Statements of Consolidated Income (Loss), Selected Operational and
Financial Information, and Condensed Consolidated
Balance Sheets Follow
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 Nine Months Ended
September 30, September 30,
----------------- -----------------
2004 2003 2004 2003
-------- -------- -------- --------
Net sales $281.8 $203.1 $792.7 $613.2
-------- -------- -------- --------
Costs and expenses:
Cost of products sold 245.3 189.7 700.7 570.6
Depreciation and amortization 5.9 6.3 16.9 20.3
Selling, administrative,
research and development,
and general 26.9 25.0 68.4 73.2
Other operating charges
(benefits), net(1) 154.7 15.0 154.7 4.7
-------- -------- -------- --------
Total costs and expenses 432.8 236.0 940.7 668.8
-------- -------- -------- --------
Operating loss (151.0) (32.9) (148.0) (55.6)
Other income (expense):
Interest expense (excluding
unrecorded contractual interest
expense of $23.7 for both quarters
and $71.2 for both nine-month
periods) (2.3) (2.5) (6.4) (7.1)
Reorganization items (10.0) (5.4) (28.9) (20.2)
Other - net(2) 1.3 (6.7) 5.2 (8.7)
-------- -------- -------- --------
Loss before income taxes and
discontinued operations (162.0) (47.5) (178.1) (91.6)
Provision for income taxes(3) (4.7) (1.4) (13.5) (5.8)
-------- -------- -------- --------
Loss from continuing operations (166.7) (48.9) (191.6) (97.4)
-------- -------- -------- --------
Discontinued operations: (4)
Loss from discontinued operations,
net of income taxes, including
minority interests (4.4) (39.7) (42.7) (117.7)
Gain from sale of commodity
interests 101.6 -- 125.0 --
-------- -------- -------- --------
Income (loss) from discontinued
operations 97.2 (39.7) 82.3 (117.7)
-------- -------- -------- --------
Net loss $(69.5) $(88.6) $(109.3) $(215.1)
======== ======== ======== ========
Income (loss) per share-
Basic/Diluted: (5)
Loss from continuing operations $(2.09) $(.61) $(2.40) $(1.21)
======== ======== ======== ========
Income (loss) from discontinued
operations $1.22 $(.50) $1.03 $(1.47)
======== ======== ======== ========
Net loss $(.87) $(1.11) $(1.37) $(2.68)
======== ======== ======== ========
Weighted average shares
outstanding (000): (5)
Basic/Diluted 79,815 80,165 79,858 80,220
(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 quarter and nine
month periods ended Sept. 30, 2004 and 2003, was as follows (the
business segment to which the item is applicable is indicated):
Quarter Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
2004 2003 2004 2003
-------- -------- -------- --------
Pension charges related to
pension plans whose
responsibility was assumed by
the PBGC - Corporate $(155.5) $-- $(155.5) $--
Environmental multi-site
settlement - Corporate -- (15.7) -- (15.7)
Gain on sale of equipment, net -
Fabricated Products -- 3.9 -- 3.9
Gain on sale of Tacoma facility -
Primary Aluminum -- -- -- 9.5
Restructured transmission service
agreement - Primary Aluminum -- (3.2) -- (3.2)
Other .8 -- .8 .8
-------- -------- -------- --------
$(154.7) $(15.0) $(154.7) $(4.7)
======== ======== ======== ========
(2) Other income (expense) for the quarter and nine month periods
ended Sept. 30, 2004 includes a gain of approximately $1.9 on the
sale of non-operating real estate. Other income (expense) for the
nine month period ended Sept. 30, 2004 also includes a gain of
approximately $6.3 which resulted from the settlement of
outstanding obligations of a former affiliate offset, in part, by
a $1.4 adjustment to the environmental liabilities. Other income
(expense) for the quarter and nine month periods ended Sept. 30,
2003, included adjustments to the environmental liabilities of
approximately $7.5. Other income (expense) for the nine month
period ended Sept. 30, 2003, also included approximately $1.7 of
adverse foreign currency exchange impacts associated with a
foreign tax settlement.
(3) The income tax (provision) benefit for the quarter and nine month
periods ended Sept. 30, 2004 and 2003, relates primarily to
foreign income taxes. For the quarter and nine month periods ended
Sept. 30, 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 (collectively, the
"sold commodity interests"). In accordance with Generally Accepted
Accounting Principles, the operating results of the sold commodity
interests are reported as Discontinued operations. The
dispositions of the Company's interests in and related to
Gramercy/KJBC and Valco were completed in October 2004. The
dispositions are expected to result in a relatively modest gain or
loss. Additional information with regard to Discontinued
operations is included in Note 2 of Notes to Interim Consolidated
Financial Statements in the Company's Quarterly Report on Form
10-Q for the quarterly period ended Sept. 30, 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 Interim Consolidated
Financial Statements in the Company's Quarterly Report on Form
10-Q for the quarterly period ended Sept. 30, 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 Nine Months Ended
September 30, September 30,
---------------- -----------------
2004 2003 2004 2003
-------- ------- -------- --------
Fabricated Products:
Shipments: (000 metric tons) 51.4 41.5 151.4 125.1
Net Sales $206.1 $145.4 $580.8 $443.4
Operating Income (Loss) $11.4 $(5.5) $13.9 $(12.4)
Commodities, Corporate and Other:
Shipments: (000 metric tons)
Primary Aluminum 20.4 18.5 56.6 54.4
Alumina 186.8 176.5 557.9 544.4
Average Realized Third-Party
Sales Price:
Primary Aluminum (per pound) $.79 $.65 $.77 $.64
Alumina (per metric ton) $221 $175 $219 $173
Net Sales:
Primary Aluminum $35.6 $26.8 $96.1 $75.6
Bauxite and Alumina 40.0 30.4 115.5 92.8
Commodities Marketing .1 .5 .3 1.4
-------- ------- -------- --------
Total Commodities $75.7 $57.7 $211.9 $169.8
======== ======= ======== ========
Operating Income (Loss):
Primary Aluminum $5.2 $3.2 $15.7 $.4
Bauxite and Alumina 9.2 3.4 27.9 16.1
Commodities Marketing (1.8) .6 (5.5) 2.6
Corporate and Other (21.5) (20.0) (53.5) (59.0)
-------- ------- -------- --------
Total Commodities, Corporate
and Other $(8.9) $(12.8) $(15.4) $(39.9)
======== ======= ======== ========
Combined:
Net Sales --
Fabricated Products $206.1 $145.4 $580.8 $443.4
Commodities 75.7 57.7 211.9 169.8
-------- ------- -------- --------
Total Net Sales $281.8 $203.1 $792.7 $613.2
======== ======= ======== ========
Operating Income (Loss)--
Fabricated Products $11.4 $(5.5) $13.9 $(12.4)
Commodities, Corporate and
Other (8.9) (12.8) (15.4) (39.9)
Eliminations 1.2 .4 8.2 1.4
Other Operating (Charges)
Benefits, Net (154.7) (15.0) (154.7) (4.7)
-------- ------- -------- --------
Total Operating Loss $(151.0) $(32.9) $(148.0) $(55.6)
======== ======= ======== ========
Discontinued operations $97.2 $(39.7) $82.3 $(117.7)
======== ======= ======== ========
Net Loss $(69.5) $(88.6) $(109.3) $(215.1)
======== ======= ======== ========
Capital Expenditures $2.1 $8.1 $7.9 $27.3
Less discontinued operations
reported separately (.2) (6.1) (3.4) (21.1)
-------- ------- -------- --------
$1.9 $2.0 $4.5 $6.2
======== ======= ======== ========
(1) The Company has sold its interests in and related to Alpart,
Gramercy/KJBC, Valco and the Mead Facility (collectively, the
"sold commodity interests"). In accordance with Generally Accepted
Accounting Principles, the operating results of the sold commodity
interests are reported as Discontinued operations. The
dispositions of the Company's interests in and related to
Gramercy/KJBC and Valco were completed in October 2004. The
dispositions are expected to result in a relatively modest gain or
loss. Additional information with regard to Discontinued
operations is included in Note 2 of Notes to Interim Consolidated
Financial Statements in the Company's Quarterly Report on Form
10-Q for the quarterly period ended Sept. 30, 2004. The amounts
remaining in Primary Aluminum relate almost entirely to the
Company's interests in and related to Anglesey. The amounts
remaining in Bauxite and Alumina relate almost entirely to the
Company's interests in and related to QAL. Additional information
with regard to the Primary Aluminum and Bauxite and Alumina
business segments and Discontinued operations is included in
Management's Discussion and Analysis of Financial Condition and
Results of operations in the Company's Quarterly Report on Form
10-Q for the quarterly period ended Sept. 30, 2004.
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
(Debtor-in-Possession)
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In millions of dollars)
September 30, December 31,
2004 2003
------------- ------------
Assets(1) (2)
Current assets(3) $311.0 $247.3
Discontinued operations' current assets(2) 96.0 178.7
Investments in and advances to
unconsolidated affiliates 55.5 50.9
Property, plant, and equipment - net 217.7 230.1
Restricted proceeds from sale of commodity
interests 302.6 -
Other assets 488.1 520.5
Discontinued operations' long-term
assets(2) 49.7 396.0
------------- ------------
Total $1,520.6 $1,623.5
============= ============
Liabilities & Stockholders' Equity
(Deficit)(1) (2)
Liabilities not subject to compromise -
Current liabilities(4) $202.5 $184.1
Discontinued operations' current
liabilities(2) 109.1 137.0
Long-term liabilities 44.5 59.4
Long-term debt 2.2 2.2
Discontinued operations' long-term
liabilities, including minority
interests(2) 54.2 195.6
Liabilities subject to compromise 2,856.0 2,783.2
Minority interests .7 .7
Commitments and contingencies
Stockholders' equity (deficit) (1,748.6) (1,738.7)
------------- ------------
Total $1,520.6 $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 Sept. 30, 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 the pending asset sales and 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 Interim Consolidated Financial Statements
of the Company's Form 10-Q for the quarterly period ending Sept.
30, 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 (collectively, the
"sold commodity interests"). In accordance with Generally Accepted
Accounting Principles, the assets and liabilities of the sold
commodity interests have been reported as discontinued operations.
Additional information with regard to the discontinued operations
is included in Note 2 of Notes to Interim Consolidated Statements
in the Company's Quarterly Report on Form 10-Q for the quarterly
period ended Sept. 30, 2004.
(3) Includes cash and cash equivalents of $31.9 and $35.6 at Sept. 30,
2004, and Dec. 31, 2003, respectively.
(4) Includes current portion of long-term debt of $1.2 and $1.3 at
Sept. 30, 2004, and Dec. 31, 2003, respectively. As of Sept. 30,
2004, the Company's liquidity was approximately $179.9, consisting
of cash and cash equivalents of $31.9 and availability under its
post-petition credit agreement (the "DIP Facility") of $148.0. At
Sept. 30, 2004, there were no borrowings and $30.4 of letters of
credit outstanding under the DIP Facility.