cenxform_10q.htm
 
 



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 
FORM 10-Q
 
x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31, 2009
 
OR
 
 
o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _______ to _______.
 
Commission file number 0-27918
 
 
 
Century Aluminum Company
 
(Exact name of Registrant as specified in its Charter)
 
Delaware
(State or other Jurisdiction of Incorporation or Organization)
13-3070826
(IRS Employer Identification No.)
2511 Garden Road
Building A, Suite 200
Monterey, California
(Address of principal executive offices)
93940
(Zip Code)
 
Registrant’s telephone number, including area code: (831) 642-9300
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   x  Yes                o  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).*  o  Yes      o  No

* - The registrant is not currently required to submit interactive data files.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer
x
Accelerated Filer
o
Non-Accelerated Filer
(Do not check if a smaller reporting company)
o
Smaller Reporting Company
o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   o  Yes     x  No

The registrant had 74,139,488 shares of common stock outstanding at April 30, 2009.
 

 


 



 
Page
PART I –  FINANCIAL INFORMATION
 
 
 
 
 
 
PART II.  OTHER INFORMATION
 
 
 
 



 

PART I – FINANCIAL INFORMATION
Item 1.  Financial Statements
CENTURY ALUMINUM COMPANY
 
CONSOLIDATED BALANCE SHEETS
 
(Dollars in thousands, except share data)
 
(Unaudited)
 
   
March 31,
   
December 31,
 
   
2009
   
2008
 
ASSETS
           
Cash
  $ 267,492     $ 129,400  
Restricted cash
    865       865  
Short-term investments
          13,686  
Accounts receivable — net
    34,517       60,859  
Due from affiliates
    12,158       39,062  
Inventories
    112,753       138,111  
Prepaid and other current assets
    23,557       99,861  
Deferred taxes — current portion
          32,290  
Total current assets
    451,342       514,134  
Property, plant and equipment — net
    1,329,956       1,340,037  
Intangible asset — net
    28,490       32,527  
Due from affiliates – less current portion
    7,599       7,599  
Other assets
    160,642       141,061  
TOTAL
  $ 1,978,029     $ 2,035,358  
LIABILITIES AND SHAREHOLDERS’ EQUITY
               
LIABILITIES:
               
Accounts payable, trade
  $ 80,189     $ 102,143  
Due to affiliates
    62,920       70,957  
Accrued and other current liabilities
    64,172       58,777  
Accrued employee benefits costs — current portion
    12,070       12,070  
Convertible senior notes
    154,691       152,700  
Industrial revenue bonds
    7,815       7,815  
Total current liabilities
    381,857       404,462  
Senior unsecured notes payable
    250,000       250,000  
Revolving credit facility
          25,000  
Accrued pension benefits costs — less current portion
    49,336       50,008  
Accrued postretirement  benefits costs — less current  portion
    180,464       219,539  
Other liabilities
    42,023       33,464  
Deferred taxes
    65,443       71,805  
Total noncurrent liabilities
    587,266       649,816  
CONTINGENCIES AND COMMITMENTS (NOTE 13)
               
SHAREHOLDERS’ EQUITY:
               
Preferred stock (one cent par value, 5,000,000 shares authorized; 153,555 and 155,787 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively)
    2       2  
Common stock (one cent par value, 100,000,000 shares authorized; 74,139,488 and 49,052,692 shares issued and outstanding at March 31, 2009 and December 31, 2008, respectively)
    741       491  
Additional paid-in capital
    2,377,310       2,272,128  
Accumulated other comprehensive loss
    (100,190 )     (137,208 )
Accumulated deficit
    (1,268,957 )     (1,154,333 )
Total shareholders’ equity
    1,008,906       981,080  
TOTAL
  $ 1,978,029     $ 2,035,358  


 
See notes to consolidated financial statements
 
- 1 -
 

 
CENTURY ALUMINUM COMPANY
 
CONSOLIDATED STATEMENTS OF OPERATIONS
 
(Dollars in thousands, except per share amounts)
 
(Unaudited)
 
   
Three months ended March 31,
 
   
2009
   
2008
 
NET SALES:
           
Third-party customers
  $ 170,414     $ 356,893  
Related parties
    54,173       114,249  
      224,587       471,142  
Cost of goods sold
    296,948       375,147  
Gross profit (loss)
    (72,361 )     95,995  
Other operating expenses
    24,332        
Selling, general and administrative expenses
    10,120       18,866  
Operating income (loss)
    (106,813 )     77,129  
Interest expense
    (8,043 )     (8,032 )
Interest income
    725       2,523  
Interest income – affiliates
    142        
Net loss on forward contracts
    (3,602 )     (448,308 )
Other expense - net
    (242 )     (533 )
Loss before income taxes and equity in earnings of joint ventures
    (117,833 )     (377,221 )
Income tax benefit
    4,096       138,892  
Loss before equity in earnings of joint ventures
    (113,737 )     (238,329 )
Equity in (losses) earnings  of joint ventures
    (887 )     4,393  
Net loss
  $ (114,624 )   $ (233,936 )
                 
LOSS PER COMMON SHARE:
               
Basic and Diluted
  $ (1.77 )   $ (5.70 )
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
               
Basic and Diluted
    64,608       41,040  

See notes to consolidated financial statements

- 2 -
 


CENTURY ALUMINUM COMPANY
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(Dollars in thousands)
 
(Unaudited)
 
   
Three months ended March 31,
 
   
2009
   
2008
 
CASH FLOWS FROM OPERATING ACTIVITIES:
           
Net loss
  $ (114,624 )   $ (233,936 )
Adjustments to reconcile net loss to net cash provided by operating activities:
               
Unrealized net loss on forward contracts
    1,817       395,930  
Accrued plant curtailment costs
    18,235        
Depreciation and amortization
    20,845       20,785  
Lower of cost or market inventory adjustment
    2,271        
Deferred income taxes
    25,548       (144,331 )
Pension and other post retirement benefits
    4,112       4,177  
Stock-based compensation
    (90 )     8,470  
Excess tax benefits from share-based compensation
          (499 )
Undistributed losses (earnings) of joint ventures
    887       (4,393 )
Changes in operating assets and liabilities:
               
Accounts receivable – net
    26,342       (6,356 )
Purchase of short-term trading securities
          (108,536 )
Sale of short-term trading securities
    13,686       127,450  
Due from affiliates
    26,904       (8,513 )
Inventories
    4,761       (12,802 )
Prepaid and other current assets
    74,187       2,710  
Accounts payable, trade
    (12,201 )     12,797  
Due to affiliates
    (8,037 )     24,542  
Accrued and other current liabilities
    (9,887 )     (18,974 )
Other – net
    (20 )     329  
Net cash provided by operating activities
    74,736       58,850  
                 
CASH FLOWS FROM INVESTING ACTIVITIES:
               
Purchase of property, plant and equipment
    (9,184 )     (8,915 )
Nordural expansion
    (6,501 )     (7,389 )
Net cash used in investing activities
    (15,685 )     (16,304 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES:
               
Repayments under revolving credit facility
    (25,000 )      
Excess tax benefits from shared-based compensation
          499  
Issuance of common stock – net of issuance costs
    104,041       1,543  
Net cash provided by financing activities
    79,041       2,042  
NET CHANGE IN CASH
    138,092       44,588  
Cash, beginning of the period
    129,400       60,962  
Cash, end of the period
  $ 267,492     $ 105,550  
 
See notes to consolidated financial statements

- 3 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements for the
Three months ended March 31, 2009 and 2008
(Dollars in thousands, except per share amounts)
(UNAUDITED)
 

 
1.
 
The accompanying unaudited interim consolidated financial statements of Century Aluminum Company should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2008.  In management’s opinion, the unaudited interim consolidated financial statements reflect all adjustments, which are of a normal and recurring nature, that are necessary for a fair presentation of financial results for the interim periods presented.  Operating results for the first three months of 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009.  Throughout this Form 10-Q, and unless expressly stated otherwise or as the context otherwise requires, "Century Aluminum," "Century," "we," "us," "our" and "ours" refer to Century Aluminum Company and its consolidated subsidiaries.
 
2.
Management’s Plans
 
We have incurred losses each year since 2005 and had an accumulated deficit of $1,268,957 as of March 31, 2009.  For the quarter ended March 31, 2009 and the year ended December 31, 2008, we sustained net losses available to common stockholders of $114,624 and $895,187 (as adjusted for the adoption of FSP APB 14-1, see Note 3), respectively.  Our financial position and liquidity have been and are expected to continue to be materially adversely affected by low aluminum prices as compared to our cost of production.  If primary aluminum prices remain at current levels, we would expect such liquidity would be sufficient to fund our operations through the middle of 2010.
 
Our principal sources of liquidity are available cash, cash flow from operations and available borrowings under our revolving credit facility.  We will continue to explore alternative or supplementary financing arrangements to the revolving credit facility.  Our principal uses of cash are operating costs, payments of principal and interest on our outstanding debt, the funding of capital expenditures and investments in related businesses, working capital and other general corporate requirements.
 

 
3.
FSP APB 14-1 Adoption
 
FSP APB 14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (the “FSP”) fundamentally changes the accounting for certain convertible debt instruments.  Issuers of convertible debt instruments that are affected by the FSP must separately account for the liability and equity components of the convertible debt instruments in a manner that reflects the entity’s hypothetical nonconvertible borrowing rate.  The FSP requires the retrospective application of these changes to our financial statements back to the date of issuance of our 1.75% convertible senior notes with a cumulative effect adjustment recognized as of the beginning of the first period presented.  The FSP was effective for Century Aluminum on January 1, 2009.
 
The FSP applies to our 1.75% convertible senior notes issued in 2004 (the “Notes”).  The holders of our Notes may convert at any time at an initial conversion rate of 32.743 shares of common stock per $1,000 principal amount of notes, equivalent to a conversion price of $30.5409 per share of common stock.  Upon conversion, we would deliver cash up to the principal amount of the Notes to be converted and, at our election, cash, common stock or a combination thereof for any conversion obligation in excess of the principal amount of the Notes to be converted.  We did not enter into any derivative transactions in connection with the issuance of the Notes.  Currently, the if-converted value of the Notes is significantly less than the principal balance of the Notes.

- 4 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
We applied the guidance in the FSP to measure the fair value of the liability component of the Notes using a discounted cash flow model.  We assessed the expected life of the liability component to be seven years or through August 2011 (based on the noteholder’s put option in August 2011) and applied a hypothetical nonconvertible borrowing rate (7.25%) which was based on yields of similarly rated nonconvertible instruments issued in August 2004.  We determined the carrying amount of the equity component by deducting the fair value of the liability component from the principal amount of the Notes.  The tax effect of the temporary basis difference associated with the liability component of the Notes is recorded as an adjustment to additional paid in capital as proscribed by the FSP.
 
In 2004, we capitalized approximately $6,000 of transaction costs related to the issuance of the Notes.  We amortize these capitalized financing fees to interest expense over the expected life of the Notes.  The FSP requires the allocation of these capitalized financing fees to the liability and equity components and accounting for the allocated fees as either debt issuance costs or equity issuance costs.
 
The adoption of the FSP resulted in the following amounts recognized in our financial statements:

   
March 31, 2009
   
December 31, 2008
 
             
Principal of the liability component of 1.75% convertible senior notes
  $ 175,000     $ 175,000  
Unamortized debt discount
    (20,309 )     (22,300 )
Net carrying amount of liability component of 1.75% convertible senior notes
  $ 154,691     $ 152,700  
                 
Net carrying amount of equity component of 1.75% convertible senior notes (net of $18,261 taxes and $1,799 issuance costs)
  $ 32,114     $ 32,114  

Interest expense related to the 1.75% convertible senior notes:
 
   
Three months ended March 31,
 
   
2009
   
2008
 
Contractual interest coupon
  $ 766     $ 766  
Amortization of the debt discount on the liability component
    1,990       1,853  
Total
  $ 2,756     $ 2,619  
                 
Effective interest rate for the liability component for the period
    6.30 %     5.99 %
 
The estimated amortization expense for the debt discount for the 1.75% convertible senior notes through the remaining expected life (August 2011) is as follows:

   
Nine months ending December 31, 2009
   
2010
   
2011
 
Estimated debt discount amortization expense
  $ 6,163     $ 8,755     $ 5,391  

 
The adoption of the FSP requires the retrospective application to all periods presented as of the beginning of the first period presented.  As of January 1, 2009, the FSP was adopted and comparative financial statements of prior years have been adjusted to apply the FSP retrospectively.  The line items for the 2008 financial statements which are affected by the change in accounting principle are indicated below.

- 5 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 

CONDENSED CONSOLIDATED BALANCE SHEETS
 
   
December 31, 2008
 
   
As Reported
   
Effect of change
   
As Adjusted
 
ASSETS
                 
Total current assets
  $ 514,134     $     $ 514,134  
Property, plant and equipment — net
    1,340,037             1,340,037  
Intangible asset — net
    32,527             32,527  
Due from affiliates – less current portion
    7,599             7,599  
Other assets
    141,802       (741 )     141,061  
TOTAL
  $ 2,036,099     $ (741 )   $ 2,035,358  
LIABILITIES AND SHAREHOLDERS’ EQUITY
                       
LIABILITIES:
                       
Accounts payable, trade
  $ 102,143     $     $ 102,143  
Due to affiliates
    70,957             70,957  
Accrued and other current liabilities
    58,777             58,777  
Accrued employee benefits costs — current portion
    12,070             12,070  
Convertible senior notes
    175,000       (22,300 )     152,700  
Industrial revenue bonds
    7,815             7,815  
Total current liabilities
    426,762       (22,300 )     404,462  
Total noncurrent liabilities
    649,816             649,816  
SHAREHOLDERS’ EQUITY:
                       
Preferred stock
    2             2  
Common stock
    491             491  
Additional paid-in capital
    2,240,014       32,114       2,272,128  
Accumulated other comprehensive loss
    (137,208 )           (137,208 )
Accumulated deficit
    (1,143,778 )     (10,555 )     (1,154,333 )
Total shareholders’ equity
    959,521       21,559       981,080  
TOTAL
  $ 2,036,099     $ (741 )   $ 2,035,358  
 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
Three months ended March 31, 2008
 
   
As Reported
   
Effect of change
   
As Adjusted
 
                   
Net Sales
  $ 471,142     $     $ 471,142  
Cost of goods sold
    375,147             375,147  
Gross profit
    95,995             95,995  
Selling, general and administrative expenses
    18,866             18,866  
Operating income
    77,129             77,129  
Interest expense
    (6,243 )     (1,789 )     (8,032 )
Interest income
    2,523             2,523  
Net loss on forward contracts
    (448,308 )           (448,308 )
Other expense - net
    (533 )           (533 )
Loss before income taxes and equity in earnings of joint ventures
    (375,432 )     (1,789 )     (377,221 )
Income tax benefit
    138,243       649       138,892  
Loss before equity in earnings of joint ventures
    (237,189 )     (1,140 )     (238,329 )
Equity in earnings of joint ventures
    4,393             4,393  
Net loss
  $ (232,796 )   $ (1,140 )   $ (233,936 )
                         
LOSS PER COMMON SHARE:
                       
Basic and Diluted
  $ (5.67 )   $ (0.03 )   $ (5.70 )
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
                       
Basic and Diluted (in thousands)
    41,040             41,040  
 

- 6 -
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)
 
 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
Three months ended March 31, 2008
 
   
As Reported
   
Effect of change
   
As Adjusted
 
CASH FLOWS FROM OPERATING ACTIVITIES:
                 
Net loss
  $ (232,796 )   $ (1,140 )   $ (233,936 )
Adjustments to reconcile net loss to net cash provided by operating activities:
                       
Unrealized net loss on forward contracts
    395,930             395,930  
Depreciation and amortization
    20,785             20,785  
Deferred income taxes
    (143,682 )     (649 )     (144,331 )
Pension and other post retirement benefits
    4,177             4,177  
Stock-based compensation
    8,470             8,470  
Excess tax benefits from share-based compensation
    (499 )           (499 )
Undistributed earnings of joint ventures
    (4,393 )           (4,393 )
Changes in operating assets and liabilities:
                       
Accounts receivable – net
    (6,356 )           (6,356 )
Purchase of short-term trading securities
    (108,536 )           (108,536 )
Sale of short-term trading securities
    127,450             127,450  
Due from affiliates
    (8,513 )           (8,513 )
Inventories
    (12,802 )           (12,802 )
Prepaid and other current assets
    2,710             2,710  
Accounts payable, trade
    12,797             12,797  
Due to affiliates
    24,542             24,542  
Accrued and other current liabilities
    (18,974 )           (18,974 )
Other – net
    (1,460 )     1,789       329  
Net cash provided by operating activities
    58,850             58,850  
                         
Net cash used in investing activities
    (16,304 )           (16,304 )
                         
Net cash provided by financing activities
    2,042             2,042  
NET CHANGE IN CASH
    44,588             44,588  
Cash, beginning of the period
    60,962             60,962  
Cash, end of the period
  $ 105,550     $     $ 105,550  
 
As the result of the accounting change, our accumulated deficit as of January 1, 2008, increased $13,684 from $245,462 to $259,146.
 

4.
Curtailment of Operations – Ravenswood and Hawesville
 
On December 17, 2008, our subsidiary, Century Aluminum of West Virginia, Inc. (“CAWV”), issued a conditional Worker Adjustment and Retraining Notification Act (“WARN”) notice at its Ravenswood, West Virginia smelter related to a curtailment of plant operations in 60 days. This facility employed approximately 684 persons.  Simultaneously with the issuance of the WARN, CAWV began the immediate curtailment of one of its four potlines which was completed by December 20, 2008.  In December 2008, we incurred curtailment costs of $1,667 for this partial curtailment at CAWV.  These costs were included in cost of goods sold.
 
On February 4, 2009, we announced the curtailment of the remaining plant operations at Ravenswood.  Layoffs for the majority of Ravenswood's employees were completed by February 20, 2009.  The decision to curtail the operations was due to the relatively high operating cost at Ravenswood and the depressed global price for primary aluminum.

- 7 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
On March 3, 2009, our subsidiary, Century Aluminum of Kentucky, announced the orderly curtailment of one potline at its Hawesville, Kentucky aluminum smelter (“Hawesville”).  Hawesville has production capacity of approximately 244,000 metric tons per year of primary aluminum from five potlines. The potline curtailment was completed in March 2009.  The action reduced primary aluminum production by approximately 4,370 metric tons per month and impacted approximately 120 employees.
 
We incurred curtailment charges of $24,332 during the three months ended March 31, 2009, which are reported in the “Other operating expenses” line item in the Consolidated Statements of Operations.  The majority of the curtailment charges related to Ravenswood.  The components of the curtailment costs for the three months ended March 31, 2009 are as follows:
 

   
Three months ended
 
   
March 31, 2009
 
       
Severance/employee-related cost
  $ 24,590  
Alumina contract – spot sales losses
    3,331  
Power/other contract termination costs
    6,332  
Ongoing site costs
    1,589  
Gross expense
    35,842  
Pension plan curtailment adjustment
    2,483  
OPEB plan curtailment adjustment
    (13,993 )
Net expense
  $ 24,332  
 
Cash expenditure forecasts and cash payments to date
 
   
Total gross cash expenditure forecast
   
Approximate cash payments through March 31, 2009
 
Curtailment of operations at Ravenswood and Kentucky (24 months)
  $ 33,000     $ 4,450  
Ongoing idling costs at Ravenswood (24 months)
  $ 32,000     $ 500  
Contract termination costs – alumina purchase contract (1)
  $ 9,000     $ 2,750  

(1)
This estimate is based on actual losses during the first quarter and $6,000 in future payments to St. Ann Bauxite Ltd. in compensation for the reduced bauxite sales related to alumina and bauxite contract amendments.  See Note 21 Subsequent Events for additional information about the alumina and bauxite contract amendments.
 

5.
Equity Offering
 
February 2009 Offering
 
In February 2009, we completed a public offering of 24,500,000 shares of common stock at a price of $4.50 per share, raising $110,250 before offering costs.  The offering costs were approximately $6,209, representing underwriting discounts and commissions and offering expenses.

- 8 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
Glencore International AG (together with its subsidiaries, “Glencore”) purchased 13,242,250 shares of common stock in the February 2009 offering.  We agreed with Glencore to amend the terms of our Standstill and Governance Agreement with Glencore to increase the percentage of our voting securities that Glencore could acquire and vote prior to April 7, 2009, in connection with Glencore’s purchase of common stock in this offering.  As of March 31, 2009, we believe that Glencore beneficially owned, through its common stock, approximately 38.1% of our issued and outstanding common stock and, through its ownership of common and preferred stock, an overall 48.7% economic ownership of Century.
 
We intend to use the net proceeds from the sale of our common stock for general corporate purposes, including repayment of debt.

 

6.
Fair Value Measurements and Derivative Instruments
 
SFAS No. 157, “Fair Value Measurements” defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements.  This pronouncement applies to a broad range of other existing accounting pronouncements that require or permit fair value measurements.  SFAS No. 157 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.”  Under SFAS No. 157, fair value is an exit price and that exit price should reflect all the assumptions that markets participant would use in pricing the asset or liability.
 
Short-term Investments.  Our short-term investments consist of tax-exempt municipal bonds.  The market value of these investments is based upon their quoted market price in markets that are not actively traded.
 
Derivatives.  Our derivative contracts have included natural gas forward financial purchase contracts, foreign currency forward contracts, primary aluminum forward physical and financial sales contracts and the Ravenswood power contract.  We measure the fair value of these contracts based on the quoted future market prices at the reporting date in their respective principal markets for all available periods.  We discount the expected cash flows from these contracts using a risk-adjusted discount rate.  The primary aluminum forward physical delivery contracts that are accounted for as derivatives are marked-to-market using the London Metals Exchange (“LME”) spot and forward market for primary aluminum and the U.S. Midwest Premium.  Because there is no quoted futures market price for the U.S. Midwest premium component of the market price for primary aluminum, it is necessary for management to estimate the U.S. Midwest premium based on the historical U.S. Midwest premium.  Prior to the termination of the primary aluminum forward financial sales contracts in July 2008, the term of one of these contracts extended beyond the quoted LME futures market.  We estimated the fair value of that contract by making certain assumptions about future market prices of primary aluminum beyond the quoted LME market prices in 2013.  These future market assumptions were significant to the fair value measurements.  The Ravenswood power contract derivative is valued based in part on the LME forward market.
 
Fluctuations in the market prices for our primary aluminum forward financial sales contracts had a significant impact on gains and losses from forward contracts included in our financial statements from period to period.  Unrealized gains and losses for these primary aluminum forward financial sales contracts were included in net gain (loss) on forward contracts.  Our other derivative contracts, natural gas forward financial purchase contracts and foreign currency forward contracts qualify for cash flow hedge treatment under SFAS No. 133, “Accounting for Derivatives.”  The effective portion of these contracts is recorded in other comprehensive income.  The realized gains or losses on these hedges are recorded in the statement of operations when the hedged transaction affects earnings.  The ineffective portions of these hedges are recognized immediately in the statement of operations.  We have no foreign currency forwards or options outstanding at March 31, 2009 or December 31, 2008.  We settled our foreign currency forward contracts in October 2008.

- 9 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)


 
Fair Value of Derivative Assets and Liabilities
   
 
Balance sheet location
 
March 31, 2009
   
December 31, 2008
 
DERIVATIVE ASSETS:
             
Power contract
Prepaid and other assets
  $ 85     $ 2,202  
TOTAL DERIVATIVE ASSETS
      85       2,202  
                   
DERIVATIVE LIABILITIES:
                 
Natural gas forward financial contracts
Accrued and other current liabilities
  $ (6,208 )   $ (10,130 )
Aluminum sales premium contracts – current portion
Accrued and other current liabilities
    (932 )     (1,256 )
Aluminum sales premium contracts – less current portion
Other liabilities
  $ (492 )     (503 )
TOTAL DERIVATIVE LIABILITIES
    $ (7,632 )     (11,889 )


Derivatives in SFAS 133 Cash Flow Hedging Relationships:
 
   
Three months ended March 31, 2009
 
   
Amount of loss recognized in OCI on derivative, net of tax (effective portion)
 
Loss reclassified from OCI to income on derivatives (effective portion)
   
Loss recognized in income on Derivative (ineffective portion)
 
   
Amount
 
Location
 
Amount
   
Location
   
Amount
 
                           
Natural gas forward financial contracts
  $ (6,208 )
Cost of goods sold
  $ (8,767 )              
                                 
Foreign currency (1)
  $ (4,110 )
Cost of goods sold
  $ (2,526 )  
Net loss on forward contracts
    $ (1,607 )

(1)
We have no foreign currency forwards or options outstanding at March 31, 2009 or December 31, 2008.  We settled our foreign currency forward contracts in October 2008.
 
Natural Gas
 
To mitigate the volatility of the natural gas markets, we enter into fixed-price forward financial purchase contracts, accounted for as cash flow hedges, which settle in cash in the period corresponding to the intended usage of natural gas.  These forward contracts, which are designated as cash flow hedges and qualify for hedge accounting under SFAS No.133, have maturities through November 2009.  The critical terms of the contracts essentially match those of the underlying exposure.
 
The effective portion of the forward contracts gain or loss is reported in other comprehensive income, and the ineffective portion is reported currently in earnings.  Each month, when we settle the natural gas forward contracts, the realized gain or loss on our cash flow hedges are recognized in income as part of our cost of goods sold.
 
We had the following outstanding forward financial purchase contracts to hedge forecasted transactions:
 
 
March 31, 2009
December 31, 2008
Natural gas forward financial contracts (thousands of MMBTU)
1,730
3,340
 


- 10 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)

 
 
 
Foreign Currency
 
We are exposed to foreign currency risk due to fluctuations in the value of the U.S. dollar as compared to the euro, the Icelandic krona (“ISK”) and the Chinese yuan.  Grundartangi’s labor costs, maintenance costs and other local services are denominated in ISK and a portion of its anode costs are denominated in euros.  As a result, an increase or decrease in the value of those currencies relative to the U.S. dollar would affect Grundartangi’s operating margins.  In addition, we expect to incur capital expenditures for the construction of the Helguvik greenfield smelter project, although we are currently evaluating the Helguvik project’s cost, scope and schedule in light of the global credit crisis and weakening commodity prices.  A significant portion of the capital expenditures for the Helguvik project are forecasted to be denominated in currencies other than the U.S. dollar with a significant portion in ISK.
 
We manage our foreign currency exposure by entering into foreign currency forward contracts when management deems such transactions appropriate.  During 2008, we purchased foreign currency forward contracts to hedge our foreign currency risk in the ISK associated with a portion of the forecasted operating costs payable in ISK at Grundartangi and for a portion of the forecasted capital expenditures payable in ISK for the Helguvik project.  These forward contracts were designated as cash flow hedges, qualified for hedge accounting under SFAS No.133 and had maturities through September 2009.  The critical terms of the contracts essentially matched those of the underlying exposure.  The effective portion of the forward contracts gain or loss was reported in other comprehensive income and the ineffective portion was reported currently in earnings.
 
Each month, when we settle the foreign currency forward contracts, the realized gain or loss on our cash flow hedges for Grundartangi operating costs are recognized in income as part of our cost of goods sold.  The realized gain or loss for our cash flow hedges for the Helguvik capital expenditures are accumulated in other comprehensive income and would be reclassified to earnings when the project is completed as part of the depreciation expense of the capital assets.
 
In October 2008, following the appreciable devaluation of the ISK versus the U.S. dollar, we reached an agreement with our counterparties and settled the remaining forward contracts that extended through September 2009.
 
We recognized losses of approximately $1,607 in the first quarter of 2009 (none in the first quarter of 2008) on the ineffective portions of the forward contracts for the forecasted Helguvik capital expenditures.  These losses are recorded in net loss on forward contracts in our Consolidated Statements of Operations.  The ineffective portion of these forward contracts represents forward contract positions in excess of the revised forecast schedule of Helguvik capital expenditures.
 
The foreign currency forward and natural gas forward financial purchase contracts are subject to counterparty credit risk.  However, we only enter into forward financial contracts with counterparties we determine to be creditworthy at the time of entering into the contract.  Due to the fact that we are currently in a liability position for almost all of our forward contracts, our counterparty risk is very minimal at this time.  If any counterparty failed to perform according to the terms of the contract, the accounting impact would be limited to the difference between the contract price and the market price applied to the contract volume on the date of settlement.

- 11 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 

 
As of March 31, 2009, an accumulated other comprehensive loss of $10,624 is expected to be reclassified to earnings over the next 12-month period.

Derivatives Not designated as Hedging Instruments under SFAS 133:
 
 
Three months ended March 31, 2009
 
 
Gain (loss) recognized in income on derivative
 
 
Location
 
Amount
 
         
Power contracts
Net loss on forward contracts
  $ (2,117 )
           
Aluminum sales premium contracts
Related party sales
  $ 804  
Aluminum sales premium contracts
Net loss on forward contracts
  $ 122  

 
Power
 
We are party to a power supply agreement at Ravenswood that contains LME-based pricing provisions that are an embedded derivative.  The embedded derivative does not qualify for cash flow hedge treatment and is marked to market quarterly.  Based on our expected power usage over the remaining term of the contract, gains and losses associated with the embedded derivative are recorded in net gain (loss) on forward contracts in the Consolidated Statements of Operations.  We have recorded a derivative asset of $85 and $2,202 for the embedded derivative at March 31, 2009 and December 31, 2008, respectively.
 
Aluminum sales premium contracts
 
The Glencore Metal Agreement I is a physical delivery contract for 50,000 mtpy of primary aluminum through December 31, 2009 with variable, LME-based pricing.  We account for the Glencore Metal Agreement I as a derivative instrument under SFAS No. 133.  We have not designated the Glencore Metal Agreement I as “normal” because it replaced and was a substitute for a significant portion of a sales contract which did not qualify for this designation.  Because the Glencore Metal Agreement I is variably priced, we do not expect significant variability in its fair value, other than changes that might result from the absence of the U.S. Midwest premium.  Gains and losses on the derivative are based on, (1) the difference between a contracted U.S. Midwest premium and the actual U.S. Midwest premium at settlement, and (2) the difference between a contracted U.S. Midwest premium and a forecast of the U.S. Midwest premium for future periods.  Settlements are recorded in related party sales.  Unrealized gains (losses) based on forecasted U.S. Midwest premiums are recorded in net loss on forward contracts on the Consolidated Statements of Operations.
 
The Glencore Metal Agreement II is a physical delivery contract for 20,400 mtpy of primary aluminum through December 31, 2013 with variable, LME-based pricing.  Under the Glencore Metal Agreement II, pricing is based on market prices, adjusted by a negotiated U.S. Midwest premium with a cap and a floor as applied to the current U.S. Midwest premium.  We account for the Glencore Metal Agreement II as a derivative instrument under SFAS No. 133.  Gains and losses on the derivative are based on the difference between the contracted U.S. Midwest premium and actual and forecasted U.S. Midwest premiums.  Settlements are recorded in related party sales.  Unrealized gains (losses) based on forecasted U.S. Midwest premiums are recorded in net loss on forward contracts on the Consolidated Statements of Operations.

- 12 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
We had the following outstanding forward contracts that were entered into that were not designated as hedging instruments:
 

   
March 31, 2009
   
December 31, 2008
 
Power contract (in megawatt hours) (1)
    3,931       1,066,000  
                 
Aluminum sales contract premiums (pounds of primary aluminum) (2)
    297,278,000       335,102,000  

(1)
We mark this contract to market based on our expected usage during the remaining term of the contract.  Our expected usage at March 31, 2009 reflects the curtailment of operations at Ravenswood in February 2009.
(2)
Represents the remaining physical deliveries under our Glencore Metal Agreements I and II.
 
Our metals, natural gas and foreign currency risk management activities are subject to the control and direction of senior management.  These activities are regularly reported to our board of directors.
 
The following table sets forth by level within the SFAS No. 157 fair value hierarchy our financial assets and liabilities that were accounted for at fair value on a recurring basis.  As required by SFAS No. 157, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.  Our assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of fair value assets and liabilities and the placement within the fair value hierarchy levels.

Recurring Fair Value Measurements
 
As of March 31, 2009
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
ASSETS:
                       
Derivative assets
  $     $     $ 85     $ 85  
                                 
LIABILITIES:
                               
Derivative liabilities
  $ (6,208 )   $     $ (1,424 )   $ (7,632 )
 

 
Recurring Fair Value Measurements
 
As of December 31, 2008
 
   
Level 1
   
Level 2
   
Level 3
   
Total
 
ASSETS:
                       
Short-term investments
  $     $ 13,686     $     $ 13,686  
Derivative assets
                2,202       2,202  
TOTAL
  $     $ 13,686     $ 2,202     $ 15,888  
                                 
LIABILITIES:
                               
Derivative liabilities
  $ (10,130 )   $     $ (1,759 )   $ (11,889 )
 

 
Change in Level 3 Fair Value Measurements during the three months ended March 31,
     
   
Derivative liabilities/assets
 
   
2009
   
2008
 
Beginning balance January 1,
  $ 443     $ (1,070,290 )
Total loss (realized/unrealized) included in earnings
    (1,946 )     (448,238 )
Settlements
    164       41,415  
Ending balance, March 31,
  $ (1,339 )   $ (1,477,113 )
                 
Amount of total loss included in earnings attributable to the change in unrealized losses relating to assets and liabilities held at March 31,
  $ (1,770 )   $ (396,006 )
 


- 13 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
The net loss on our derivative liabilities is recorded in our statement of operations under Net loss on forward contracts.  In 2009, our Level 3 derivative liabilities are included in our Accrued and other liabilities and Other liabilities line items of our consolidated balance sheet.  In 2008, our Level 3 derivative liabilities are included in our Due to affiliates, Accrued and other liabilities, Due to affiliates – less current portion and Other liabilities line items of our consolidated balance sheet.

7.
Earnings Per Share
 
The following table provides a reconciliation of the computation of the basic and diluted earnings per share:
 
   
For the three months ended March 31,
   
2009
 
2008
   
Loss
 
 
Shares (000)
 
Per-Share
 
Loss
 
 
Shares (000)
 
Per-Share
Net loss
  $ (114,624 )       $ (233,936 )    
Amount allocated to common shareholders (1)
    100 %         100 %    
Basic and Diluted EPS:
                       
Loss allocable to common shareholders
  $ (114,624 )
64,608
$(1.77)
  $ (233,936 )
41,040
$(5.70)

(1)
We have not allocated the net loss allocable to common shareholders between common and preferred shareholders, as the holders of our preferred shares do not have a contractual obligation to share in the loss.  For the three months ended March 31, 2008, there was no preferred stock outstanding.

 
Impact of issuance of Series A Convertible Preferred Stock on EPS
 
In July 2008, we issued 160,000 shares of Series A Convertible Preferred Stock (convertible into 16,000,000 common shares) as a portion of the consideration for the termination of primary aluminum forward financial sales contracts with Glencore.  The preferred stock has similar characteristics of a “participating security” as described by SFAS No. 128, “Earnings Per Share” and EITF 03-6, “Participating Securities and the Two-Class Method under FASB Statement No. 128.”  In accordance with the guidance in SFAS No. 128 and EITF 03-6, we calculated basic EPS using the Two-Class Method, allocating undistributed income to our preferred shareholder consistent with their participation rights, and diluted EPS using the If-Converted Method.
 
EITF 03-6 does not require the presentation of basic and diluted EPS for securities other than common stock and the EPS amounts, as presented, only pertain to our common stock.
 
The Two-Class Method is an earnings allocation formula that determines earnings per share for common shares and participating securities according to dividends declared (or accumulated) and the participation rights in undistributed earnings.  Our preferred stock is a non-cumulative perpetual participating convertible preferred stock with no set dividend preferences.  The dividend rights of our preferred shareholder are equal to our common shareholders, as if it held of the number of common shares into which its shares of preferred stock are convertible into as of the record date.  The liquidation rights of the preferred stock mirror their dividend rights, in that the preferred stock ranks in parity to the common stock in respect of liquidation preference and would be entitled to share ratably with common stock holders in the distribution of assets in a liquidation (as though the preferred stock holders held the number of shares of common stock into which their shares of preferred stock were convertible).  The preferred stock has a liquidation preference of $0.01 per share.
 
The holders of our convertible preferred stock do not have a contractual obligation to share in the losses of Century.  Thus, in periods where we report net losses, we will not allocate the net losses to the convertible preferred stock for the computation of basic or diluted EPS.

- 14 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
Options to purchase 413,434 and 445,843 shares of common stock were outstanding as of March 31, 2009 and 2008, respectively.  For the three months ended March 31, 2009, all options, service-based stock and shares to be issued upon the assumed conversion of our convertible debt were excluded from the calculation of diluted EPS because of their antidilutive effect on earnings per share.  The average price for our common stock in the three months ended March 31, 2009 was below the conversion price of our 1.75% convertible senior notes.
 
For the three months ended March 31, 2008, all options, service-based stock, and shares to be issued upon the assumed conversion of our convertible debt were excluded from the calculation of diluted EPS because of their antidilutive effect on earnings per share.  Based on the average price for our common stock in the three months ended March 31, 2008, we would have been required to issue approximately 2,722,000 shares upon an assumed conversion of our convertible debt.
 
Service-based stock for which vesting is based upon continued service is not considered issued and outstanding shares of common stock until vested.  However, the service-based stock is considered a common stock equivalent and, therefore, the weighted average service-based stock is included, using the treasury stock method, in common shares outstanding for diluted earnings per share computations if they have a dilutive effect on earnings per share.  There were approximately 64,000 and 43,000 unvested shares of service-based stock outstanding at March 31, 2009 and 2008, respectively.  Our goal-based performance share units are not considered common stock equivalents until it becomes probable that performance goals will be obtained.
 

8.
Shareholders’ Equity
 
Series A Convertible Preferred Stock Conversions
 
In July 2008, we issued 160,000 shares of our Series A Convertible Preferred Stock.  All shares of Series A Convertible Preferred Stock are held by Glencore and were issued in connection with the termination of primary aluminum forward financial sales contracts with Glencore on July 7, 2008.  The issuance of common stock under our stock incentive programs triggers anti-dilution provisions of the preferred stock and results in the automatic conversion of shares of preferred stock into shares of common stock.
 

Automatic conversion of Series A Convertible Preferred Stock during the period:
 
Series A Convertible Preferred Stock
   
Shares of common stock issued upon conversion
 
             
Year ended December 31, 2008
    4,213       421,282  
Three months ended March 31, 2009
    2,232       223,252  
Total preferred stock conversions
    6,445       644,534  



9.
Income Taxes
 
As of March 31, 2009 and December 31, 2008, we had total unrecognized tax benefits (excluding interest) of $21,300 and $21,600, respectively.  The total amount of unrecognized tax benefits (including interest and net of federal benefit) that, if recognized, would affect the effective tax rate as of March 31, 2009 and December 31, 2008, respectively, are $15,300 and $15,200.
 
We recognize interest and penalties accrued related to unrecognized tax benefits in tax expense.  As of March 31, 2009, and December 31, 2008, we had approximately $3,800 and $3,400, respectively, of accrued interest related to unrecognized income tax benefits.

- 15 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
We do not expect any other significant change in the balance of unrecognized tax benefits within the next twelve months.
 
Our federal income tax returns beginning in 2005 are subject to examination.  Material state and local income tax matters have been concluded for years through 2002.  West Virginia completed an income tax examination for 2003 through 2005 with no changes. The majority of our other state returns beginning in 2003 are subject to examination.  Our Icelandic tax returns are subject to examination and income tax matters have been concluded for years through 2001.
 
During the three months ended March 31, 2009, we received a federal income tax refund of $79,724 related to a carryback of a portion of the December 31, 2008 taxable loss to tax years ended December 31, 2006 and December 31, 2007.  Additionally, we received a $10,094 federal income tax refund related to overpayments of December 31, 2008 estimated tax payments.
 

10.
Inventories
 
Inventories consist of the following:
 
   
March 31, 2009
   
December 31, 2008
 
Raw materials
  $ 7,150     $ 19,664  
Work-in-process
    11,764       16,133  
Finished goods
    15,291       8,203  
Operating and other supplies
    78,548       94,111  
Inventories
  $ 112,753     $ 138,111  
 
Inventories are stated at the lower of cost or market, using the first-in, first-out method.  Due to the curtailment of our Ravenswood operations in February 2009, approximately $18,326 of items that were classified as inventory at December 31, 2008 are not expected to be consumed within one year and have been reclassified to Other assets.
 

11.
Goodwill and Intangible Asset
 
In December 2008, we tested our goodwill for impairment and recorded a $94,844 impairment loss.  As of January 1, 2009, we have no goodwill.
 
The intangible asset consists of the power contract acquired in connection with our acquisition of the Hawesville facility (“Hawesville”).  The contract value is being amortized over its term using a method that results in annual amortization equal to the percentage of a given year’s expected gross annual benefit to the total as applied to the total recorded value of the power contract.  As of March 31, 2009, the gross carrying amount of the intangible asset was $155,986 with accumulated amortization of $127,496.

- 16 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
For the three months ended March 31, 2009 and 2008, amortization expense for the intangible asset totaled $4,037 and $3,769, respectively.  For the years ending December 31, 2009 and December 31, 2010, the estimated aggregate amortization expense for the intangible asset will be approximately $16,149 and $16,378, respectively.  The intangible asset is reviewed for impairment in accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” whenever events or circumstances indicate that its net carrying amount may not be recoverable.


12.
Debt

   
March 31, 2009
   
December 31, 2008
 
Debt classified as current liabilities:
           
1.75% convertible senior notes due 2024, interest payable semiannually, net of debt discount of $20,309 and $22,300, respectively (1)(2)(3)(4)
  $ 154,691     $ 152,700  
Hancock County industrial revenue bonds due 2028, interest payable quarterly (variable interest rates (not to exceed 12%))(1)
    7,815       7,815  
Debt classified as non-current liabilities:
               
7.5% senior unsecured notes payable due 2014, interest payable semiannually (3)(5)
    250,000       250,000  
Revolving credit facility (6)
          25,000  
Total Debt
  $ 412,506     $ 435,515  

(1)
The 1.75% convertible senior notes are classified as current because they are convertible at any time by the holder.  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 March 31, 2009 was 0.84%.
(2)
The 1.75% convertible senior notes are convertible at any time by the holder at an initial conversion rate of 32.7430 shares of Century common stock per one thousand dollars of principal amount of convertible senior notes, subject to adjustments for certain events.  The initial conversion rate is equivalent to a conversion price of approximately $30.5409 per share of Century common stock. Upon conversion of a 1.75% convertible senior note, the holder of such convertible note shall receive cash up to the principal amount of the 1.75% convertible senior note and, at our election, either cash or Century common stock, or a combination thereof, for the 1.75% convertible senior notes conversion value in excess of such principal amount, if any.  We may redeem some or all of the notes on or after August 6, 2009 at a price equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest, if any.  Holders of the 1.75% convertible senior notes may require us to purchase for cash all or part of the notes on each of August 1, 2011, August 1, 2014 and August 1, 2019 at a price equal to 100% of the principal amount of the notes being purchased, plus accrued and unpaid interest, if any.
(3)
The obligations of Century pursuant to the notes are unconditionally guaranteed, jointly and severally, on a senior unsecured basis by all of our existing domestic restricted subsidiaries.  The indentures governing these obligations contain customary covenants, including limitations on our ability to incur additional indebtedness, pay dividends, sell assets or stock of certain subsidiaries and purchase or redeem capital stock.
(4)
Amounts reflect the adoption and retrospective application of FSP APB 14-1 as of January 1, 2009.  This pronouncement changes the accounting treatment for certain convertible debt instruments requiring the segregation of these instruments into a liability and equity component.  These amounts represent the fair value of the liability component.  See Note 3 Adoption of FSP APB 14-1 for additional information.
(5)
On or after August 15, 2009, we may redeem any of the senior notes, in whole or in part, at an initial redemption price equal to 103.75% of the principal amount, plus accrued and unpaid interest.  The redemption price will decline each year after 2009 and will be 100% of the principal amount, plus accrued and unpaid interest, beginning on August 15, 2012.
(6)
Borrowings under the revolving line of credit are, at our option, at the LIBOR rate or bank base rate, plus or minus in each case an applicable margin.  The revolving line of credit is subject to customary covenants, including limitations on capital expenditures, additional indebtedness, affiliate transactions, liens, guarantees, mergers and acquisitions, dividends, distributions, capital redemptions and investments.

 
We have a $100,000 senior secured revolving credit facility (“Credit Facility”) with a syndicate of banks that will mature September 19, 2010.  Our obligations under the Credit Facility are unconditionally guaranteed by our domestic subsidiaries (other than Century Aluminum Holdings, Inc., Century Louisiana, Inc., and Nordural US LLC) and secured by a first priority security interest in all accounts receivable and inventory belonging to Century and our subsidiary borrowers.  The availability of funds under the Credit Facility is subject to a $15,000 reserve and limited by a specified borrowing base consisting of certain eligible accounts receivable and inventory.  Borrowings under the Credit Facility are, at our option, at the LIBOR rate or bank base rate, plus or minus in each case an applicable margin.  The Credit Facility is subject to customary covenants, including limitations on capital expenditures, additional indebtedness, affiliate transactions, liens, guarantees, mergers and acquisitions, dividends, distributions, capital redemptions and investments. We could issue up to a maximum of $25,000 in letters of credit under the Credit Facility. As of March 31, 2009, we had letters of credit totaling $11,263 outstanding.  Any outstanding letters of credit reduce our borrowing availability on a dollar-for-dollar basis.   We had no outstanding borrowings under the Credit Facility as of March 31, 2009.  As of March 31, 2009, we had additional borrowing availability of $22,780 under the Credit Facility.  We pay a commitment fee for the unused portion of the line.
 
The curtailment of our Ravenswood facility in February 2009 and one line at Hawesville in March 2009 resulted in lower eligible accounts receivable and inventory balances included in the borrowing base calculation and lowered the availability of funds under the Credit Facility.  See Note 4 Curtailment of Operations - Ravenswood and Hawesville for additional information.


13.
Contingencies and Commitments
 
Environmental Contingencies
 
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, there can be no assurance that future requirements or conditions at currently or formerly owned or operated properties will not result in liabilities which may have a material adverse effect.
 
Century Aluminum of West Virginia, Inc. continues to perform remedial measures at our Ravenswood, West Virginia facility (“Ravenswood”) pursuant to an order issued by the Environmental Protection Agency (“EPA”) in 1994 (the “3008(h) Order”). CAWV also conducted a RCRA facility investigation (“RFI”) under the 3008(h) Order evaluating other areas at Ravenswood that may have contamination requiring remediation. The RFI has been approved by appropriate agencies. CAWV has completed interim remediation measures at two sites identified in the RFI, and we believe no further remediation will be required. A Corrective Measures Study, which will formally document the conclusion of these activities, is being completed with the EPA. We believe a significant portion of the contamination on the two sites identified in the RFI is attributable to the operations of third parties and is their financial responsibility.

- 17 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
Prior to our purchase of Hawesville, the EPA issued a final Record of Decision (“ROD”) under the Comprehensive Environmental Response, Compensation and Liability Act. By agreement, Southwire, the former owner and operator is to perform all obligations under the ROD.  Century Aluminum of Kentucky General Partnership (“Century Kentucky”) has agreed to operate and maintain the ground water treatment system required under the ROD on behalf of Southwire, and Southwire will reimburse Century Kentucky for any expense that exceeds $400 annually.
 
Century is a party to an EPA Administrative Order on Consent (the “Order”) pursuant to which other past and present owners of an alumina refining facility at St. Croix, Virgin Islands 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. Lockheed Martin Corporation (“Lockheed”), which sold the facility to one of our affiliates, Virgin Islands Alumina Corporation (“Vialco”), in 1989, has tendered indemnity and defense of this matter to Vialco pursuant to the terms of the Lockheed–Vialco Asset Purchase Agreement.  Management does not believe Vialco’s liability under the Order or its indemnity to Lockheed will require material payments.  Through March 31, 2009, we have expended approximately $800 on the Hydrocarbon Recovery Plan.  Although there is no limit on the obligation to make indemnification payments, we expect the future potential payments under this indemnification to comply with the Order will be approximately $500, which may be offset in part by sales of recoverable hydrocarbons.
 
In May 2005, Century and Vialco were among several defendants listed in a lawsuit filed by the Commissioner of the Department of Planning and Natural Resources, in his capacity as Trustee for Natural Resources of the United States Virgin Islands.  The complaint alleges damages to natural resources caused by alleged releases from the alumina refinery facility at St. Croix and the adjacent petroleum refinery.  The primary cause of action is pursuant to the natural resource damage provisions of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, but various ancillary Territorial law causes of action were included as well.  Lockheed has tendered indemnity and defense of the case to Vialco pursuant to the terms of the Lockheed-Vialco Asset Purchase Agreement.  The complaint seeks unspecified monetary damages, costs and attorney fees.
 
In July 2005, Century and Vialco and the other defendants timely filed separate motions to dismiss asserting certain affirmative defenses including the statute of limitations.  On October 31, 2008, the district judge issued his ruling on these motions.  The judge denied the defendants' motions to dismiss based on the statute of limitations, but granted the motions as to certain of the Territorial law causes of action.  As to the motions to dismiss, the judge concluded that defendants had not proved the defense based only on the pleadings and did not consider the various exhibits attached to the motions.  Accordingly, this ruling does not foreclose a later finding, after appropriate discovery is conducted, that the statute of limitations bars certain claims.
 
In December 2006, Vialco and the two succeeding owners of the alumina facility were named as defendants in a lawsuit filed by the Commissioner of the Department of Planning and Natural Resources of the United States Virgin Islands.  The complaint alleges the defendants failed to take certain actions specified in a Coastal Zone management permit issued to Vialco in October 1994, and seeks statutory and other unspecified monetary penalties for the alleged violations.  Vialco filed its answer to the complaint asserting factual and affirmative defenses.  The parties are currently engaged in the discovery process.
 
We intend to defend both Vialco lawsuits vigorously and to assert all applicable defenses.  Pursuant to the terms of the asset purchase agreement between Vialco and the purchaser of the facility in 1995, the purchaser assumed responsibility for all costs and other liabilities associated with the bauxite waste disposal facilities, including pre-closure and post-closure liabilities.  At this time, it not practicable to predict the ultimate outcome of these actions or to estimate a range of possible damage awards.

- 18 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 
In July 2006, Century was 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 (formerly Pechiney Rolled Products, LLC) in July 1999. The complaint also seeks costs and attorney fees.  At this time, it is not practicable to predict the ultimate outcome of these actions or to estimate a range of possible damage awards.
 
It is our policy to accrue for costs associated with environmental assessments and remedial efforts when it becomes probable that a liability has been incurred and the costs can be reasonably estimated.  The aggregate environmental-related accrued liabilities were $927 and $848 at March 31, 2009 and December 31, 2008, respectively. All accrued amounts have been recorded without giving effect to any possible future recoveries. With respect to costs for ongoing environmental compliance, including maintenance and monitoring, such costs are expensed as incurred.
 
Because of the issues and uncertainties described above, and our inability to predict the requirements of future environmental laws, there can be no assurance that future capital expenditures and costs for environmental compliance will not have a material adverse effect on our future financial condition, results of operations, or liquidity. Based upon all available information, management does not believe that the outcome of these environmental matters will have a material adverse effect on our financial condition, results of operations, or liquidity.
 
Legal Contingencies
 
We have pending against us or may be subject to various lawsuits, claims and proceedings related primarily to employment, commercial, environmental, shareholder, safety and health matters. Although it is not presently possible to determine the outcome of these matters, management believes their ultimate disposition will not have a material adverse effect on our financial condition, results of operations, or liquidity.

In March 2009, four purported stockholder class actions against the Company were filed in the United States District Court for the Northern District of California.  The actions are entitled Petzschke v. Century Aluminum Co., et al., Abrams v. Century Aluminum Co., et al., McClellan v. Century Aluminum Co., et al., and Hilyard v. Century Aluminum Co., et al.  These cases allege that the Company improperly accounted for cash flows associated with the termination of certain forward financial sales contracts.  These actions seek certification as a class action, rescission of the Company's February 2009 common stock offering, unspecified compensatory damages, including interest thereon, costs and expenses and counsel fees.  Management intends to vigorously defend these actions, but at the date of this report, it is not possible to predict the ultimate outcome of these actions or to estimate a range of possible damage awards.
 
Power Commitments
 
Hawesville purchases substantially all of its power from Kenergy Corp. (“Kenergy”), a retail electric member cooperative of the Big Rivers Electrical Corporation (“Big Rivers”), under a power supply contract that expires at the end of 2010.  Under this contract, approximately all of Hawesville’s current power requirements (four operating potlines) are at fixed prices.  We acquire the power requirements for Hawesville’s fifth potline (currently idled) through a combination of short-term fixed-price contracts and deliveries at the spot market rates.
 
We are working with Big Rivers and Kenergy on a proposal that would restructure and extend the existing power supply contract.  The proposed new long-term power contract was filed with the Kentucky Public Service Commission in late December 2008.  The contract would provide all of Hawesville’s power requirements through 2023 at cost-based pricing.  The various parties to the new contract expect the transaction to close in the second quarter of 2009, but there is no assurance it will do so.
 

- 19 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)




Appalachian Power Company (“APCo”) supplies all of Ravenswood’s power requirements under an agreement at prices set forth in published tariffs, which are subject to change.  Under the special rate contract, which currently extends through June 2009, Ravenswood may be excused from or may defer the payment of the increase in the tariff rate if aluminum prices as quoted on the LME fall below pre-determined levels.  We are reviewing options to extend the term of the existing agreement that establishes an LME based cap on the tariff rates.  In March 2009, APCo requested a rate increase to cover the increased cost of fuel and purchased power as well as capital improvements.  At this time, it is not practicable to predict the outcome of this rate case or its impact on Ravenswood.  
 
Mt. Holly purchases all of its power from the South Carolina Public Service Authority at rates established by published schedules. Mt. Holly’s current power contract expires December 31, 2015.  Power delivered through 2010 will be priced as set forth in currently published schedules, subject to adjustments for fuel costs. Rates for the period 2011 through 2015 will be as provided under then-applicable schedules.  Mt. Holly is subject to significant demand charges if it fails to take all of the power provided under its power contract through 2015.
 
The Nordural facility at Grundartangi, Iceland (“Grundartangi”) purchases power from Landsvirkjun, HS Orka hf and Orkuveita Reykjavikur (“OR”) under long-term contracts due to expire between 2019 and 2029. The power delivered to Grundartangi is priced at a rate based on the LME price for primary aluminum, is paid in U.S. dollars and is from hydroelectric and geothermal sources.  All power commitments for power delivered to Grundartangi are provided on an 85% take or pay basis.
 
Nordural Helguvik has signed electrical power supply agreements with HS Orka hf and OR, for the proposed Helguvik smelter.  Under the agreements, power will be supplied to the proposed Helguvik facility in four 90,000 mtpy stages, beginning with an initial phase of up to 160 megawatts (“MW”).  HS Orka hf will provide up to 150 MW in this initial stage, and OR will supply up to 47.5 MW.  Electricity delivery for this first phase is targeted to begin in late 2011.  The agreements which are subject to the satisfaction of certain conditions provide for additional power, as available, to support a complete potline of 360,000 mtpy.
 
Labor Commitments
 
Approximately 79% of our U.S. based work force is represented by the United Steel, Paper and Forestry, Manufacturing, Energy, Allied Industrial and Service Workers International Union (the “USWA”).  Our Ravenswood plant employees represented by the USWA are under a labor agreement that will expire on May 31, 2009.  For additional information about Ravenswood operations see Note 4 Curtailment of Operations – Ravenswood and Hawesville.  Our Hawesville, Kentucky, plant employees represented by the USWA are under a collective bargaining agreement that will expire on March 31, 2010.  The agreement covers the hourly workers at the Hawesville plant.
 
Approximately 84% of Grundartangi’s work force is represented by five labor unions under an agreement that expires on December 31, 2009.


- 20 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



14.
Forward Delivery Contracts and Financial Instruments
 
As a producer of primary aluminum, we are exposed to fluctuating raw material and primary aluminum prices.  We enter into fixed and market priced contracts for the sale of primary aluminum and the purchase of raw materials in future periods.

Forward Physical Delivery Agreements
 
Primary Aluminum Sales Contracts
 
 
Contract
 
Customer
 
Volume
 
Term
 
Pricing
Alcan Metal Agreement (1)(2)
Alcan
14 million pounds per month
Through August 31, 2009
Variable, based on U.S. Midwest market
Glencore Metal Agreement I (3)
Glencore
50,000 mtpy
Through December 31, 2009
Variable, LME-based
Glencore Metal Agreement II (4)
Glencore
20,400 mtpy
Through December 31, 2013
Variable, based on U.S. Midwest market
Southwire Metal Agreement (5)
Southwire
240 million pounds per year (high conductivity molten aluminum)
Through March 31, 2011
Variable, based on U.S. Midwest market
Southwire Metal Agreement
Southwire
60 million pounds per year (standard-grade molten aluminum)
Through December 31, 2010
Variable, based on U.S. Midwest market

(1)
See Note 21 Subsequent Events for additional information about this agreement.
(2)
A force majeure event at the Alcan facility reduced our January 2009 shipments under this contract approximately 3 million pounds.
(3)
We account for the Glencore Metal Agreement I as a derivative instrument under SFAS No. 133.  We have not designated the Glencore Metal Agreement I as “normal” because it replaced and substituted for a significant portion of a sales contract which did not qualify for this designation.  Because the Glencore Metal Agreement I is variably priced, we do not expect significant variability in its fair value, other than changes that might result from the absence of the U.S. Midwest premium.
(4)
We account for the Glencore Metal Agreement II as a derivative instrument under SFAS No. 133.  Under the Glencore Metal Agreement II, pricing is based on then-current market prices, adjusted by a negotiated U.S. Midwest premium with a cap and a floor as applied to the current U.S. Midwest premium.
(5)
The Southwire Metal Agreement will automatically renew for additional five-year terms, unless either party provides 12 months notice that it has elected not to renew.
 
Tolling Contracts
 
 
Contract
 
Customer
 
Volume
 
Term
 
Pricing
Billiton Tolling Agreement (1)
BHP Billiton
130,000 mtpy
Through December 31, 2013
LME-based
Glencore Toll Agreement (1)(2)
Glencore
90,000 mtpy
Through July 31, 2016
LME-based
Glencore Toll Agreement (1)
Glencore
40,000 mtpy
Through December 31, 2014
LME-based
Billiton Tolling Agreement
BHP Billiton
9,900 mtpy
Through December 31, 2009
LME-based

(1)
Grundartangi’s tolling revenues include a premium based on the European Union (“EU”) import duty for primary aluminum.  In May 2007, the EU members reduced the EU import duty for primary aluminum from six percent to three percent and agreed to review the new duty after three years.  This decrease in the EU import duty for primary aluminum negatively impacts Grundartangi’s revenues and further decreases would also have a negative impact on Grundartangi’s revenues, but it is not expected to have a material effect on our financial position and results of operations.
(2)
Glencore assigned 50% of its tolling rights under this agreement to Hydro Aluminum through December 31, 2010.


- 21 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



Apart from the Alcan Metal Agreement, Glencore Metal Agreement I, Glencore Metal Agreement II and Southwire Metal Agreement, we had forward delivery contracts to sell 60,372 metric tons and 84,047 metric tons of primary aluminum at March 31, 2009 and December 31, 2008, respectively.  Of these forward delivery contracts, we had no fixed price commitments to sell primary aluminum at March 31, 2009 and 330 metric tons of fixed price commitments to sell primary aluminum at December 31, 2008, of which 319 metric tons at December 31, 2008 were with Glencore.

Financial Sales Agreements
 
Historically, to mitigate the volatility in our unpriced forward delivery contracts, we have entered into primary aluminum forward financial sales contracts, which settle in cash in the period corresponding to the intended delivery dates of the forward delivery contracts.  Certain of these primary aluminum forward financial sales contracts were accounted for as cash flow hedges based on our designation of each contract at its inception.
 
All of the outstanding primary aluminum forward financial sales contracts were settled in July 2008 in a termination transaction with Glencore.  As of March 31, 2009 and December 31, 2008, we had no primary aluminum forward financial sales contracts outstanding.  We had no forward financial contracts to purchase aluminum at March 31, 2009 or December 31, 2008.

Forwards and Financial Purchase Agreements
 
We are party to various forward financial and physical delivery contracts that are accounted for under SFAS No. 133.  See Note 6 Fair Value Measurements and Derivative Instruments for additional information about these instruments.

15.
Supplemental Cash Flow Information

   
Three months ended March 31,
 
   
2009
   
2008
 
Cash paid for:
           
Interest
  $ 11,068     $ 10,981  
Income tax
    106       505  
                 
Cash received for:
               
Interest
    1,205       1,874  
Income tax refunds (1)
    90,337        

(1)
See Note 9 Income Taxes for more information.
 
Non-cash Activities
 
Due to the curtailment of our Ravenswood operations in February 2009, we reclassified certain inventory items into other assets.  As a result, there was an $18,326 non-cash change in the inventory and other asset account balances due to this reclassification.
 
In the first quarter of 2009, we issued 354,320 shares of common stock as part of our performance share program to satisfy a $694 performance share liability to certain key employees.
 
In the first quarter of 2008, we issued 58,990 shares of common stock as part of our performance share program to satisfy a $3,702 performance share liability to certain key employees.

- 22 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)



 

16.
Asset Retirement Obligations
 
Our asset retirement obligations (“ARO”) consist primarily of costs associated with the disposal of spent pot liner used in the reduction cells of our domestic facilities.  As a result of the curtailment of our operations, we have suspended the disposal of spent potliner at our Ravenswood facility.
 
The reconciliation of the changes in the asset retirement obligations is presented below:
 

   
Three months ended
March 31, 2009
   
Year ended December 31, 2008
 
Beginning balance, ARO liability
  $ 14,337     $ 13,586  
Additional ARO liability incurred
    224       2,140  
ARO liabilities settled
    (279 )     (2,464 )
Accretion expense
    278       1,075  
Ending balance, ARO liability
  $ 14,560     $ 14,337  
 
Certain conditional AROs related to the disposal costs of fixed assets at our primary aluminum facilities have not been recorded because they have an indeterminate settlement date.  These conditional AROs will be initially recognized in the period in which sufficient information exists to estimate their fair value.


17.
Comprehensive Loss and Accumulated Other Comprehensive Loss
 

Comprehensive Loss:
 
   
Three months ended March 31,
 
   
2009
   
2008
 
             
Net loss
  $ (114,624 )   $ (233,936 )
Other comprehensive income (loss):
               
Net unrealized loss on financial instruments, net of $0 and $2 tax of, respectively
    (4,847 )     (190 )
Net losses on cash flow hedges  reclassified to income, net of tax of $(2,633) and $(2,528), respectively
    6,135       5,225  
Net loss (gain) on foreign currency cash flow hedges reclassified to income, net of tax of $(379) and $6, respectively
    3,754       (38 )
Defined benefit pension and other postemployment benefit plans:
               
Net curtailment gain arising during the period, net of $0 tax
    33,018        
Amortization of net loss during the period, net of $(71) and $(300) tax, respectively
    290       780  
Amortization of prior service cost during the period, net of $396 and $100 tax, respectively
    (1,332 )     (259 )
Other Comprehensive Income:
    37,018       5,518  
Comprehensive loss
  $ (77,606 )   $ (228,418 )


- 23 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)




Components of Accumulated Other Comprehensive Loss:
           
   
March 31, 2009
   
December 31, 2008
 
Unrealized loss on financial instruments, net of $(82) and $784 tax benefit, respectively
  $ (10,318 )   $ (17,506 )
Defined benefit plan liabilities, net of $24,064 and $26,534 tax benefit, respectively
    (84,202 )     (114,032 )
Equity in investee other comprehensive income (1)
    (5,670 )     (5,670 )
    $ (100,190 )   $ (137,208 )

(1)
Includes our equity in the other comprehensive income of Gramercy Alumina LLC, St. Ann Bauxite Ltd and Mt. Holly Aluminum Company.  Their other comprehensive income consists primarily of pension and other postretirement benefit obligations.


18.
Components of Net Periodic Benefit Cost
 

   
Pension Benefits
   
Other Postretirement Benefits
 
   
Three months ended March 31,
   
Three months ended March 31,
 
   
2009
   
2008
   
2009
   
2008
 
Service cost
  $ 835     $ 1,028     $ 1,514     $ 1,642  
Interest cost
    1,603       1,551       2,985       3,104  
Expected return on plan assets
    (1,104 )     (1,893 )            
Amortization of prior service cost
    61       182       (422 )     (540 )
Amortization of net loss
    634       128       1,095       950  
Curtailment
    2,601             (14,312 )      
Net periodic benefit cost
  $ 4,630     $ 996     $ (9,140 )   $ 5,156  


19.
Recently Issued Accounting Standards

FSP FAS 132(R)-1.  In December 2008, the FASB issued FSP 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (the “FSP”).  The FSP amends SFAS No. 132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to provide guidance on an employer’s disclosures about plan assets of a defined benefit pension or other postretirement plan.  This guidance is intended to ensure that an employer meets the objectives of the disclosures about plan assets in an employer’s defined benefit pension or other postretirement plan to provide users of financial statements with an understanding of the following:  (1) how investment allocation decisions are made; (2) the major categories of plan assets; (3) the inputs and valuation techniques used to measure the fair value of plan assets; (4) the effect of fair value measurements using significant unobservable inputs on change in plan assets, and; (5) significant concentrations of risk within the plan assets.  The FSP becomes effective for Century on December 31, 2009.  The FSP only requires enhanced disclosures, and therefore we have determined that the adoption of the FSP will not have a significant impact on our financial position, results of operations or cash flows.

- 24 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)




20.
Condensed Consolidating Financial Information
 
Our 7.5% Senior Notes due 2014 and 1.75% Convertible Senior Notes due 2024 are guaranteed by each of our material existing and future domestic subsidiaries, except for Nordural US LLC.  Each subsidiary guarantor is 100% owned by Century.  All guarantees are full and unconditional; and all guarantees are joint and several.  These notes are not guaranteed by our foreign subsidiaries (such subsidiaries and Nordural US LLC, collectively the “Non-Guarantor Subsidiaries”).  
 
The following summarized condensed consolidating balance sheets as of March 31, 2009 and December 31, 2008, condensed consolidating statements of operations for the three months ended March 31, 2009 and March 31, 2008 and the condensed consolidating statements of cash flows for the three months ended March 31, 2009 and March 31, 2008 present separate results for Century, the guarantor subsidiaries, the non-guarantor subsidiaries, consolidating adjustments and total consolidated amounts.
 
This summarized condensed consolidating financial information may not necessarily be indicative of the results of operations or financial position had Century, the guarantor subsidiaries or the non-guarantor subsidiaries operated as independent entities.

- 25 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)


 
 

CONDENSED CONSOLIDATING BALANCE SHEET
 
As of March 31, 2009
 
   
Combined Guarantor Subsidiaries
   
Combined Non-Guarantor Subsidiaries
   
The Company
   
Reclassifications and Eliminations
   
Consolidated
 
Assets:
                             
Cash
  $     $ 76,630     $ 190,862     $     $ 267,492  
Restricted cash
    865                         865  
Accounts receivable — net
    23,190       11,327                   34,517  
Due from affiliates
    586,916       2,009       2,452,213       (3,028,980 )     12,158  
Inventories
    64,470       48,283                   112,753  
Prepaid and other assets
    334       8,864       14,359             23,557  
Deferred taxes — current portion
    18,250                   (18,250 )      
Total current assets
    694,025       147,113       2,657,434       (3,047,230 )     451,342  
Investment in subsidiaries
    38,057             (969,143 )     931,086        
Property, plant and equipment — net
    420,127       908,480       1,359       (10 )     1,329,956  
Intangible asset — net
    28,490                         28,490  
Due from affiliates — less current portion
          7,599                   7,599  
Deferred taxes — less current portion
                5,483       (5,483 )      
Other assets
    82,311       48,716       17,101       12,514       160,642  
Total assets
  $ 1,263,010     $ 1,111,908     $ 1,712,234     $ (2,109,123 )   $ 1,978,029  
                                         
Liabilities and shareholders’ equity:
                                       
Accounts payable – trade
  $ 40,625     $ 38,336     $ 1,228     $     $ 80,189  
Due to affiliates
    1,822,324       42,472       149,331       (1,951,207 )     62,920  
Accrued and other current liabilities
    35,462       9,683       19,027             64,172  
Accrued employee benefits costs — current portion
    10,745             1,325             12,070  
Deferred taxes — current portion
                94,073       (94,073 )      
Convertible senior notes
                154,691             154,691  
Industrial revenue bonds
    7,815                         7,815  
Total current liabilities
    1,916,971       90,491       419,675       (2,045,280 )     381,857  
Senior unsecured notes payable
                250,000             250,000  
Accrued pension benefit costs — less current portion
    29,999             19,337             49,336  
Accrued postretirement benefit costs — less current portion
    178,422             2,042             180,464  
Other liabilities/intercompany loan
    47,429       659,331       12,274       (677,011 )     42,023  
Deferred taxes — less current portion
    317,918       65,443             (317,918 )     65,443  
Total noncurrent liabilities
    573,768       724,774       283,653       (994,929 )     587,266  
Shareholders’ equity:
                                       
Preferred stock
                2             2  
Common stock
    60       12       741       (72 )     741  
Additional paid-in capital
    297,292       144,371       2,377,310       (441,663 )     2,377,310  
Accumulated other comprehensive income (loss)
    (113,166 )     (2,083 )     (100,190 )     115,249       (100,190 )
Retained earnings (accumulated deficit)
    (1,411,915 )     154,343       (1,268,957 )     1,257,572       (1,268,957 )
Total shareholders’ equity
    (1,227,729 )     296,643       1,008,906       931,086       1,008,906  
Total liabilities and shareholders’ equity
  $ 1,263,010     $ 1,111,908     $ 1,712,234     $ (2,109,123 )   $ 1,978,029  
 

 


- 26 -
 
CENTURY ALUMINUM COMPANY
Notes to the Consolidated Financial Statements - continued
(UNAUDITED)


 

 
CONDENSED CONSOLIDATING BALANCE SHEET
 
As of December 31, 2008
 
   
Combined Guarantor Subsidiaries
   
Combined Non-Guarantor Subsidiaries
   
The Company
   
Reclassifications and Eliminations
   
Consolidated
 
Assets:
                             
Cash
  $     $ 71,545     $ 57,855     $     $ 129,400  
Res