Century Aluminum Reports Third Quarter 2006 Earnings

Century Aluminum Company (NASDAQ: CENX) reported net income of $173.9 million ($5.36 per basic share and $5.26 per diluted share) for the third quarter of 2006. Reported third quarter results were positively impacted by an after-tax gain of $134.6 million ($4.15 per basic share and $4.06 per diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting.

In the third quarter of 2005, the company reported a net loss of $20.1 million ($0.62 per basic and diluted share), which included an after-tax loss of $36.4 million ($1.13 per basic and diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting.

Third quarter 2006 highlights included:

--  All of the pots from the Nordural capacity expansion from 90,000 to
    220,000 metric tons per year (mtpy) were energized in September. The
    expansion remains on schedule and budget and the plant is expected to reach
    full rated capacity of 220,000 mtpy by year-end 2006.
--  A three-year labor agreement covering 580 hourly workers was ratified
    by the United Steelworkers at the Ravenswood, West Virginia smelter.
--  As a result of a notice to strike by the United Steelworkers (prior to
    the ratification of the agreement) one potline at the Ravenswood smelter
    was shut down and subsequently restarted. This action resulted in lost
    production of approximately 8,000 tonnes during the quarter.
    

Sales in the third quarter of 2006 were $381 million, up over 40 percent from $271 million in the third quarter of 2005. Shipments of primary aluminum for the quarter totaled 374 million pounds compared with 337 million pounds in the year-ago quarter, reflecting the impact of the Nordural expansion less the production curtailment at Ravenswood.

Net income for the first nine months of 2006 was $78.2 million ($2.41 per basic share and $2.38 per diluted share), which compares to $32.4 million ($1.01 per basic and diluted share) for the year-ago period.

Sales in the first nine months of 2006 were $1,134 million compared with $839 million in the same period of 2005. Shipments of primary aluminum for the first nine months of 2006 were 1,098 million pounds compared with 1,014 million pounds for the comparable 2005 period.

"Lower operating results in the quarter compared to the second quarter of 2006 were primarily a result of a decline in the market price for aluminum and the Ravenswood potline shutdown," said president and chief executive officer Logan W. Kruger. "Our performance during the quarter was also impacted by operating costs at Nordural related to the start-up of the expansion as well as higher U.S. energy costs.

"Despite these challenges, we made important progress during the quarter. The major expansion at Nordural is nearing completion and remains on schedule and budget. We are continuing to make progress with our greenfield project at Helguvik, Iceland. The labor agreements at Ravenswood and Hawesville support the longer-term future of these smelters. With these developments, we are well positioned for the fourth quarter and beyond."

Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership stake in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California.

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    Nine months ended
                                     September 30,        September 30,
                                  -------------------  -------------------
                                    2006      2005       2006      2005
                                  --------- ---------  --------- ---------
NET SALES:
   Third-party customers          $ 312,038 $ 222,811  $ 966,753 $ 713,565
   Related parties                   69,239    48,025    167,446   125,923
                                  --------- ---------  --------- ---------
                                    381,277   270,836  1,134,199   839,488

COST OF GOODS SOLD                  310,303   240,778    878,753   712,515
                                  --------- ---------  --------- ---------

GROSS PROFIT                         70,974    30,058    255,446   126,973

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES              8,144     8,104     28,639    24,946
                                  --------- ---------  --------- ---------

OPERATING INCOME                     62,830    21,954    226,807   102,027

INTEREST EXPENSE - Net               (9,823)   (5,617)   (25,025)  (18,325)
NET GAIN (LOSS) ON FORWARD
 CONTRACTS                          210,268   (53,481)  (106,948)  (52,480)
OTHER INCOME (EXPENSE) - Net              3       (67)      (121)     (132)
                                  --------- ---------  --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES
 AND EQUITY IN EARNINGS OF JOINT
 VENTURES                           263,278   (37,211)    94,713    31,090

INCOME TAX (EXPENSE) BENEFIT        (92,922)   15,155    (27,675)   (7,578)
                                  --------- ---------  --------- ---------

INCOME (LOSS) BEFORE EQUITY IN
 EARNINGS OF JOINT VENTURES         170,356   (22,056)    67,038    23,512

EQUITY IN EARNINGS OF JOINT
 VENTURES                             3,583     1,985     11,130     8,891
                                  --------- ---------  --------- ---------

NET INCOME (LOSS)                 $ 173,939 $ (20,071) $  78,168 $  32,403
                                  ========= =========  ========= =========


EARNINGS (LOSS) PER COMMON SHARE
   Basic - Net income (loss)      $    5.36 $   (0.62) $    2.41 $    1.01
   Diluted - Net income (loss)    $    5.26 $   (0.62) $    2.38 $    1.01

WEIGHTED AVERAGE COMMON SHARES
 OUTSTANDING
   Basic                             32,438    32,162     32,374    32,120
   Diluted                           33,148    32,162     33,515    32,163


                         Century Aluminum Company
                        Consolidated Balance Sheets
                          (Dollars in Thousands)
                                (Unaudited)



                                                 September 30, December 31,
ASSETS                                                2006         2005
                                                  -----------  -----------
Current Assets:
   Cash                                           $    50,094  $    17,752
   Restricted cash                                      2,026        2,028
   Accounts receivable - net                           82,388       83,016
   Due from affiliates                                 28,200       18,638
   Inventories                                        145,739      111,436
   Prepaid and other current assets                    25,905       23,918
   Deferred taxes - current portion                    70,831       37,705
                                                  -----------  -----------
      Total current assets                            405,183      294,493
Property, plant and equipment - net                 1,189,182    1,070,158
Intangible asset - net                                 64,856       74,643
Goodwill                                               94,844       94,844
Other assets                                          165,995      143,293
                                                  -----------  -----------
      Total                                       $ 1,920,060  $ 1,677,431
                                                  ===========  ===========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
   Accounts payable, trade                        $    58,820  $    61,919
   Due to affiliates                                  227,004      158,682
   Accrued and other current liabilities               55,644       53,715
   Long term debt - current portion                    30,099          581
   Accrued employee benefits costs - current
    portion                                             9,333        9,333
   Convertible senior notes                           175,000      175,000
   Industrial revenue bonds                             7,815        7,815
                                                  -----------  -----------
      Total current liabilities                       563,715      467,045
                                                  -----------  -----------

Senior unsecured notes payable - net                  250,000      250,000
Nordural debt                                         289,484      230,436
Revolving credit facility                                   -        8,069

Accrued pension benefit costs - less current
 portion                                               10,953       10,350
Accrued postretirement benefits costs - less
 current portion                                      107,062       96,660
Due to affiliates - less current portion              338,140      337,416
Other liabilities                                      28,395       28,010
Deferred taxes                                         16,890       16,890
                                                  -----------  -----------
      Total noncurrent liabilities                  1,040,924      977,831
                                                  -----------  -----------

Shareholders' Equity:
   Common stock (one cent par value, 100,000,000
    shares authorized; 32,456,835 shares
    outstanding at September 30, 2006 and
    32,188,165 at December 31, 2005)                      325          322
   Additional paid-in capital                         431,153      419,009
   Accumulated other comprehensive loss               (98,867)     (91,418)
   Accumulated deficit                                (17,190)     (95,358)
                                                  -----------  -----------
      Total shareholders' equity                      315,421      232,555
                                                  -----------  -----------
      Total                                       $ 1,920,060  $ 1,677,431
                                                  ===========  ===========


                         Century Aluminum Company
                  Consolidated Statements of Cash Flows
                          (Dollars in Thousands)
                                (Unaudited)


                                                        Nine months ended
                                                           September 30,
                                                          2006      2005
                                                        --------  --------
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                           $ 78,168  $ 32,403
   Adjustments to reconcile net income to net cash
    provided by operating activities:
      Unrealized net loss on forward contracts            62,766    49,934
      Depreciation and amortization                       50,090    42,306
      Deferred income taxes                              (26,224)   17,606
      Pension and other post retirement benefits          11,005    11,253
      Stock-based compensation                             4,603         -
      Excess tax benefits from share based compensation   (1,244)        -
      (Gain) loss on disposal of assets                       43       (20)
      Non cash loss on early extinguishment of debt            -       253
      Change in operating assets and liabilities:
         Accounts receivable - net                           628      (934)
         Due from affiliates                              (9,562)   (3,246)
         Inventories                                     (29,084)    5,076
         Prepaid and other current assets                 (4,564)   (2,437)
         Accounts payable, trade                            (784)    6,668
         Due to affiliates                                 3,129     2,480
         Accrued and other current liabilities            (6,381)  (23,209)
         Other - net                                     (15,079)  (10,909)
                                                        --------  --------
      Net cash provided by operating activities          117,510   127,224
                                                        --------  --------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchase of property, plant and equipment             (10,610)   (9,629)
   Nordural expansion                                   (155,756) (200,641)
   Proceeds from sale of property, plant and equipment        22       101
   Restricted and other cash deposits                     (3,998)     (350)
   Business acquisitions, net of cash acquired                 -    (7,000)
                                                        --------  --------
      Net cash used in investing activities             (170,342) (217,519)
                                                        --------  --------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Borrowings of long-term debt                           89,000   188,937
   Repayment of long-term debt                              (434)  (83,138)
   Net repayments under revolving credit facility         (8,069)        -
   Financing fees                                              -    (5,132)
   Excess tax benefits from share based compensation       1,244         -
   Dividends                                                   -       (16)
   Issuance of common stock                                3,433     1,323
                                                        --------  --------
      Net cash provided by financing activities           85,174   101,974
                                                        --------  --------

NET INCREASE IN CASH                                      32,342    11,679

CASH, BEGINNING OF PERIOD                                 17,752    44,168
                                                        --------  --------

CASH, END OF PERIOD                                     $ 50,094  $ 55,847
                                                        ========  ========


                          Century Aluminum Company
                          Selected Operating Data
                                (Unaudited)

                        SHIPMENTS - PRIMARY ALUMINUM

                               Direct (1)                   Toll
                      -------------------------- --------------------------
                       Metric   (000)             Metric   (000)    (000)
                        Tons   Pounds   $/Pound    Tons   Pounds   Revenue
                      -------- -------- -------- -------- -------- --------
2006
3rd Quarter            126,810  279,568 $   1.07   42,788   94,331 $ 81,424
2nd Quarter            132,590  292,311 $   1.12   39,125   86,255 $ 77,702
1st Quarter            132,378  291,843 $   1.03   24,573   54,174 $ 45,166

2005
3rd Quarter            129,555  285,619 $   0.83   23,435   51,665 $ 33,175
2nd Quarter            130,974  288,748 $   0.86   23,025   50,761 $ 34,174
1st Quarter            130,083  286,783 $   0.88   22,756   50,168 $ 33,372


(1) Does not include Toll shipments from Nordural






                FORWARD PRICED SALES - As of September 30, 2006



                        2006                                        2011-
                       (1)(2)  2007(2)  2008(2)  2009(2)  2010(2)  2015(2)
                      -------  -------  -------  -------  -------  -------
Base Volume
   Pounds (000)       100,891  374,565  240,745  231,485  231,485  826,733
   Metric Tons         45,763  169,900  109,200  105,000  105,000  375,000
   Percent of
    estimated
    capacity               25%      22%      14%      13%      13%       9%

Potential Additional
 Volume(2)
   Pounds (000)        13,889  111,113  220,903  231,485  231,485  826,733
   Metric Tons          6,300   50,400  100,200  105,000  105,000  375,000
   Percent of
    estimated
    capacity                3%       7%      12%      13%      13%       9%


(1) The forward priced sales in 2006 exclude October 2006 shipments to
    customers that are priced based upon the prior month's market price.


(2) Certain financial sales contracts included in the forward priced sales
    base volume for the period 2006 through 2015 contain clauses that
    trigger potential additional sales volume when the market price for a
    contract month is above the base contract ceiling price.  These
    contracts will be settled monthly and, if the market price exceeds the
    ceiling price for all contract months through 2015, the potential
    additional sales volume would be equivalent to the amounts shown above.



Contact:
Century Aluminum Company
Monterey, California
Michael Dildine
831-642-9364
Email Contact

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