Kaiser Aluminum Corp
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KAISER ALUMINUM CORP FORM 10-K (Annual Report) Filed 3/10/2000 For Period Ending 12/31/1999 KAISER ALUMINUM & CHEMICAL CORP 5847 SAN FELIPE ST STE Address 2500 HOUSTON, Texas 77057 Telephone 713-267-3777 CIK 0000811596 Industry Metal Mining Sector Basic Materials Fiscal 12/31 Year FORM 10-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 1999 Commission file number 1-9447 KAISER ALUMINUM CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 94-3030279 (State of Incorporation) (I.R.S. Employer Identification No.) 5847 SAN FELIPE, SUITE 2600, HOUSTON, TEXAS 77057-3010 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (713) 267-3777 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange Title of each class on which registered ------------------- ------------------- Common Stock, $.01 par value New York Stock Exchange Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ___ As of January 28, 2000, there were 79,405,333 shares of the Common Stock of the registrant outstanding. Based upon the New York Stock Exchange closing price on January 28, 2000, the aggregate market value of the registrant's Common Stock held by non-affiliates was $183.1 million. Certain portions of the registrant's definitive proxy statement to be filed not later than 120 days after the close of the registrant's fiscal year are incorporated by reference into Part III of this Report on Form 10-K. NOTE Kaiser Aluminum Corporation's Report on Form 10-K filed with the Securities and Exchange Commission includes all exhibits required to be filed with the Report. Copies of this Report on Form 10-K, including only Exhibit 21 of the exhibits listed on pages 69 - 75 of this Report, are available without charge upon written request. The registrant will furnish copies of the other exhibits to this Report on Form 10-K upon payment of a fee of 25 cents per page. Please contact the office set forth below to request copies of this Report on Form 10-K and for information as to the number of pages contained in each of the exhibits and to request copies of such exhibits: Corporate Secretary Kaiser Aluminum Corporation 5847 San Felipe, Suite 2600 Houston, Texas 77057 (713) 267-3777 (i) KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES TABLE OF CONTENTS Page ---- PART I........................................................................................................ 1 ITEM 1. BUSINESS.................................................................................... 1 ITEM 2. PROPERTIES.................................................................................. 15 ITEM 3. LEGAL PROCEEDINGS........................................................................... 16 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS......................................... 17 PART II....................................................................................................... 17 ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS............................................................... 17 ITEM 6. SELECTED FINANCIAL DATA..................................................................... 17 ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS....................................................... 18 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.................................. 28 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA................................................. 30 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE....................................................... 61 PART III...................................................................................................... 61 ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.......................................... 61 ITEM 11. EXECUTIVE COMPENSATION...................................................................... 61 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............................................................................ 61 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.............................................. 61 PART IV....................................................................................................... 61 ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K....................................................................... 61 SCHEDULE I ............................................................................................ 64 SIGNATURES ............................................................................................ 68 INDEX OF EXHIBITS............................................................................................. 69 EXHIBIT 21 SUBSIDIARIES................................................................................ 76 (ii) KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES PART I ITEM 1. BUSINESS This Annual Report on Form 10-K (the "Report") contains statements which constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this Report (see, for example, Item 1. "Business - Incident at Gramercy Facility,"" - Strategic Initiatives," " - Business Operations," " - Competition," " - Research and Development," " - Environmental Matters," and " - Factors Affecting Future Performance," Item 3. "Legal Proceedings," and Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations"). Such statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "estimates," "will," "should," "plans" or "anticipates" or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties, and that actual results may vary materially from those in the forward-looking statements as a result of various factors. These factors include the effectiveness of management's strategies and decisions, general economic and business conditions, developments in technology, new or modified statutory or regulatory requirements, and changing prices and market conditions. Certain sections of this Report identify other factors that could cause differences between such forward-looking statements and actual results. No assurance can be given that these are all of the factors that could cause actual results to vary materially from the forward-looking statements. General Kaiser Aluminum Corporation (the "Company"), a Delaware corporation organized in 1987, is a subsidiary of MAXXAM Inc. ("MAXXAM"). MAXXAM and one of its wholly-owned subsidiaries together own approximately 63% of the Company's Common Stock, with the remaining approximately 37% publicly held. The Company, through its wholly-owned subsidiary, Kaiser Aluminum & Chemical Corporation ("KACC"), operates in all principal aspects of the aluminum industry - the mining of bauxite, the refining of bauxite into alumina, the production of primary aluminum from alumina, and the manufacture of fabricated (including semi-fabricated) aluminum products. In addition to the production utilized by KACC in its operations, KACC sells significant amounts of alumina and primary aluminum in domestic and international markets. In 1999, KACC produced approximately 2,524,000 tons[1] of alumina, of which approximately 83% was sold to third parties, and produced approximately 426,400 tons of primary aluminum, of which approximately 62% was sold to third parties. In 1999, KACC shipped approximately 389,000 tons of fabricated aluminum products to third parties, which accounted for approximately 5% of total United States domestic shipments. The Company's operations are conducted through KACC's business units. The following table sets forth total shipments and intersegment transfers of KACC's alumina, primary aluminum, and fabricated aluminum operations: Year Ended December 31, ---------------------------------- 1999 1998 1997 -------- -------- -------- (in thousands of tons) ALUMINA: (1) Shipments to Third Parties 2,093.9 2,250.0 1,929.8 Intersegment Transfers 757.3 750.7 968.0 -------- -------- -------- PRIMARY ALUMINUM: 2,851.2 3,000.7 2,897.8 -------- -------- -------- Shipments to Third Parties 295.6 263.2 327.9 Intersegment Transfers 171.2 162.8 164.2 -------- -------- -------- 466.8 426.0 492.1 -------- -------- -------- FLAT-ROLLED PRODUCTS 217.9 235.6 247.9 ENGINEERED PRODUCTS 171.1 169.4 152.1 (1) As a result of the explosion at the Gramercy alumina refinery in July