Noranda reports third quarter results, sequential and year-over-year improvement in profitability on higher aluminum prices

Third Quarter 2014 Highlights and Recent Events

• Excluding special items, earnings per share ("EPS") was a $0.04 loss in third quarter 2014 and reported EPS was a $0.06 loss compared to a $0.27 loss in the third quarter 2013
• Total segment profit was $36.6 million, compared to $30.4 million in second quarter 2014 and $11.0 million in third quarter 2013
• Average realized Midwest transaction price per pound shipped was $1.08, compared to $0.99 in second quarter 2014; $0.92 in third quarter 2013
• Net Cash Cost was $0.90 per pound, compared to $0.84 per pound in second quarter 2014; third quarter 2013 Net Cash Cost was $0.89 per pound
• Cash and cash equivalents totaled $24.3 million and total available liquidity was $183.5 million as of September 30, 2014
Noranda Aluminum Holding Corporation (NYSE: NOR) today reported results for third quarter 2014.

"Our third quarter 2014 performance reflects a sequential and year-over-year improvement in our operating results," said Layle K. Smith, Noranda's President and Chief Executive Officer. "These improved results reflect continued strong demand for aluminum products and better aluminum prices, both of which demonstrate the value of our integrated business model and its leverage to improving aluminum prices. We are focused on enhancing that value by making accretive investments in our business, executing on our three-year plan to transform our cost structure, and prudently managing our balance sheet."

"While we are pleased with our improved operating results, we are disappointed that temporary aluminum reduction cell issues at our aluminum smelter had an impact on volume and costs. We understand the root cause of those issues and are taking the actions to return the smelter to normal production levels."

Third Quarter 2014 Results

Sales for third quarter 2014 were $361.4 million, compared to $345.9 million in second quarter 2014 and $339.9 million in third quarter 2013.

• Sequentially (comparing third quarter 2014 to second quarter 2014), sales increased $15.5 million, or 4.5%, primarily driven by higher realized LME aluminum prices (8 cent per pound increase) and Midwest premiums (2 cent per pound increase). Third-party shipment volumes in the Alumina segment were higher as the refinery recovered from a brief second quarter power outage; however, these improvements were offset by lower shipment volumes in the Primary Aluminum segment as a higher concentration of failures for the Company's reduction cells, or pots, caused the smelter to operate at approximately 5% below normal production levels.
• Year-over-year (comparing third quarter 2014 to third quarter 2013), sales increased $21.5 million, or 6.3%. Higher realized LME aluminum prices (9 cent per pound increase) and Midwest premiums (10 cent per pound increase) increased revenues by $25.2 million. Higher shipment volumes in the Bauxite, Alumina and Flat-Rolled Products segments had a $12.2 million favorable impact on revenues; however that impact was more than offset by lower volumes in the Primary Aluminum segment because of lower production levels.

Total third quarter 2014 segment profit was $36.6 million, compared to $30.4 million in second quarter 2014 and $11.0 million in third quarter 2013.

• Sequentially, segment profit increased $6.2 million. Results improved primarily due to higher LME aluminum prices and Midwest premiums ($18.7 million), offset by seasonal peak power rates in the Primary Aluminum segment ($11.6 million).
• Year-over-year, segment profit increased $25.6 million, largely due to a $24.5 million impact from higher LME aluminum prices and Midwest premiums. Productivity gains under the company's CORE program were largely offset by the impact of lower production levels in the Primary Aluminum segment.
Reported third quarter 2014 results were a $3.9 million net loss ($0.06 loss per diluted share), compared to a $7.6 million second quarter 2014 net loss ($0.11 loss per diluted share) and a $18.2 million third quarter 2013 net loss ($0.27 loss per diluted share).

Excluding special items, Noranda's third quarter 2014 results were a net loss of $2.8 million ($0.04 loss per diluted share), versus a net loss of $6.6 million ($0.10 loss per diluted share) in second quarter 2014 and a net loss of $22.2 million ($0.33 loss per diluted share) in third quarter 2013. The $3.8 million sequential decrease in net loss (excluding special items) primarily reflects a $6.2 million ($4.9 million after-tax) improvement in segment profit. The $19.4 million year-over-year decrease in net loss (excluding special items) reflects a $25.6 million improvement in segment profit ($20.2 million after-tax).

Year-to-date Results

Sales for the nine months ended September 30, 2014 were $1.02 billion, compared to $1.03 billion in the nine months ended September 30, 2013. Of the $11.4 million decrease in sales, a 7% decrease in external primary aluminum shipments had a $29.6 million unfavorable impact, driven by the weather-related disruptions in first quarter 2014, and lower production levels in third quarter 2014. The decrease was partially offset by the effects of higher external shipment volumes in the Bauxite, Alumina and Flat-Rolled Products segments.

Total segment profit was $77.7 million in the nine months ended September 30, 2014 and $72.3 million in the nine months ended September 30, 2013. The $5.4 million year-over-year increase in segment profit is the result of an improvement in realized aluminum prices, lower commodity-based input prices (other than natural gas), and productivity gains, which were partially offset by higher natural gas prices and weather-related and other operating disruptions in the Alumina and Primary Aluminum segments.