Century Aluminum Reports Third Quarter 2007 Earnings MONTEREY, CA--(Marketwire - October 25, 2007) - Century Aluminum Company (NASDAQ: CENX) reported net income of $7.5 million ($0.18 per basic share and $0.17 per diluted share) for the third quarter of 2007. Reported third quarter results include an after-tax charge of $46.2 million ($1.13 per basic share and $1.06 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 2006, the company reported net income of $173.9 million ($5.36 per basic share and $5.26 per diluted share), which included 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. Third quarter 2007 highlights included: -- The 40,000 tonne expansion of the Grundartangi, Iceland smelter remains on schedule and budget for a fourth quarter, 2007 completion. At the end of the third quarter, approximately two-thirds of the expansion capacity was operational. Grundartangi produced at an annual rate of 242,000 tonnes during the quarter. -- Nordural received a positive opinion from the Icelandic Planning Agency on the Environmental Impact Assessment for the company's proposed greenfield smelter to be constructed near Helguvik, Iceland. The project remains on schedule. -- All primary aluminum facilities operated at or above capacity. -- Cash flow remained strong. Cash flow from operations for the first nine months of 2007 was a use of cash of $41 million; included in this result was a use of cash of $259 million due to an increase in short-term investments. Cash flow from operations for the first nine months of 2006 was $118 million. Sales in the third quarter of 2007 were $454.4 million, compared with $381.3 million in the third quarter of 2006. Shipments of primary aluminum for the quarter totaled 195,540 tonnes compared with 169,598 tonnes in the third quarter of 2006. The increase reflects additional volume from the continuing expansion at Grundartangi and the temporary shutdown of one potline at the Ravenswood, West Virginia smelter in 2006, which resulted in lost production of approximately 8,000 tonnes in the year-ago quarter. Net income for the first nine months of 2007 was $11.1 million ($0.31 per basic and $0.29 per diluted share), which includes an after-tax charge of $172.1 million ($4.79 per basic share and $4.50 per diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. 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 included an after tax charge of $68.4 million ($2.11 per basic share and $2.04 per diluted share) for mark-to-market adjustments on forward contracts that do not qualify for cash flow hedge accounting. Sales in the first nine months of 2007 were $1,366.0 million compared with $1,134.2 million in the same period of 2006. Shipments of primary aluminum for the first nine months of 2007 were 568,812 tonnes compared with 498,264 tonnes for the comparable 2006 period. "Century achieved solid performance during the third quarter," said president and chief executive officer Logan W. Kruger. "Our plants produced above capacity and operating costs were within expectations, despite continuing upward pressure on U.S. power costs. We made significant progress on our growth projects in Iceland and elsewhere. We expect to complete the latest 40,000 tonne expansion of the Grundartangi facility later this year, on schedule and on budget. The positive opinion by the Icelandic Planning Agency on the Environmental Impact Assessment for our proposed greenfield smelter at Helguvik is a significant milestone and we plan to begin preparing the site for construction by early next year." Century Aluminum Company owns primary aluminum capacity in the United States and Iceland, as well as an ownership interest in alumina and bauxite assets in the United States and Jamaica. Century's corporate offices are located in Monterey, California. Century Aluminum's quarterly conference call is scheduled for 5:00 p.m. Eastern time today. To listen to the conference call and to view related presentation materials, go to www.centuryaluminum.com and click on the conference call link on the homepage. Cautionary Statement This press release may contain "forward-looking statements" within the meaning of U.S. federal securities laws. The company has based its forward-looking statements on current expectations and projections about the future; however, these statements are subject to risks, uncertainties and assumptions, any of which could cause the company's actual results to differ materially from those expressed in its forward-looking statements. More information about these risks, uncertainties and assumptions can be found in the risk factors and forward-looking statements cautionary language contained in the company's Annual Report on Form 10-K and in other filings made with the Securities and Exchange Commission. The company does not undertake, and specifically disclaims, any obligation to revise any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such forward-looking statements are made. Century Aluminum Company Consolidated Statements of Operations (in Thousands, Except Per Share Amounts) (Unaudited) Three months ended Nine months ended September 30, September 30, -------------------- ---------------------- 2007 2006 2007 2006 --------- --------- ----------- --------- NET SALES: Third-party customers $ 360,336 $ 312,038 $ 1,112,072 $ 966,753 Related parties 94,035 69,239 253,961 167,446 --------- --------- ----------- --------- 454,371 381,277 1,366,033 1,134,199 COST OF GOODS SOLD 369,875 310,303 1,062,493 878,753 --------- --------- ----------- --------- GROSS PROFIT 84,496 70,974 303,540 255,446 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 13,372 8,144 40,784 28,639 --------- --------- ----------- --------- OPERATING INCOME 71,124 62,830 262,756 226,807 INTEREST EXPENSE - Net (2,657) (9,823) (19,126) (25,025) NET GAIN (LOSS) ON FORWARD CONTRACTS (75,041) 210,268 (279,897) (106,948) OTHER INCOME (EXPENSE) - Net (131) 3 (3,426) (121) --------- --------- ----------- --------- INCOME (LOSS) BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT VENTURES (6,705) 263,278 (39,693) 94,713 INCOME TAX (EXPENSE) BENEFIT 10,438 (92,922) 39,396 (27,675) --------- --------- ----------- --------- INCOME (LOSS) BEFORE EQUITY IN EARNINGS OF JOINT VENTURES 3,733 170,356 (297) 67,038 EQUITY IN EARNINGS OF JOINT VENTURES 3,737 3,583 11,351 11,130 --------- --------- ----------- --------- NET INCOME $ 7,470 $ 173,939 $ 11,054 $ 78,168 ========= ========= =========== ========= EARNINGS PER COMMON SHARE Basic - Net income $ 0.18 $ 5.36 $ 0.31 $ 2.41 Diluted - Net income $ 0.17 $ 5.26 $ 0.29 $ 2.38 WEIGHTED AVERAGE COMMON SHARES OUTSTANDING Basic 40,957 32,438 35,927 32,374 Diluted 43,459 33,148 38,246 33,515 Century Aluminum Company Consolidated Balance Sheets (Dollars in Thousands) (Unaudited) September 30, December 31, ASSETS 2007 2006 ------------- ------------- Current Assets: Cash $ 64,776 $ 96,365 Restricted cash 867 2,011 Short-term investments 258,727 - Accounts receivable - net 100,127 113,371 Due from affiliates 27,693 37,542 Inventories 166,400 145,410 Prepaid and other current assets 20,194 19,830 Deferred taxes - current portion 116,042 103,110 ------------- ------------- Total current assets 754,826 517,639 Property, plant and equipment - net 1,259,776 1,218,777 Intangible asset - net 51,101 61,594 Goodwill 94,844 94,844 Other assets 323,824 292,380 ------------- ------------- Total $ 2,484,371 $ 2,185,234 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts payable, trade $ 72,859 $ 64,849 Due to affiliates 225,960 282,282 Accrued and other current liabilities 44,250 75,143 Long term debt - current portion - 30,105 Accrued employee benefits costs - current portion 11,083 11,083 Convertible senior notes 175,000 175,000 Industrial revenue bonds 7,815 7,815 ------------- ------------- Total current liabilities 536,967 646,277 ------------- ------------- Senior unsecured notes payable 250,000 250,000 Nordural debt 20,000 309,331 Accrued pension benefit costs - less current portion 15,987 19,239 Accrued postretirement benefits costs - less current portion 209,092 206,415 Due to affiliates - less current portion 716,636 554,864 Other liabilities 40,686 27,811 Deferred taxes 59,860 41,587 ------------- ------------- Total noncurrent liabilities 1,312,261 1,409,247 ------------- ------------- Shareholders' Equity: Common stock (one cent par value, 100,000,000 shares authorized; 40,958,071 shares outstanding at September 30, 2007 and 32,457,670 at December 31, 2006) 410 325 Additional paid-in capital 854,545 432,270 Accumulated other comprehensive loss (86,653) (166,572) Accumulated deficit (133,159) (136,313) ------------- ------------- Total shareholders' equity 635,143 129,710 ------------- ------------- Total $ 2,484,371 $ 2,185,234 ============= ============= Century Aluminum Company Consolidated Statements of Cash Flows (Dollars in Thousands) (Unaudited) Nine months ended September 30, 2007 2006 --------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 11,054 $ 78,168 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Unrealized net loss on forward contracts 201,999 62,766 Depreciation and amortization 57,735 50,090 Deferred income taxes (38,822) (26,224) Pension and other postretirement benefits 6,499 11,005 Stock-based compensation 3,765 4,603 Excess tax benefits from share based compensation (516) (1,244) (Gain) loss on disposal of assets (49) 43 Non-cash loss on early extinguishment of debt 2,461 - Increase in short-term investments - net (258,727) - Undistributed earnings of joint ventures (11,351) (11,130) Change in operating assets and liabilities: Accounts receivable - net 13,244 628 Due from affiliates 9,849 (9,562) Inventories (20,989) (29,084) Prepaid and other current assets (1,988) (4,564) Accounts payable, trade 11,849 (784) Due to affiliates 12,018 3,129 Accrued and other current liabilities (52,289) (6,381) Other - net 13,518 (3,949) --------- --------- Net cash (used in) provided by operating activities (40,740) 117,510 --------- --------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property, plant and equipment (13,693) (10,610) Nordural expansion (79,560) (155,756) Proceeds from sale of property, plant and equipment 543 22 Restricted cash deposits 3,744 (3,998) --------- --------- Net cash used in investing activities (88,966) (170,342) --------- --------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings of long-term debt 30,000 89,000 Repayment of long-term debt (349,436) (434) Net repayments under revolving credit facility - (8,069) Excess tax benefits from share based compensation 516 1,244 Issuance of common stock 417,037 3,433 --------- --------- Net cash provided by financing activities 98,117 85,174 --------- --------- NET (DECREASE) INCREASE IN CASH (31,589) 32,342 CASH, BEGINNING OF PERIOD 96,365 17,752 --------- --------- CASH, END OF PERIOD $ 64,776 $ 50,094 ========= ========= Century Aluminum Company Selected Operating Data (Unaudited) SHIPMENTS - PRIMARY ALUMINUM Direct (1) Toll ---------------------------- ----------------------------- Metric (000) Metric (000) (000) Tons Pounds $/Pound Tons Pounds Revenue -------- -------- -------- -------- -------- --------- 2007 3rd Quarter 134,494 296,509 $ 1.13 61,046 134,583 $ 120,554 2nd Quarter 132,496 292,104 $ 1.19 56,154 123,798 $ 117,667 1st Quarter 131,568 290,057 $ 1.15 53,054 116,964 $ 114,383 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 (1) Does not include Toll shipments from Nordural FORWARD PRICED SALES - As of September 30, 2007 2011- 2007(1)(2) 2008(2) 2009(2) 2010(2) 2015(2) -------- -------- -------- -------- -------- Base Volume Pounds (000) 92,843 241,745 231,485 231,485 826,733 Metric Tons 42,113 109,654 105,000 105,000 375,000 Percent of estimated capacity 21% 14% 13% 13% 9% Potential Additional Volume(2) Pounds (000) 27,778 220,903 231,485 231,485 826,733 Metric Tons 12,600 100,200 105,000 105,000 375,000 Percent of estimated capacity 6% 12% 13% 13% 9% (1) The forward priced sales in 2007 exclude October 2007 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 2007 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. Contacts: Mike Dildine (media) 831-642-9364 Shelly Lair (investors) 831-642-9357