KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
(Debtor-in-Possession)
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
(Unaudited)
(In millions of dollars, except share and per share amounts)
Quarter Ended Year Ended
December 31, December 31,
------------------- --------------------
2004 2003 2004 2003
-------- --------- --------- ----------
Net sales $257.7 $183.3 $942.4 $710.2
-------- --------- --------- ----------
Costs and expenses:
Cost of products sold 232.2 182.9 852.2 681.2
Depreciation and
amortization 5.4 5.5 22.3 25.7
Selling, administrative,
research and development,
and general 24.0 18.3 92.3 92.5
Other operating charges
(benefits), net(1) 638.5 136.9 793.2 141.6
-------- --------- --------- ----------
Total costs and expenses 900.1 343.6 1,760.0 941.0
-------- --------- --------- ----------
Operating loss (642.4) (160.3) (817.6) (230.8)
Other income (expense):
Interest expense (excluding
unrecorded contractual
interest expense of $23.7
for both quarters and $95.0
for both years) (3.0) (2.0) (9.5) (9.1)
Reorganization items (10.1) (6.8) (39.0) (27.0)
Other - net(2) (1.1) 1.9 4.2 (5.2)
-------- --------- --------- ----------
Loss before income taxes and
discontinued operations (656.6) (167.2) (861.9) (272.1)
(Provision) benefit for income
taxes(3) (.9) 1.2 (6.2) (1.5)
-------- --------- --------- ----------
Loss from continuing
operations (657.5) (166.0) (868.1) (273.6)
-------- --------- --------- ----------
Discontinued operations: (4)
Income (loss) from
discontinued operations,
net of income taxes,
including minority
interests 20.0 (407.2) (5.3) (514.7)
Gain from sale of commodity
interests -- -- 126.6 --
-------- --------- --------- ----------
Income (loss) from
discontinued operations 20.0 (407.2) 121.3 (514.7)
-------- --------- --------- ----------
Net loss $(637.5) $(573.2) $(746.8) $(788.3)
======== ========= ====================
Income (loss) per share-
Basic/Diluted: (5)
Loss from continuing
operations $(8.25) $(2.07) $(10.88) $(3.41)
======== ========= ========= ==========
Income (loss) from
discontinued operations $.25 $(5.09) $1.52 $(6.42)
======== ========= ========= ==========
Net loss $(8.00) $(7.16) $(9.36) $(9.83)
======== ========= ========= ==========
Weighted average shares
outstanding (000):(5)
Basic/Diluted 79,686 80,043 79,815 80,175
(1) The income (loss) impact associated with other operating (charges)
benefits, net, after deducting other operating (charges) benefits,
net related to discontinued operations, for the quarters and years
ended December 31, 2004 and 2003, was as follows (the business
segment to which the item is applicable is indicated):
Quarter Ended Year Ended
December 31, December 31,
------------------- --------------------
2004 2003 2004 2003
--------- --------- --------- ----------
Pension charges related to
terminated pension plans -
Corporate $(154.5) $(121.2) $(310.0) $(121.2)
Charge related to settlement
with United Steelworkers of
America unfair labor practice
allegations - Corporate (175.0) -- (175.0) --
Settlement charge related to
termination of post-
retirement medical benefit
plans - Corporate (312.5) -- (312.5) --
Hearing Loss claims -
Corporate -- (15.8) -- (15.8)
Environmental multi-site
settlement - Corporate -- -- -- (15.7)
Gain on sale of equipment, net
- Fabricated Products -- -- 3.9
Gain on sale of Tacoma
facility - Primary Aluminum -- -- -- 9.5
Restructured transmission
service agreement - Primary
Aluminum -- -- -- (3.2)
Other 3.5 0.1 4.3 .9
--------- --------- --------- ----------
$(638.5) $(136.9) $(793.2) $(141.6)
========= ========= ========= ==========
(2) Other income (expense) for the year ended December 31, 2004
includes a gain of approximately $6.3 which resulted from the
settlement of outstanding obligations of a former affiliate. Other
income (expense) for the year ended December 31, 2003, included
adjustments to the environmental liabilities of approximately
$7.5.
(3) The income tax (provision) benefit for the quarters and years
periods ended December 31, 2004 and 2003, relates primarily to
foreign income taxes. For the quarters and years ended December
31, 2004 and 2003, as a result of the Cases, the Company did not
recognize any U.S. income tax benefits for the losses incurred
from its domestic operations (including temporary differences) or
any U.S. tax benefit for foreign income taxes. Instead, the
increases in federal and state deferred tax assets as a result of
the additional net operating losses and foreign tax credits
generated in 2004 and 2003 were fully offset by increases in the
valuation allowances.
(4) The Company has sold its interests in and related to Alpart,
Gramercy/KJBC, Valco and the Mead Facility. The Company expects to
complete the sale of its interests in and related to QAL in April
2005. A net gain in excess of $300.0 is expected to result from
the sale. In accordance with Generally Accepted Accounting
Principles, the operating results of these interests are reported
as Discontinued operations. Additional information with regard to
Discontinued operations is included in Note 3 of Notes to
Consolidated Financial Statements in the Company's Annual Report
on Form 10-K for the year ended December 31, 2004.
(5) Income (loss) per share may not be meaningful, because as a part
of a plan of reorganization, it is likely the interests of the
Company's existing stockholders will be cancelled without
consideration. See Note 2 of Notes to Consolidated Financial
Statements in the Company's Annual Report on Form 10-K for the
year ended December 31, 2004.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
(Debtor-in-Possession)
SELECTED OPERATIONAL AND FINANCIAL INFORMATION(1)
(Unaudited)
(In millions of dollars, except shipments and prices)
Quarter Ended Year Ended
December 31, December 31,
------------------- -------------------
2004 2003 2004 2003
--------- --------- --------- ---------
Shipments (mm lbs)
Fabricated Products 117.6 96.6 458.6 372.3
Primary Aluminum 39.1 38.7 156.6 158.7
--------- --------- --------- ---------
156.7 135.3 615.2 531.0
========= ========= ========= =========
Average Realized Third-Party
Sales Price (per pound):
Fabricated Products(2) $1.89 $1.60 $1.76 $1.61
Primary Aluminum $.92 $.75 $.85 $.71
Net Sales:
Fabricated Products $221.9 $154.4 $809.3 $597.8
Primary Aluminum 35.8 28.9 133.1 112.4
--------- --------- --------- ---------
Total Net Sales $257.7 $183.3 $942.4 $710.2
========= ========= ========= =========
Segment Operating Income
(Loss) - (3)
Fabricated Products(4) $11.8 $(10.2) $33.0 $(21.2)
Primary Aluminum 2.1 2.5 13.9 6.7
Corporate and Other (17.8) (15.7) (71.3) (74.7)
Other Operating (Charges)
Benefits, Net (638.5) (136.9) (793.2) (141.6)
--------- --------- --------- ---------
Total Operating Loss $(642.4) $(160.3) $(817.6) $(230.8)
========= ========= ========= =========
Discontinued operations $20.0 $(407.2) $121.3 $(514.7)
========= ========= ========= =========
Net Loss $(637.5) $(573.2) $(746.8) $(788.3)
========= ========= ========= =========
Capital expenditures
(excluding discontinued
operations) $3.1 $2.7 $7.6 $8.9
========= ========= ========= =========
(1) The Company has sold its interests in and related to Alpart,
Gramercy/KJBC, Valco and the Mead Facility. The Company expects to
complete the sale of its interests in and related to QAL in April
2005. A net gain in excess of $300.0 is expected to result from
the sale. In accordance with Generally Accepted Accounting
Principles, the operating results of these interests are reported
as Discontinued operations. Additional information with regard to
Discontinued operations is included in Note 3 of Notes to
Consolidated Financial Statements in the Company's Annual Report
on Form 10-K for the year ended December 31, 2004.
(2) Average realized prices for the Company's Fabricated products
business unit are subject to fluctuations due to changes in
product mix as well as underlying primary aluminum prices and is
not necessarily indicative of changes in underlying profitability.
(3) The Company has changed its segment presentation in 2004 to
eliminate the "Eliminations" segment as the primary purpose for
such segment was to eliminate the intercompany profit on sales by
the Primary aluminum and Bauxite and alumina business units,
substantially all of which are now considered Discontinued
operations. Eliminations not representing Discontinued operations
are now included in segment results. See Note 15 of Notes to
Consolidated Financial Statements in the Company's Annual Report
on Form 10-K for the year ended December 31, 2004 for additional
information with regard to segment information.
(4) Operating results for the quarter and year ended December 31, 2004
include LIFO inventory charges of $12.1. Operating results for the
quarter and year ended December 31, 2003 include LIFO inventory
charges of $3.2.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
(Debtor-in-Possession)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions of dollars)
December 31, December 31,
2004 2003
-------------- --------------
Assets(1)(2)
Current assets(3) $291.3 $232.3
Discontinued operations' current
assets(2) 30.6 193.7
Investments in and advances to
unconsolidated affiliate 16.7 13.1
Property, plant, and equipment - net 214.6 230.1
Restricted proceeds from sale of
commodity interests 280.8 -
Personal injury-related insurance
recoveries receivable 967.0 465.4
Other assets 42.5 55.1
Discontinued operations' long-term
assets(2) 38.9 433.8
-------------- --------------
Total $1,882.4 $1,623.5
============== ==============
Liabilities & Stockholders' Equity (Deficit)(1)(2)
Liabilities not subject to compromise -
Current liabilities(4) $191.2 $143.6
Discontinued operations' current
liabilities(2) 57.7 177.5
Long-term liabilities 32.9 59.4
Long-term debt 2.8 2.2
Discontinued operations' long-term
liabilities, including minority
interests in 2003(2) 26.4 208.7
Liabilities subject to compromise 3,954.9 2,770.1
Minority interests .7 .7
Commitments and contingencies
Stockholders' equity (deficit) (2,384.2) (1,738.7)
-------------- --------------
Total $1,882.4 $1,623.5
============== ==============
(1) The Company and 25 of its subsidiaries have filed petitions for
reorganization under Chapter 11 of the United States Federal Code.
The balance sheet as of December 31, 2004, has been prepared on a
"going concern" basis, which contemplates the realization of
assets and liquidation of liabilities in the ordinary course of
business; however, as a result of the Chapter 11 filings, such
realization of assets and liquidation of liabilities are subject
to a significant number of uncertainties. Specifically, but not
all inclusive, the balance sheet does not present: (a) the
realizable value of assets on a liquidation basis or the
availability of such assets to satisfy liabilities, (b) the amount
which will ultimately be paid to settle liabilities and
contingencies which may be allowed or (c) the effect of any
changes which may be made in connection with the Company's
capitalization or operations resulting from a plan of
reorganization.
Upon emergence from the Chapter 11 proceedings, the Company
expects to apply "fresh start" accounting to its consolidated
financial statements as required by AICPA Statement of Position
90-7, Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code. As such, the Company will restate its balance
sheet to equal the reorganization value as determined in its
plan(s) of reorganization and approved by the Court. Because fresh
start accounting will be adopted at emergence, and because of the
significance of liabilities subject to compromise (that will be
relieved upon emergence), comparisons between the current
historical financial statements and the financial statements upon
emergence may be difficult to make.
See Note 1 of Notes to Consolidated Financial Statements of the
Company's Annual Report on Form 10-K for the year ended December
31, 2004 for additional information regarding the Company's
Chapter 11 proceedings.
(2) The Company has sold its interests in and related to Alpart,
Gramercy/KJBC, Valco and the Mead Facility. The Company expects to
complete the sale of its interests in and related to QAL in April
2005. A net gain in excess of $300.0 is expected to result from
the sale. In accordance with Generally Accepted Accounting
Principles, the assets and liabilities of these interests have
been reported as Discontinued operations. Additional information
with regard to Discontinued operations is included in Note 3 of
Notes to Consolidated Statements in the Company's Annual Report on
Form 10-K for the year ended December 31, 2004.
(3) Includes Cash and cash equivalents of $55.4 and $35.5 at December
31, 2004 and December 31, 2003, respectively.
(4) Includes Current portion of long-term debt of $1.2 and $1.3 at
December 31, 2004 and December 31, 2003, respectively. On February
11, 2005, the Company entered into a new financing agreement (the
"DIP Facility") which replaced the existing post-petition credit
agreement (the "Replaced Facility"). As of February 28, 2005,
there were no outstanding borrowings under the DIP Facility. While
there were only $1.8 of letters of credit outstanding under the
DIP Facility at February 28, 2005, there were approximately $15.9
of outstanding letters of credit that had been issued under the
Replaced Facility for which the Company had deposited cash of
$16.7 as collateral. The outstanding letters of credit under the
Replaced Facility are expected to be replaced with letters of
credit issued under the DIP Facility, at which time, the
applicable cash deposit will be refunded to the Company. See Note
7 of Notes to Consolidated Financial Statements in the Company's
Annual Report on Form 10-K for the year ended December 31, 2004
for additional information with regard to the DIP Facility.