite |
$ |
14.7 |
|
$ |
11.9 |
|
$ |
37.0 |
|
$ |
36.5 |
|
|
Alumina |
64.3 |
|
57.3 |
|
171.6 |
|
150.4 |
|
|
Primary |
89.3 |
|
135.0 |
|
337.0 |
|
391.4 |
|
|
Flat-Rolled |
141.2 |
|
157.2 |
|
442.2 |
|
440.6 |
|
|
Total |
$ |
309.5 |
|
$ |
361.4 |
|
$ |
987.8 |
|
$ |
1,018.9 |
|
|
Segment profit (loss): |
|
|
|
|
|
Bauxite |
$ |
0.5 |
|
(1.5 |
) |
$ |
(0.5 |
) |
$ |
(0.3 |
) |
|
Alumina |
2.2 |
|
6.5 |
|
14.3 |
|
(8.6 |
) |
|
Primary |
(38.8 |
) |
20.4 |
|
(11.9 |
) |
63.9 |
|
|
Flat-Rolled |
18.1 |
|
17.6 |
|
47.2 |
|
43.6 |
|
|
Corporate |
(8.9 |
) |
(6.0 |
) |
(23.7 |
) |
(20.0 |
) |
|
Eliminations |
0.5 |
|
(0.4 |
) |
1.5 |
|
(0.9 |
) |
|
Total |
$ |
(26.4 |
) |
$ |
36.6 |
|
$ |
26.9 |
|
$ |
77.7 |
|
|
Financial and other data: |
|
|
|
|
|
Average realized Midwest transaction price (per pound) |
$ |
0.79 |
|
$ |
1.08 |
|
$ |
0.93 |
|
$ |
1.00 |
|
| Net
Cash Cost (per pound shipped) |
$ |
1.06 |
|
$ |
0.90 |
|
$ |
0.92 |
|
$ |
0.88 |
|
|
Shipments: |
|
|
|
|
|
External shipments: |
|
|
|
|
|
Bauxite (kMts) |
568.1 |
|
543.7 |
|
1,566.9 |
|
1,664.7 |
|
|
Alumina (kMts) |
211.7 |
|
178.7 |
|
547.6 |
|
482.5 |
|
|
Primary (pounds, in millions) |
99.6 |
|
113.2 |
|
316.8 |
|
346.3 |
|
|
Flat-Rolled (pounds, in millions) |
101.2 |
|
103.0 |
|
296.1 |
|
297.3 |
|
|
Intersegment shipments: |
|
|
|
|
|
Bauxite (kMts) |
657.0 |
|
658.1 |
|
2,082.1 |
|
1,938.8 |
|
|
Alumina (kMts) |
59.3 |
|
129.9 |
|
292.6 |
|
378.7 |
|
|
Primary (pounds, in millions) |
34.4 |
|
27.6 |
|
76.6 |
|
79.6 |
|
* The
Net loss per common share, Weighted-average shares outstanding, and
Cash dividends declared per common share amounts for all periods
presented reflect the 1-for-7 reverse stock split of the Company's
common stock that became effective on August 25, 2015.
NORANDA ALUMINUM
HOLDING CORPORATION
CONSOLIDATED BALANCE SHEETS
(in millions, except par value)
(unaudited)
|
|
September 30,
2015 |
December 31, 2014 |
|
|
$ |
$ |
|
ASSETS |
|
|
|
Current assets: |
|
|
| Cash
and cash equivalents |
8.9 |
|
20.5 |
|
|
Accounts receivable, net |
92.2 |
|
102.5 |
|
|
Inventories, net |
162.6 |
|
196.7 |
|
| Other
current assets |
38.9 |
|
27.4 |
|
|
Total current assets |
302.6 |
|
347.1 |
|
|
Property, plant and equipment, net |
692.4 |
|
695.0 |
|
|
Goodwill |
- |
|
137.6 |
|
| Other
intangible assets, net |
44.5 |
|
49.3 |
|
| Other
assets |
82.0 |
|
89.1 |
|
|
Total assets |
1,121.5 |
|
1,318.1 |
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities: |
|
|
|
Accounts payable |
117.8 |
|
122.6 |
|
|
Accrued liabilities |
87.4 |
|
59.1 |
|
|
Deferred tax liabilities |
- |
|
11.7 |
|
|
Current portion of long-term debt and lease financing |
16.6 |
|
11.6 |
|
|
Total current liabilities |
221.8 |
|
205.0 |
|
|
Long-term debt and lease financing, net |
660.7 |
|
656.4 |
|
|
Pension and other post-retirement ("OPEB") liabilities |
192.5 |
|
195.4 |
|
| Other
long-term liabilities |
44.5 |
|
45.9 |
|
|
Long-term deferred tax liabilities |
125.7 |
|
143.3 |
|
|
Shareholders' equity: |
|
|
|
Preferred stock (25.0 shares authorized, $0.01 par value; no shares
issued and outstanding at September 30, 2015 and December 31,
2014) |
- |
|
- |
|
| Common
stock (30.0 shares authorized; $0.01 par value; 10.0 shares issued
and outstanding at September 30, 2015; 9.8 shares issued and
outstanding at December 31, 2014)* |
0.1 |
|
0.1 |
|
|
Capital in excess of par value * |
246.7 |
|
244.2 |
|
|
Accumulated deficit |
(273.0 |
) |
(68.2 |
) |
|
Accumulated other comprehensive loss.. |
(103.5 |
) |
(110.0 |
) |
|
Total shareholders' equity (deficit) |
(129.7 |
) |
66.1 |
|
|
Non-controlling interest |
6.0 |
|
6.0 |
|
|
Total equity (deficit) |
(123.7 |
) |
72.1 |
|
|
Total liabilities and equity |
1,121.5 |
|
1,318.1 |
|
*
The Common stock and Capital in excess of par value amounts for all
periods presented reflect the 1-for-7 reverse stock split of the
Company's common stock that became effective on August 25,
2015.
NORANDA ALUMINUM
HOLDING CORPORATION
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in millions)
(unaudited)
|
|
Three months ended September 30, |
Nine months ended September 30, |
|
|
2015 |
2014 |
2015 |
2014 |
|
|
$ |
$ |
$ |
$ |
|
Operating activities |
|
|
|
|
| Net
loss |
(175.1 |
) |
(3.9 |
) |
(203.2 |
) |
(28.3 |
) |
|
Adjustments to reconcile net loss to cash provided by operating
activities: |
|
|
|
|
|
Depreciation and amortization |
23.9 |
|
21.7 |
|
70.4 |
|
65.7 |
|
|
Non-cash interest expense |
0.7 |
|
0.7 |
|
2.1 |
|
2.0 |
|
| Last
in, first out and lower of cost or market |
(0.8 |
) |
2.2 |
|
0.3 |
|
3.2 |
|
|
Goodwill and other intangibles impairment |
137.9 |
|
- |
|
137.9 |
|
- |
|
| (Gain)
loss on disposal of assets |
(1.1 |
) |
0.1 |
|
(1.6 |
) |
0.2 |
|
| (Gain)
loss on hedging activities, excluding cash settlements |
0.6 |
|
(0.5 |
) |
0.6 |
|
(0.8 |
) |
|
Deferred income taxes |
(24.9 |
) |
(9.2 |
) |
(36.0 |
) |
(29.7 |
) |
|
Stock-based compensation expense |
0.7 |
|
0.9 |
|
2.3 |
|
2.5 |
|
|
Changes in other assets |
(1.2 |
) |
(1.6 |
) |
(3.6 |
) |
(5.7 |
) |
|
Changes in pension, other post-retirement and other long-term
liabilities |
0.7 |
|
(3.4 |
) |
5.7 |
|
(4.4 |
) |
|
Changes in current operating assets and liabilities: |
|
|
|
|
|
Accounts receivable, net |
3.7 |
|
(14.6 |
) |
10.3 |
|
(40.1 |
) |
|
Inventories, net |
33.3 |
|
(9.3 |
) |
31.5 |
|
(23.7 |
) |
| Taxes
receivable and taxes payable |
(3.0 |
) |
3.7 |
|
(1.9 |
) |
13.5 |
|
| Other
current assets |
(3.5 |
) |
(0.6 |
) |
(2.6 |
) |
(3.2 |
) |
|
Accounts payable |
(16.4 |
) |
26.7 |
|
(9.0 |
) |
47.2 |
|
|
Accrued liabilities |
11.5 |
|
8.5 |
|
21.8 |
|
5.8 |
|
|
Cash (used in)/provided by operating
activities |
(13.0 |
) |
21.4 |
|
25.0 |
|
4.2 |
|
|
Investing activities |
|
|
|
|
|
Capital expenditures |
(13.8 |
) |
(28.8 |
) |
(57.6 |
) |
(59.9 |
) |
|
Insurance proceeds for property |
1.7 |
|
- |
|
1.7 |
|
- |
|
|
Proceeds from life insurance policies |
6.4 |
|
- |
|
6.4 |
|
- |
|
|
Proceeds from sale of property, plant and equipment |
1.2 |
|
- |
|
2.2 |
|
0.2 |
|
|
Net cash used in investing activities |
(4.5 |
) |
(28.8 |
) |
(47.3 |
) |
(59.7 |
) |
|
Financing activities |
|
|
|
|
| Shares
tendered for taxes, net of proceeds from issuance of common shares
for share-based payment arrangements |
- |
|
- |
|
(0.2 |
) |
(1.1 |
) |
|
Dividends paid to shareholders |
- |
|
(0.7 |
) |
(1.4 |
) |
(2.1 |
) |
|
Borrowings on revolving credit facility |
83.5 |
|
67.5 |
|
226.0 |
|
86.0 |
|
|
Repayments on revolving credit facility |
(83.5 |
) |
(67.5 |
) |
(226.0 |
) |
(86.0 |
) |
|
Borrowings on long-term debt and lease financing |
1.3 |
|
0.7 |
|
17.4 |
|
7.2 |
|
|
Repayments on long-term debt and lease financing |
(3.0 |
) |
(1.2 |
) |
(8.7 |
) |
(3.6 |
) |
|
Short-term product financing |
3.6 |
|
- |
|
3.6 |
|
- |
|
|
Cash provided by (used in) financing
activities |
1.9 |
|
(1.2 |
) |
10.7 |
|
0.4 |
|
|
Change in cash and cash equivalents |
(15.6 |
) |
(8.6 |
) |
(11.6 |
) |
(55.1 |
) |
| Cash
and cash equivalents, beginning of period |
24.5 |
|
32.9 |
|
20.5 |
|
79.4 |
|
| Cash
and cash equivalents, end of period. |
8.9 |
|
24.3 |
|
8.9 |
|
24.3 |
|
NORANDA ALUMINUM
HOLDING CORPORATION
SEGMENT RESULTS
(in millions)
(unaudited)
|
|
Three months ended September 30,
2015 |
|
|
Bauxite |
Alumina |
Primary |
Flat-Rolled |
Corporate |
Eliminations |
Consolidated |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|
Sales: |
|
|
|
|
|
|
|
|
External customers |
14.7 |
|
64.3 |
|
89.3 |
|
141.2 |
|
- |
|
- |
|
309.5 |
|
|
Intersegment |
18.8 |
|
13.7 |
|
26.5 |
|
- |
|
- |
|
(59.0 |
) |
- |
|
| Total
sales |
33.5 |
|
78.0 |
|
115.8 |
|
141.2 |
|
- |
|
(59.0 |
) |
309.5 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
0.9 |
|
3.0 |
|
10.2 |
|
(0.3 |
) |
- |
|
- |
|
13.8 |
|
| Reconciliation of segment profit (loss) to operating
income (loss): |
|
Segment profit (loss) |
0.5 |
|
2.2 |
|
(38.8 |
) |
18.1 |
|
(8.9 |
) |
0.5 |
|
(26.4 |
) |
|
Depreciation and amortization |
(3.2 |
) |
(6.0 |
) |
(9.6 |
) |
(4.5 |
) |
(0.6 |
) |
- |
|
(23.9 |
) |
| Last
in, first out and lower of cost or market inventory
adjustments |
- |
|
- |
|
0.1 |
|
0.7 |
|
- |
|
- |
|
0.8 |
|
| Gain
(loss) on disposal of assets |
- |
|
(0.1 |
) |
1.2 |
|
- |
|
- |
|
- |
|
1.1 |
|
|
Goodwill and other intangibles impairment |
- |
|
(0.3 |
) |
(137.6 |
) |
- |
|
- |
|
- |
|
(137.9 |
) |
|
Non-cash pension, accretion and stock compensation |
- |
|
(0.3 |
) |
(1.7 |
) |
(1.2 |
) |
(1.0 |
) |
- |
|
(4.2 |
) |
|
Restructuring, relocation and severance |
(0.2 |
) |
- |
|
(0.2 |
) |
(0.1 |
) |
- |
|
- |
|
(0.5 |
) |
|
Consulting fees |
(0.4 |
) |
- |
|
(0.1 |
) |
- |
|
(0.9 |
) |
- |
|
(1.4 |
) |
| Cash
settlements paid on hedging transactions |
- |
|
- |
|
0.7 |
|
6.1 |
|
- |
|
- |
|
6.8 |
|
| Excess
insurance recoveries |
- |
|
- |
|
5.1 |
|
- |
|
- |
|
- |
|
5.1 |
|
| Other,
net |
- |
|
(0.5 |
) |
(0.6 |
) |
- |
|
- |
|
- |
|
(1.1 |
) |
|
Operating income (loss) |
(3.3 |
) |
(5.0 |
) |
(181.5 |
) |
19.1 |
|
(11.4 |
) |
0.5 |
|
(181.6 |
) |
| Interest expense, net |
13.0 |
|
| Loss on hedging activities, net |
7.3 |
|
| Total other expense, net |
20.3 |
|
| Loss before income taxes |
(201.9 |
) |
NORANDA ALUMINUM
HOLDING CORPORATION
SEGMENT RESULTS
(in millions)
(unaudited)
|
|
Three months ended September 30,
2014 |
|
|
Bauxite |
Alumina |
Primary |
Flat-Rolled |
Corporate |
Eliminations |
Consolidated |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|
Sales: |
|
|
|
|
|
|
|
|
External customers |
11.9 |
|
57.3 |
|
135.0 |
|
157.2 |
|
- |
|
- |
|
361.4 |
|
|
Intersegment |
18.9 |
|
35.4 |
|
31.2 |
|
- |
|
- |
|
(85.5 |
) |
- |
|
| Total
sales |
30.8 |
|
92.7 |
|
166.2 |
|
157.2 |
|
- |
|
(85.5 |
) |
361.4 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
5.1 |
|
3.9 |
|
16.7 |
|
2.5 |
|
0.6 |
|
- |
|
28.8 |
|
| Reconciliation of segment profit (loss) to operating
income (loss): |
|
Segment profit (loss) |
(1.5 |
) |
6.5 |
|
20.4 |
|
17.6 |
|
(6.0 |
) |
(0.4 |
) |
36.6 |
|
|
Depreciation and amortization |
(2.5 |
) |
(5.0 |
) |
(9.2 |
) |
(4.8 |
) |
(0.2 |
) |
- |
|
(21.7 |
) |
| Last
in, first out and lower of cost or market inventory
adjustments |
- |
|
- |
|
(0.7 |
) |
(1.3 |
) |
- |
|
(0.2 |
) |
(2.2 |
) |
| Loss
on disposal of assets |
- |
|
- |
|
- |
|
(0.1 |
) |
- |
|
- |
|
(0.1 |
) |
|
Non-cash pension, accretion and stock compensation |
- |
|
(0.2 |
) |
(0.8 |
) |
(0.4 |
) |
(1.0 |
) |
- |
|
(2.4 |
) |
|
Restructuring, relocation and severance |
- |
|
- |
|
(0.6 |
) |
(0.1 |
) |
- |
|
- |
|
(0.7 |
) |
| Cash
settlements received on hedging transactions |
- |
|
- |
|
(0.2 |
) |
(2.5 |
) |
- |
|
- |
|
(2.7 |
) |
| Other,
net |
- |
|
(0.2 |
) |
- |
|
(0.1 |
) |
(0.3 |
) |
0.1 |
|
(0.5 |
) |
|
Operating income (loss) |
(4.0 |
) |
1.1 |
|
8.9 |
|
8.3 |
|
(7.5 |
) |
(0.5 |
) |
6.3 |
|
| Interest expense, net |
12.6 |
|
| Gain on hedging activities, net |
(2.6 |
) |
| Total other expense, net |
10.0 |
|
| Loss before income taxes |
(3.7 |
) |
NORANDA ALUMINUM
HOLDING CORPORATION
SEGMENT RESULTS
(in millions)
(unaudited)
|
|
Nine months ended September 30,
2015 |
|
|
Bauxite |
Alumina |
Primary |
Flat-Rolled |
Corporate |
Eliminations |
Consolidated |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|
Sales: |
|
|
|
|
|
|
|
|
External customers |
37.0 |
|
171.6 |
|
337.0 |
|
442.2 |
|
- |
|
- |
|
987.8 |
|
|
Intersegment |
58.6 |
|
73.6 |
|
67.1 |
|
- |
|
- |
|
(199.3 |
) |
- |
|
| Total
sales |
95.6 |
|
245.2 |
|
404.1 |
|
442.2 |
|
- |
|
(199.3 |
) |
987.8 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
4.6 |
|
6.2 |
|
42.8 |
|
3.5 |
|
0.5 |
|
- |
|
57.6 |
|
| Reconciliation of segment profit (loss) to operating
income (loss): |
|
Segment profit (loss) |
(0.5 |
) |
14.3 |
|
(11.9 |
) |
47.2 |
|
(23.7 |
) |
1.5 |
|
26.9 |
|
|
Depreciation and amortization |
(9.4 |
) |
(16.4 |
) |
(29.5 |
) |
(13.3 |
) |
(1.8 |
) |
- |
|
(70.4 |
) |
| Last
in, first out and lower of cost or market inventory
adjustments |
- |
|
- |
|
(2.7 |
) |
2.2 |
|
- |
|
0.2 |
|
(0.3 |
) |
| Gain
(loss) on disposal of assets |
- |
|
0.7 |
|
1.1 |
|
(0.2 |
) |
- |
|
- |
|
1.6 |
|
|
Goodwill and other intangibles impairment |
- |
|
(0.3 |
) |
(137.6 |
) |
- |
|
- |
|
- |
|
(137.9 |
) |
|
Non-cash pension, accretion and stock compensation |
(0.1 |
) |
(0.8 |
) |
(5.1 |
) |
(3.8 |
) |
(3.5 |
) |
- |
|
(13.3 |
) |
|
Relocation and severance |
(3.4 |
) |
(0.3 |
) |
(0.5 |
) |
0.2 |
|
(1.1 |
) |
- |
|
(5.1 |
) |
|
Consulting fees |
(0.7 |
) |
(0.1 |
) |
(0.6 |
) |
- |
|
(1.6 |
) |
- |
|
(3.0 |
) |
| Cash
settlements paid on hedging transactions |
- |
|
- |
|
1.3 |
|
11.1 |
|
- |
|
- |
|
12.4 |
|
| Excess
insurance recoveries |
- |
|
- |
|
5.1 |
|
- |
|
- |
|
- |
|
5.1 |
|
| Other,
net |
- |
|
(0.8 |
) |
(1.3 |
) |
- |
|
(0.2 |
) |
(1.3 |
) |
(3.6 |
) |
|
Operating income (loss) |
(14.1 |
) |
(3.7 |
) |
(181.7 |
) |
43.4 |
|
(31.9 |
) |
0.4 |
|
(187.6 |
) |
| Interest expense, net |
39.4 |
|
| Loss on hedging activities, net |
10.5 |
|
| Total other expense, net |
49.9 |
|
| Loss before income taxes |
(237.5 |
) |
NORANDA ALUMINUM
HOLDING CORPORATION
SEGMENT RESULTS
(in millions)
(unaudited)
|
|
Nine months ended September 30,
2014 |
|
|
Bauxite |
Alumina |
Primary |
Flat-Rolled |
Corporate |
Eliminations |
Consolidated |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
$ |
|
Sales: |
|
|
|
|
|
|
|
|
External customers |
36.5 |
|
150.4 |
|
391.4 |
|
440.6 |
|
- |
|
- |
|
1,018.9 |
|
|
Intersegment |
54.4 |
|
97.3 |
|
80.2 |
|
- |
|
- |
|
(231.9 |
) |
- |
|
| Total
sales |
90.9 |
|
247.7 |
|
471.6 |
|
440.6 |
|
- |
|
(231.9 |
) |
1,018.9 |
|
|
|
|
|
|
|
|
|
|
|
Capital expenditures |
7.4 |
|
9.0 |
|
33.0 |
|
9.5 |
|
1.0 |
|
- |
|
59.9 |
|
| Reconciliation of segment profit (loss) to operating
income (loss): |
|
Segment profit (loss) |
(0.3 |
) |
(8.6 |
) |
63.9 |
|
43.6 |
|
(20.0 |
) |
(0.9 |
) |
77.7 |
|
|
Depreciation and amortization |
(7.4 |
) |
(15.2 |
) |
(28.8 |
) |
(13.8 |
) |
(0.5 |
) |
- |
|
(65.7 |
) |
| Last
in, first out and lower of cost or market inventory
adjustments |
- |
|
- |
|
(3.1 |
) |
0.1 |
|
- |
|
(0.2 |
) |
(3.2 |
) |
| Gain
(loss) on disposal of assets |
- |
|
- |
|
0.1 |
|
(0.3 |
) |
- |
|
- |
|
(0.2 |
) |
|
Non-cash pension, accretion and stock compensation |
(0.1 |
) |
(0.6 |
) |
(2.3 |
) |
(1.3 |
) |
(2.8 |
) |
- |
|
(7.1 |
) |
|
Relocation and severance |
- |
|
- |
|
(0.7 |
) |
0.3 |
|
0.1 |
|
- |
|
(0.3 |
) |
|
Consulting fees |
- |
|
- |
|
- |
|
- |
|
(0.3 |
) |
- |
|
(0.3 |
) |
| Cash
settlements received on hedging transactions |
- |
|
- |
|
(0.4 |
) |
(2.6 |
) |
- |
|
- |
|
(3.0 |
) |
| Other,
net |
- |
|
(0.4 |
) |
- |
|
(0.1 |
) |
(0.1 |
) |
0.6 |
|
- |
|
|
Operating income (loss) |
(7.8 |
) |
(24.8 |
) |
28.7 |
|
25.9 |
|
(23.6 |
) |
(0.5 |
) |
(2.1 |
) |
| Interest expense, net |
37.7 |
|
| Gain on hedging activities, net |
(2.2 |
) |
| Total other expense, net |
35.5 |
|
| Loss before income taxes. |
(37.6 |
) |
ADJUSTED
EBITDA
(in millions)
(unaudited)
"Adjusted EBITDA", referred to as
"EBITDA" in the Company's debt agreements, is relevant to several
material covenants in the debt agreements addressing our ability to
enter into specified transactions and incur additional
indebtedness. The Company's debt agreements do not require it to
achieve any specified level of Adjusted EBITDA, or ratio of
Adjusted EBITDA to any other financial metric, in order to avoid a
default (subject, in the case of the asset-based revolving credit
facility, to its maintaining minimum availability thereunder). As
used herein, Adjusted EBITDA means net income before income taxes,
net interest expense, depreciation and amortization, adjusted to
eliminate certain non-cash expenses and other specified items of
income or expense as outlined below (in millions):
|
|
Three months ended September 30, |
Nine months
ended September 30, |
Twelve months ended |
|
|
2015 |
2014 |
2015 |
2014 |
September 30, 2015 |
December 31, 2014 |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
|
Adjusted EBITDA |
(26.4 |
) |
36.6 |
|
26.9 |
|
77.7 |
|
76.5 |
|
127.3 |
|
| Last
in, first out and lower of cost or market inventory adjustments
(a) |
0.8 |
|
(2.2 |
) |
(0.3 |
) |
(3.2 |
) |
(2.0 |
) |
(4.9 |
) |
| Gain
(loss) on disposal of assets |
1.1 |
|
(0.1 |
) |
1.6 |
|
(0.2 |
) |
1.4 |
|
(0.4 |
) |
|
Goodwill and other intangibles impairment |
(137.9 |
) |
- |
|
(137.9 |
) |
- |
|
(137.9 |
) |
- |
|
|
Non-cash pension, accretion and stock compensation |
(4.2 |
) |
(2.4 |
) |
(13.3 |
) |
(7.1 |
) |
(15.8 |
) |
(9.6 |
) |
|
Restructuring, relocation and severance |
(0.5 |
) |
(0.7 |
) |
(5.1 |
) |
(0.3 |
) |
(6.1 |
) |
(1.3 |
) |
|
Consulting fees |
(1.4 |
) |
- |
|
(3.0 |
) |
(0.3 |
) |
(3.4 |
) |
(0.7 |
) |
|
Non-cash derivative gains (losses)(b) |
(0.5 |
) |
(0.1 |
) |
1.9 |
|
(0.8 |
) |
2.4 |
|
(0.3 |
) |
| Excess
insurance recoveries |
5.1 |
|
- |
|
5.1 |
|
- |
|
5.1 |
|
- |
|
| Other,
net |
(1.1 |
) |
(0.5 |
) |
(3.6 |
) |
- |
|
(2.5 |
) |
1.1 |
|
|
Depreciation and amortization |
(23.9 |
) |
(21.7 |
) |
(70.4 |
) |
(65.7 |
) |
(94.2 |
) |
(89.5 |
) |
|
Interest expense, net |
(13.0 |
) |
(12.6 |
) |
(39.4 |
) |
(37.7 |
) |
(52.1 |
) |
(50.4 |
) |
| Income
tax benefit (expense) |
26.8 |
|
(0.2 |
) |
34.3 |
|
9.3 |
|
27.1 |
|
2.1 |
|
| Net
loss |
(175.1 |
) |
(3.9 |
) |
(203.2 |
) |
(28.3 |
) |
(201.5 |
) |
(26.6 |
) |
(a)
The New Madrid smelter and rolling mills use the LIFO method
of inventory accounting for financial reporting and tax purposes.
This adjustment restates net income to the FIFO method by
eliminating LIFO expenses related to product inventories held at
the New Madrid smelter and the Flat-Rolled segment. Alumina
segment and Bauxite segment product inventories and supplies
inventories are stated at lower of weighted-average cost or market,
and are not subject to the LIFO adjustment. The Company also
reduces inventories to the lower of cost (adjusted for purchase
accounting) or market value.
(b)
The Company uses derivative financial instruments to mitigate
effects of fluctuations in aluminum prices. This adjustment
eliminates the non-cash gains and losses resulting from fair market
value changes of aluminum swaps. Cash settlements (received) or
paid, except settlements on hedge terminations, related to
derivatives are included in Adjusted EBITDA.
Adjusted EBITDA is not a measure
of financial performance under U.S. GAAP, and may not be comparable
to similarly titled measures used by other companies in the
Company's industry. Adjusted EBITDA should not be considered in
isolation from or as an alternative to net income (loss), income
(loss) from continuing operations, operating income (loss) or any
other performance measures derived in accordance with U.S. GAAP.
Adjusted EBITDA has limitations as an analytical tool, and you
should not consider it in isolation or as a substitute for analysis
of the Company's results as reported under U.S. GAAP. For example,
Adjusted EBITDA excludes certain tax payments that may represent a
reduction in cash available to the Company; does not reflect any
cash requirements for the assets being depreciated and amortized
that may have to be replaced in the future; does not reflect
capital cash expenditures, future requirements for capital
expenditures or contractual commitments; does not reflect changes
in, or cash requirements for, the Company's working capital needs;
and does not reflect the significant interest expense, or the cash
requirements necessary to service interest or principal payments on
the Company's indebtedness. Adjusted EBITDA also includes
incremental stand-alone costs and eliminates the effect of non-cash
hedging gains and losses, and certain other non-cash charges that
are deducted in calculating net income. However, these are expenses
that may recur, vary greatly and are difficult to predict. In
addition, certain of these expenses can represent the reduction of
cash that could be used for other corporate purposes. You should
not consider the Company's Adjusted EBITDA as an alternative to
operating income or net income determined in accordance with U.S.
GAAP, as an indicator of the Company's operating performance, an
alternative to cash flows from operating activities, determined in
accordance with U.S. GAAP, as an indicator of the Company's cash
flows or as a measure of liquidity.
The following table reconciles
Adjusted EBITDA to cash flow from operating activities for the
periods presented (in millions):
|
|
Three months ended September 30, |
Nine months
ended September 30, |
Twelve months ended |
|
|
2015 |
2014 |
2015 |
2014 |
September 30, 2015 |
December 31, 2014 |
|
|
$ |
$ |
$ |
$ |
$ |
$ |
|
Adjusted EBITDA |
(26.4 |
) |
36.6 |
|
26.9 |
|
77.7 |
|
76.5 |
|
127.3 |
|
|
Share-based compensation expense |
0.7 |
|
0.9 |
|
2.3 |
|
2.5 |
|
3.2 |
|
3.4 |
|
|
Changes in other assets |
(1.2 |
) |
(1.6 |
) |
(3.6 |
) |
(5.7 |
) |
(8.3 |
) |
(10.4 |
) |
|
Changes in pension, other post-retirement liabilities and other
long-term liabilities |
0.7 |
|
(3.4 |
) |
5.7 |
|
(4.4 |
) |
7.7 |
|
(2.4 |
) |
|
Changes in current operating assets and liabilities |
25.6 |
|
14.4 |
|
50.1 |
|
(0.5 |
) |
32.0 |
|
(18.6 |
) |
|
Changes in current income taxes |
1.9 |
|
(9.4 |
) |
(1.7 |
) |
(20.4 |
) |
9.2 |
|
(9.5 |
) |
|
Changes in accrued interest |
(12.3 |
) |
(11.9 |
) |
(37.3 |
) |
(35.7 |
) |
(49.3 |
) |
(47.7 |
) |
|
Non-cash pension, accretion and stock compensation |
(4.2 |
) |
(2.4 |
) |
(13.3 |
) |
(7.1 |
) |
(15.8 |
) |
(9.6 |
) |
|
Restructuring, relocation and severance |
(0.5 |
) |
(0.7 |
) |
(5.1 |
) |
(0.3 |
) |
(6.1 |
) |
(1.3 |
) |
|
Consulting fees |
(1.4 |
) |
- |
|
(3.0 |
) |
(0.3 |
) |
(3.4 |
) |
(0.7 |
) |
| Excess
insurance recoveries |
5.1 |
|
- |
|
5.1 |
|
- |
|
5.1 |
|
- |
|
| Other,
net |
(1.0 |
) |
(1.1 |
) |
(1.1 |
) |
(1.6 |
) |
0.6 |
|
0.1 |
|
| Cash
provided by (used in) operating activities |
(13.0 |
) |
21.4 |
|
25.0 |
|
4.2 |
|
51.4 |
|
30.6 |
|
NORANDA ALUMINUM
HOLDING CORPORATION
PRIMARY SEGMENT NET CASH COST
(unaudited)
Primary segment net cash cost per
pound represents the costs of producing commodity grade aluminum
net of value-added premiums on Primary sales. The Company has
provided net cash cost per pound of aluminum shipped because it
provides investors with additional information to measure operating
performance. Using this metric, investors are able to assess the
prevailing LME price plus Midwest premium per pound compared to
unit net costs per pound shipped. Net cash cost per pound is
positively or negatively impacted by changes in Primary segment,
Alumina segment and Bauxite segment production and sales volumes,
natural gas and oil related costs, seasonality in electrical
contract rates, and increases or decreases in other production
related costs. Net cash cost per pound is not a measure of
financial performance under U.S. GAAP and may not be comparable to
similarly titled measures used by other companies. Net cash cost
per pound shipped should not be considered in isolation from or as
an alternative to any performance measures derived in accordance
with U.S. GAAP. The following table shows the calculation of
Primary segment net cash cost:
|
|
Three months ended September 30, |
Nine months ended September 30 |
|
|
| 2015 |
2014 |
2015 |
2014 |
| Total
Primary cash cost (in millions)(a) |
| $ |
141.8 |
|
$ |
127.3 |
|
$ |
362.9 |
|
$ |
373.9 |
|
| Total
shipments (pounds in millions) |
134.0 |
|
140.8 |
|
393.4 |
|
425.9 |
|
| Net
Cash Cost (per pound shipped) (b) |
$ |
1.06 |
|
$ |
0.90 |
|
$ |
0.92 |
|
$ |
0.88 |
|
|
|
|
|
|
|
|
(a) Total
Primary cash cost is calculated below (in millions): |
|
|
|
|
| Total
Primary revenue |
$ |
115.8 |
|
$ |
166.2 |
|
$ |
404.1 |
|
$ |
471.6 |
|
| Less
fabrication premiums and other revenue |
(9.6 |
) |
(13.9 |
) |
(37.8 |
) |
(43.6 |
) |
|
Realized Midwest transaction price revenue |
106.2 |
|
152.3 |
|
366.3 |
|
428.0 |
|
|
|
|
|
|
|
|
Primary segment profit (loss) |
(38.8 |
) |
20.4 |
|
(11.9 |
) |
63.9 |
|
|
Alumina segment profit (loss) |
2.2 |
|
6.5 |
|
14.3 |
|
(8.6 |
) |
|
Bauxite segment profit (loss) |
0.5 |
|
(1.5 |
) |
(0.5 |
) |
(0.3 |
) |
| Profit
eliminations |
0.5 |
|
(0.4 |
) |
1.5 |
|
(0.9 |
) |
|
Total |
(35.6 |
) |
25.0 |
|
3.4 |
|
54.1 |
|
| Total
Primary cash cost (in millions) |
$ |
141.8 |
|
$ |
127.3 |
|
$ |
362.9 |
|
$ |
373.9 |
|
(b)
Net Cash Cost may not recalculate precisely as shown due to
rounding.
NORANDA
ALUMINUM HOLDING CORPORATION
CALCULATION OF DILUTED EARNINGS (LOSS) PER
SHARE,
EXCLUDING SPECIAL ITEMS
(in millions, except per share
information)
(unaudited)
"Net income (loss), excluding
special items" means net income (loss) adjusted to eliminate the
impact of certain transactions and events referred to as "special
items," as listed in the table below. "Diluted earnings (loss) per
share, excluding special items" refers to net income (loss)
excluding special items, divided by the number of weighted-average
diluted common shares outstanding. Management has provided net
income (loss), excluding special items and diluted earnings (loss)
per share, excluding special items because the measure provides
investors with additional information with which to measure
operating results exclusive of items that do not reflect management
of day-to-day operations. Using these metrics, investors are able
to assess the impact of certain transactions and events on earnings
and to compare net income (loss) from period to period after
eliminating the effect of those transactions and events. Management
believes this metric is a valuable tool in assisting investors to
compare financial results from period to period.
Net loss, excluding special items
may not be comparable to similarly titled measures used by other
companies. Net loss, excluding special items should not be
considered in isolation from or as an alternative to net income
(loss) or any other performance measures derived in accordance with
U.S. GAAP. Net loss, excluding special items has limitations
as an analytical tool and you should not consider it in isolation
or as a substitute for analysis of results as reported under
U.S. GAAP.
Special items and diluted earnings
(loss) per share, excluding special items are outlined below
(in millions):
| |
Three months ended September 30, |
Nine months ended September 30 |
| |
2015 |
2014 |
2015 |
2014 |
| |
$ |
$ |
$ |
$ |
| |
Increase (decrease) to net
income |
Increase (decrease) to net
income |
| Special items: |
|
|
|
|
| Gain (loss) on hedging activities: (3) |
|
|
|
|
| GAAP mark-to-market |
(7.3 |
) |
2.6 |
|
(10.5 |
) |
2.2 |
|
| Cash settlements received (paid) |
(6.8 |
) |
2.7 |
|
(12.4 |
) |
3.0 |
|
| Amount treated as special item |
(0.5 |
) |
(0.1 |
) |
1.9 |
|
(0.8 |
) |
| Other termination expenses |
(0.5 |
) |
(0.7 |
) |
(5.1 |
) |
(0.2 |
) |
| Non-recurring consulting fees |
(1.4 |
) |
- |
|
(3.0 |
) |
(1.0 |
) |
| Non-recurring employee benefits |
- |
|
- |
|
(0.7 |
) |
- |
|
| Goodwill and other intangibles impairment |
(137.9 |
) |
- |
|
(137.9 |
) |
- |
|
| Excess insurance recoveries |
5.1 |
|
- |
|
5.1 |
|
- |
|
| Other, net |
0.2 |
|
(0.2 |
) |
0.3 |
|
(0.4 |
) |
| Pre-tax loss from special items |
(135.0 |
) |
(1.0 |
) |
(139.4 |
) |
(2.4 |
) |
| Diluted loss per share, excluding special
items: |
|
|
|
| Pre-tax loss |
(201.9 |
) |
(3.7 |
) |
(237.5 |
) |
(37.6 |
) |
| Exclude pre-tax impact of special items |
135.0 |
|
1.0 |
|
139.4 |
|
2.4 |
|
| Pre-tax loss, excluding special items |
(66.9 |
) |
(2.7 |
) |
(98.1 |
) |
(35.2 |
) |
| Income tax expense (benefit), excluding special items
(1) |
(28.2 |
) |
0.4 |
|
(35.4 |
) |
(8.9 |
) |
| Net loss, excluding special items |
(38.7 |
) |
(3.1 |
) |
(62.7 |
) |
(26.3 |
) |
| Weighted-average common shares outstanding, diluted
(shares, in millions) (2)* |
10.01 |
|
9.84 |
|
9.93 |
|
9.80 |
|
| Diluted loss per share, excluding special items* |
(3.87 |
) |
(0.32 |
) |
(6.31 |
) |
(2.68 |
) |
(1)
Income taxes, excluding special items were calculated using the
Company's estimated annual effective tax rate from continuing
operations 14.4% for the nine months ended September 30, 2015 and
24.7% for the nine months ended September 30, 2014. The
income tax rate used to calculate special items is calculated by
jurisdiction, which was 34.4% for the United States and 0% for
Jamaica for the nine months ended September 30, 2015. Individual
quarters may not recalculate to the year to date amount due to
changes made quarterly to the estimated annual effective tax
rate.
(2)
For periods with a net loss, potential common shares were excluded
from the weighted-average common shares outstanding because these
potential shares would have been antidilutive.
(3)
Prior periods have been recalculated to conform to the current
period calculation of the special items impact of gain (loss) on
hedging activities.
* The Weighted-average
common shares outstanding and Diluted loss per share amounts for
all periods presented reflect the 1-for-7 reverse stock split of
the Company's common stock that became effective on August 25,
2015.
Forward-Looking
Statements
This press release contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including expected
effects of our efforts to achieve sustainable operations and
targeted cost structure improvements, expected fourth quarter 2015
improvements in net cash cost and our expectation that we will not
record lower-of-cost or market or other pricing adjustments in the
fourth quarter 2015 similar to those recorded in the third quarter
of 2015. Forward-looking statements are statements about future,
not past, events and involve certain important risks and
uncertainties, any of which could cause the Company's actual
results to differ materially from those expressed in
forward-looking statements, including, without limitation: the
cyclical nature of the aluminum industry and fluctuating commodity
prices, which cause variability in earnings and cash flows; a
downturn in general economic conditions, including changes in
interest rates, as well as a downturn in the end-use markets for
certain of the Company's products; fluctuations in the relative
cost of certain raw materials and energy compared to the price of
primary aluminum and aluminum rolled products; the inability of our
targeted cost structure improvements to achieve anticipated cost
savings and operational improvements; delays in implementation of
cost-saving projects; the effects of competition in Noranda's
business lines; Noranda's ability to retain customers, a
substantial number of which do not have long-term contractual
arrangements with the Company; failure to maintain a competitive
and sustainable power rate at the smelter in Missouri, with
consequent risk of smelter closure; the ability to fulfill the
business's substantial capital investment needs; labor relations
(i.e. disruptions, strikes or work stoppages) and labor costs;
unexpected issues arising in connection with Noranda's operations
outside of the United States; the ability to retain key management
personnel; environmental, safety, production and product
regulations or concerns; eliminate environmental change legislation
or regulations; natural disasters and Noranda's expectations with
respect to its acquisition activity, or difficulties encountered in
connection with acquisitions, dispositions or similar
transactions.
Forward-looking statements contain
words such as "believes," "expects," "will," "may," "should,"
"seeks," "approximately," "intends," "plans," "estimates," or
"anticipates" or similar expressions that relate to Noranda's
strategy, plans or intentions. All statements Noranda makes
relating to its estimated and projected earnings, margins, costs,
expenditures, cash flows, growth rates and financial results or to
the Company's expectations regarding future industry trends are
forward-looking statements. Noranda undertakes no obligation to
publicly update or revise any forward-looking statement as a result
of new information, future events or otherwise except as otherwise
required by law. Readers are cautioned not to place undue reliance
on forward-looking statements, which speak only as of the date on
which they are made and which reflect management's current
estimates, projections, expectations or beliefs.
For a discussion of additional
risks and uncertainties that may affect the future results of
Noranda, please see the Company's filings with the Securities and
Exchange Commission, including its Annual Report on Form 10-K and
its Quarterly Reports on Form 10-Q.
Non-GAAP
Financial Measures
This press release and the
presentation slides for the earnings call contain non-GAAP
financial measures as defined by SEC rules. Management believes
that these measures are helpful to investors in measuring financial
performance and comparing performance to that of the Company's
peers. However, these non-GAAP financial measures may not be
comparable to similarly titled non-GAAP financial measures used by
other companies. These non-GAAP financial measures have limitations
as an analytical tool and should not be considered in isolation or
as a substitute for U.S. GAAP financial measures. To the
extent non-GAAP financial measures are discussed on the earnings
call, a reconciliation of each measure to the most directly
comparable U.S. GAAP measure will be available within this
press release or within the presentation slides filed as an exhibit
to the Current Report on Form 8-K furnished to the SEC concurrently
with the issuance of this press release.
About the
Company
Noranda Aluminum Holding
Corporation is a leading North American integrated producer of
value-added Primary Aluminum Products, as well as high quality
rolled aluminum coils.
Earnings Conference Call
At 5:00 PM Eastern / 4:00 PM
Central on November 9, 2015, Noranda Aluminum Holding
Corporation (NYSE: NOR) will host a conference call to discuss
results for third quarter 2015. The call will be broadcast over the
Internet on the Company's homepage at
www.norandaaluminum.com/investor. The webcast will be archived
shortly after the conference call concludes and will be available
for replay. Please dial the appropriate number below at least 15
minutes prior to the start of the call to participate in the
question-and-answer session.
Conference Call
Information
U.S.
participants:
(855) 232-8956
International
participants: (315)
625-6978
Participant Passcode:
71354060
Contact
Noranda Aluminum Holding Corporation
Dale W. Boyles
Chief Financial Officer
(615) 771-5789
dale.boyles@noralinc.com
John A. Parker
Vice President of Communication and Investor Relations
(615) 771-5734
john.parker@noralinc.com
This
announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: Noranda Aluminum Holding Corporation via
Globenewswire
HUG#1965662
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