UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C.  20549




FORM
10-Q




x  QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE
SECURITIES EXCHANGE ACT OF 1934




For the
quarterly period ended March 31, 2009




OR






o  TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE
SECURITIES EXCHANGE ACT OF 1934




For the
transition period from _______ to _______.




Commission
file number 0-27918











Century
Aluminum Company




(Exact
name of Registrant as specified in its Charter)




Delaware
              (State
      or other Jurisdiction of Incorporation or Organization)
            13-3070826
              (IRS
      Employer Identification No.)2511
      Garden Road
              Building
      A, Suite 200
              Monterey,
      California
              (Address
      of principal executive offices)
            93940
              (Zip
      Code)




Registrant’s
telephone number, including area code: (831) 642-9300




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 (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.   x  Yes                o  No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).*  o  Yes      o  No





* - The
registrant is not currently required to submit interactive data
files.





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company.  See definition of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):





Large
      Accelerated Filer
            x
            Accelerated
      Filer
            oNon-Accelerated
      Filer
              (Do
      not check if a smaller reporting company)
            o
            Smaller
      Reporting Company
            o





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   o  Yes     x  No





The
registrant had 74,139,488 shares of common stock outstanding at April 30,
2009.










Table of Contents








TABLE OF CONTENTSPagePART
      I –  FINANCIAL INFORMATIONItem 1.  Financial StatementsNotes to Consolidated Financial
    StatementsItem 2.  Management’s Discussion and Analysis of
      Financial Condition and Results of OperationsItem 3.  Quantitative and Qualitative Disclosures
      about Market RiskItem 4.  Controls and
    ProceduresPART
      II.  OTHER INFORMATIONItem 1. Legal ProceedingsItem 6.  ExhibitsSIGNATURES








Table of Contents


PART
I – FINANCIAL INFORMATION


Item 1.  Financial Statements


CENTURY
      ALUMINUM COMPANYCONSOLIDATED
      BALANCE SHEETS(Dollars
      in thousands, except share data)(Unaudited)March
      31,
            
            
            December
      31,2009
            
            
            2008ASSETSCash
            
            $
            267,492
            
            
            $
            129,400Restricted
      cash
            
            
            865
            
            
            
            865Short-term
      investments
            
            
            —
            
            
            
            13,686Accounts
      receivable — net
            
            
            34,517
            
            
            
            60,859Due
      from affiliates
            
            
            12,158
            
            
            
            39,062Inventories
            
            
            112,753
            
            
            
            138,111Prepaid
      and other current assets
            
            
            23,557
            
            
            
            99,861Deferred
      taxes — current portion
            
            
            —
            
            
            
            32,290Total
      current assets
            
            
            451,342
            
            
            
            514,134Property,
      plant and equipment — net
            
            
            1,329,956
            
            
            
            1,340,037Intangible
      asset — net
            
            
            28,490
            
            
            
            32,527Due
      from affiliates – less current portion
            
            
            7,599
            
            
            
            7,599Other
      assets
            
            
            160,642
            
            
            
            141,061TOTAL
            
            $
            1,978,029
            
            
            $
            2,035,358LIABILITIES
      AND SHAREHOLDERS’ EQUITYLIABILITIES:Accounts
      payable, trade
            
            $
            80,189
            
            
            $
            102,143Due
      to affiliates
            
            
            62,920
            
            
            
            70,957Accrued
      and other current liabilities
            
            
            64,172
            
            
            
            58,777Accrued
      employee benefits costs — current portion
            
            
            12,070
            
            
            
            12,070Convertible
      senior notes
            
            
            154,691
            
            
            
            152,700Industrial
      revenue bonds
            
            
            7,815
            
            
            
            7,815Total
      current liabilities
            
            
            381,857
            
            
            
            404,462Senior
      unsecured notes payable
            
            
            250,000
            
            
            
            250,000Revolving
      credit facility
            
            
            —
            
            
            
            25,000Accrued
      pension benefits costs — less current portion
            
            
            49,336
            
            
            
            50,008Accrued
      postretirement  benefits costs — less
      current  portion
            
            
            180,464
            
            
            
            219,539Other
      liabilities
            
            
            42,023
            
            
            
            33,464Deferred
      taxes
            
            
            65,443
            
            
            
            71,805Total
      noncurrent liabilities
            
            
            587,266
            
            
            
            649,816CONTINGENCIES
      AND COMMITMENTS (NOTE 13)SHAREHOLDERS’
      EQUITY:Preferred
      stock (one cent par value, 5,000,000 shares authorized; 153,555 and
      155,787 shares issued and outstanding at March 31, 2009 and December 31,
      2008, respectively)
            
            
            2
            
            
            
            2Common
      stock (one cent par value, 100,000,000 shares authorized; 74,139,488 and
      49,052,692 shares issued and outstanding at March 31, 2009 and December
      31, 2008, respectively)
            
            
            741
            
            
            
            491Additional
      paid-in capital
            
            
            2,377,310
            
            
            
            2,272,128Accumulated
      other comprehensive loss
            
            
            (100,190
            )
            
            
            (137,208
            )Accumulated
      deficit
            
            
            (1,268,957
            )
            
            
            (1,154,333
            )Total
      shareholders’ equity
            
            
            1,008,906
            
            
            
            981,080TOTAL
            
            $
            1,978,029
            
            
            $
            2,035,358










See
notes to consolidated financial statements




- 1
-
 Table of Contents







CENTURY
      ALUMINUM COMPANYCONSOLIDATED
      STATEMENTS OF OPERATIONS(Dollars
      in thousands, except per share amounts)(Unaudited)Three
      months ended March 31,2009
            
            
            2008NET
      SALES:Third-party
      customers
            
            $
            170,414
            
            
            $
            356,893Related
      parties
            
            
            54,173
            
            
            
            114,249224,587
            
            
            
            471,142Cost
      of goods sold
            
            
            296,948
            
            
            
            375,147Gross
      profit (loss)
            
            
            (72,361
            )
            
            
            95,995Other
      operating expenses
            
            
            24,332
            
            
            
            —Selling,
      general and administrative expenses
            
            
            10,120
            
            
            
            18,866Operating
      income (loss)
            
            
            (106,813
            )
            
            
            77,129Interest
      expense
            
            
            (8,043
            )
            
            
            (8,032
            )Interest
      income
            
            
            725
            
            
            
            2,523Interest
      income – affiliates
            
            
            142
            
            
            
            —Net
      loss on forward contracts
            
            
            (3,602
            )
            
            
            (448,308
            )Other
      expense - net
            
            
            (242
            )
            
            
            (533
            )Loss
      before income taxes and equity in earnings of joint
    ventures
            
            
            (117,833
            )
            
            
            (377,221
            )Income
      tax benefit
            
            
            4,096
            
            
            
            138,892Loss
      before equity in earnings of joint ventures
            
            
            (113,737
            )
            
            
            (238,329
            )Equity
      in (losses) earnings  of joint ventures
            
            
            (887
            )
            
            
            4,393Net
      loss
            
            $
            (114,624
            )
            
            $
            (233,936
            )LOSS
      PER COMMON SHARE:Basic
      and Diluted
            
            $
            (1.77
            )
            
            $
            (5.70
            )WEIGHTED
      AVERAGE COMMON SHARES OUTSTANDING:Basic
      and Diluted
            
            
            64,608
            
            
            
            41,040





See
notes to consolidated financial statements


- 2
-
 Table of Contents





CENTURY
      ALUMINUM COMPANYCONSOLIDATED
      STATEMENTS OF CASH FLOWS(Dollars
      in thousands)(Unaudited)Three
      months ended March 31,2009
            
            
            2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (114,624
            )
            
            $
            (233,936
            )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Unrealized
      net loss on forward contracts
            
            
            1,817
            
            
            
            395,930Accrued
      plant curtailment costs
            
            
            18,235
            
            
            
            —Depreciation
      and amortization
            
            
            20,845
            
            
            
            20,785Lower
      of cost or market inventory adjustment
            
            
            2,271
            
            
            
            —Deferred
      income taxes
            
            
            25,548
            
            
            
            (144,331
            )Pension
      and other post retirement benefits
            
            
            4,112
            
            
            
            4,177Stock-based
      compensation
            
            
            (90
            )
            
            
            8,470Excess
      tax benefits from share-based compensation
            
            
            —
            
            
            
            (499
            )Undistributed
      losses (earnings) of joint ventures
            
            
            887
            
            
            
            (4,393
            )Changes
      in operating assets and liabilities:Accounts
      receivable – net
            
            
            26,342
            
            
            
            (6,356
            )Purchase
      of short-term trading securities
            
            
            —
            
            
            
            (108,536
            )Sale
      of short-term trading securities
            
            
            13,686
            
            
            
            127,450Due
      from affiliates
            
            
            26,904
            
            
            
            (8,513
            )Inventories
            
            
            4,761
            
            
            
            (12,802
            )Prepaid
      and other current assets
            
            
            74,187
            
            
            
            2,710Accounts
      payable, trade
            
            
            (12,201
            )
            
            
            12,797Due
      to affiliates
            
            
            (8,037
            )
            
            
            24,542Accrued
      and other current liabilities
            
            
            (9,887
            )
            
            
            (18,974
            )Other
      – net
            
            
            (20
            )
            
            
            329Net
      cash provided by operating activities
            
            
            74,736
            
            
            
            58,850CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of property, plant and equipment
            
            
            (9,184
            )
            
            
            (8,915
            )Nordural
      expansion
            
            
            (6,501
            )
            
            
            (7,389
            )Net
      cash used in investing activities
            
            
            (15,685
            )
            
            
            (16,304
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Repayments
      under revolving credit facility
            
            
            (25,000
            )
            
            
            —Excess
      tax benefits from shared-based compensation
            
            
            —
            
            
            
            499Issuance
      of common stock – net of issuance costs
            
            
            104,041
            
            
            
            1,543Net
      cash provided by financing activities
            
            
            79,041
            
            
            
            2,042NET
      CHANGE IN CASH
            
            
            138,092
            
            
            
            44,588Cash,
      beginning of the period
            
            
            129,400
            
            
            
            60,962Cash,
      end of the period
            
            $
            267,492
            
            
            $
            105,550




See
notes to consolidated financial statements


- 3
-
 Table of Contents
 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements for the
 Three
months ended March 31, 2009 and 2008
 (Dollars
in thousands, except per share amounts)
 (UNAUDITED)







1.
            General




The
accompanying unaudited interim consolidated financial statements of Century
Aluminum Company should be read in conjunction with the audited consolidated
financial statements for the year ended December 31, 2008.  In
management’s opinion, the unaudited interim consolidated financial statements
reflect all adjustments, which are of a normal and recurring nature, that are
necessary for a fair presentation of financial results for the interim periods
presented.  Operating results for the first three months of 2009 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2009.  Throughout this Form 10-Q, and unless
expressly stated otherwise or as the context otherwise requires, "Century
Aluminum," "Century," "we," "us," "our" and "ours" refer to Century Aluminum
Company and its consolidated subsidiaries.




2.
            Management’s
      Plans




We have
incurred losses each year since 2005 and had an accumulated deficit of
$1,268,957 as of March 31, 2009.  For the quarter ended March 31, 2009
and the year ended December 31, 2008, we sustained net losses available to
common stockholders of $114,624 and $895,187 (as adjusted for the adoption of
FSP APB 14-1, see Note 3), respectively.  Our financial position and
liquidity have been and are expected to continue to be materially adversely
affected by low aluminum prices as compared to our cost of
production.  If primary aluminum prices remain at current levels, we
would expect such liquidity would be sufficient to fund our operations through
the middle of 2010.




Our
principal sources of liquidity are available cash, cash flow from operations and
available borrowings under our revolving credit facility.  We will
continue to explore alternative or supplementary financing arrangements to the
revolving credit facility.  Our principal uses of cash are operating
costs, payments of principal and interest on our outstanding debt, the funding
of capital expenditures and investments in related businesses, working capital
and other general corporate requirements.









3.
            FSP
      APB 14-1 Adoption




FSP APB
14-1 “Accounting for Convertible Debt Instruments That May Be Settled in Cash
upon Conversion (Including Partial Cash Settlement)” (the “FSP”) fundamentally
changes the accounting for certain convertible debt
instruments.  Issuers of convertible debt instruments that are
affected by the FSP must separately account for the liability and equity
components of the convertible debt instruments in a manner that reflects the
entity’s hypothetical nonconvertible borrowing rate.  The FSP requires
the retrospective application of these changes to our financial statements back
to the date of issuance of our 1.75% convertible senior notes with a cumulative
effect adjustment recognized as of the beginning of the first period
presented.  The FSP was effective for Century Aluminum on January 1,
2009.




The FSP
applies to our 1.75% convertible senior notes issued in 2004 (the
“Notes”).  The holders of our Notes may convert at any time at an
initial conversion rate of 32.743 shares of common stock per $1,000 principal
amount of notes, equivalent to a conversion price of $30.5409 per share of
common stock.  Upon conversion, we would deliver cash up to the
principal amount of the Notes to be converted and, at our election, cash, common
stock or a combination thereof for any conversion obligation in excess of the
principal amount of the Notes to be converted.  We did not enter into
any derivative transactions in connection with the issuance of the
Notes.  Currently, the if-converted value of the Notes is
significantly less than the principal balance of the Notes.


- 4
-
 Table of Contents
 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







We
applied the guidance in the FSP to measure the fair value of the liability
component of the Notes using a discounted cash flow model.  We
assessed the expected life of the liability component to be seven years or
through August 2011 (based on the noteholder’s put option in August 2011) and
applied a hypothetical nonconvertible borrowing rate (7.25%) which was based on
yields of similarly rated nonconvertible instruments issued in August
2004.  We determined the carrying amount of the equity component by
deducting the fair value of the liability component from the principal amount of
the Notes.  The tax effect of the temporary basis difference
associated with the liability component of the Notes is recorded as an
adjustment to additional paid in capital as proscribed by the FSP.




In 2004,
we capitalized approximately $6,000 of transaction costs related to the issuance
of the Notes.  We amortize these capitalized financing fees to
interest expense over the expected life of the Notes.  The FSP
requires the allocation of these capitalized financing fees to the liability and
equity components and accounting for the allocated fees as either debt issuance
costs or equity issuance costs.




The
adoption of the FSP resulted in the following amounts recognized in our
financial statements:





March
      31, 2009
            
            
            December
      31, 2008Principal
      of the liability component of 1.75% convertible senior
    notes
            
            $
            175,000
            
            
            $
            175,000Unamortized
      debt discount
            
            
            (20,309
            )
            
            
            (22,300
            )Net
      carrying amount of liability component of 1.75% convertible senior
      notes
            
            $
            154,691
            
            
            $
            152,700Net
      carrying amount of equity component of 1.75% convertible senior notes (net
      of $18,261 taxes and $1,799 issuance costs)
            
            $
            32,114
            
            
            $
            32,114





Interest
      expense related to the 1.75% convertible senior notes:Three
      months endedMarch 31,2009
            
            
            2008Contractual
      interest coupon
            
            $
            766
            
            
            $
            766Amortization
      of the debt discount on the liability component
            
            
            1,990
            
            
            
            1,853Total
            
            $
            2,756
            
            
            $
            2,619Effective
      interest rate for the liability component for the period
            
            
            6.30
            %
            
            
            5.99
            %




The
estimated amortization expense for the debt discount for the 1.75% convertible
senior notes through the remaining expected life (August 2011) is as
follows:





Nine
      months ending December 31, 2009
            
            
            2010
            
            
            2011Estimated
      debt discount amortization expense
            
            $
            6,163
            
            
            $
            8,755
            
            
            $
            5,391







The
adoption of the FSP requires the retrospective application to all periods
presented as of the beginning of the first period presented.  As of
January 1, 2009, the FSP was adopted and comparative financial statements of
prior years have been adjusted to apply the FSP retrospectively.  The
line items for the 2008 financial statements which are affected by the change in
accounting principle are indicated below.


- 5
-
 Table of Contents
 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)










CONDENSED
      CONSOLIDATED BALANCE SHEETSDecember
      31, 2008As
      Reported
            
            
            Effect
      of change
            
            
            As
      AdjustedASSETSTotal
      current assets
            
            $
            514,134
            
            
            $
            —
            
            
            $
            514,134Property,
      plant and equipment — net
            
            
            1,340,037
            
            
            
            —
            
            
            
            1,340,037Intangible
      asset — net
            
            
            32,527
            
            
            
            —
            
            
            
            32,527Due
      from affiliates – less current portion
            
            
            7,599
            
            
            
            —
            
            
            
            7,599Other
      assets
            
            
            141,802
            
            
            
            (741
            )
            
            
            141,061TOTAL
            
            $
            2,036,099
            
            
            $
            (741
            )
            
            $
            2,035,358LIABILITIES
      AND SHAREHOLDERS’ EQUITYLIABILITIES:Accounts
      payable, trade
            
            $
            102,143
            
            
            $
            —
            
            
            $
            102,143Due
      to affiliates
            
            
            70,957
            
            
            
            —
            
            
            
            70,957Accrued
      and other current liabilities
            
            
            58,777
            
            
            
            —
            
            
            
            58,777Accrued
      employee benefits costs — current portion
            
            
            12,070
            
            
            
            —
            
            
            
            12,070Convertible
      senior notes
            
            
            175,000
            
            
            
            (22,300
            )
            
            
            152,700Industrial
      revenue bonds
            
            
            7,815
            
            
            
            —
            
            
            
            7,815Total
      current liabilities
            
            
            426,762
            
            
            
            (22,300
            )
            
            
            404,462Total
      noncurrent liabilities
            
            
            649,816
            
            
            
            —
            
            
            
            649,816SHAREHOLDERS’
      EQUITY:Preferred
      stock
            
            
            2
            
            
            
            —
            
            
            
            2Common
      stock
            
            
            491
            
            
            
            —
            
            
            
            491Additional
      paid-in capital
            
            
            2,240,014
            
            
            
            32,114
            
            
            
            2,272,128Accumulated
      other comprehensive loss
            
            
            (137,208
            )
            
            
            —
            
            
            
            (137,208
            )Accumulated
      deficit
            
            
            (1,143,778
            )
            
            
            (10,555
            )
            
            
            (1,154,333
            )Total
      shareholders’ equity
            
            
            959,521
            
            
            
            21,559
            
            
            
            981,080TOTAL
            
            $
            2,036,099
            
            
            $
            (741
            )
            
            $
            2,035,358







CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONSThree
      months ended March 31, 2008As
      Reported
            
            
            Effect
      of change
            
            
            As
      AdjustedNet
      Sales
            
            $
            471,142
            
            
            $
            —
            
            
            $
            471,142Cost
      of goods sold
            
            
            375,147
            
            
            
            —
            
            
            
            375,147Gross
      profit
            
            
            95,995
            
            
            
            —
            
            
            
            95,995Selling,
      general and administrative expenses
            
            
            18,866
            
            
            
            —
            
            
            
            18,866Operating
      income
            
            
            77,129
            
            
            
            —
            
            
            
            77,129Interest
      expense
            
            
            (6,243
            )
            
            
            (1,789
            )
            
            
            (8,032
            )Interest
      income
            
            
            2,523
            
            
            
            —
            
            
            
            2,523Net
      loss on forward contracts
            
            
            (448,308
            )
            
            
            —
            
            
            
            (448,308
            )Other
      expense - net
            
            
            (533
            )
            
            
            —
            
            
            
            (533
            )Loss
      before income taxes and equity in earnings of joint
    ventures
            
            
            (375,432
            )
            
            
            (1,789
            )
            
            
            (377,221
            )Income
      tax benefit
            
            
            138,243
            
            
            
            649
            
            
            
            138,892Loss
      before equity in earnings of joint ventures
            
            
            (237,189
            )
            
            
            (1,140
            )
            
            
            (238,329
            )Equity
      in earnings of joint ventures
            
            
            4,393
            
            
            
            —
            
            
            
            4,393Net
      loss
            
            $
            (232,796
            )
            
            $
            (1,140
            )
            
            $
            (233,936
            )LOSS
      PER COMMON SHARE:Basic
      and Diluted
            
            $
            (5.67
            )
            
            $
            (0.03
            )
            
            $
            (5.70
            )WEIGHTED
      AVERAGE COMMON SHARES OUTSTANDING:Basic
      and Diluted (in thousands)
            
            
            41,040
            
            
            
            —
            
            
            
            41,040







- 6
-
 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWSThree
      months ended March 31, 2008As
      Reported
            
            
            Effect
      of change
            
            
            As
      AdjustedCASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (232,796
            )
            
            $
            (1,140
            )
            
            $
            (233,936
            )Adjustments
      to reconcile net loss to net cash provided by operating
      activities:Unrealized
      net loss on forward contracts
            
            
            395,930
            
            
            
            —
            
            
            
            395,930Depreciation
      and amortization
            
            
            20,785
            
            
            
            —
            
            
            
            20,785Deferred
      income taxes
            
            
            (143,682
            )
            
            
            (649
            )
            
            
            (144,331
            )Pension
      and other post retirement benefits
            
            
            4,177
            
            
            
            —
            
            
            
            4,177Stock-based
      compensation
            
            
            8,470
            
            
            
            —
            
            
            
            8,470Excess
      tax benefits from share-based compensation
            
            
            (499
            )
            
            
            —
            
            
            
            (499
            )Undistributed
      earnings of joint ventures
            
            
            (4,393
            )
            
            
            —
            
            
            
            (4,393
            )Changes
      in operating assets and liabilities:Accounts
      receivable – net
            
            
            (6,356
            )
            
            
            —
            
            
            
            (6,356
            )Purchase
      of short-term trading securities
            
            
            (108,536
            )
            
            
            —
            
            
            
            (108,536
            )Sale
      of short-term trading securities
            
            
            127,450
            
            
            
            —
            
            
            
            127,450Due
      from affiliates
            
            
            (8,513
            )
            
            
            —
            
            
            
            (8,513
            )Inventories
            
            
            (12,802
            )
            
            
            —
            
            
            
            (12,802
            )Prepaid
      and other current assets
            
            
            2,710
            
            
            
            —
            
            
            
            2,710Accounts
      payable, trade
            
            
            12,797
            
            
            
            —
            
            
            
            12,797Due
      to affiliates
            
            
            24,542
            
            
            
            —
            
            
            
            24,542Accrued
      and other current liabilities
            
            
            (18,974
            )
            
            
            —
            
            
            
            (18,974
            )Other
      – net
            
            
            (1,460
            )
            
            
            1,789
            
            
            
            329Net
      cash provided by operating activities
            
            
            58,850
            
            
            
            —
            
            
            
            58,850Net
      cash used in investing activities
            
            
            (16,304
            )
            
            
            —
            
            
            
            (16,304
            )Net
      cash provided by financing activities
            
            
            2,042
            
            
            
            —
            
            
            
            2,042NET
      CHANGE IN CASH
            
            
            44,588
            
            
            
            —
            
            
            
            44,588Cash,
      beginning of the period
            
            
            60,962
            
            
            
            —
            
            
            
            60,962Cash,
      end of the period
            
            $
            105,550
            
            
            $
            —
            
            
            $
            105,550




As the
result of the accounting change, our accumulated deficit as of January 1, 2008,
increased $13,684 from $245,462 to $259,146.







4.
            Curtailment
      of Operations – Ravenswood and
Hawesville




On
December 17, 2008, our subsidiary, Century Aluminum of West Virginia, Inc.
(“CAWV”), issued a conditional Worker Adjustment and Retraining Notification Act
(“WARN”) notice at its Ravenswood, West Virginia smelter related to a
curtailment of plant operations in 60 days. This facility employed approximately
684 persons.  Simultaneously with the issuance of the WARN, CAWV began
the immediate curtailment of one of its four potlines which was completed by
December 20, 2008.  In December 2008, we incurred curtailment costs of
$1,667 for this partial curtailment at CAWV.  These costs were
included in cost of goods sold.




On
February 4, 2009, we announced the curtailment of the remaining plant operations
at Ravenswood.  Layoffs for the majority of Ravenswood's employees
were completed by February 20, 2009.  The decision to curtail the
operations was due to the relatively high operating cost at Ravenswood and the
depressed global price for primary aluminum.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







On March
3, 2009, our subsidiary, Century Aluminum of Kentucky, announced the orderly
curtailment of one potline at its Hawesville, Kentucky aluminum smelter
(“Hawesville”).  Hawesville has production capacity of approximately
244,000 metric tons per year of primary aluminum from five potlines. The potline
curtailment was completed in March 2009.  The action reduced primary
aluminum production by approximately 4,370 metric tons per month and impacted
approximately 120 employees.




We
incurred curtailment charges of $24,332 during the three months ended March 31,
2009, which are reported in the “Other operating expenses” line item in the
Consolidated Statements of Operations.  The majority of the
curtailment charges related to Ravenswood.  The components of the
curtailment costs for the three months ended March 31, 2009 are as
follows:







Three
      months endedMarch
      31, 2009Severance/employee-related
      cost
            
            $
            24,590Alumina
      contract – spot sales losses
            
            
            3,331Power/other
      contract termination costs
            
            
            6,332Ongoing
      site costs
            
            
            1,589Gross
      expense
            
            
            35,842Pension
      plan curtailment adjustment
            
            
            2,483OPEB
      plan curtailment adjustment
            
            
            (13,993
            )Net
      expense
            
            $
            24,332




Cash
expenditure forecasts and cash payments to date




Total
      gross cash expenditure forecast
            
            
            Approximate
      cash payments through March 31, 2009Curtailment
      of operations at Ravenswood and Kentucky (24 months)
            
            $
            33,000
            
            
            $
            4,450Ongoing
      idling costs at Ravenswood (24 months)
            
            $
            32,000
            
            
            $
            500Contract
      termination costs – alumina purchase contract (1)
            
            $
            9,000
            
            
            $
            2,750





(1)
            This
      estimate is based on actual losses during the first quarter and $6,000 in
      future payments to St. Ann Bauxite Ltd. in compensation for
      the reduced bauxite sales related to alumina and bauxite contract
      amendments.  See Note 21 Subsequent Events for additional
      information about the alumina and bauxite contract
    amendments.







5.
            Equity
      Offering




February
2009 Offering




In
February 2009, we completed a public offering of 24,500,000 shares of common
stock at a price of $4.50 per share, raising $110,250 before offering
costs.  The offering costs were approximately $6,209, representing
underwriting discounts and commissions and offering expenses.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







Glencore
International AG (together with its subsidiaries, “Glencore”) purchased
13,242,250 shares of common stock in the February 2009 offering.  We
agreed with Glencore to amend the terms of our Standstill and Governance
Agreement with Glencore to increase the percentage of our voting securities that
Glencore could acquire and vote prior to April 7, 2009, in connection with
Glencore’s purchase of common stock in this offering.  As of March 31,
2009, we believe that Glencore beneficially owned, through its common stock,
approximately 38.1% of our issued and outstanding common stock and, through its
ownership of common and preferred stock, an overall 48.7% economic ownership of
Century.




We intend
to use the net proceeds from the sale of our common stock for general corporate
purposes, including repayment of debt.










6.
            Fair
      Value Measurements and Derivative
Instruments




SFAS No.
157, “Fair Value Measurements” defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value
measurements.  This pronouncement applies to a broad range of other
existing accounting pronouncements that require or permit fair value
measurements.  SFAS No. 157 defines fair value as “the price that
would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement
date.”  Under SFAS No. 157, fair value is an exit price and that exit
price should reflect all the assumptions that markets participant would use in
pricing the asset or liability.




Short-term
Investments.Our short-term investments consist of tax-exempt
municipal bonds.  The market value of these investments is based upon
their quoted market price in markets that are not actively traded.




Derivatives.  Our
derivative contracts have included natural gas forward financial purchase
contracts, foreign currency forward contracts, primary aluminum forward physical
and financial sales contracts and the Ravenswood power contract.  We
measure the fair value of these contracts based on the quoted future market
prices at the reporting date in their respective principal markets for all
available periods.  We discount the expected cash flows from these
contracts using a risk-adjusted discount rate.  The primary aluminum
forward physical delivery contracts that are accounted for as derivatives are
marked-to-market using the London Metals Exchange (“LME”) spot and forward
market for primary aluminum and the U.S. Midwest Premium.  Because
there is no quoted futures market price for the U.S. Midwest premium component
of the market price for primary aluminum, it is necessary for management to
estimate the U.S. Midwest premium based on the historical U.S. Midwest
premium.  Prior to the termination of the primary aluminum forward
financial sales contracts in July 2008, the term of one of these contracts
extended beyond the quoted LME futures market.  We estimated the fair
value of that contract by making certain assumptions about future market prices
of primary aluminum beyond the quoted LME market prices in
2013.  These future market assumptions were significant to the fair
value measurements.  The Ravenswood power contract derivative is
valued based in part on the LME forward market.




Fluctuations
in the market prices for our primary aluminum forward financial sales contracts
had a significant impact on gains and losses from forward contracts included in
our financial statements from period to period.  Unrealized gains and
losses for these primary aluminum forward financial sales contracts were
included in net gain (loss) on forward contracts.  Our other
derivative contracts, natural gas forward financial purchase contracts and
foreign currency forward contracts qualify for cash flow hedge treatment under
SFAS No. 133, “Accounting for Derivatives.”  The effective portion of
these contracts is recorded in other comprehensive income.  The
realized gains or losses on these hedges are recorded in the statement of
operations when the hedged transaction affects earnings.  The
ineffective portions of these hedges are recognized immediately in the statement
of operations.  We have no foreign currency forwards or options
outstanding at March 31, 2009 or December 31, 2008.  We settled our
foreign currency forward contracts in October 2008.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)





Fair
      Value of Derivative Assets and LiabilitiesBalance
      sheet location
            
            March
      31, 2009
            
            
            December
      31, 2008DERIVATIVE
      ASSETS:Power
      contract
            Prepaid
      and other assets
            
            $
            85
            
            
            $
            2,202TOTAL
      DERIVATIVE ASSETS
            
            
            
            85
            
            
            
            2,202DERIVATIVE
      LIABILITIES:Natural
      gas forward financial contracts
            Accrued
      and other current liabilities
            
            $
            (6,208
            )
            
            $
            (10,130
            )Aluminum
      sales premium contracts – current portion
            Accrued
      and other current liabilities
            
            
            (932
            )
            
            
            (1,256
            )Aluminum
      sales premium contracts – less current portion
            Other
      liabilities
            
            $
            (492
            )
            
            
            (503
            )TOTAL
      DERIVATIVE LIABILITIES
            
            
            $
            (7,632
            )
            
            
            (11,889
            )








Derivatives
      in SFAS 133 Cash Flow Hedging Relationships:Three
      months ended March 31, 2009Amount
      of loss recognized in OCI on derivative, net of tax (effective
      portion)
            
            Loss
      reclassified from OCI to income on derivatives (effective
      portion)
            
            
            Loss
      recognized in income on Derivative (ineffective portion)Amount
            
            Location
            
            Amount
            
            
            Location
            
            
            AmountNatural
      gas forward financial contracts
            
            $
            (6,208
            )
            Cost
      of goods sold
            
            $
            (8,767
            )
            
            
            
            
            
            
            —Foreign
      currency (1)
            
            $
            (4,110
            )
            Cost
      of goods sold
            
            $
            (2,526
            )
            
            Net
      loss on forward contracts
            
            
            $
            (1,607
            )





(1)
            We
      have no foreign currency forwards or options outstanding at March 31, 2009
      or December 31, 2008.  We settled our foreign currency forward
      contracts in October 2008.




Natural
Gas




To
mitigate the volatility of the natural gas markets, we enter into fixed-price
forward financial purchase contracts, accounted for as cash flow hedges, which
settle in cash in the period corresponding to the intended usage of natural
gas.  These forward contracts, which are designated as cash flow
hedges and qualify for hedge accounting under SFAS No.133, have maturities
through November 2009.  The critical terms of the contracts
essentially match those of the underlying exposure.




The
effective portion of the forward contracts gain or loss is reported in other
comprehensive income, and the ineffective portion is reported currently in
earnings.  Each month, when we settle the natural gas forward
contracts, the realized gain or loss on our cash flow hedges are recognized in
income as part of our cost of goods sold.




We had
the following outstanding forward financial purchase contracts to hedge
forecasted transactions:




March
      31, 2009
            December
      31, 2008Natural
      gas forward financial contracts (thousands of MMBTU)
            1,730
            3,340







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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)








Foreign
Currency




We are
exposed to foreign currency risk due to fluctuations in the value of the U.S.
dollar as compared to the euro, the Icelandic krona (“ISK”) and the Chinese
yuan.  Grundartangi’s labor costs, maintenance costs and other local
services are denominated in ISK and a portion of its anode costs are denominated
in euros.  As a result, an increase or decrease in the value of those
currencies relative to the U.S. dollar would affect Grundartangi’s operating
margins.  In addition, we expect to incur capital expenditures for the
construction of the Helguvik greenfield smelter project, although we are
currently evaluating the Helguvik project’s cost, scope and schedule in light of
the global credit crisis and weakening commodity prices.  A
significant portion of the capital expenditures for the Helguvik project are
forecasted to be denominated in currencies other than the U.S. dollar with a
significant portion in ISK.




We manage
our foreign currency exposure by entering into foreign currency forward
contracts when management deems such transactions appropriate.  During
2008, we purchased foreign currency forward contracts to hedge our foreign
currency risk in the ISK associated with a portion of the forecasted operating
costs payable in ISK at Grundartangi and for a portion of the forecasted capital
expenditures payable in ISK for the Helguvik project.  These forward
contracts were designated as cash flow hedges, qualified for hedge accounting
under SFAS No.133 and had maturities through September 2009.  The
critical terms of the contracts essentially matched those of the underlying
exposure.  The effective portion of the forward contracts gain or loss
was reported in other comprehensive income and the ineffective portion was
reported currently in earnings.




Each
month, when we settle the foreign currency forward contracts, the realized gain
or loss on our cash flow hedges for Grundartangi operating costs are recognized
in income as part of our cost of goods sold.  The realized gain or
loss for our cash flow hedges for the Helguvik capital expenditures are
accumulated in other comprehensive income and would be reclassified to earnings
when the project is completed as part of the depreciation expense of the capital
assets.




In
October 2008, following the appreciable devaluation of the ISK versus the U.S.
dollar, we reached an agreement with our counterparties and settled the
remaining forward contracts that extended through September 2009.




We
recognized losses of approximately $1,607 in the first quarter of 2009 (none in
the first quarter of 2008) on the ineffective portions of the forward contracts
for the forecasted Helguvik capital expenditures.  These losses are
recorded in net loss on forward contracts in our Consolidated Statements of
Operations.  The ineffective portion of these forward contracts
represents forward contract positions in excess of the revised forecast schedule
of Helguvik capital expenditures.




The
foreign currency forward and natural gas forward financial purchase contracts
are subject to counterparty credit risk.  However, we only enter into
forward financial contracts with counterparties we determine to be creditworthy
at the time of entering into the contract.  Due to the fact that we
are currently in a liability position for almost all of our forward contracts,
our counterparty risk is very minimal at this time.  If any
counterparty failed to perform according to the terms of the contract, the
accounting impact would be limited to the difference between the contract price
and the market price applied to the contract volume on the date of
settlement.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)












As of
March 31, 2009, an accumulated other comprehensive loss of $10,624 is expected
to be reclassified to earnings over the next 12-month period.





Derivatives
      Not designated as Hedging Instruments under SFAS 133:Three
      months ended March 31, 2009Gain
      (loss) recognized in income on derivativeLocation
            
            AmountPower
      contracts
            Net
      loss on forward contracts
            
            $
            (2,117
            )Aluminum
      sales premium contracts
            Related
      party sales
            
            $
            804Aluminum
      sales premium contracts
            Net
      loss on forward contracts
            
            $
            122







Power




We are
party to a power supply agreement at Ravenswood that contains LME-based pricing
provisions that are an embedded derivative.  The embedded derivative
does not qualify for cash flow hedge treatment and is marked to market
quarterly.  Based on our expected power usage over the remaining term
of the contract, gains and losses associated with the embedded derivative are
recorded in net gain (loss) on forward contracts in the Consolidated Statements
of Operations.  We have recorded a derivative asset of $85 and $2,202
for the embedded derivative at March 31, 2009 and December 31, 2008,
respectively.




Aluminum
sales premium contracts




The
Glencore Metal Agreement I is a physical delivery contract for 50,000 mtpy of
primary aluminum through December 31, 2009 with variable, LME-based
pricing.  We account for the Glencore Metal Agreement I as a
derivative instrument under SFAS No. 133.  We have not designated the
Glencore Metal Agreement I as “normal” because it replaced and was a substitute
for a significant portion of a sales contract which did not qualify for this
designation.  Because the Glencore Metal Agreement I is variably
priced, we do not expect significant variability in its fair value, other than
changes that might result from the absence of the U.S. Midwest
premium.  Gains and losses on the derivative are based on, (1) the
difference between a contracted U.S. Midwest premium and the actual U.S. Midwest
premium at settlement, and (2) the difference between a contracted U.S. Midwest
premium and a forecast of the U.S. Midwest premium for future
periods.  Settlements are recorded in related party
sales.  Unrealized gains (losses) based on forecasted U.S. Midwest
premiums are recorded in net loss on forward contracts on the Consolidated
Statements of Operations.




The
Glencore Metal Agreement II is a physical delivery contract for 20,400 mtpy of
primary aluminum through December 31, 2013 with variable, LME-based
pricing.  Under the Glencore Metal Agreement II, pricing is based on
market prices, adjusted by a negotiated U.S. Midwest premium with a cap and a
floor as applied to the current U.S. Midwest premium.  We account for
the Glencore Metal Agreement II as a derivative instrument under SFAS No.
133.  Gains and losses on the derivative are based on the difference
between the contracted U.S. Midwest premium and actual and forecasted U.S.
Midwest premiums.  Settlements are recorded in related party
sales.  Unrealized gains (losses) based on forecasted U.S. Midwest
premiums are recorded in net loss on forward contracts on the Consolidated
Statements of Operations.


- 12
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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







We had
the following outstanding forward contracts that were entered into that were not
designated as hedging instruments:







March
      31, 2009
            
            
            December
      31, 2008Power
      contract (in megawatt hours) (1)
            
            
            3,931
            
            
            
            1,066,000Aluminum
      sales contract premiums (pounds of primary aluminum) (2)
            
            
            297,278,000
            
            
            
            335,102,000





(1)
            We
      mark this contract to market based on our expected usage during the
      remaining term of the contract.  Our expected usage at March 31,
      2009 reflects the curtailment of operations at Ravenswood in February
      2009.(2)
            Represents
      the remaining physical deliveries under our Glencore Metal Agreements I
      and II.




Our
metals, natural gas and foreign currency risk management activities are subject
to the control and direction of senior management.  These activities
are regularly reported to our board of directors.




The
following table sets forth by level within the SFAS No. 157 fair value hierarchy
our financial assets and liabilities that were accounted for at fair value on a
recurring basis.  As required by SFAS No. 157, financial assets and
liabilities are classified in their entirety based on the lowest level of input
that is significant to the fair value measurement.  Our assessment of
the significance of a particular input to the fair value measurement requires
judgment, and may affect the valuation of fair value assets and liabilities and
the placement within the fair value hierarchy levels.





Recurring
      Fair Value Measurements
            
            As
      of March 31, 2009Level
      1
            
            
            Level
      2
            
            
            Level
      3
            
            
            TotalASSETS:Derivative
      assets
            
            $
            —
            
            
            $
            —
            
            
            $
            85
            
            
            $
            85LIABILITIES:Derivative
      liabilities
            
            $
            (6,208
            )
            
            $
            —
            
            
            $
            (1,424
            )
            
            $
            (7,632
            )







Recurring
      Fair Value Measurements
            
            As
      of December 31, 2008Level
      1
            
            
            Level
      2
            
            
            Level
      3
            
            
            TotalASSETS:Short-term
      investments
            
            $
            —
            
            
            $
            13,686
            
            
            $
            —
            
            
            $
            13,686Derivative
      assets
            
            
            —
            
            
            
            —
            
            
            
            2,202
            
            
            
            2,202TOTAL
            
            $
            —
            
            
            $
            13,686
            
            
            $
            2,202
            
            
            $
            15,888LIABILITIES:Derivative
      liabilities
            
            $
            (10,130
            )
            
            $
            —
            
            
            $
            (1,759
            )
            
            $
            (11,889
            )







Change
      in Level 3 Fair Value Measurements during the three months ended March
      31,Derivative
      liabilities/assets2009
            
            
            2008Beginning
      balance January 1,
            
            $
            443
            
            
            $
            (1,070,290
            )Total
      loss (realized/unrealized) included in earnings
            
            
            (1,946
            )
            
            
            (448,238
            )Settlements
            
            
            164
            
            
            
            41,415Ending
      balance, March 31,
            
            $
            (1,339
            )
            
            $
            (1,477,113
            )Amount
      of total loss included in earnings attributable to the change in
      unrealized losses relating to assets and liabilities held at March
      31,
            
            $
            (1,770
            )
            
            $
            (396,006
            )







- 13
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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







The net
loss on our derivative liabilities is recorded in our statement of operations
under Net loss on forward contracts.  In 2009, our Level 3 derivative
liabilities are included in our Accrued and other liabilities and Other
liabilities line items of our consolidated balance sheet.  In 2008,
our Level 3 derivative liabilities are included in our Due to affiliates,
Accrued and other liabilities, Due to affiliates – less current portion and
Other liabilities line items of our consolidated balance sheet.





7.
            Earnings
      Per Share




The
following table provides a reconciliation of the computation of the basic and
diluted earnings per share:




For
      the three months ended March 31,2009
            
            2008Loss
            
            Shares
      (000)
            Per-Share
            
            Loss
            
            Shares
      (000)
            Per-ShareNet
      loss
            
            $
            (114,624
            )
            
            
            
            $
            (233,936
            )Amount
      allocated to common shareholders (1)
            
            
            100
            %
            
            
            
            
            100
            %Basic
      and Diluted EPS:Loss
      allocable to common shareholders
            
            $
            (114,624
            )
            64,608
            $(1.77)
            
            $
            (233,936
            )
            41,040
            $(5.70)





(1)
            We
      have not allocated the net loss allocable to common shareholders between
      common and preferred shareholders, as the holders of our preferred shares
      do not have a contractual obligation to share in the loss.  For
      the three months ended March 31, 2008, there was no preferred stock
      outstanding.







Impact
of issuance of Series A Convertible Preferred Stock on EPS




In July
2008, we issued 160,000 shares of Series A Convertible Preferred Stock
(convertible into 16,000,000 common shares) as a portion of the consideration
for the termination of primary aluminum forward financial sales
contracts with Glencore.  The preferred stock has similar
characteristics of a “participating security” as described by SFAS No. 128,
“Earnings Per Share” and EITF 03-6, “Participating Securities and the Two-Class
Method under FASB Statement No. 128.”  In accordance with the guidance
in SFAS No. 128 and EITF 03-6, we calculated basic EPS using the Two-Class
Method, allocating undistributed income to our preferred shareholder consistent
with their participation rights, and diluted EPS using the If-Converted
Method.




EITF 03-6
does not require the presentation of basic and diluted EPS for securities other
than common stock and the EPS amounts, as presented, only pertain to our common
stock.




The
Two-Class Method is an earnings allocation formula that determines earnings per
share for common shares and participating securities according to dividends
declared (or accumulated) and the participation rights in undistributed
earnings.  Our preferred stock is a non-cumulative perpetual
participating convertible preferred stock with no set dividend
preferences.  The dividend rights of our preferred shareholder are
equal to our common shareholders, as if it held of the number of common shares
into which its shares of preferred stock are convertible into as of the record
date.  The liquidation rights of the preferred stock mirror their
dividend rights, in that the preferred stock ranks in parity to the common stock
in respect of liquidation preference and would be entitled to share ratably with
common stock holders in the distribution of assets in a liquidation (as though
the preferred stock holders held the number of shares of common stock into which
their shares of preferred stock were convertible).  The preferred
stock has a liquidation preference of $0.01 per share.




The
holders of our convertible preferred stock do not have a contractual obligation
to share in the losses of Century.  Thus, in periods where we report
net losses, we will not allocate the net losses to the convertible preferred
stock for the computation of basic or diluted EPS.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







Options
to purchase 413,434 and 445,843 shares of common stock were outstanding as of
March 31, 2009 and 2008, respectively.  For the three months ended
March 31, 2009, all options, service-based stock and shares to be issued upon
the assumed conversion of our convertible debt were excluded from the
calculation of diluted EPS because of their antidilutive effect on earnings per
share.  The average price for our common stock in the three months
ended March 31, 2009 was below the conversion price of our 1.75% convertible
senior notes.




For the
three months ended March 31, 2008, all options, service-based stock, and shares
to be issued upon the assumed conversion of our convertible debt were excluded
from the calculation of diluted EPS because of their antidilutive effect on
earnings per share.  Based on the average price for our common stock
in the three months ended March 31, 2008, we would have been required to issue
approximately 2,722,000 shares upon an assumed conversion of our convertible
debt.




Service-based
stock for which vesting is based upon continued service is not considered issued
and outstanding shares of common stock until vested.  However, the
service-based stock is considered a common stock equivalent and, therefore, the
weighted average service-based stock is included, using the treasury stock
method, in common shares outstanding for diluted earnings per share computations
if they have a dilutive effect on earnings per share.  There were
approximately 64,000 and 43,000 unvested shares of service-based stock
outstanding at March 31, 2009 and 2008, respectively.  Our goal-based
performance share units are not considered common stock equivalents until it
becomes probable that performance goals will be obtained.







8.
            Shareholders’
      Equity




Series A
Convertible Preferred Stock Conversions




In July
2008, we issued 160,000 shares of our Series A Convertible Preferred
Stock.  All shares of Series A Convertible Preferred Stock are
held by Glencore and were issued in connection with the termination of primary
aluminum forward
financial sales contracts with Glencore on July 7,
2008.  The issuance of common stock under our stock incentive programs
triggers anti-dilution provisions of the preferred stock and results in the
automatic conversion of shares of preferred stock into shares of common
stock.




Automatic
      conversion of Series A Convertible
      Preferred Stock during the period:
              
              Series A
      Convertible Preferred Stock
              
              
              Shares
      of common stock issued upon conversionYear
      ended December 31, 2008
              
              
              4,213
              
              
              
              421,282Three
      months ended March 31, 2009
              
              
              2,232
              
              
              
              223,252Total
      preferred stock conversions
              
              
              6,445
              
              
              
              644,534





9.
            Income
      Taxes




As of
March 31, 2009 and December 31, 2008, we had total unrecognized tax benefits
(excluding interest) of $21,300 and $21,600, respectively.  The total
amount of unrecognized tax benefits (including interest and net of federal
benefit) that, if recognized, would affect the effective tax rate as of March
31, 2009 and December 31, 2008, respectively, are $15,300 and
$15,200.




We
recognize interest and penalties accrued related to unrecognized tax benefits in
tax expense.  As of March 31, 2009, and December 31, 2008, we had
approximately $3,800 and $3,400, respectively, of accrued interest related to
unrecognized income tax benefits.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







We do not
expect any other significant change in the balance of unrecognized tax benefits
within the next twelve months.




Our
federal income tax returns beginning in 2005 are subject to
examination.  Material state and local income tax matters have been
concluded for years through 2002.  West Virginia completed an income
tax examination for 2003 through 2005 with no changes. The majority of our
other state returns beginning in 2003 are subject to examination.  Our
Icelandic tax returns are subject to examination and income tax matters have
been concluded for years through 2001.




During
the three months ended March 31, 2009, we received a federal income tax refund
of $79,724 related to a carryback of a portion of the December 31, 2008 taxable
loss to tax years ended December 31, 2006 and December 31,
2007.  Additionally, we received a $10,094 federal income tax refund
related to overpayments of December 31, 2008 estimated tax
payments.







10.
            Inventories




Inventories
consist of the following:




March
      31, 2009
            
            
            December
      31, 2008Raw
      materials
            
            $
            7,150
            
            
            $
            19,664Work-in-process
            
            
            11,764
            
            
            
            16,133Finished
      goods
            
            
            15,291
            
            
            
            8,203Operating
      and other supplies
            
            
            78,548
            
            
            
            94,111Inventories
            
            $
            112,753
            
            
            $
            138,111




Inventories
are stated at the lower of cost or market, using the first-in, first-out
method.  Due to the curtailment of our Ravenswood operations in
February 2009, approximately $18,326 of items that were classified as inventory
at December 31, 2008 are not expected to be consumed within one year and have
been reclassified to Other assets.







11.
            Goodwill
      and Intangible Asset




In
December 2008, we tested our goodwill for impairment and recorded a $94,844
impairment loss.  As of January 1, 2009, we have no
goodwill.




The
intangible asset consists of the power contract acquired in connection with our
acquisition of the Hawesville facility (“Hawesville”).  The contract
value is being amortized over its term using a method that results in annual
amortization equal to the percentage of a given year’s expected gross annual
benefit to the total as applied to the total recorded value of the power
contract.  As of March 31, 2009, the gross carrying amount of the
intangible asset was $155,986 with accumulated amortization of
$127,496.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







For the
three months ended March 31, 2009 and 2008, amortization expense for the
intangible asset totaled $4,037 and $3,769, respectively.  For the
years ending December 31, 2009 and December 31, 2010, the estimated aggregate
amortization expense for the intangible asset will be approximately $16,149 and
$16,378, respectively.  The intangible asset is reviewed for
impairment in accordance with SFAS No. 142, “Goodwill and Other Intangible
Assets,” whenever events or circumstances indicate that its net carrying amount
may not be recoverable.








12.
            Debt





March
      31, 2009
            
            
            December
      31, 2008Debt
      classified as current liabilities:1.75%
      convertible senior notes due 2024, interest payable semiannually, net of
      debt discount of $20,309 and $22,300, respectively
      (1)(2)(3)(4)
            
            $
            154,691
            
            
            $
            152,700Hancock
      County industrial revenue bonds due 2028, interest payable quarterly
      (variable interest rates (not to exceed 12%))(1)
            
            
            7,815
            
            
            
            7,815Debt
      classified as non-current liabilities:7.5%
      senior unsecured notes payable due 2014, interest payable semiannually
      (3)(5)
            
            
            250,000
            
            
            
            250,000Revolving
      credit facility (6)
            
            
            —
            
            
            
            25,000Total
      Debt
            
            $
            412,506
            
            
            $
            435,515





(1)
            The
      1.75% convertible senior notes are classified as current because they are
      convertible at any time by the holder.  The IRBs are classified
      as current liabilities because they are remarketed weekly and could be
      required to be repaid upon demand if there is a failed remarketing. The
      IRB interest rate at March 31, 2009 was 0.84%.(2)
            The
      1.75% convertible senior notes are convertible at any time by the holder
      at an initial conversion rate of 32.7430 shares of Century common stock
      per one thousand dollars of principal amount of convertible senior notes,
      subject to adjustments for certain events.  The initial
      conversion rate is equivalent to a conversion price of approximately
      $30.5409 per share of Century common stock. Upon conversion of a 1.75%
      convertible senior note, the holder of such convertible note shall receive
      cash up to the principal amount of the 1.75% convertible senior note
      and, at our election, either cash or Century common stock, or a
      combination thereof, for the 1.75% convertible senior notes conversion
      value in excess of such principal amount, if any.  We may redeem
      some or all of the notes on or after August 6, 2009 at a price equal
      to 100% of the principal amount of the notes being redeemed, plus accrued
      and unpaid interest, if any.  Holders of the 1.75% convertible
      senior notes may require us to purchase for cash all or part of the notes
      on each of August 1, 2011, August 1, 2014 and August 1,
      2019 at a price equal to 100% of the principal amount of the notes being
      purchased, plus accrued and unpaid interest, if any.(3)
            The
      obligations of Century pursuant to the notes are unconditionally
      guaranteed, jointly and severally, on a senior unsecured basis by all of
      our existing domestic restricted subsidiaries.  The indentures
      governing these obligations contain customary covenants, including
      limitations on our ability to incur additional indebtedness, pay
      dividends, sell assets or stock of certain subsidiaries and purchase or
      redeem capital stock.(4)
            Amounts
      reflect the adoption and retrospective application of FSP APB 14-1 as of
      January 1, 2009.  This pronouncement changes the accounting
      treatment for certain convertible debt instruments requiring the
      segregation of these instruments into a liability and equity
      component.  These amounts represent the fair value of the
      liability component.  See Note 3 Adoption of FSP APB 14-1 for
      additional information.(5)
            On
      or after August 15, 2009, we may redeem any of the senior notes, in whole
      or in part, at an initial redemption price equal to 103.75% of the
      principal amount, plus accrued and unpaid interest.  The
      redemption price will decline each year after 2009 and will be 100% of the
      principal amount, plus accrued and unpaid interest, beginning on August
      15, 2012.(6)
            Borrowings
      under the revolving line of credit are, at our option, at the LIBOR rate
      or bank base rate, plus or minus in each case an applicable
      margin.  The revolving line of credit is subject to customary
      covenants, including limitations on capital expenditures, additional
      indebtedness, affiliate transactions, liens, guarantees, mergers and
      acquisitions, dividends, distributions, capital redemptions and
      investments.







We have a
$100,000 senior secured revolving credit facility (“Credit Facility”) with a
syndicate of banks that will mature September 19, 2010.  Our
obligations under the Credit Facility are unconditionally guaranteed by our
domestic subsidiaries (other than Century Aluminum Holdings, Inc., Century
Louisiana, Inc., and Nordural US LLC) and secured by a first priority security
interest in all accounts receivable and inventory belonging to Century and our
subsidiary borrowers.  The availability of funds under the Credit
Facility is subject to a $15,000 reserve and limited by a specified borrowing
base consisting of certain eligible accounts receivable and
inventory.  Borrowings under the Credit Facility are, at our option,
at the LIBOR rate or bank base rate, plus or minus in each case an applicable
margin.  The Credit Facility is subject to customary covenants,
including limitations on capital expenditures, additional indebtedness,
affiliate transactions, liens, guarantees, mergers and acquisitions, dividends,
distributions, capital redemptions and investments. We could issue up to a
maximum of $25,000 in letters of credit under the Credit Facility. As of March
31, 2009, we had letters of credit totaling $11,263 outstanding.  Any
outstanding letters of credit reduce our borrowing availability on a
dollar-for-dollar basis.   We had no outstanding borrowings under
the Credit Facility as of March 31, 2009.  As of March 31, 2009, we
had additional borrowing availability of $22,780 under the Credit
Facility.  We pay a commitment fee for the unused portion of the
line.




The
curtailment of our Ravenswood facility in February 2009 and one line at
Hawesville in March 2009 resulted in lower eligible accounts receivable and
inventory balances included in the borrowing base calculation and lowered the
availability of funds under the Credit Facility.  See Note 4
Curtailment of Operations - Ravenswood and Hawesville for additional
information.








13.
            Contingencies
      and Commitments




Environmental
Contingencies




We
believe our current environmental liabilities do not have, and are not likely to
have, a material adverse effect on our financial condition, results of
operations or liquidity. However, there can be no assurance that future
requirements or conditions at currently or formerly owned or operated properties
will not result in liabilities which may have a material adverse
effect.




Century
Aluminum of West Virginia, Inc. continues to perform remedial measures at our
Ravenswood, West Virginia facility (“Ravenswood”) pursuant to an order issued by
the Environmental Protection Agency (“EPA”) in 1994 (the “3008(h) Order”). CAWV
also conducted a RCRA facility investigation (“RFI”) under the 3008(h) Order
evaluating other areas at Ravenswood that may have contamination requiring
remediation. The RFI has been approved by appropriate agencies. CAWV has
completed interim remediation measures at two sites identified in the RFI, and
we believe no further remediation will be required. A Corrective Measures Study,
which will formally document the conclusion of these activities, is being
completed with the EPA. We believe a significant portion of the contamination on
the two sites identified in the RFI is attributable to the operations of third
parties and is their financial responsibility.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







Prior to
our purchase of Hawesville, the EPA issued a final Record of Decision (“ROD”)
under the Comprehensive Environmental Response, Compensation and Liability Act.
By agreement, Southwire, the former owner and operator is to perform all
obligations under the ROD.  Century Aluminum of Kentucky General
Partnership (“Century Kentucky”) has agreed to operate and maintain the ground
water treatment system required under the ROD on behalf of Southwire, and
Southwire will reimburse Century Kentucky for any expense that exceeds $400
annually.




Century
is a party to an EPA Administrative Order on Consent (the “Order”) pursuant to
which other past and present owners of an alumina refining facility at St.
Croix, Virgin Islands have agreed to carry out a Hydrocarbon Recovery Plan to
remove and manage hydrocarbons floating on groundwater underlying the
facility.  Pursuant to the Hydrocarbon Recovery Plan, recovered
hydrocarbons and groundwater are delivered to the adjacent petroleum refinery
where they are received and managed. Lockheed Martin Corporation (“Lockheed”),
which sold the facility to one of our affiliates, Virgin Islands Alumina
Corporation (“Vialco”), in 1989, has tendered indemnity and defense of this
matter to Vialco pursuant to the terms of the Lockheed–Vialco Asset Purchase
Agreement.  Management does not believe Vialco’s liability under the
Order or its indemnity to Lockheed will require material
payments.  Through March 31, 2009, we have expended approximately $800
on the Hydrocarbon Recovery Plan.  Although there is no limit on the
obligation to make indemnification payments, we expect the future potential
payments under this indemnification to comply with the Order will be
approximately $500, which may be offset in part by sales of recoverable
hydrocarbons.




In May
2005, Century and Vialco were among several defendants listed in a lawsuit filed
by the Commissioner of the Department of Planning and Natural Resources, in his
capacity as Trustee for Natural Resources of the United States Virgin
Islands.  The complaint alleges damages to natural resources caused by
alleged releases from the alumina refinery facility at St. Croix and the
adjacent petroleum refinery.  The primary cause of action is
pursuant to the natural resource damage provisions of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, but various
ancillary Territorial law causes of action were included as
well.  Lockheed has tendered indemnity and defense of the case to
Vialco pursuant to the terms of the Lockheed-Vialco Asset Purchase
Agreement.  The complaint seeks unspecified monetary damages, costs and
attorney fees.




In July
2005, Century and Vialco and the other defendants timely filed separate
motions to dismiss asserting certain affirmative defenses including the statute
of limitations.  On October 31, 2008, the district judge issued his
ruling on these motions.  The judge denied the defendants' motions to
dismiss based on the statute of limitations, but granted the motions as to
certain of the Territorial law causes of action.  As to the motions to
dismiss, the judge concluded that defendants had not proved the defense based
only on the pleadings and did not consider the various exhibits attached to the
motions.  Accordingly, this ruling does not foreclose a later finding,
after appropriate discovery is conducted, that the statute of limitations bars
certain claims.




In
December 2006, Vialco and the two succeeding owners of the alumina facility were
named as defendants in a lawsuit filed by the Commissioner of the Department of
Planning and Natural Resources of the United States Virgin
Islands.  The complaint alleges the defendants failed to take certain
actions specified in a Coastal Zone management permit issued to Vialco in
October 1994, and seeks statutory and other unspecified monetary penalties for
the alleged violations.  Vialco filed its answer to the complaint
asserting factual and affirmative defenses.  The parties are currently
engaged in the discovery process.




We intend
to defend both Vialco lawsuits vigorously and to assert all applicable
defenses.  Pursuant to the terms of the asset purchase agreement
between Vialco and the purchaser of the facility in 1995, the purchaser assumed
responsibility for all costs and other liabilities associated with the bauxite
waste disposal facilities, including pre-closure and post-closure
liabilities.  At this time, it not practicable to predict the ultimate
outcome of these actions or to estimate a range of possible damage
awards.


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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







In July
2006, Century was named as a defendant, together with certain affiliates of
Alcan Inc., in a lawsuit brought by Alcoa Inc. seeking to determine
responsibility for certain environmental indemnity obligations related to the
sale of a cast aluminum plate manufacturing facility located in Vernon,
California, which we purchased from Alcoa Inc. in December 1998, and sold to
Alcan Rolled Products-Ravenswood LLC (formerly Pechiney Rolled Products, LLC) in
July 1999. The complaint also seeks costs and attorney fees.  At this
time, it is not practicable to predict the ultimate outcome of these
actions or to estimate a range of possible damage awards.




It is our
policy to accrue for costs associated with environmental assessments and
remedial efforts when it becomes probable that a liability has been incurred and
the costs can be reasonably estimated.  The aggregate
environmental-related accrued liabilities were $927 and $848 at March 31, 2009
and December 31, 2008, respectively. All accrued amounts have been recorded
without giving effect to any possible future recoveries. With respect to costs
for ongoing environmental compliance, including maintenance and monitoring, such
costs are expensed as incurred.




Because
of the issues and uncertainties described above, and our inability to predict
the requirements of future environmental laws, there can be no assurance that
future capital expenditures and costs for environmental compliance will not have
a material adverse effect on our future financial condition, results of
operations, or liquidity. Based upon all available information, management does
not believe that the outcome of these environmental matters will have a material
adverse effect on our financial condition, results of operations, or
liquidity.




Legal
Contingencies




We have
pending against us or may be subject to various lawsuits, claims and proceedings
related primarily to employment, commercial, environmental, shareholder, safety
and health matters. Although it is not presently possible to determine the
outcome of these matters, management believes their ultimate disposition will
not have a material adverse effect on our financial condition, results of
operations, or liquidity.





In March
2009, four purported stockholder class actions against the Company were filed in
the United States District Court for the Northern District of California. 
The actions are entitledPetzschke v. Century Aluminum Co., et al.,Abrams v. Century Aluminum Co., et
al.,McClellan v.
Century Aluminum Co., et al., andHilyard v. Century Aluminum Co., et
al.  These cases allege that the Company improperly accounted for
cash flows associated with the termination of certain forward financial sales
contracts.  These actions seek certification as a class action, rescission
of the Company's February 2009 common stock offering, unspecified compensatory
damages, including interest thereon, costs and expenses and counsel fees. 
Management intends to vigorously defend these actions, but at the date of this
report, it is not possible to predict the ultimate outcome of these actions or
to estimate a range of possible damage awards.




Power
Commitments




Hawesville
purchases substantially all of its power from Kenergy Corp. (“Kenergy”), a
retail electric member cooperative of the Big Rivers Electrical Corporation
(“Big Rivers”), under a power supply contract that expires at the end of
2010.  Under this contract, approximately all of Hawesville’s current
power requirements (four operating potlines) are at fixed prices.  We
acquire the power requirements for Hawesville’s fifth potline (currently idled)
through a combination of short-term fixed-price contracts and deliveries at the
spot market rates.




We are
working with Big Rivers and Kenergy on a proposal that would restructure and
extend the existing power supply contract.  The proposed new long-term
power contract was filed with the Kentucky Public Service Commission in late
December 2008.  The contract would provide all of Hawesville’s
power requirements through 2023 at cost-based pricing.  The various
parties to the new contract expect the transaction to close in the second
quarter of 2009, but there is no assurance it will do so.




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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)








Appalachian
Power Company (“APCo”) supplies all of Ravenswood’s power requirements under an
agreement at prices set forth in published tariffs, which are subject to
change.  Under the special rate contract, which currently extends
through June 2009, Ravenswood may be excused from or may defer the payment of
the increase in the tariff rate if aluminum prices as quoted on the LME fall
below pre-determined levels.  We are reviewing options to extend the
term of the existing agreement that establishes an LME based cap on the tariff
rates.  In March 2009, APCo requested a rate increase to cover the
increased cost of fuel and purchased power as well as capital
improvements.  At this time, it is not practicable to predict the
outcome of this rate case or its impact on Ravenswood.




Mt. Holly
purchases all of its power from the South Carolina Public Service Authority at
rates established by published schedules. Mt. Holly’s current power contract
expires December 31, 2015.  Power delivered through 2010 will be
priced as set forth in currently published schedules, subject to adjustments for
fuel costs. Rates for the period 2011 through 2015 will be as provided under
then-applicable schedules.  Mt. Holly is subject to significant demand
charges if it fails to take all of the power provided under its power contract
through 2015.




The
Nordural facility at Grundartangi, Iceland (“Grundartangi”) purchases power from
Landsvirkjun, HS Orka hf and Orkuveita Reykjavikur (“OR”) under long-term
contracts due to expire between 2019 and 2029. The power delivered to
Grundartangi is priced at a rate based on the LME price for primary aluminum, is
paid in U.S. dollars and is from hydroelectric and geothermal
sources.  All power commitments for power delivered to Grundartangi
are provided on an 85% take or pay basis.




Nordural
Helguvik has signed electrical power supply agreements with HS Orka hf and OR,
for the proposed Helguvik smelter.  Under the agreements, power will
be supplied to the proposed Helguvik facility in four 90,000 mtpy stages,
beginning with an initial phase of up to 160 megawatts (“MW”).  HS
Orka hf will provide up to 150 MW in this initial stage, and OR will supply up
to 47.5 MW.  Electricity delivery for this first phase is targeted to
begin in late 2011.  The agreements which are subject to the
satisfaction of certain conditions provide for additional power, as available,
to support a complete potline of 360,000 mtpy.




Labor
Commitments




Approximately
79% of our U.S. based work force is represented by the United Steel, Paper and
Forestry, Manufacturing, Energy, Allied Industrial and Service Workers
International Union (the “USWA”).  Our Ravenswood plant employees
represented by the USWA are under a labor agreement that will expire on May 31,
2009.  For additional information about Ravenswood operations see Note
4 Curtailment of Operations – Ravenswood and Hawesville.  Our
Hawesville, Kentucky, plant employees represented by the USWA are under a
collective bargaining agreement that will expire on March 31,
2010.  The agreement covers the hourly workers at the Hawesville
plant.




Approximately
84% of Grundartangi’s work force is represented by five labor unions under an
agreement that expires on December 31, 2009.





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 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)


14.
              Forward
      Delivery Contracts and Financial
Instruments
  As a
producer of primary aluminum, we are exposed to fluctuating raw material and
primary aluminum prices.  We enter into fixed and market priced
contracts for the sale of primary aluminum and the purchase of raw materials in
future periods.


Forward
Physical Delivery Agreements




Primary
Aluminum Sales Contracts




Contract
            Customer
            Volume
            Term
            PricingAlcan
      Metal Agreement (1)(2)
            Alcan
            14
      million pounds per month
            Through
      August 31, 2009
            Variable,
      based on U.S. Midwest marketGlencore
      Metal Agreement I (3)
            Glencore
            50,000
      mtpy
            Through
      December 31, 2009
            Variable,
      LME-basedGlencore
      Metal Agreement II (4)
            Glencore
            20,400
      mtpy
            Through
      December 31, 2013
            Variable,
      based on U.S. Midwest marketSouthwire
      Metal Agreement (5)
            Southwire
            240
      million pounds per year (high conductivity molten
      aluminum)
            Through
      March 31, 2011
            Variable,
      based on U.S. Midwest marketSouthwire
      Metal Agreement
            Southwire
            60
      million pounds per year (standard-grade molten aluminum)
            Through
      December 31, 2010
            Variable,
      based on U.S. Midwest market





(1)
            See
      Note 21 Subsequent Events for additional information about this
      agreement.(2)
            A
      force majeure event at the Alcan facility reduced our January 2009
      shipments under this contract approximately 3 million
    pounds.(3)
            We
      account for the Glencore Metal Agreement I as a derivative instrument
      under SFAS No. 133.  We have not designated the Glencore Metal
      Agreement I as “normal” because it replaced and substituted for a
      significant portion of a sales contract which did not qualify for this
      designation.  Because the Glencore Metal Agreement I is variably
      priced, we do not expect significant variability in its fair value, other
      than changes that might result from the absence of the U.S. Midwest
      premium.(4)
            We
      account for the Glencore Metal Agreement II as a derivative instrument
      under SFAS No. 133.  Under the Glencore Metal Agreement II,
      pricing is based on then-current market prices, adjusted by a negotiated
      U.S. Midwest premium with a cap and a floor as applied to the current U.S.
      Midwest premium.(5)
            The
      Southwire Metal Agreement will automatically renew for additional
      five-year terms, unless either party provides 12 months notice that it has
      elected not to renew.




Tolling
Contracts




Contract
            Customer
            Volume
            Term
            PricingBilliton
      Tolling Agreement (1)
            BHP
      Billiton
            130,000
      mtpy
            Through
      December 31, 2013
            LME-basedGlencore
      Toll Agreement (1)(2)
            Glencore
            90,000
      mtpy
            Through
      July 31, 2016
            LME-basedGlencore
      Toll Agreement (1)
            Glencore
            40,000
      mtpy
            Through
      December 31, 2014
            LME-basedBilliton
      Tolling Agreement
            BHP
      Billiton
            9,900
      mtpy
            Through
      December 31, 2009
            LME-based





(1)
            Grundartangi’s
      tolling revenues include a premium based on the European Union (“EU”)
      import duty for primary aluminum.  In May 2007, the EU members
      reduced the EU import duty for primary aluminum from six percent to three
      percent and agreed to review the new duty after three
      years.  This decrease in the
      EU import duty for primary aluminum negatively impacts Grundartangi’s
      revenues and further decreases would also have a negative impact on
      Grundartangi’s revenues, but it is not expected to have a material
      effect on our financial position and results of
  operations.(2)
            Glencore
      assigned 50% of its tolling rights under this agreement to Hydro Aluminum
      through December 31, 2010.





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ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)





Apart
from the Alcan Metal Agreement, Glencore Metal Agreement I, Glencore Metal
Agreement II and Southwire Metal Agreement, we had forward delivery contracts to
sell 60,372 metric tons and 84,047 metric tons of primary aluminum at March 31,
2009 and December 31, 2008, respectively.  Of these forward delivery
contracts, we had no fixed price commitments to sell primary aluminum at March
31, 2009 and 330 metric tons of fixed price commitments to sell primary aluminum
at December 31, 2008, of which 319 metric tons at December 31, 2008 were with
Glencore.





Financial
Sales
Agreements




Historically,
to mitigate the volatility in our unpriced forward delivery contracts, we have
entered into primary aluminum forward financial sales contracts, which settle in
cash in the period corresponding to the intended delivery dates of the forward
delivery contracts.  Certain of these primary aluminum forward
financial sales contracts were accounted for as cash flow hedges based on our
designation of each contract at its inception.




All of
the outstanding primary aluminum forward financial sales contracts were settled
in July 2008 in a termination transaction with Glencore.  As of March
31, 2009 and December 31, 2008, we had no primary aluminum forward financial
sales contracts outstanding.  We had no forward financial contracts to
purchase aluminum at March 31, 2009 or December 31, 2008.





Forwards
and Financial Purchase
Agreements




We are
party to various forward financial and physical delivery contracts that are
accounted for under SFAS No. 133.  See Note 6 Fair Value Measurements
and Derivative Instruments for additional information about these
instruments.





15.
            Supplemental
      Cash Flow Information





Three
      months ended March 31,2009
            
            
            2008Cash
      paid for:Interest
            
            $
            11,068
            
            
            $
            10,981Income
      tax
            
            
            106
            
            
            
            505Cash
      received for:Interest
            
            
            1,205
            
            
            
            1,874Income
      tax refunds (1)
            
            
            90,337
            
            
            
            —





(1)
            See
      Note 9 Income Taxes for more
information.




Non-cash
Activities




Due to
the curtailment of our Ravenswood operations in February 2009, we reclassified
certain inventory items into other assets.  As a result, there was an
$18,326 non-cash change in the inventory and other asset account balances due to
this reclassification.




In the
first quarter of 2009, we issued 354,320 shares of common stock as part of our
performance share program to satisfy a $694 performance share liability to
certain key employees.




In the
first quarter of 2008, we issued 58,990 shares of common stock as part of our
performance share program to satisfy a $3,702 performance share liability to
certain key employees.


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 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)










16.
            Asset
      Retirement Obligations




Our asset
retirement obligations (“ARO”) consist primarily of costs associated with the
disposal of spent pot liner used in the reduction cells of our domestic
facilities.  As a result of the curtailment of our operations, we have
suspended the disposal of spent potliner at our Ravenswood
facility.




The
reconciliation of the changes in the asset retirement obligations is presented
below:







Three
      months endedMarch 31, 2009
            
            
            Year
      ended December 31,2008Beginning
      balance, ARO liability
            
            $
            14,337
            
            
            $
            13,586Additional
      ARO liability incurred
            
            
            224
            
            
            
            2,140ARO
      liabilities settled
            
            
            (279
            )
            
            
            (2,464
            )Accretion
      expense
            
            
            278
            
            
            
            1,075Ending
      balance, ARO liability
            
            $
            14,560
            
            
            $
            14,337




Certain
conditional AROs related to the disposal costs of fixed assets at our primary
aluminum facilities have not been recorded because they have an indeterminate
settlement date.  These conditional AROs will be initially recognized
in the period in which sufficient information exists to estimate their fair
value.








17.
            Comprehensive
      Loss and Accumulated Other Comprehensive
Loss







Comprehensive
      Loss:Three
      months ended March 31,2009
            
            
            2008Net
      loss
            
            $
            (114,624
            )
            
            $
            (233,936
            )Other
      comprehensive income (loss):Net
      unrealized loss on financial instruments, net of $0 and $2 tax of,
      respectively
            
            
            (4,847
            )
            
            
            (190
            )Net
      losses on cash flow hedges  reclassified to income, net of tax
      of $(2,633) and $(2,528), respectively
            
            
            6,135
            
            
            
            5,225Net
      loss (gain) on foreign currency cash flow hedges reclassified to income,
      net of tax of $(379) and $6, respectively
            
            
            3,754
            
            
            
            (38
            )Defined
      benefit pension and other postemployment benefit plans:Net
      curtailment gain arising during the period, net of $0
    tax
            
            
            33,018
            
            
            
            —Amortization
      of net loss during the period, net of $(71) and $(300) tax,
      respectively
            
            
            290
            
            
            
            780Amortization
      of prior service cost during the period, net of $396 and $100 tax,
      respectively
            
            
            (1,332
            )
            
            
            (259
            )Other
      Comprehensive Income:
            
            
            37,018
            
            
            
            5,518Comprehensive
      loss
            
            $
            (77,606
            )
            
            $
            (228,418
            )





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ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)








Components
      of Accumulated Other Comprehensive Loss:March
      31, 2009
            
            
            December
      31, 2008Unrealized
      loss on financial instruments, net of $(82) and $784 tax benefit,
      respectively
            
            $
            (10,318
            )
            
            $
            (17,506
            )Defined
      benefit plan liabilities, net of $24,064 and $26,534 tax benefit,
      respectively
            
            
            (84,202
            )
            
            
            (114,032
            )Equity
      in investee other comprehensive income (1)
            
            
            (5,670
            )
            
            
            (5,670
            )$
            (100,190
            )
            
            $
            (137,208
            )





(1)
            Includes
      our equity in the other comprehensive income of Gramercy Alumina LLC, St.
      Ann Bauxite Ltd and Mt. Holly Aluminum Company.  Their other
      comprehensive income consists primarily of pension and other
      postretirement benefit obligations.








18.
            Components
      of Net Periodic Benefit Cost







Pension
      Benefits
            
            
            Other
      Postretirement BenefitsThree
      months ended March 31,
            
            
            Three
      months ended March 31,2009
            
            
            2008
            
            
            2009
            
            
            2008Service
      cost
            
            $
            835
            
            
            $
            1,028
            
            
            $
            1,514
            
            
            $
            1,642Interest
      cost
            
            
            1,603
            
            
            
            1,551
            
            
            
            2,985
            
            
            
            3,104Expected
      return on plan assets
            
            
            (1,104
            )
            
            
            (1,893
            )
            
            
            —
            
            
            
            —Amortization
      of prior service cost
            
            
            61
            
            
            
            182
            
            
            
            (422
            )
            
            
            (540
            )Amortization
      of net loss
            
            
            634
            
            
            
            128
            
            
            
            1,095
            
            
            
            950Curtailment
            
            
            2,601
            
            
            
            —
            
            
            
            (14,312
            )
            
            
            —Net
      periodic benefit cost
            
            $
            4,630
            
            
            $
            996
            
            
            $
            (9,140
            )
            
            $
            5,156








19.
            Recently
      Issued Accounting Standards





FSP FAS
132(R)-1.  In December 2008, the FASB issued FSP 132(R)-1,
“Employers’ Disclosures about Postretirement Benefit Plan Assets” (the
“FSP”).  The FSP amends SFAS No. 132 (revised 2003), “Employers’
Disclosures about Pensions and Other Postretirement Benefits,” to provide
guidance on an employer’s disclosures about plan assets of a defined benefit
pension or other postretirement plan.  This guidance is intended to
ensure that an employer meets the objectives of the disclosures about plan
assets in an employer’s defined benefit pension or other postretirement plan to
provide users of financial statements with an understanding of the
following:  (1) how investment allocation decisions are made; (2) the
major categories of plan assets; (3) the inputs and valuation techniques used to
measure the fair value of plan assets; (4) the effect of fair value measurements
using significant unobservable inputs on change in plan assets, and; (5)
significant concentrations of risk within the plan assets.  The FSP
becomes effective for Century on December 31, 2009.  The FSP only
requires enhanced disclosures, and therefore we have determined that the
adoption of the FSP will not have a significant impact on our financial
position, results of operations or cash flows.


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ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)








20.
            Condensed
      Consolidating Financial Information




Our 7.5%
Senior Notes due 2014 and 1.75% Convertible Senior Notes due 2024 are guaranteed
by each of our material existing and future domestic subsidiaries, except for
Nordural US LLC.  Each subsidiary guarantor is 100% owned by
Century.  All guarantees are full and unconditional; and all
guarantees are joint and several.  These notes are not guaranteed by
our foreign subsidiaries (such subsidiaries and Nordural US LLC, collectively
the “Non-Guarantor Subsidiaries”).




The
following summarized condensed consolidating balance sheets as of March 31, 2009
and December 31, 2008, condensed consolidating statements of operations for the
three months ended March 31, 2009 and March 31, 2008 and the condensed
consolidating statements of cash flows for the three months ended March 31, 2009
and March 31, 2008 present separate results for Century, the guarantor
subsidiaries, the non-guarantor subsidiaries, consolidating adjustments and
total consolidated amounts.




This
summarized condensed consolidating financial information may not necessarily be
indicative of the results of operations or financial position had Century, the
guarantor subsidiaries or the non-guarantor subsidiaries operated as independent
entities.


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ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)









CONDENSED
      CONSOLIDATING BALANCE SHEETAs
      of March 31, 2009Combined
      Guarantor Subsidiaries
            
            
            Combined
      Non-Guarantor Subsidiaries
            
            
            The Company
            
            
            Reclassifications
      and Eliminations
            
            
            ConsolidatedAssets:Cash
            
            $
            —
            
            
            $
            76,630
            
            
            $
            190,862
            
            
            $
            —
            
            
            $
            267,492Restricted
      cash
            
            
            865
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            865Accounts
      receivable — net
            
            
            23,190
            
            
            
            11,327
            
            
            
            —
            
            
            
            —
            
            
            
            34,517Due
      from affiliates
            
            
            586,916
            
            
            
            2,009
            
            
            
            2,452,213
            
            
            
            (3,028,980
            )
            
            
            12,158Inventories
            
            
            64,470
            
            
            
            48,283
            
            
            
            —
            
            
            
            —
            
            
            
            112,753Prepaid
      and other assets
            
            
            334
            
            
            
            8,864
            
            
            
            14,359
            
            
            
            —
            
            
            
            23,557Deferred
      taxes — current portion
            
            
            18,250
            
            
            
            —
            
            
            
            —
            
            
            
            (18,250
            )
            
            
            —Total
      current assets
            
            
            694,025
            
            
            
            147,113
            
            
            
            2,657,434
            
            
            
            (3,047,230
            )
            
            
            451,342Investment
      in subsidiaries
            
            
            38,057
            
            
            
            —
            
            
            
            (969,143
            )
            
            
            931,086
            
            
            
            —Property,
      plant and equipment — net
            
            
            420,127
            
            
            
            908,480
            
            
            
            1,359
            
            
            
            (10
            )
            
            
            1,329,956Intangible
      asset — net
            
            
            28,490
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            28,490Due
      from affiliates — less current portion
            
            
            —
            
            
            
            7,599
            
            
            
            —
            
            
            
            —
            
            
            
            7,599Deferred
      taxes — less current portion
            
            
            —
            
            
            
            —
            
            
            
            5,483
            
            
            
            (5,483
            )
            
            
            —Other
      assets
            
            
            82,311
            
            
            
            48,716
            
            
            
            17,101
            
            
            
            12,514
            
            
            
            160,642Total
      assets
            
            $
            1,263,010
            
            
            $
            1,111,908
            
            
            $
            1,712,234
            
            
            $
            (2,109,123
            )
            
            $
            1,978,029Liabilities
      and shareholders’ equity:Accounts
      payable – trade
            
            $
            40,625
            
            
            $
            38,336
            
            
            $
            1,228
            
            
            $
            —
            
            
            $
            80,189Due
      to affiliates
            
            
            1,822,324
            
            
            
            42,472
            
            
            
            149,331
            
            
            
            (1,951,207
            )
            
            
            62,920Accrued
      and other current liabilities
            
            
            35,462
            
            
            
            9,683
            
            
            
            19,027
            
            
            
            —
            
            
            
            64,172Accrued
      employee benefits costs — current portion
            
            
            10,745
            
            
            
            —
            
            
            
            1,325
            
            
            
            —
            
            
            
            12,070Deferred
      taxes — current portion
            
            
            —
            
            
            
            —
            
            
            
            94,073
            
            
            
            (94,073
            )
            
            
            —Convertible
      senior notes
            
            
            —
            
            
            
            —
            
            
            
            154,691
            
            
            
            —
            
            
            
            154,691Industrial
      revenue bonds
            
            
            7,815
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            7,815Total
      current liabilities
            
            
            1,916,971
            
            
            
            90,491
            
            
            
            419,675
            
            
            
            (2,045,280
            )
            
            
            381,857Senior
      unsecured notes payable
            
            
            —
            
            
            
            —
            
            
            
            250,000
            
            
            
            —
            
            
            
            250,000Accrued
      pension benefit costs — less current portion
            
            
            29,999
            
            
            
            —
            
            
            
            19,337
            
            
            
            —
            
            
            
            49,336Accrued
      postretirement benefit costs — less current portion
            
            
            178,422
            
            
            
            —
            
            
            
            2,042
            
            
            
            —
            
            
            
            180,464Other
      liabilities/intercompany loan
            
            
            47,429
            
            
            
            659,331
            
            
            
            12,274
            
            
            
            (677,011
            )
            
            
            42,023Deferred
      taxes — less current portion
            
            
            317,918
            
            
            
            65,443
            
            
            
            —
            
            
            
            (317,918
            )
            
            
            65,443Total
      noncurrent liabilities
            
            
            573,768
            
            
            
            724,774
            
            
            
            283,653
            
            
            
            (994,929
            )
            
            
            587,266Shareholders’
      equity:Preferred
      stock
            
            
            —
            
            
            
            —
            
            
            
            2
            
            
            
            —
            
            
            
            2Common
      stock
            
            
            60
            
            
            
            12
            
            
            
            741
            
            
            
            (72
            )
            
            
            741Additional
      paid-in capital
            
            
            297,292
            
            
            
            144,371
            
            
            
            2,377,310
            
            
            
            (441,663
            )
            
            
            2,377,310Accumulated
      other comprehensive income (loss)
            
            
            (113,166
            )
            
            
            (2,083
            )
            
            
            (100,190
            )
            
            
            115,249
            
            
            
            (100,190
            )Retained
      earnings (accumulated deficit)
            
            
            (1,411,915
            )
            
            
            154,343
            
            
            
            (1,268,957
            )
            
            
            1,257,572
            
            
            
            (1,268,957
            )Total
      shareholders’ equity
            
            
            (1,227,729
            )
            
            
            296,643
            
            
            
            1,008,906
            
            
            
            931,086
            
            
            
            1,008,906Total
      liabilities and shareholders’ equity
            
            $
            1,263,010
            
            
            $
            1,111,908
            
            
            $
            1,712,234
            
            
            $
            (2,109,123
            )
            
            $
            1,978,029












- 26
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ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







CONDENSED
      CONSOLIDATING BALANCE SHEETAs
      of December 31, 2008Combined
      Guarantor Subsidiaries
            
            
            Combined
      Non-Guarantor Subsidiaries
            
            
            The Company
            
            
            Reclassifications
      and Eliminations
            
            
            ConsolidatedAssets:Cash
            
            $
            —
            
            
            $
            71,545
            
            
            $
            57,855
            
            
            $
            —
            
            
            $
            129,400Restricted
      cash
            
            
            865
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            865Short-term
      investments
            
            
            —
            
            
            
            —
            
            
            
            13,686
            
            
            
            —
            
            
            
            13,686Accounts
      receivable — net
            
            
            46,506
            
            
            
            14,353
            
            
            
            —
            
            
            
            —
            
            
            
            60,859Due
      from affiliates
            
            
            649,440
            
            
            
            4,878
            
            
            
            2,442,509
            
            
            
            (3,057,765
            )
            
            
            39,062Inventories
            
            
            87,673
            
            
            
            50,438
            
            
            
            —
            
            
            
            —
            
            
            
            138,111Prepaid
      and other assets
            
            
            2,205
            
            
            
            18,479
            
            
            
            79,177
            
            
            
            —
            
            
            
            99,861Deferred
      taxes — current portion
            
            
            32,290
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            32,290Total
      current assets
            
            
            818,979
            
            
            
            159,693
            
            
            
            2,593,227
            
            
            
            (3,057,765
            )
            
            
            514,134Investment
      in subsidiaries
            
            
            40,356
            
            
            
            —
            
            
            
            (891,412
            )
            
            
            851,056
            
            
            
            —Property,
      plant and equipment — net
            
            
            427,532
            
            
            
            911,083
            
            
            
            1,422
            
            
            
            —
            
            
            
            1,340,037Intangible
      asset — net
            
            
            32,527
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            32,527Due
      from affiliates — less current portion
            
            
            —
            
            
            
            7,599
            
            
            
            —
            
            
            
            —
            
            
            
            7,599Other
      assets
            
            
            62,168
            
            
            
            50,649
            
            
            
            16,929
            
            
            
            11,315
            
            
            
            141,061Total
      assets
            
            $
            1,381,562
            
            
            $
            1,129,024
            
            
            $
            1,720,166
            
            
            $
            (2,195,394
            )
            
            $
            2,035,358Liabilities
      and shareholders’ equity:Accounts
      payable – trade
            
            $
            61,094
            
            
            $
            40,913
            
            
            $
            136
            
            
            $
            —
            
            
            $
            102,143Due
      to affiliates
            
            
            2,157,671
            
            
            
            50,860
            
            
            
            251,456
            
            
            
            (2,389,030
            )
            
            
            70,957Accrued
      and other current liabilities
            
            
            27,991
            
            
            
            8,836
            
            
            
            21,950
            
            
            
            —
            
            
            
            58,777Accrued
      employee benefits costs — current portion
            
            
            10,744
            
            
            
            —
            
            
            
            1,326
            
            
            
            —
            
            
            
            12,070Convertible
      senior notes
            
            
            —
            
            
            
            —
            
            
            
            152,700
            
            
            
            —
            
            
            
            152,700Industrial
      revenue bonds
            
            
            7,815
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            7,815Total
      current liabilities
            
            
            2,265,315
            
            
            
            100,609
            
            
            
            427,568
            
            
            
            (2,389,030
            )
            
            
            404,462Senior
      unsecured notes payable
            
            
            —
            
            
            
            —
            
            
            
            250,000
            
            
            
            —
            
            
            
            250,000Revolving
      credit facility
            
            
            —
            
            
            
            —
            
            
            
            25,000
            
            
            
            —
            
            
            
            25,000Accrued
      pension benefit costs — less current portion
            
            
            29,772
            
            
            
            —
            
            
            
            20,236
            
            
            
            —
            
            
            
            50,008Accrued
      postretirement benefit costs — less current portion
            
            
            216,895
            
            
            
            —
            
            
            
            2,644
            
            
            
            —
            
            
            
            219,539Other
      liabilities/intercompany loan
            
            
            29,434
            
            
            
            647,812
            
            
            
            13,638
            
            
            
            (657,420
            )
            
            
            33,464Deferred
      taxes — less current portion
            
            
            5,767
            
            
            
            66,038
            
            
            
            —
            
            
            
            —
            
            
            
            71,805Total
      noncurrent liabilities
            
            
            281,868
            
            
            
            713,850
            
            
            
            311,518
            
            
            
            (657,420
            )
            
            
            649,816Shareholders’
      equity:Preferred
      stock
            
            
            —
            
            
            
            —
            
            
            
            2
            
            
            
            —
            
            
            
            2Common
      stock
            
            
            60
            
            
            
            12
            
            
            
            491
            
            
            
            (72
            )
            
            
            491Additional
      paid-in capital
            
            
            297,292
            
            
            
            144,371
            
            
            
            2,272,128
            
            
            
            (441,663
            )
            
            
            2,272,128Accumulated
      other comprehensive income (loss)
            
            
            (147,979
            )
            
            
            (5,837
            )
            
            
            (137,208
            )
            
            
            153,816
            
            
            
            (137,208
            )Retained
      earnings (accumulated deficit)
            
            
            (1,314,994
            )
            
            
            176,019
            
            
            
            (1,154,333
            )
            
            
            1,138,975
            
            
            
            (1,154,333
            )Total
      shareholders’ equity
            
            
            (1,165,621
            )
            
            
            314,565
            
            
            
            981,080
            
            
            
            851,056
            
            
            
            981,080Total
      liabilities and shareholders’ equity
            
            $
            1,381,562
            
            
            $
            1,129,024
            
            
            $
            1,720,166
            
            
            $
            (2,195,394
            )
            
            $
            2,035,358


- 27
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 Table of Contents
 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)







CONDENSED
      CONSOLIDATING STATEMENT OF OPERATIONSFor
      the three months ended March 31, 2009Combined
      Guarantor Subsidiaries
            
            
            Combined
      Non-Guarantor Subsidiaries
            
            
            The
      Company
            
            
            Reclassifications
      and Eliminations
            
            
            ConsolidatedNet
      sales:Third-party
      customers
            
            $
            121,909
            
            
            $
            48,505
            
            
            $
            —
            
            
            $
            —
            
            
            $
            170,414Related
      parties
            
            
            31,222
            
            
            
            23,340
            
            
            
            —
            
            
            
            (389
            )
            
            
            54,173153,131
            
            
            
            71,845
            
            
            
            —
            
            
            
            (389
            )
            
            
            224,587Cost
      of goods sold
            
            
            222,890
            
            
            
            75,635
            
            
            
            —
            
            
            
            (1,577
            )
            
            
            296,948Gross
      profit (loss)
            
            
            (69,759
            )
            
            
            (3,790
            )
            
            
            —
            
            
            
            1,188
            
            
            
            (72,361
            )Other
      operating expenses
            
            
            24,332
            
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            24,332Selling,
      general and admin expenses
            
            
            9,962
            
            
            
            158
            
            
            
            —
            
            
            
            —
            
            
            
            10,120Operating
      income (loss)
            
            
            (104,053
            )
            
            
            (3,948
            )
            
            
            —
            
            
            
            1,188
            
            
            
            (106,813
            )Interest
      expense – third party
            
            
            (8,043
            )
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (8,043
            )Interest
      expense – affiliates
            
            
            14,737
            
            
            
            (14,737
            )
            
            
            —
            
            
            
            —
            
            
            
            —Interest
      income
            
            
            342
            
            
            
            383
            
            
            
            —
            
            
            
            —
            
            
            
            725Interest
      income – affiliates
            
            
            —
            
            
            
            142
            
            
            
            —
            
            
            
            —
            
            
            
            142Net
      loss on forward contracts
            
            
            (1,995
            )
            
            
            (1,607
            )
            
            
            —
            
            
            
            —
            
            
            
            (3,602
            )Other
      expense - net
            
            
            157
            
            
            
            (399
            )
            
            
            —
            
            
            
            —
            
            
            
            (242
            )Income
      (loss) before taxes and equity in earnings (loss) of subsidiaries and
      joint ventures
            
            
            (98,855
            )
            
            
            (20,166
            )
            
            
            —
            
            
            
            1,188
            
            
            
            (117,833
            )Income
      tax benefit (expense)
            
            
            2,902
            
            
            
            1,194
            
            
            
            —
            
            
            
            —
            
            
            
            4,096Income
      (loss) before equity in earnings (loss) of subsidiaries and joint
      ventures
            
            
            (95,953
            )
            
            
            (18,972
            )
            
            
            —
            
            
            
            1,188
            
            
            
            (113,737
            )Equity
      earnings (loss) of subsidiaries and joint ventures
            
            
            (965
            )
            
            
            (2,703
            )
            
            
            (114,624
            )
            
            
            117,405
            
            
            
            (887
            )Net
      income (loss)
            
            $
            (96,918
            )
            
            $
            (21,675
            )
            
            $
            (114,624
            )
            
            $
            118,593
            
            
            $
            (114,624
            )











CONDENSED
      CONSOLIDATING STATEMENT OF OPERATIONSFor
      the three months ended March 31, 2008Combined
      Guarantor Subsidiaries
            
            
            Combined
      Non-Guarantor Subsidiaries
            
            
            The
      Company
            
            
            Reclassifications
      and Eliminations
            
            
            ConsolidatedNet
      sales:Third-party
      customers
            
            $
            272,088
            
            
            $
            84,805
            
            
            $
            —
            
            
            $
            —
            
            
            $
            356,893Related
      parties
            
            
            71,470
            
            
            
            42,779
            
            
            
            —
            
            
            
            —
            
            
            
            114,249343,558
            
            
            
            127,584
            
            
            
            —
            
            
            
            —
            
            
            
            471,142Cost
      of goods sold
            
            
            285,010
            
            
            
            90,775
            
            
            
            —
            
            
            
            (638
            )
            
            
            375,147Gross
      profit
            
            
            58,548
            
            
            
            36,809
            
            
            
            —
            
            
            
            638
            
            
            
            95,995Selling,
      general and admin expenses
            
            
            18,594
            
            
            
            272
            
            
            
            —
            
            
            
            —
            
            
            
            18,866Operating
      income
            
            
            39,954
            
            
            
            36,537
            
            
            
            —
            
            
            
            638
            
            
            
            77,129Interest
      expense – third party
            
            
            (8,032
            )
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (8,032
            )Interest
      expense – affiliates
            
            
            13,160
            
            
            
            (13,160
            )
            
            
            —
            
            
            
            —
            
            
            
            —Interest
      income
            
            
            2,326
            
            
            
            197
            
            
            
            —
            
            
            
            —
            
            
            
            2,523Net
      loss on forward contracts
            
            
            (448,308
            )
            
            
            —
            
            
            
            —
            
            
            
            —
            
            
            
            (448,308
            )Other
      expense - net
            
            
            (9
            )
            
            
            (524
            )
            
            
            —
            
            
            
            —
            
            
            
            (533
            )Income
      (loss) before taxes and equity in earnings (loss) of subsidiaries and
      joint ventures
            
            
            (400,909
            )
            
            
            23,050
            
            
            
            —
            
            
            
            638
            
            
            
            (377,221
            )Income
      tax benefit (expense)
            
            
            139,761
            
            
            
            (635
            )
            
            
            —
            
            
            
            (234
            )
            
            
            138,892Income
      (loss) before equity in earnings (loss) of subsidiaries and joint
      ventures
            
            
            (261,148
            )
            
            
            22,415
            
            
            
            —
            
            
            
            404
            
            
            
            (238,329
            )Equity
      earnings (loss) of subsidiaries and joint ventures
            
            
            6,624
            
            
            
            739
            
            
            
            (233,936
            )
            
            
            230,966
            
            
            
            4,393Net
      income (loss)
            
            $
            (254,524
            )
            
            $
            23,154
            
            
            $
            (233,936
            )
            
            $
            231,370
            
            
            $
            (233,936
            )








- 28
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 Table of Contents
 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)









CONDENSED
      CONSOLIDATING STATEMENT OF CASH FLOWSFor
      the three months ended March 31, 2009Combined
      Guarantor Subsidiaries
            
            
            Combined
      Non-Guarantor Subsidiaries
            
            
            The
      Company
            
            
            ConsolidatedNet
      cash provided by (used in) operating activities
            
            $
            86,642
            
            
            $
            (11,906
            )
            
            $
            —
            
            
            $
            74,736Investing
      activities:Purchase
      of property, plant and equipment
            
            
            (7,386
            )
            
            
            (1,750
            )
            
            
            (48
            )
            
            
            (9,184
            )Nordural
      expansion
            
            
            —
            
            
            
            (6,501
            )
            
            
            —
            
            
            
            (6,501
            )Net
      cash used in investing activities
            
            
            (7,386
            )
            
            
            (8,251
            )
            
            
            (48
            )
            
            
            (15,685
            )Financing
      activities:Repayment
      under revolving credit facility
            
            
            —
            
            
            
            —
            
            
            
            (25,000
            )
            
            
            (25,000
            )Intercompany
      transactions
            
            
            (79,256
            )
            
            
            25,242
            
            
            
            54,014
            
            
            
            —Issuance
      of common stock – net of issuance costs
            
            
            —
            
            
            
            —
            
            
            
            104,041
            
            
            
            104,041Net
      cash provided by (used in) financing activities
            
            
            (79,256
            )
            
            
            25,242
            
            
            
            133,055
            
            
            
            79,041Net
      change in cash
            
            
            —
            
            
            
            5,085
            
            
            
            133,007
            
            
            
            138,092Beginning
      cash
            
            
            —
            
            
            
            71,545
            
            
            
            57,855
            
            
            
            129,400Ending
      cash
            
            $
            —
            
            
            $
            76,630
            
            
            $
            190,862
            
            
            $
            267,492










CONDENSED
      CONSOLIDATING STATEMENT OF CASH FLOWSFor
      the three months ended March 31, 2008Combined
      Guarantor Subsidiaries
            
            
            Combined
      Non-Guarantor Subsidiaries
            
            
            The
      Company
            
            
            ConsolidatedNet
      cash provided by operating activities
            
            $
            41,449
            
            
            $
            17,401
            
            
            $
            —
            
            
            $
            58,850Investing
      activities:Purchase
      of property, plant and equipment
            
            
            (2,779
            )
            
            
            (5,771
            )
            
            
            (365
            )
            
            
            (8,915
            )Nordural
      expansion
            
            
            —
            
            
            
            (7,389
            )
            
            
            —
            
            
            
            (7,389
            )Net
      cash used in investing activities
            
            
            (2,779
            )
            
            
            (13,160
            )
            
            
            (365
            )
            
            
            (16,304
            )Financing
      activities:Excess
      tax benefits from share-based compensation
            
            
            —
            
            
            
            —
            
            
            
            499
            
            
            
            499Intercompany
      transactions
            
            
            (38,670
            )
            
            
            18,465
            
            
            
            20,205
            
            
            
            —Issuance
      of common stock – net of issuance costs
            
            
            —
            
            
            
            —
            
            
            
            1,543
            
            
            
            1,543Net
      cash provided by (used in) financing activities
            
            
            (38,670
            )
            
            
            18,465
            
            
            
            22,247
            
            
            
            2,042Net
      change in cash
            
            
            —
            
            
            
            22,706
            
            
            
            21,882
            
            
            
            44,588Beginning
      cash
            
            
            —
            
            
            
            11,128
            
            
            
            49,834
            
            
            
            60,962Ending
      cash
            
            $
            —
            
            
            $
            33,834
            
            
            $
            71,716
            
            
            $
            105,550










- 29
-
 Table of Contents
 CENTURY
ALUMINUM COMPANY
 Notes
to the Consolidated Financial Statements - continued
 (UNAUDITED)












21.
            Subsequent
      Events





Alcan
Metal Agreement terminated




In April
2009, by their actions, Alcan and CAWV agreed to terminate all remaining
obligations under the Alcan Metal Agreement.  CAWV agreed to pay Alcan
$623 to settle the remaining delivery obligations.




Alumina
and Bauxite contract amendments




On April
21, 2009, we agreed with Glencore to amend two alumina purchase agreements,
dated April 14, 2008 and April 26, 2006, respectively (collectively, the
“Amendments”).




The
Amendments reduce the amount of alumina Glencore will supply to Century from
330,000 metric tons to 110,368 metric tons in 2009 and from 290,000 metric tons
to 229,632 metric tons in 2010, for an overall alumina supply reduction of
280,000 metric tons.  With the Amendments, given the alumina received
to date, we reduced our total remaining alumina obligation under the respective
agreements for 2009 to 13,500 metric tons.




In
conjunction with these alumina supply reductions, St. Ann Bauxite Limited
(“SABL”), a joint venture owned 50% by Century Aluminum Company, agreed to
reduce the amount of bauxite it will supply Glencore in 2009 by 775,000 dry
metric tons, 650,000 dry metric tons being cancelled and 125,000 dry metric tons
being deferred to 2010.  As part of this transaction, we have agreed
to pay SABL $6,000 in compensation for the reduced bauxite sales.




APCo
Rate filing




In March 2009, APCo
filed a request for a 43% average increase in overall electric rates to be
phased in over a three year period, with the first increase to be effective as
of July 1, 2009.  As a result of the large proposed increase, the
West Virginia Public
Service Commission (the “PSC”) indicated that it would make a decision by
the end of September and that any increase would be effective by December
2009.  In April 2009, APCo filed a motion for an interim rate
increase.




On April
27, 2009, the PSC announced it would rule on the interim motion by written order
and indicated that it remains their intent to issue the final order by the end
of September.  The PSC advised that a revised procedural order will be
entered as soon as practical.







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 Table of Contents


FORWARD-LOOKING
STATEMENTS – CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES REFORM ACT OF
1995.







This
Quarterly Report on Form 10-Q contains forward-looking statements. We have based
these forward-looking statements on current expectations and projections about
future events.  Many of these statements may be identified by the use
of forward-looking words such as “expects,” “anticipates,” “plans,” “believes,”
“projects,” “estimates,” “intends,” “should,” “could,” “would,” and “potential”
and similar words.  These forward-looking statements are subject to
risks, uncertainties and assumptions including, among other things, those
discussed under Part I, Item 2, “Management’s Discussion and Analysis of
Financial Condition and Results of Operations,” Part I, Item 1, “Financial
Statements,” and:







·
            The
      decline in aluminum prices has adversely affected our financial position
      and results of operations and could result in further additional
      curtailment of operations at one or more of our facilities if alternate
      sources of liquidity are not available or prices do not
      increase.·
            A
      continuation or worsening of global financial and economic conditions
      could adversely impact our financial position and results of operations
      and limit our ability to access the credit and capital markets on
      acceptable terms to obtain funding for our operations and capital
      projects.·
            Continued
      turmoil in the financial markets could have adverse effects on our pension
      funding obligations.·
            If
      economic and political conditions in Iceland deteriorate, our financial
      position and results of operations could be adversely
      impacted.·
            The
      market price of our common stock has declined significantly, may continue
      to be volatile, and may decline further.·
            Any
      construction and development activities which we may plan will require
      substantial capital. We may be unable to obtain needed capital or
      financing on satisfactory terms or at all, which could delay or curtail
      any such construction projects.·
            We
      may be required to write down the value of certain
  assets.·
            Our
      credit ratings have been recently lowered by two major credit rating
      agencies.·
            The
      cyclical nature of the aluminum industry causes variability in our
      earnings and cash flows.·
            Our
      molten aluminum sales at Hawesville are subject to long-term sales
      contracts which limit our ability to cut costs and creates dependence on
      one major customer.·
            We
      would be required to incur substantial costs in order to curtail
      unprofitable aluminum production.·
            Currently,
      the cost of alumina used at Hawesville is significantly higher than under
      our LME-based alumina contracts and impacts the results of operations at
      Hawesville.·
            Changes
      or disruptions to our raw material supply arrangements and power supply
      could increase our production costs and reduce the profitability of our
      operations.·
            Changes
      in the relative cost and availability of certain raw materials and energy
      compared to the price of primary aluminum could affect our operating
      results.·
            Unexpected
      events, including natural disasters, may increase our cost of doing
      business or disrupt our operations.·
            We
      are subject to the risk of union disputes.·
            We
      are subject to a variety of environmental laws and regulations that could
      result in unanticipated costs or liabilities.·
            International
      operations expose us to political, regulatory, currency and other related
      risks.·
            We
      have pending against us or may be subject to various lawsuits, claims and
      proceedings related primarily to employment, commercial, environmental,
      shareholder, safety and health matters.·
            Our
      historical financial information may not be comparable to our results for
      future periods.·
            Our
      level of indebtedness requires significant cash flow to meet our debt
      service requirements, which reduces cash available for other purposes,
      such as the payment of dividends, and limits our ability to pursue our
      growth opportunities.






- 31
-
 Table of Contents








·
            Restrictive
      covenants in our credit facility and the indenture governing our senior
      notes limit our ability to incur additional debt and pursue our growth
      strategy.·
            Further
      consolidation within the metals industry could provide competitive
      advantages to our competitors.·
            Reductions
      in the duty on primary aluminum imports into the European Union decrease
      our revenues at Grundartangi.·
            We
      depend upon intercompany transfers from our subsidiaries to meet our debt
      service obligations.·
            Provisions
      in our charter documents and state law may make it difficult for others to
      obtain control of Century, even though some stockholders may consider them
      to be beneficial.




We
believe the expectations reflected in our forward-looking statements are
reasonable, based on information available to us on the date of this
filing.  However, given the described uncertainties and risks, we
cannot guarantee our future performance or results of operations and you should
not place undue reliance on these forward-looking statements.  We
undertake no obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.  When reading any forward-looking statements in this
filing, the reader should consider the risks described above and elsewhere in
this report as well as those described under the headings “Risk Factors” and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations” in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q
filed with the Securities and Exchange Commission.  Given these
uncertainties and risks, the reader should not place undue reliance on these
forward-looking statements.






Item 2.  Management’sDiscussion and Analysis of
Financial Condition and Results of Operations




Recent
Developments




Alcan
Metal Agreement terminated




In April
2009, by their actions, Alcan and CAWV agreed to terminate all remaining
obligations under the Alcan Metal Agreement.  CAWV agreed to pay Alcan
$0.6 million to settle the remaining delivery obligations.




Helguvik
Investment Agreement




An
Enabling Act for an Investment Agreement with the Government of Iceland for
Helguvik, which governs certain meaningful aspects of the project such as the
fiscal regime, was recently approved by the Icelandic Parliament.  The
Investment Agreement is subject to approval by the European Surveillance
Authority.




IRS
Tax Refunds received




In the
first quarter of 2009, we received a federal income tax refund for $79.7 million
related to a carryback of a portion of the December 31, 2008 taxable loss to tax
years ended December 31, 2006 and December 31, 2007.  Additionally, we
received a $10.1 million federal income tax refund related to overpayments of
December 31, 2008 estimated tax payments.




.


- 32
-
 Table of Contents


Curtailment
of Operations at Ravenswood and Hawesville
  On
February 4, 2009, we announced the curtailment of the remaining plant operations
at Ravenswood.  Layoffs for the majority of Ravenswood's employees
were completed by February 20, 2009.  The decision to curtail the
operations was due to the relatively high operating cost at Ravenswood and
depressed global price for primary aluminum




On March
3, 2009, our subsidiary, Century Aluminum of Kentucky announced the orderly
curtailment of one potline at its Hawesville, Kentucky aluminum smelter
(“Hawesville”).  Hawesville has production capacity of approximately
244,000 metric tons per year of primary aluminum from five potlines. The potline
curtailment was completed in March 2009.  The action reduced primary
aluminum production by approximately 4,370 metric tons per month and impacted
approximately 120 employees.  The action was needed to reduce the
continuing cash losses as a result of the depressed global price for primary
aluminum.





Credit
Rating Downgrade




In April
2009, Moody’s further downgraded our credit rating to “Caa3” from
“B2.”  The downgrade reflects Moody’s concerns regarding the level of
cash consumption, and the potential for liquidity challenges absent a
significant recovery in the aluminum markets.   Moody’s has
stated the Caa3 corporate family rating anticipates that operating cash flow
generated from Grundartangi is unlikely to be sufficient to support ongoing
operations across Century on a sustained basis.  According to Moody’s,
obligations rated “Caa3” are judged to be of poor standing and are subject to
very high credit risk, and have “extremely poor credit quality.”  This
recent action by Moody’s and any further actions they may take, could negatively
impact our ability to access liquidity in the credit and capital markets in the
future and could lead to worsened trade terms, increasing our liquidity
needs.




Equity
Offering




In
February 2009, we completed a public offering of 24,500,000 shares of common
stock at a price of $4.50 per share, raising approximately $110.2 million before
offering costs.  The offering costs were approximately $6.2 million,
representing underwriting discounts and commissions and offering
expenses.




Glencore
purchased 13,242,250 shares of common stock in this offering.  We have
agreed with Glencore to amend the terms of our Standstill and Governance
Agreement with Glencore to increase the percentage of our voting securities that
Glencore may acquire prior to April 7, 2009 and to allow Glencore to
exercise voting rights with respect to the shares of common stock it purchased
in this offering.  As of March 31, 2009, we believe that Glencore
beneficially owned, through common stock approximately 38.1% of our issued and
outstanding common stock and, through ownership of common and preferred stock,
an overall 48.7% economic ownership of Century.




We intend
to use the net proceeds from the sale of our common stock for general corporate
purposes, including repayment of debt.




Alumina
and bauxite contract amendments




On April
21, 2009, we agreed with Glencore to amend two alumina purchase agreements dated
April 14, 2008 and April 26, 2006, respectively (collectively, the
“Amendments”).




The
Amendments reduce the amount of alumina Glencore will supply to Century from
330,000 metric tons to 110,368 metric tons in 2009 and from 290,000 metric tons
to 229,632 metric tons in 2010, for an overall alumina supply reduction of
280,000 metric tons.  With the Amendments, given the alumina received
to date, we reduced our total remaining alumina obligation under the respective
agreements for 2009 to 13,500 metric tons.




In
conjunction with these alumina supply reductions, St. Ann Bauxite Limited
(“SABL”), a joint venture owned 50% by Century Aluminum Company, agreed to
reduce the amount of bauxite it will supply Glencore in 2009 by 775,000 dry
metric tons, with 650,000 dry metric tons being cancelled and 125,000 dry metric
tons being deferred to 2010.  As part of this transaction, we have
agreed to pay SABL $6.0 million in compensation for the reduced bauxite
sales.


- 33
-
 Table of Contents












Joint
ventures production volume decreases




The
Gramercy alumina refinery is currently producing smelter grade alumina at
approximately 50% of capacity with Century taking approximately 250,000 metric
tons annually.  St. Ann Bauxite Ltd. is
currently operating atapproximately 60% ofcapacity.




Baise
Haohai Carbon Co., Ltd. (“BHH”), a carbon anode and cathode facility located in
the Guangxi Zhuang Autonomous Region of south China, is currently operating at
50% of its rated capacity due to the reduced operations of its main customer in
China.




Impact
of the adoption of FSP APB 14-1




We
adopted FSP APB 14-1 effective January 1, 2009 and retrospectively applied the
changes under this new accounting principle to our financial
statements.  Retrospective application to all periods presented is
required.  Accordingly, we have adjusted our previously issued
financial statements to reflect the changes that resulted from the adoption of
the FSP for the years 2004 through 2008 to give effect to FSP APB 14-1, as
applicable.




We have
assessed the impact of adopting FSP APB 14-1 on our historical and future net
income calculations.  The adoption of FSP APB 14-1 increased our
reported interest expense by $7.6 million for 2008, and will increase interest
expense by $8.2 million in 2009, $8.8 million in 2010 and $5.4 million in
2011.




Extension
of labor contract at Ravenswood




In April
2009, we reached a tentative agreement with the USWA to extend the labor
contract at Ravenswood three months from May 31, 2009 to August 31,
2009.




APCo
Rate filing




In March 2009, APCo
filed a request for a 43% average increase in overall electric rates to be
phased in over a three year period, with the first increase to be effective as
of July 1, 2009.  As a result of the large proposed increase, the
West Virginia Public
Service Commission (the “PSC”) indicated that it would make a decision by
the end of September and that any increase would be effective by December
2009.  In April 2009, APCo filed a motion for an interim rate
increase.




On April
27, 2009, the PSC announced it would rule on the interim motion by written order
and indicated that it remains their intent to issue the final order by the end
of September.  The PSC advised that a revised procedural order will be
entered as soon as practical.


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Results
of Operations




The
following discussion reflects our historical results of operations.




Century’s
financial highlights include:


Three
      months ended March 31,2009
            
            
            2008(In
      thousands, except per share data)Net
      sales:Third-party
      customers
            
            $
            170,414
            
            
            $
            356,893Related
      party customers
            
            
            54,173
            
            
            
            114,249Total
            
            $
            224,587
            
            
            $
            471,142Gross
      profit (loss)
            
            $
            (72,361
            )
            
            $
            95,995Net
      loss
            
            $
            (114,624
            )
            
            $
            (233,936
            )Net
      loss allocated to common shareholders
            
            $
            (114,624
            )
            
            $
            (233,936
            )Loss
      per common share:Basic
      and Diluted
            
            $
            (1.77
            )
            
            $
            (5.70
            )Shipments
      – primary aluminum (thousands of pounds):Direct
            
            
            214,712
            
            
            
            293,223Toll
            
            
            150,126
            
            
            
            147,086Total
            
            
            364,838
            
            
            
            440,309Shipments
      – primary aluminum (metric tons):Direct
            
            
            97,392
            
            
            
            133,004Toll
            
            
            68,096
            
            
            
            66,717Total
            
            
            165,488
            
            
            
            199,721








Net
      sales (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            224.6
            
            
            $
            471.1
            
            
            $
            (246.5
            )
            
            
            (52.3
            )%




Lower
price realizations for our primary aluminum shipments in the three months ended
March 31, 2009, due to lower LME prices for primary aluminum, resulted in a
$157.6 million sales decrease.  Reduced sales volume contributed $88.9
million to the decrease in net sales.  Direct shipments declined 78.5
million pounds in the three months ended March 31, 2009 primarily due to the
capacity curtailments at our U.S. smelters.  Toll shipments increased
3.0 million pounds from the same period in 2008 due to increased production at
the Grundartangi smelter.


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Gross
      profit (loss) (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            (72.4
            )
            
            $
            96.0
            
            
            $
            (168.4
            )
            
            
            (175.4
            )%




During
the three months ended March 31, 2009, lower price realizations, net of
LME-based alumina cost and LME-based power cost decreases, reduced gross profit
by $132.1 million.  Lower shipment volume, due to capacity
curtailments, resulted in a $9.4 million decrease to gross profit.  In
addition, we experienced $26.9 million in net cost increases comprised
of:  increased power and natural gas costs at our U.S. smelters, $3.5
million; increased costs associated with Gramercy supplied alumina, $10.0
million; and other cost increases, $11.1 million, due to increased average plant
indirect costs resulting from reduced production levels and a destocking of
various production support inventories.  Due to further declines in
LME prices in the first quarter of 2009 below the year-end 2008 price levels,
the market value of our inventory declined relative to its cost basis, resulting
in an additional charge of $2.3 million.







Other
      operating expenses (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            (24.3
            )
            
            $
            —
            
            
            $
            (24.3
            )
            
            
            100.0
            %




During
the three months ended March 31, we idled the remaining three potlines at our
Ravenswood facility and one potline at our Hawesville facility.  These
curtailment expenses represent the recognition of employee-related liabilities,
contractual obligations and losses on alumina sales associated with the idling
of capacity.  In addition, certain expenses incurred while the
Ravenswood facility is in an idled state are included in this line
item.  For further discussion see Note 4 Curtailment of Operations –
Ravenswood and Hawesville in the Consolidated Financial Statements included
herein.







Selling,
      general and administrative expenses (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            10.1
            
            
            $
            18.9
            
            
            $
            (8.8
            )
            
            
            (46.6
            )%




The
decrease in selling, general and administrative expenses for the three months
ended March 31, 2009 was primarily due to reduced accruals under our share-based
performance compensation programs.





Interest
      income (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            0.7
            
            
            $
            2.5
            
            
            $
            (1.8
            )
            
            
            (72.0
            )%




The
decrease in interest income for the three months ended March 31, 2009 from the
same period in 2008 is the result of lower average cash and short-term
investment balances and lower interest rates during the 2009
period.




Net
      loss on forward contracts (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            (3.6
            )
            
            $
            (448.3
            )
            
            $
            444.7
            
            
            
            99.2
            %




The net
loss in the three months ended March 31, 2009 relates to the recognition of
previously settled Icelandic krona hedges associated with the Helguvik project
and an unrealized loss due to an embedded derivative in our Ravenswood power
contract.




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The loss
on forward contracts for the three months ended March 31, 2008, was a result of
mark-to-market adjustments associated with our long term primary aluminum
forward financial sales contracts that did not qualify for cash flow hedge
accounting.  Cash settlements of these contracts during the three
months ended March 31, 2008 were $52.3 million.  In July 2008, we
terminated these contracts.




Income
      tax benefit (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            4.1
            
            
            $
            138.9
            
            
            $
            (134.8
            )
            
            
            (97.0
            )%




The
decrease in the income tax benefit for the three months ended March 31, 2009
from the same period in 2008 was primarily due to our inability to provide any
U.S. tax benefits on pre-tax losses as a result of the valuation allowance
recorded against our federal and state deferred tax assets in December
2008.





Equity
      in (losses) earnings of joint ventures (in millions)
            
            2009
            
            
            2008
            
            
            $
      Difference
            
            
            %
      DifferenceThree
      months ended March 31,
            
            $
            (0.9
            )
            
            $
            4.4
            
            
            $
            (5.3
            )
            
            
            (120.5
            )%




Income from
our equity investments decreased for the three months ended March 31, 2009 due
to lower selling prices at Gramercy, lower volumes at Gramercy and St. Ann and
inventory adjustments at BHH.






Liquidity and Capital
Resources





Liquidity




Our
financial position and liquidity have been and will continue to be materially
adversely affected by low aluminum prices as compared to our cost of
production.  If prices remain at current levels or decline further, we
would have to take additional actions to reduce costs, including significant
curtailment of our operations, and/or raise additional financing, in order to
have the liquidity required to operate through 2010.  There can be no
assurance that such actions would be sufficient.




Our
principal sources of liquidity are available cash, cash flow from operations and
available borrowings under our revolving credit facility.  We have
also raised capital through the public offerings of our common stock in 2007,
2008 and in February 2009.  We are continuously exploring alternative
or supplementary financing arrangements to the revolving credit
facility. Our principal uses of cash are operating costs, payments of
principal and interest on our outstanding debt, the funding of capital
expenditures and investments in related businesses, working capital and other
general corporate requirements.




As of
March 31, 2009, we had $432.8 million of principal indebtedness outstanding,
consisting of the $175 million principal amount of our 1.75% convertible senior
notes, $250 million principal amount of our 7.5% senior notes and $7.8 million
principal amount under our industrial revenue bonds.  Our revolving
credit facility and the indenture governing our senior notes each contain
various covenants that restrict the way we may conduct our business and limit
our ability to incur debt, pay dividends and engage in transactions such as
acquisitions and investments, among other things, which may impair our ability
to obtain additional liquidity and pursue our growth strategy.  More
information concerning the various debt instruments and our borrowing
arrangements is available in Note 12 to the Consolidated Financial Statements
included herein.


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Our
ability to pay interest and to repay or refinance our indebtedness, including
our senior notes and convertible senior notes, and to satisfy other commitments,
will depend upon our future operating performance, which is subject to general
economic, financial, competitive, legislative, regulatory, business and other
factors, including market prices for primary aluminum, that are beyond our
control, as well as access to additional sources of liquidity. Accordingly,
there is no assurance that our business will generate sufficient cash flow from
operations or that future capital raisings will be available to us in an amount
sufficient to enable us to repay or service our debt obligations or to fund our
other liquidity needs. If we are unable to meet our debt obligations or fund our
other liquidity needs, we could attempt to restructure or refinance our
indebtedness or seek additional debt or equity capital. There can be no
assurance that we would be able to accomplish those actions on satisfactory
terms or at all.




Our
consolidated cash balance at March 31, 2009 was approximately $267
million.  During February 2009, we completed a public offering of 24.5
million shares of our common stock with net proceeds to us of approximately $104
million after underwriter discounts and commissions and before other offering
costs.  We believe the current availability under our revolving credit
facility is approximately $20 to $25 million.  This availability has
been reduced by the curtailments of operations at the Ravenswood and Hawesville
facilities and the reduced value of our inventory due to the decrease in primary
aluminum prices.  Our revolving credit facility will mature in
September 2010.  The holders of our $175 million principal amount
of 1.75% convertible senior notes have an option to require us to repurchase all
or any portion of these securities at par in August 2011.  At any time
prior to August 2011, the holders of our convertible senior notes may exercise
their conversion right and require us to deliver cash based on market value up
to the principal amount of the convertible notes.  These events would
increase our liquidity needs.




Our U.S.
operations are not cash flow positive at recent aluminum prices and our
Icelandic operations are slightly profitable on a cash
basis.  Forecasts of primary aluminum prices for 2009 recently
published by various industry analysts have generally been in the range of
$1,350 to $1,450 per metric ton.  Assuming the midpoint of this range,
and taking into account our current balance of cash and availability under our
revolving credit facility, our current production levels and other operating and
financial assumptions, we would expect to have sufficient liquidity to fund our
operations until mid 2010.  We believe we also have options to further
curtail operations.  The result of such actions would, at recent metal
prices, reduce our cash losses and thus improve our liquidity, even after
accounting for the cost of implementing such actions.  Actual results
could differ materially from our estimates if aluminum prices are different, any
of our key assumptions as to our production levels and operating costs prove
incorrect, we cannot obtain the liquidity we expect, changes in Icelandic rules
limit our access to cash flow from our Icelandic operations, or due to any of
the factors described under “Risk Factors” in our 2008 Annual Report on Form
10-K.





Potential
Additional Sources of Liquidity




While we
do not have other committed sources of capital, we believe we have identified
potential alternative sources of liquidity in the near term in addition to our
cash balances.  Upon the possible closing of a new long-term power
contract for Hawesville, we expect to receive a cash payment of
$45 million; the possible closing is expected in the second quarter of
2009.  This closing is subject to contractual conditions, which
include obtaining the approvals of federal and state regulatory agencies; we
cannot assure whether or when the closing will occur.




Given the
state of the financial and credit markets and our current and expected liquidity
and capital resource needs, we are exploring a variety of financing
alternatives.  These may include equity, equity-linked and short
and/or long-term debt financings on a secured or unsecured basis by Century, its
subsidiaries or a combination of Century and its subsidiaries.  We may
also explore project financings and nontraditional structures that could include
an offering of securities or loans by a subsidiary on a nonrecourse
basis.  We might also explore exchange offers with our existing
security holders and transactions involving our outstanding securities given
their secondary market trading prices.  If we were to affect an equity
or equity-linked securities offering, it might result in dilution to existing
shareholders.  If we were to incur debt, we would become more
leveraged and would have higher interest expense.  We cannot assure
you, if we pursue any of these transactions, that we will be successful in
completing a transaction on attractive terms or at all.


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Credit
Rating Downgrades




Two major
credit rating agencies have recently changed the status of our ratings on a
general basis and of our specific debt securities. On January 30, 2009, Standard
& Poor’s removed their CreditWatch and downgraded our credit rating to “B”
with a negative outlook from “BB-“.  Standard & Poor’s has stated
that the downgrade reflects their expectation that operating results will
deteriorate over the next several quarters due to continued low aluminum prices
that are unlikely to show significant improvement until general economic
activity picks up globally and high inventory levels are
reduced.  According to Standard & Poor’s, an obligation rated “B”
is more vulnerable to nonpayment than obligations rated “BB”, but the obligor
currently has the capacity to meet its financial commitment on the
obligation.  In Standard & Poor’s opinion, adverse business,
financial, or economic conditions will likely impair the obligor's capacity or
willingness to meet its financial commitment on the obligation.  On
December 17, 2008, Moody’s Investors Service downgraded our credit rating to
“B2” from “Ba3” and kept our ratings under review for further possible
downgrade.  In April 2009, Moody’s further downgraded our credit
rating to “Caa3” from “B2.”  The downgrade reflects Moody’s concerns
regarding the level of cash consumption, and the potential for liquidity
challenges absent a significant recovery in the aluminum
markets.   Moody’s has stated the Caa3 corporate family rating
anticipates that operating cash flow generated from Grundartangi is unlikely to
be sufficient to support ongoing operations across Century on a sustained
basis.  According to Moody’s, obligations rated “Caa3” are judged to
be of poor standing and are subject to very high credit risk, and have
“extremely poor credit quality.”  These recent actions by Standard
& Poor’s and Moody’s, and any further actions the credit rating agencies may
take, could negatively impact our ability to access liquidity in the credit and
capital markets in the future and could lead to worsened trade terms, increasing
our liquidity needs.




Capital
Resources




We intend
to finance our future capital expenditures from available cash, our cash flow
from operations and from future capital raising.  We may be unable to
issue additional debt or equity securities, or to issue these securities on
attractive terms, due to a number of factors including a lack of demand,
unfavorable pricing, poor economic conditions, unfavorable interest rates or our
financial condition or credit rating at the time.  Continued
turbulence in the U.S. and international markets and economy may adversely
affect our liquidity, our ability to access the capital markets and our
financial condition. If additional capital resources are unavailable, we may
further curtail construction and development activities.




Capital
expenditures for the three months ended March 31, 2009 were $15.7 million, $6.5
million of which was related to the Helguvik project, with the balance
principally related to upgrading production equipment, improving facilities and
complying with environmental requirements.  We believe capital
spending in 2009, excluding the modest activity which will continue on the
Helguvik greenfield project, will be approximately $15 to $20 million
compared to $54 million in 2008.




In light
of current global financial and economic conditions, we are reviewing our
capital plans and reducing, stopping or deferring all non-critical capital
expenditures in our existing smelters. We have made and continue making modest
capital expenditures for the construction and development of our new Helguvik
smelter project.  In 2008, we expended approximately $71 million in
capital expenditures for the Helguvik greenfield project.  From
inception through December 31, 2008, we expended approximately $83 million for
Helguvik.  We are currently evaluating the Helguvik project’s cost,
scope and schedule in light of the global economic crisis and weakening
commodity prices. During this evaluation process, we have significantly reduced
spending on the project; we expect that capital expenditures on this project
during 2009 will be approximately $20 million until and unless a decision is
made to restart major construction and engineering activities.


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Historical




Our
statements of cash flows for the three months ended March 31, 2009 and 2008 are
summarized below:





Three
      months ended March 31,2009
            
            
            2008(dollars
      in millions)Net
      cash provided by operating activities
            
            $
            74.7
            
            
            $
            58.9Net
      cash used in investing activities
            
            
            (15.7
            )
            
            
            (16.3
            )Net
      cash provided by financing activities
            
            
            79.1
            
            
            
            2.0Net
      change in cash
            
            $
            138.1
            
            
            $
            44.6







Net cash
from operating activities in the first three months of 2009 was $15.8 million
higher than 2008 primarily due to amounts received for income tax refunds and
reductions in working capital, partially offset by lower operating income in
2009.




Our net
cash used in investing activities for the three month period ended March 31,
2009 was $15.7 million.  The net cash used in investing activities
consisted of capital expenditures to maintain and improve plant operations of
$9.2 million, and $6.5 million for the Helguvik facility project.




Our net
cash used in investing activities for the three month period ended March 31,
2008 was $16.3 million.  The net cash used in investing activities
consisted of capital expenditures to maintain and improve plant operations of
$8.9 million, and $7.4 million for the Helguvik facility project.




Net cash
provided by financing activities during the first three months of 2009 was $79.1
million.  We received proceeds from the issuance of common stock of
$104.1 million related to the February 2009 public offering of common stock, net
of offering expenses.  We repaid $25.0 million for amounts outstanding
under our revolving credit facility.




Net cash
provided by financing activities during the first three months of 2008 was $2.0
million.  We received proceeds from the issuance of common stock of
$1.5 million related to the exercise of stock options and excess tax benefits
from share-based compensation of $0.5 million.







Other
Contingencies




In March
2009, four purported stockholder class actions against the Company were filed in
the United States District Court for the Northern District of California. 
The actions are entitled Petzschke v. Century Aluminum Co., et al., Abrams v.
Century Aluminum Co., et al., McClellan v. Century Aluminum Co., et al., and
Hilyard v. Century Aluminum Co., et al.  These cases allege that the
Company improperly accounted for cash flows associated with the termination of
certain forward financial sales contracts.  These actions seek
certification as a class action, rescission of the Company's February 2009
common stock offering, unspecified compensatory damages, including interest
thereon, costs and expenses and counsel fees.  Management intends to
vigorously defend these actions, but at the date of this report, it is not
possible to predict the ultimate outcome of these actions or to estimate a range
of possible damage awards.


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Item 3.  Quantitative and Qualitative Disclosures about
Market Risk




Commodity
Price Risk




We are
exposed to price risk for primary aluminum.  We manage our exposure to
fluctuations in the price of primary aluminum by selling aluminum at fixed
prices for future delivery, as well as by purchasing certain of our alumina and
power requirements under supply contracts with prices tied to the same indices
as our aluminum sales contracts (the LME price of primary
aluminum).  Our risk management activities do not include any trading
or speculative transactions.




Apart
from the Alcan Metal Agreement, Glencore Metal Agreement I, Glencore Metal
Agreement II and Southwire Metal Agreement, we had forward delivery contracts to
sell 60,372 metric tons and 84,047 metric tons of primary aluminum at March 31,
2009 and December 31, 2008, respectively.  Of these forward delivery
contracts, we had no fixed price commitments to sell primary aluminum at March
31, 2009 and 330 metric tons of fixed price commitments to sell primary aluminum
at December 31, 2008, of which 319 metric tons at December 31, 2008 were with
Glencore.




All of
the outstanding primary aluminum forward financial sales contracts were settled
in July 2008 in a termination transaction with Glencore.  We had no
fixed price forward financial contracts to purchase aluminum at March 31, 2009
or December 31, 2008.




Additionally,
to mitigate the volatility of the natural gas markets, we enter into fixed price
forward financial purchase contracts, accounted for as cash flow hedges, which
settle in cash in the period corresponding to the intended usage of natural
gas.





Natural
      Gas Forward Financial Purchase Contracts as of:(Thousands
      of MMBTU)March
      31, 2009
            
            
            December
      31, 20082009
            
            
            1,730
            
            
            
            3,340







On a
hypothetical basis, a $1.00 per million British Thermal Units (“MMBTU”) decrease
in the market price of natural gas is estimated to have an unfavorable impact of
$1.7 million on accumulated other comprehensive loss for the period ended March
31, 2009 as a result of the natural gas forward financial purchase
contracts outstanding at March 31, 2009.




Exchange
Rate Risk




We are
exposed to foreign currency risk due to fluctuations in the value of the U.S.
dollar as compared to the euro, the ISK and the Chinese
yuan.  Grundartangi’s labor, maintenance and other local service costs
are denominated in Icelandic krona and a portion of its anode costs are
denominated in euros.  As a result, an increase or decrease in the
value of those currencies relative to the U.S. dollar would affect
Grundartangi’s operating margins.  In addition, we expect to incur
capital expenditures for the construction of the Helguvik greenfield smelter
project.  We expect a significant portion of the capital expenditures
for the Helguvik project will be denominated in currencies other than the U.S.
dollar.




We
managed our exposure by entering into foreign currency forward contracts that
settle monthly.  We reviewed the forecasted transactions and projected
cash flows for each currency in future periods.  The functional
currency cash flow variability associated with forecasted transactions was
considered a cash-flow hedge.  The effective portion of the forward
contracts gain or loss was reported in other comprehensive income, and the
ineffective portion was reported currently in earnings.  Realized
gains and losses are reclassified into earnings when the hedged transaction
affects earnings.


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During
2008, Century entered into foreign currency forward contracts to hedge our
exposure to fluctuations in the ISK for our forecasted operations at
Grundartangi and capital expenditures for the Helguvik greenfield
project.  In October 2008, we reached an agreement with our
counterparties and settled the remaining forward contracts that extended through
September 2009.  This settlement represented all of our remaining
foreign currency forward contracts.  We paid our counterparties
approximately $30 million, an amount based on the intrinsic values of the
contracts based on the forward curve on the date of settlement.  See
Note 6 in the Consolidated Financial Statements included herein for further
information about these forward contracts.




Our
metals, natural gas and foreign currency risk management activities are subject
to the control and direction of senior management.  These activities
are regularly reported to our board of directors.




Our
alumina contracts, except Hawesville’s alumina contract with Gramercy, are
indexed to the LME price for primary aluminum.  As of March 31, 2009,
these contracts hedge approximately 5% of our production.  As of March
31, 2009, approximately 25% of our production for the remainder of 2009 is
hedged by our LME-based alumina contracts and Grundartangi’s electrical
power and tolling contracts.




Iceland.  Substantially
all of Grundartangi’s revenues are derived from toll conversion agreements with
Glencore, Hydro and a subsidiary of BHP Billiton Ltd., whereby Grundartangi
converts alumina provided by these companies into primary aluminum for a fee
based on the LME price for primary aluminum.  Grundartangi’s LME-based
toll revenues are subject to the risk of decreases in the market price of
primary aluminum; however, Grundartangi is not exposed to increases in the price
for alumina, the principal raw material used in the production of primary
aluminum.  In addition, under its power contract, Grundartangi
purchases power at a rate which is a percentage of the LME price for primary
aluminum, providing Grundartangi with a hedge against downswings in the market
for primary aluminum.  Grundartangi’s tolling revenues include a
premium based on the exemption available to Icelandic aluminum producers from
the EU import duty for primary aluminum.  In May 2007, the EU members
reduced the EU import duty for primary aluminum from six percent to three
percent and agreed to review the new duty after three years.  This
decrease in the EU import duty for primary aluminum negatively impacts
Grundartangi’s revenues and further decreases would also have a negative impact
on Grundartangi’s revenues.




Grundartangi
is exposed to foreign currency risk due to fluctuations in the value of the U.S.
dollar relative to the euro and the ISK.  Grundartangi’s revenues and
power costs are based on the LME price for primary aluminum, which is
denominated in U.S. dollars.  There is no currency risk associated
with these contracts.  However, Grundartangi’s labor and certain other
operating costs are denominated in ISK and a portion of its anode costs are
denominated in euros.  As a result, an increase or decrease in the
value of those currencies relative to the U.S. dollar would affect
Grundartangi’s operating margins.




Subprime
and Related Risks




Asset-backed
securities related to subprime consumer mortgages have experienced significant
increases in expected default rates, resulting in a dramatic reduction in asset
prices and market liquidity.  Our exposure to these instruments is
limited, but we continue to review this exposure.  At present, we
believe our exposure is limited to assets in our pension plans that are invested
in bond funds.  We believe that approximately 2.3% of our pension
assets are invested in various subprime investments.  The approximate
value of these assets at March 31, 2009 was $1.2 million.  We do not
expect that any defaults would be material to our financial position or results
of operations.  Any defaults in these funds would lower our actual
return on plan assets and increase the defined benefit plan net loss in other
comprehensive income, and subsequently increase our pension expense and future
funding requirements as these losses are amortized over the service life of the
participants.


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Item 4.  Controls and Procedures




a.
Evaluation of Disclosure Controls and Procedures




As of
March 31, 2009, we carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and our
Chief Financial Officer, of the effectiveness of our disclosure controls and
procedures.  Based upon that evaluation, our management, including the
Chief Executive Officer and the Chief Financial Officer, have concluded that our
disclosure controls and procedures were effective as of March 31,
2009.




b.
Changes in Internal Controls over Financial Reporting




During
the three months ended March 31, 2009, there were no changes in our internal
controls over financial reporting that materially affected, or are reasonably
likely to materially affect, our internal controls over financial
reporting.


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PART II – OTHER INFORMATION





Item 1. Legal Proceedings





In March
2009, four purported stockholder class actions against the Company were filed in
the United States District Court for the Northern District of California. 
The actions are entitledPetzschke v. Century Aluminum Co., et al.,Abrams v. Century Aluminum Co., et
al.,McClellan v.
Century Aluminum Co., et al., andHilyard v. Century Aluminum Co., et
al.  These cases allege that the Company improperly accounted for
cash flows associated with the termination of certain forward financial sales
contracts.  These actions seek certification as a class action, rescission
of the Company's February 2009 common stock offering, unspecified compensatory
damages, including interest thereon, costs and expenses and counsel fees. 
Management intends to vigorously defend these actions, but at the date of this
report, it is not possible to predict the ultimate outcome of these actions or
to estimate a range of possible damage awards.





Item 6.  Exhibits





Exhibit
      Number
            Description
      of Exhibit
            Incorporated
      by Reference
            Filed
      HerewithForm
            File
      No.
            Filing
      Date10.1
            Amendment
      to Alumina Purchase Agreement, dated April 21, 2009, by and among Century
      Aluminum Company and Glencore AG.*
            8-K
            000-27918
            April
      27, 200910.2
            Amendment
      to Alumina Purchase Agreement, dated April 21, 2009, by and among Century
      Aluminum of West Virginia, Inc. and Glencore AG.*
            8-K
            000-27918
            April
      27, 200931.1
            Rule
      13a-14(a)/15d-14(a) Certification of the Chief Executive
      Officer.
            
            
            
            X31.2
            Rule
      13a-14(a)/15d-14(a) Certification of the Chief Financial
      Officer.
            
            
            
            X32.1
            Section
      1350 Certifications.
            
            
            
            X





*  Written
description of these amendments are incorporated by reference to the
disclosure under Item 1.01 of the Century Aluminum Company Current Report on
Form 8-K dated April 21, 2009.





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SIGNATURES




Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.





Century
      Aluminum CompanyDate:
            May
      11, 2009
            
            By:
            /s/
      LOGAN W. KRUGERLogan
      W. KrugerPresident
      and Chief Executive OfficerDate:
            May
      11, 2009
            
            By:
            /s/
      MICHAEL A. BLESSMichael
      A. BlessExecutive
      Vice-President and Chief Financial
Officer





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Exhibit
Index





Exhibit
      Number
            Description
      of Exhibit
            Incorporated
      by Reference
            Filed
      HerewithForm
            File
      No.
            Filing
      Date10.1
            Amendment
      to Alumina Purchase Agreement, dated April 21, 2009, by and among Century
      Aluminum Company and Glencore AG.*
            8-K
            000-27918
            April
      27, 200910.2
            Amendment
      to Alumina Purchase Agreement, dated April 21, 2009, by and among Century
      Aluminum of West Virginia, Inc. and Glencore AG.*
            8-K
            000-27918
            April
      27, 200931.1
            Rule
      13a-14(a)/15d-14(a) Certification of the Chief Executive
      Officer.
            
            
            
            X31.2
            Rule
      13a-14(a)/15d-14(a) Certification of the Chief Financial
      Officer.
            
            
            
            X32.1
            Section
      1350 Certifications.
            
            
            
            X





*  Written
description of these amendments are incorporated by reference to the
disclosure under Item 1.01 of the Century Aluminum Company Current Report on
Form 8-K dated April 21, 2009.