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Noranda Reports Third Quarter 2011 Results

Stocks in this article: NOR

Noranda Aluminum Holding Corporation (NYSE: NOR) today reported results for the third quarter and first nine months of 2011.

“Noranda’s third quarter results continued our trend of solid performance, despite uncertainty in global economic activity and lower aluminum prices,” said Layle K. (Kip) Smith, Noranda’s President and Chief Executive Officer. “Our ability to improve our results against this challenging backdrop underscores our ability to create value across the commodity cycle through our strategy of integration, cost independence from the LME and our focus on productivity and growth.”

Noranda reported third quarter 2011 net income of $30.8 million ($0.45 per diluted share), compared to net income of $25.2 million ($0.45 per diluted share) for third quarter 2010. Excluding special items, Noranda reported third quarter 2011 net income of $14.5 million ($0.21 per diluted share), a 65% increase compared to third quarter 2010 of $8.8 million ($0.16 per diluted share). Total weighted-average common diluted shares outstanding were 56.30 million for the third quarter 2010, compared to 68.49 million in third quarter 2011.

Noranda reported first nine months of 2011 net income of $116.5 million ($1.71 per diluted share), compared to net income of $32.0 million ($0.64 per diluted share) for the first nine months of 2010. Excluding special items, Noranda reported first nine months of 2011 net income of $69.5 million ($1.02 per diluted share), a 220% increase compared to $21.7 million ($0.43 per diluted share) for the first nine months of 2010.

Special items during the third quarter and first nine months of 2010 and 2011 are outlined below (in millions):

 
 

Three months ended September 30,

 

Nine months ended September 30,

2010   2011   2010   2011
$   $   $   $
Increase (decrease) to net income   Increase (decrease) to net income
Pre-tax impact of special items:    

Release of indemnification receivable related to uncertain tax positions (1)

(3.4)

(3.4

)

Restructuring (7.6)
Gain on debt repurchase 3.5 0.9
Management agreement termination (12.5)
Modification of stock options (3.2)
Transaction related legal costs (5.5)
Gain on hedging activities 21.7   19.5   44.0   65.6
Total pre-tax impact of special items 25.2 16.1 16.1 62.2
Income tax impact of special items 8.8  

(0.2

) (2)

5.8  

15.2

(2)

After-tax impact of special items 16.4   16.3   10.3   47.0
 

(1)  In third quarter 2011, the Company expensed $3.4 million of an indemnification receivable from Xstrata through selling, general and administrative expenses because statutes to examine certain income tax returns expired. Net income was not impacted by the release of this indemnification receivable as a corresponding tax benefit of $3.4 million was recorded.

(2)  The income tax impact of special items includes a $5.4 million and $5.3 million income tax benefit related to the release of a portion of the company's reserve for uncertain tax positions, for the three and nine months ended September 30, 2011, respectively.





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