Kaiser Aluminum Corporation Reports Third Quarter and Year-to-Date 2010 Financial Results

Kaiser Aluminum Corporation yestday reported net income of $6 million and earnings per diluted share of $0.29 for the third quarter ended September 30, 2010 compared to $23 million and earnings per diluted share of $1.14 for the quarter ended September 30, 2009. Both periods included pre-tax, non-run-rate items, including non-cash mark-to-market gains on derivative positions of approximately $15 million in the third quarter 2010 and $27 million in the third quarter of 2009 and an increase in the environmental accrual of $14 million in the third quarter of 2010. Excluding the impact of pre-tax, non-run-rate items, adjusted net income was $6 million, or $0.32 earnings per diluted share, for the third quarter of 2010 compared to adjusted net income and earnings per diluted share of $6 million and $0.27, respectively, for the prior year quarter.

For the nine months ended September 30, 2010, reported net income was $14 million or $0.74 of earnings per diluted share compared to $46 million or $2.31 million per diluted share in the prior year period. Adjusting for pre-tax, non-run-rate and predominantly non-cash items, earnings per diluted share for the nine months ended September 30, 2010 improved to $1.47 from $1.39 for the prior year period.

The Company reported consolidated operating income before non-run-rate items of $14 million in the third quarter 2010, a sequential decline of $12 million from the second quarter 2010, reflecting seasonal weakness and cost inefficiencies, but slightly higher than the $13 million reported in the prior-year period. Non-run-rate items in each quarter included significant non-cash, mark-to-market gains or losses on derivative hedging positions. Consolidated operating income as reported was $13 million for the third quarter of 2010 compared to $4 million for the second quarter and $43 million for the prior-year quarter.

For the nine months ended September 30, 2010, consolidated operating income before non-run-rate items was $56 million compared to $54 million for the prior year period as improved shipments and cost structure for the Fabricated Products segment was partially offset by a reduction of Anglesey-related earnings. Reported operating income was $32 million for the nine months ended September 30, 2010 compared to $85 million for the prior year period, reflecting non-run-rate items comprised of an increase in the environmental accrual in the third quarter 2010 and non-cash, mark-to-market gains or losses on derivative hedging positions.