Century Reports 2008 Financial Results MONTEREY, CA--(Marketwire - February 19, 2009) - Century Aluminum Company (NASDAQ: CENX) today reported a net loss of $700.2 million ($14.27 per basic and diluted share) for the fourth quarter of 2008. Reported fourth quarter results were impacted by a charge for goodwill impairment of $94.8 million ($1.93 per basic and diluted share), a tax charge of $522.9 million ($10.66 per basic and diluted share) related to the recording of a valuation allowance on deferred tax assets and an inventory write down to market value of $55.9 million ($1.14 per basic and diluted share). For the fourth quarter of 2007, the company reported a net loss of $112.3 million ($2.74 per basic and diluted share). Reported results for this quarter were impacted by an after-tax charge of $147.7 million ($3.61 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting and by a tax benefit of $4.0 million ($0.10 per basic share) related to the increase in the carrying amount of deferred tax assets as a result of a state tax law change. The dilutive effect of the options, convertible notes and service-based awards would reduce basic EPS by $0.05 per share. Recent highlights include: -- 2008 direct and toll shipment volumes totaled a record 803,771 metric tons, a 5 percent increase from 2007. During the fourth quarter, the Grundartangi smelter shipped at an annualized rate of more than 276,000 metric tons. -- All primary aluminum facilities operated safely at or above available potline capacity during 2008. -- In December, the company issued a WARN notice and implemented the immediate curtailment of one potline at the Ravenswood, West Virginia smelter. Pursuant to the WARN notice, an orderly curtailment of the entire smelter was essentially completed by mid February. -- The company completed a public offering of 24.5 million shares of its common stock in early February. Net proceeds were approximately $104 million. -- Salaried staff reductions of approximately 13 percent were implemented at the Hawesville, KY smelter and Monterey, CA headquarters. -- The company's greenfield smelter project near Helguvik, Iceland, remains under review. Site activity is continuing at a minimal level. For 2008, Century reported a net loss of $898.3 million ($20.07 per basic and diluted share). Included in these results is a net after tax charge of $742.1 million ($16.58 per basic and diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. Full year results were also impacted by a charge for goodwill impairment of $94.8 million ($2.12 per basic and diluted share), a tax charge of $522.9 million ($11.68 per basic and diluted share) related to the recording of a valuation allowance on deferred tax assets and an inventory write down to market value of $55.9 million ($1.25 per basic and diluted share). For 2007, Century reported a net loss of $101.2 million ($2.72 per basic and diluted share). Results for 2007 include a net after-tax charge of $328.3 million ($8.83 per basic share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. 2007 results were also impacted by a tax benefit of $8.3 million ($0.22 per basic share) related to the increase in the carrying amount of deferred tax assets as a result of a state tax law change. Sales for the fourth quarter of 2008 were $402.2 million compared with $432.1 million for the fourth quarter of 2007. Shipments of primary aluminum for the 2008 fourth quarter were 202,259 tonnes, compared with 198,138 tonnes shipped in the year-ago quarter. Sales for 2008 were $1,971 million compared with $1,798 million for 2007, and total 2008 primary aluminum shipments of 803,771 tonnes compared with 766,951 tonnes shipped in 2007. "Century has taken aggressive action in response to the global economic crisis and its impact on commodity prices," said president and chief executive officer Logan W. Kruger. "In the United States, we have begun implementation of the difficult actions required to bridge the current environment and lay the groundwork for a stronger company when metal markets strengthen. "Our greenfield smelter project near Helguvik, Iceland, remains under review; new construction activity has been essentially halted. We are in the process of rescoping the project in its entirety and are also reviewing financing options. We continue to view Helguvik as an excellent investment for our shareholders and remain convinced that the environment in Iceland will remain attractive to our business over the long term. In addition, our forecasts of capital and operating costs have fallen since the project's inception. "We continue to believe the factors supporting the long-term growth of aluminum demand remain in place. We expect that Century's improved liquidity and streamlined cost position will enable us to weather the current global financial crisis and prepare the company for renewed profitable growth once aluminum markets stabilize and recover. We have further options to enhance both our cost position and liquidity, and will implement them as appropriate to protect the long-term value of the company." Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California. Century Aluminum's quarterly conference call is scheduled for 5:00 p.m. Eastern time today. To listen to the conference call and to view related presentation materials, go to www.centuryaluminum.com and click on the conference call link on the homepage. Certified Advisors for the First North market of the OMX Nordic Exchange Iceland hf. for Global Depositary Receipts in Iceland: Helga Gunnarsdottir, Director-Corporate Finance, NBI hf. Astros Vidarsdottir, Senior Manager-Corporate Finance, NBI hf. Cautionary Statement This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future; however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made. Century Aluminum Company Consolidated Statements of Operations (in Thousands, Except Per Share Amounts) (Unaudited) Three months ended Year ended December 31, December 31, ------------------------ ------------------------ 2008 2007 2008 2007 ----------- ----------- ----------- ----------- NET SALES: Third-party customers $ 271,119 $ 337,678 $ 1,474,815 $ 1,449,750 Related parties 131,079 94,452 495,961 348,413 ----------- ----------- ----------- ----------- 402,198 432,130 1,970,776 1,798,163 COST OF GOODS SOLD 464,776 372,207 1,659,152 1,434,700 ----------- ----------- ----------- ----------- GROSS PROFIT (LOSS) (62,578) 59,923 311,624 363,463 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,253 19,136 48,223 59,920 GOODWILL IMPAIRMENT 94,844 - 94,844 - ----------- ----------- ----------- ----------- OPERATING INCOME (LOSS) (161,675) 40,787 168,557 303,543 INTEREST EXPENSE - Net (4,972) (2,983) (17,015) (22,109) INTEREST INCOME (EXPENSE) - RELATED PARTIES 171 - (827) - NET LOSS ON FORWARD CONTRACTS (13,253) (228,978) (744,448) (508,875) OTHER INCOME (EXPENSE) - Net (581) 124 (2,178) (3,302) ----------- ----------- ----------- ----------- LOSS BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES (180,310) (191,050) (595,911) (230,743) INCOME TAX (EXPENSE) BENEFIT (524,282) 74,453 (319,311) 113,849 ----------- ----------- ----------- ----------- LOSS BEFORE EQUITY IN EARNINGS OF JOINT VENTURES (704,592) (116,597) (915,222) (116,894) EQUITY IN EARNINGS OF JOINT VENTURES 4,440 4,294 16,906 15,645 ----------- ----------- ----------- ----------- NET LOSS $ (700,152) $ (112,303) $ (898,316) $ (101,249) =========== =========== =========== =========== LOSS PER COMMON SHARE Basic - Net loss $ (14.27) $ (2.74) $ (20.07) $ (2.72) Diluted - Net loss $ (14.27) $ (2.74) $ (20.07) $ (2.72) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic 49,051 40,973 44,759 37,199 Diluted 49,051 40,973 44,759 37,199 Century Aluminum Company Consolidated Balance Sheets (Dollars in Thousands) (Unaudited) December 31, December 31, ASSETS 2008 2007 ------------- ------------- Current Assets: Cash $ 129,400 $ 60,962 Restricted cash 865 873 Short-term investments 13,686 280,169 Accounts receivable - net 60,859 93,451 Due from affiliates 39,062 26,693 Inventories 138,111 175,101 Prepaid and other current assets 99,861 40,091 Deferred taxes - current portion 32,290 69,858 ------------- ------------- Total current assets 514,134 747,198 Property, plant and equipment - net 1,340,037 1,260,040 Intangible asset - net 32,527 47,603 Goodwill - 94,844 Deferred taxes - less current portion - 321,068 Due from affiliates - less current portion 7,599 - Other assets 141,802 107,518 ------------- ------------- Total $ 2,036,099 $ 2,578,271 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable, trade $ 102,143 $ 79,482 Due to affiliates 70,957 216,754 Accrued and other current liabilities 58,777 60,482 Accrued employee benefits costs - current portion 12,070 11,997 Convertible senior notes 175,000 175,000 Industrial revenue bonds 7,815 7,815 ------------- ------------- Total current liabilities 426,762 551,530 ------------- ------------- Senior unsecured notes payable 250,000 250,000 Revolving credit facility 25,000 - Accrued pension benefits costs - less current portion 50,008 14,427 Accrued postretirement benefits costs - less current portion 219,539 184,853 Due to affiliates - less current portion - 913,683 Other liabilities 33,464 39,643 Deferred taxes 71,805 62,931 ------------- ------------- Total noncurrent liabilities 649,816 1,465,537 ------------- ------------- Shareholders' Equity: Preferred stock (one cent par value, 5,000,000 shares authorized; 155,787 shares outstanding at December 31, 2008 and none at December 31, 2007) 2 - Common stock (one cent par value, 100,000,000 shares authorized; 49,052,692 shares outstanding at December 31, 2008 and 40,988,058 at December 31, 2007) 491 410 Additional paid-in capital 2,240,014 857,787 Accumulated other comprehensive loss (137,208) (51,531) Accumulated deficit (1,143,778) (245,462) ------------- ------------- Total shareholders' equity 959,521 561,204 ------------- ------------- Total $ 2,036,099 $ 2,578,271 ============= ============= Century Aluminum Company Consolidated Statements of Cash Flows (Dollars in Thousands) (Unaudited) Year ended December 31, 2008 2007 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (898,316) $ (101,249) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Unrealized net loss on forward contracts 602,389 411,023 Goodwill impairment 94,844 - Depreciation and amortization 84,268 78,060 Deferred income taxes 329,526 (131,819) Pension and other postretirement benefits 16,430 12,688 Workers' compensation (359) (743) Stock-based compensation 11,753 5,962 Excess tax benefits from share-based compensation (657) (588) Loss on disposal of assets 49 69 Non-cash loss on early extinguishment of debt - 2,461 Undistributed earnings of joint ventures (16,906) (15,645) Change in operating assets and liabilities: Accounts receivable - net 32,592 19,920 Purchase of short-term trading securities (106,532) (721,271) Sale of short-term trading securities 373,014 441,102 Due from affiliates (12,369) 10,850 Inventories 37,026 (26,080) Prepaid and other current assets 11,502 (12,540) Accounts payable, trade 4,736 18,211 Due to affiliates (223,868) 13,188 Accrued and other current liabilities (69,728) (16,912) Other - net 899 7,558 ---------- ---------- Net cash provided by (used in) operating activities 270,293 (5,755) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (50,787) (24,240) Nordural expansion (80,314) (88,764) Investments in and advances to joint ventures - net (35,220) - Proceeds from sale of property, plant and equipment 331 695 Restricted cash deposits 8 3,738 ---------- ---------- Net cash used in investing activities (165,982) (108,571) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings of long-term debt - 30,000 Repayment of long-term debt - (369,436) Repayment of long-term debt - related party (505,197) - Borrowing under revolving credit facility 35,000 - Repayment under revolving credit facility (10,000) - Excess tax benefits from share-based compensation 657 588 Issuance of common stock - net of issuance costs 443,667 417,771 ---------- ---------- Net cash provided by (used in) financing activities (35,873) 78,923 ---------- ---------- CHANGE IN CASH 68,438 (35,403) CASH, BEGINNING OF YEAR 60,962 96,365 ---------- ---------- CASH, END OF YEAR $ 129,400 $ 60,962 ========== ========== Century Aluminum Company Selected Operating Data (Unaudited) SHIPMENTS - PRIMARY ALUMINUM Direct (1) Toll ----------------------------- ----------------------------- Metric (000) Metric (000) (000) Tons Pounds $/Pound Tons Pounds Revenue --------- --------- --------- --------- --------- --------- 2008 4th Quarter 132,477 292,061 $ 1.00 69,783 153,844 $ 111,159 3rd Quarter 135,200 298,065 $ 1.36 68,418 150,835 $ 148,227 2nd Quarter 131,639 290,214 $ 1.37 66,533 146,681 $ 147,128 1st Quarter 133,004 293,223 $ 1.17 66,717 147,086 $ 127,177 --------- --------- --------- --------- --------- --------- Total 532,320 1,173,563 $ 1.23 271,451 598,446 $ 533,691 2007 4th Quarter 133,002 293,219 $ 1.07 65,136 143,600 $ 119,635 3rd Quarter 134,495 296,509 $ 1.13 61,046 134,583 $ 120,554 2nd Quarter 132,496 292,104 $ 1.19 56,154 123,798 $ 117,667 1st Quarter 131,568 290,057 $ 1.15 53,054 116,964 $ 114,383 --------- --------- --------- --------- --------- --------- Total 531,561 1,171,889 $ 1.13 235,390 518,945 $ 472,239 (1) Does not include Toll shipments from Nordural Grundartangi Contacts: Mike Dildine (media) 831-642-9364 Shelly Lair (investors) 831-642-9357