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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
Commission file number 1-9447
KAISER ALUMINUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-3030279
(State of incorporation) (I.R.S. Employer Identification No.)
5847 San Felipe, Suite 2600, Houston, Texas 77057-3010
(Address of principal executive offices) (Zip Code)
(713) 267-3777
(Registrant's telephone number, including area code)
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.
Yes x No
----- ------
At April 30, 1995, the registrant had 58,205,833 shares of common
stock outstanding.
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KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
--------------------
CONSOLIDATED BALANCE SHEETS
(In millions of dollars)
March 31, December 31,
1995 1994
--------------------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 7.4 $ 17.6
Receivables 266.5 199.2
Inventories 503.1 468.0
Prepaid expenses and other current assets 105.0 158.0
-----------------------
Total current assets 882.0 842.8
Investments in and advances to unconsolidated affiliates 168.6 169.7
Property, plant, and equipment - net 1,123.0 1,133.2
Deferred income taxes 280.0 271.2
Other assets 319.2 281.2
-----------------------
Total $2,772.8 $2,698.1
=======================
Liabilities & Stockholders' Equity
Current liabilities:
Accounts payable $ 145.1 $ 152.1
Accrued interest 13.8 32.6
Accrued salaries, wages, and related expenses 71.3 77.7
Accrued postretirement medical benefit obligation - current portion 47.0 47.0
Other accrued liabilities 156.2 176.9
Payable to affiliates 87.2 85.3
Long-term debt - current portion 12.2 11.5
-----------------------
Total current liabilities 532.8 583.1
Long-term liabilities 539.4 495.5
Accrued postretirement medical benefit obligation 738.1 734.9
Long-term debt 824.3 751.1
Minority interests 122.4 116.2
Stockholders' equity:
Preferred stock .6 .6
Common stock .6 .6
Additional capital 528.1 527.8
Accumulated deficit (504.4) (502.6)
Additional minimum pension liability (9.1) (9.1)
-----------------------
Total stockholders' equity 15.8 17.3
-----------------------
Total $2,772.8 $2,698.1
=======================
The accompanying notes to interim consolidated financial statements
are an integral part of these statements.
- 1 -
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED INCOME (LOSS)
(Unaudited)
(In millions of dollars, except per share amounts)
Quarter Ended
March 31,
--------------------
1995 1994
--------------------
Net sales $513.0 $415.1
--------------------
Costs and expenses:
Cost of products sold 426.7 387.8
Depreciation 23.7 24.9
Selling, administrative, research and development, and general 30.0 28.0
--------------------
Total costs and expenses 480.4 440.7
--------------------
Operating income (loss) 32.6 (25.6)
Other income (expense):
Interest and other income (expense) - net (.8) 2.0
Interest expense (23.6) (21.4)
--------------------
Income (loss) before income taxes, minority interests, and extraordinary loss 8.2 (45.0)
Credit (provision) for income taxes (2.9) 15.8
Minority interests (1.8) (.1)
--------------------
Income (loss) before extraordinary loss 3.5 (29.3)
Extraordinary loss on early extinguishment of debt, net of tax benefit of $2.9 (5.4)
--------------------
Net income (loss) 3.5 (34.7)
Dividends on preferred stock (5.3) (4.2)
--------------------
Net loss attributable to common shareholders $ (1.8) $(38.9)
====================
Per common and common equivalent share:
Loss before extraordinary loss $ (.03) $ (.58)
Extraordinary loss (.09)
--------------------
Net loss $ (.03) $ (.67)
====================
Weighted average common and common equivalent shares outstanding (000) 58,205 58,096
====================
The accompanying notes to interim consolidated financial statements
are an integral part of these statements.
- 2 -
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(Unaudited)
(In millions of dollars)
Quarter Ended
March 31,
-----------------
1995 1994
------------------
Cash flows from operating activities:
Net income (loss) $ 3.5 $(34.7)
Adjustments to reconcile net income (loss) to net cash used for operating activities:
Depreciation 23.7 24.9
Non-cash postretirement medical benefit expenses 3.2 3.4
Amortization of excess investment over equity in net assets of unconsolidated
affiliates 2.9 2.9
Amortization of deferred financing costs and discount on long-term debt 1.3 2.2
Equity in (income) losses of unconsolidated affiliates (1.8) 1.3
Minority interests 1.8 .1
Extraordinary loss on early extinguishment of debt - net 5.4
Increase in receivables (69.6) (6.6)
(Increase) decrease in inventories (35.1) 14.5
Decrease (increase) in prepaid expenses and other current assets 43.8 (7.3)
Incurrence of financing costs (.7) (17.1)
Decrease in accounts payable (7.0) (12.8)
Decrease in accrued interest (18.6) (10.7)
Decrease in payable to affiliates and accrued liabilities (3.8) (8.8)
Decrease in accrued and deferred income taxes (3.7) (17.7)
Other 3.7 (6.9)
-----------------
Net cash used for operating activities (56.4) (67.9)
-----------------
Cash flows from investing activities:
Net proceeds from disposition of property and investments 1.1 2.3
Capital expenditures (13.7) (9.6)
Redemption fund for minority interest preference stock (1.2) (2.3)
-----------------
Net cash used for investing activities (13.8) (9.6)
-----------------
Cash flows from financing activities:
Repayments of long-term debt, including revolving credit (237.5) (321.4)
Borrowings of long-term debt, including revolving credit 311.2 353.5
Net short-term debt repayments (.5)
Dividends paid (10.6) (4.2)
Capital stock issued 100.4
Redemption of minority interests' preference stock (3.1) (7.4)
-----------------
Net cash provided by financing activities 60.0 120.4
-----------------
Net (decrease) increase in cash and cash equivalents during the period (10.2) 42.9
Cash and cash equivalents at beginning of period 17.6 14.7
-----------------
Cash and cash equivalents at end of period $ 7.4 $ 57.6
=================
Supplemental disclosure of cash flow information:
Interest paid, net of capitalized interest $ 40.9 $ 29.9
Income taxes paid 4.0 2.4
The accompanying notes to interim consolidated financial statements
are an integral part of these statements.
- 3 -
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(In millions of dollars)
1. General
-------
Kaiser Aluminum Corporation (the "Company") is a subsidiary of
MAXXAM Inc. ("MAXXAM"). MAXXAM owns approximately 58% of the
Company's common stock, assuming the conversion of each outstanding
$.65 Depositary Share, each representing ownership of one-tenth of a
share of Series A Mandatory Conversion Premium Dividend Preferred
Stock (the "Series A Shares"), and each outstanding share of 8.255%
PRIDES, Convertible Preferred Stock (the PRIDES ), into one share of
the Company's common stock, with the remaining 42% publicly held. The
Company operates through its direct subsidiary, Kaiser Aluminum &
Chemical Corporation ("KACC").
The foregoing unaudited interim consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions
to Form 10-Q and Article 10 of Regulation S-X as promulgated by the
Securities and Exchange Commission. Accordingly, these financial
statements do not include all of the information and footnotes
required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
necessary for a fair statement of the results for the interim periods
presented have been included. Operating results for the first quarter
of 1995 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1995. These unaudited
interim consolidated financial statements should be read in
conjunction with the audited consolidated financial statements for the
year ended December 31, 1994. Certain reclassifications of prior-
period information were made to conform to the current presentation.
2. Inventories
-----------
The classification of inventories is as follows:
March 31, December 31,
1995 1994
------------------------
Finished fabricated aluminum products $ 55.8 $ 49.4
Primary aluminum and work in process 222.8 203.1
Bauxite and alumina 110.3 102.3
Operating supplies and repair and maintenance parts 114.2 113.2
------------------------
Total $503.1 $468.0
========================
Substantially all product inventories are stated at last-in,
first-out (LIFO) cost, not in excess of market. Replacement cost is
not in excess of LIFO cost.
3. Net Loss per Common and Common Equivalent Share
-----------------------------------------------
Net loss per common and common equivalent share is computed based
on the weighted average number of common and common equivalent shares
outstanding during each period. For the quarter ended March 31, 1995,
common equivalent shares of 19,382,950 attributable to the Series A
Shares, 8,855,550 attributable to the PRIDES, and 1,119,680
attributable to nonqualified stock options were excluded from the
calculation of weighted average shares because they were antidilutive.
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KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
4. Contingencies
-------------
Environmental Contingencies - The Company and KACC are subject to
a wide variety of environmental laws and regulations and to fines or
penalties assessed for alleged breaches of the environmental laws and
to claims and litigation based on such laws. KACC currently is
subject to a number of lawsuits under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended by the
Superfund Amendments Reauthorization Act of 1986 ("CERCLA"), and,
along with certain other entities, has been named as a potentially
responsible party for remedial costs at certain third-party sites
listed on the National Priorities List under CERCLA.
Based on the Company's evaluation of these and other
environmental matters, the Company has established environmental
accruals primarily related to potential solid waste disposal and soil
and groundwater remediation matters. At March 31, 1995, the balance
of such accruals, which is primarily included in Long-term
liabilities, was $40.8. These environmental accruals represent the
Company's estimate of costs reasonably expected to be incurred based
on presently enacted laws and regulations, currently available facts,
existing technology, and the Company's assessment of the likely
remediation action to be taken. The Company expects that these
remediation actions will be taken over the next several years and
estimates that annual expenditures to be charged to these
environmental accruals will be approximately $3.0 to $11.0 for the
years 1995 through 1999 and an aggregate of approximately $11.0
thereafter.
As additional facts are developed and definitive remediation
plans and necessary regulatory approvals for implementation of
remediation are established or alternative technologies are developed,
changes in these and other factors may result in actual costs
exceeding the current environmental accruals. The Company believes
that it is reasonably possible that costs associated with these
environmental matters may exceed current accruals by amounts that
could range, in the aggregate, up to approximately $20.0. While
uncertainties are inherent in the final outcome of these environmental
matters, and it is presently impossible to determine the actual costs
that ultimately may be incurred, management currently believes that
the resolution of such uncertainties should not have a material
adverse effect on the Company's consolidated financial position or
results of operations.
Asbestos Contingencies - KACC is a defendant in a number of
lawsuits in which the plaintiffs allege that certain of their injuries
were caused by, among other things, exposure to asbestos during, and
as a result of, their employment or association with KACC or exposure
to products containing asbestos produced or sold by KACC. The
lawsuits generally relate to products KACC has not manufactured for at
least 15 years. At March 31, 1995, the number of such lawsuits
pending was approximately 29,200.
Based on past experience and reasonably anticipated future
activity, the Company has established an accrual for estimated
asbestos-related costs for claims filed and estimated to be filed and
settled through 2007. The Company's accrual was calculated based on
the current and anticipated number of asbestos-related claims, the
prior timing and amounts of asbestos-related payments, the current
state of case law related to asbestos claims, and the advice of
counsel. Accordingly, an asbestos-related cost accrual of $135.1,
before considerations for insurance recoveries, is included primarily
in Long-term liabilities at March 31, 1995. KACC estimates that
annual future cash payments in connection with such litigation will be
approximately $11.0 to $13.0 for each of the years 1995 through 1999,
and an aggregate of approximately $74.0 thereafter through 2007. The
Company does not presently believe there is a reasonable basis for
estimating such costs beyond 2007 and, accordingly, no accrual has
been recorded for such costs which may be incurred beyond 2007.
The Company believes that KACC has insurance coverage available
to recover a substantial portion of its asbestos-related costs. While
claims for recovery from some of KACC's insurance carriers are
currently subject to pending litigation and other carriers have raised
certain defenses, the Company believes, based on prior insurance-
related recoveries in respect of asbestos-related claims, existing
insurance policies, and the advice of counsel, that
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KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
substantial recoveries from the insurance carriers are probable.
Accordingly, an estimated aggregate insurance recovery of $119.5,
determined on the same basis as the asbestos-related cost accrual, is
recorded primarily in Other assets at March 31, 1995.
While uncertainties are inherent in the final outcome of these
asbestos matters and it is presently impossible to determine the
actual costs that ultimately may be incurred and the insurance
recoveries that will be received, management currently believes that,
based on the factors discussed in the preceding paragraphs, the
resolution of the asbestos-related uncertainties and the incurrence of
asbestos-related costs net of related insurance recoveries should not
have a material adverse effect on the Company's consolidated financial
position or results of operations.
Other Contingencies - The Company and KACC are involved in
various other claims, lawsuits, and other proceedings relating to a
wide variety of matters. While uncertainties are inherent in the
final outcome of such matters, and it is presently impossible to
determine the actual costs that ultimately may be incurred, management
currently believes that the resolution of such uncertainties and the
incurrence of such costs should not have a material adverse effect on
the Company's consolidated financial position or results of
operations.
5. Derivative Financial Instruments and Related Hedging Programs
-------------------------------------------------------------
KACC enters into primary metal hedging transactions with
off-balance sheet risk in the normal course of business. The prices
realized by the Company under certain sales contracts for alumina,
primary aluminum, and fabricated aluminum products as well as the
costs incurred by the Company on certain items, such as aluminum
scrap, rolling ingot, power, and bauxite, fluctuate with the market
price of primary aluminum, together resulting in a "net exposure" of
earnings. The primary metal hedging transactions are designed to
mitigate the net exposure of earnings to declines in the market price
of primary aluminum, while retaining the ability to participate in
favorable environments that may materialize. KACC has developed
strategies which include forward sales of primary aluminum at fixed
prices and the purchase or sale of options for primary aluminum. In
this regard, in respect of its remaining 1995 anticipated net
exposure, at March 31, 1995, KACC had net forward sales contracts for
235,800 tons* of primary aluminum at fixed prices, purchased call
options in respect of 47,250 tons of primary aluminum, purchased put
options to establish a minimum price for 160,250 tons of primary
aluminum, and entered into option contracts that established a price
range for 71,000 tons of primary aluminum. In respect of its 1996
anticipated net exposure, at March 31, 1995, KACC had sold forward
15,000 tons of primary aluminum at fixed prices.
KACC also enters into hedging transactions in the normal course
of business that are designed to reduce its exposure to fluctuations
in foreign exchange rates. At March 31, 1995, KACC had net forward
foreign exchange contracts totaling approximately $139.5 for the
purchase of 192.0 Australian dollars through March 1997.
At March 31, 1995, the net unrealized loss on KACC's position in
aluminum forward sales and option contracts (based on a market price
of $1,859 per ton of primary aluminum) and forward foreign exchange
contracts was $16.3.
KACC has established margin accounts with its counterparties
related to aluminum forward sales and option contracts. KACC is
entitled to receive advances from counterparties related to unrealized
gains and, in turn, is required to make margin deposits with
counterparties to cover unrealized losses related to these contracts.
At March 31, 1995, KACC had $7.5, compared with $50.5 at December 31,
1994, on deposit with various counterparties in respect of such
unrealized losses. These amounts are recorded in Prepaid expenses and
other current assets.
See Note 10 of the Notes to Consolidated Financial Statements for
the year ended December 31, 1994.
- -------------------------
* All references to tons in this report refer to metric tons of
2,204.6 pounds.
- 6 -
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
-----------------------------------------------------------
AND RESULTS OF OPERATIONS
-------------------------
(In millions of dollars, except shipments, prices, and per
share amounts)
The following should be read in conjunction with the response to
Item 1, Part I, of this Report.
Results of Operations
- ----------------------
The Company's operating results are sensitive to changes in
prices of alumina, primary aluminum, and fabricated aluminum products,
and also depend to a significant degree on the volume and mix of all
products sold and on KACC's hedging strategies. See Note 5 of Notes
to Interim Consolidated Financial Statements for an explanation of
KACC's hedging strategies. The table on the following page provides
selected operational and financial information on a consolidated basis
with respect to the Company for the quarters ended March 31, 1995 and
1994. As an integrated aluminum producer, the Company uses a portion
of its bauxite, alumina, and primary aluminum production for
additional processing at certain of its other facilities.
Intracompany shipments and sales are excluded from the information set
forth on the following page.
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KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
SELECTED OPERATIONAL AND FINANCIAL INFORMATION
Quarter Ended
March 31,
-----------------
1995 1994
-----------------
Shipments:<F1>
Alumina 446.5 468.2
Aluminum products:
Primary aluminum 47.7 64.3
Fabricated aluminum products 94.5 96.8
-----------------
Total aluminum products 142.2 161.1
=================
Average realized sales price:
Alumina (per ton) $ 197 $ 155
Primary aluminum (per pound) .81 .55
Net sales:
Bauxite and alumina:
Alumina $ 87.9 $ 72.5
Other<F2><F3> 19.1 20.4
-----------------
Total bauxite and alumina 107.0 92.9
-----------------
Aluminum processing:
Primary aluminum 85.0 77.3
Fabricated aluminum products 316.2 241.5
Other<F3> 4.8 3.4
-----------------
Total aluminum processing 406.0 322.2
-----------------
Total net sales $513.0 $415.1
=================
Operating income (loss):
Bauxite and alumina $ 1.4 $ (2.4)
Aluminum processing 49.3 (6.0)
Corporate (18.1) (17.2)
-----------------
Total operating income (loss) $ 32.6 $(25.6)
=================
Income (loss) before income taxes, minority interests, and extraordinary loss $ 8.2 $(45.0)
=================
Income (loss) before extraordinary loss $ 3.5 $(29.3)
Extraordinary loss on early extinguishment of debt, net of tax benefit of $2.9 (5.4)
-----------------
Net income (loss) $ 3.5 $(34.7)
=================
Capital expenditures $ 13.7 $ 9.6
=================
<FN>
- ------------------------------------
<F1> In thousands of tons.
<F2> Includes net sales of bauxite.
<F3> Includes the portion of net sales attributable to minority
interests in consolidated subsidiaries.
</FN>
- 8 -
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
Net Sales
Bauxite and Alumina - Revenue from net sales to third parties for
the bauxite and alumina segment in the first quarter of 1995 was 15%
higher than the first quarter of 1994. Revenue from alumina
increased 21% in the first quarter of 1995 from the first quarter of
1994, principally due to increased average realized prices, partially
offset by lower shipments.
Aluminum Processing - Revenue from net sales to third parties for
the aluminum processing segment in the first quarter of 1995 was 26%
higher than the first quarter of 1994. Revenue from primary aluminum
increased 10% in the first quarter of 1995 from the first quarter of
1994, principally due to higher average realized prices, significantly
offset by decreased shipments caused by the strike by the United
Steelworkers of America ("USWA") discussed below and by a mid-1994
partial curtailment of production at the Company's 90%-owned Valco
smelter. Shipments of primary aluminum to third parties were
approximately 34% of total aluminum products shipments in the first
quarter, compared with approximately 40% in the first quarter of 1994.
Revenue from fabricated aluminum products increased 31% in the first
quarter of 1995 from the first quarter of 1994, due to higher average
realized prices, partially offset by lower shipments for most of these
products.
Operating Income (Loss)
First quarter results were adversely affected by (i) an eight-day
strike at five major domestic locations by the USWA, (ii) a six-day
strike by the National Workers Union at the Company's 65%-owned Alpart
alumina refinery in Jamaica, and (iii) a four-day disruption of
alumina production at Alpart caused by a boiler failure. The combined
impact of these events on the first quarter results was approximately
$17.0 in the aggregate (on a pre-tax basis) principally from
lower production volume and other related costs.
Bauxite and Alumina - This segment had operating income in the
first quarter of 1995, compared with an operating loss in the first
quarter of 1994, principally due to higher revenue, partially offset
by the effect of the strikes and boiler failure.
Aluminum Processing - This segment had operating income in the
first quarter of 1995, compared with an operating loss in the first
quarter of 1994, principally due to higher revenue, partially offset
by the effect of the strike by the USWA.
Corporate - Corporate operating expenses represented corporate
general and administrative expenses which are not allocated to the
Company's segments.
Net Income (Loss)
The Company had a net loss of $.03 per common and common
equivalent share for the first quarter of 1995 (as net income was more
than offset by dividends on preferred stock), compared with a net loss
of $.67 per common and common equivalent share for the first quarter
of 1994. The principal reason for this change was the improvement in
operating income previously described.
Liquidity and Capital Resources
- -------------------------------
Operating Activities
At March 31, 1995, the Company had working capital of $349.2,
compared with working capital of $259.7 at December 31, 1994. The
increase in working capital was due to an increase in Receivables (as
a result of an
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KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
increase in net sales) and Inventories (as a result of lower shipments)
and a decrease in Accrued interest and Other accrued liabilities. The
increase in working capital is partially offset by a decrease in
Prepaid expenses and other current assets (due to lower margin
deposits). See Note 5 of the Notes to Interim Consolidated Financial
Statements.
Investing Activities
Cash used for investing activities in the first quarter of 1995
primarily consisted of capital expenditures to improve production
efficiency, reduce operating costs, and expand capacity at existing
facilities.
Financing Activities
At March 31, 1995, the Company had long-term debt of $824.3,
compared with $751.1 at December 31, 1994. In March 1995, the 1994
Credit Agreement (see Note 5 of the Notes to Consolidated Financial
Statements for the year ended December 31, 1994) was amended by the
Second Amendment to Credit Agreement (the "Second Amendment"). The
Second Amendment provided, among other things, for an increase in the
revolving line of credit from $275.0 to $325.0. At March 31, 1995,
$173.4 (of which $57.5 could have been used for letters of credit) was
available to KACC under the 1994 Credit Agreement.
Trends
- ------
In March 1995, the Bonneville Power Administration (the "BPA")
offered to its industrial customers, including KACC, surplus firm
power at a discounted rate for the period April 1, 1995, through July
31, 1995, to enable such customers to restart idle industrial loads.
In April 1995, KACC and the BPA entered into a contract for an amount
of such power, and KACC expects to restart one-half of an idle potline
(approximately 9,000 tons of annual capacity) at its Tacoma,
Washington, smelter in the near future.
In February 1995, the BPA issued an initial rate increase
announcement which proposed a 5.4% increase to its direct service
industry customers (the "DSIs") to apply during a two-year period
beginning October 1, 1995. In April 1995, the DSIs, including KACC,
entered into agreements with the BPA pursuant to which (i) the
proposed 5.4% rate increase was replaced by an agreed 4% rate increase
to be in effect for the one-year period October 1, 1995, through
September 30, 1996, which will increase production costs at KACC's
Mead and Tacoma smelters by an aggregate of approximately $4.0 per
year, based on the operating rate of those smelters after the restart
of one-half of a potline at the Tacoma smelter, discussed above, (ii)
the variable rate structure currently in effect was extended through
September 30, 1996, (iii) the BPA rate proceedings were deferred, (iv)
the DSIs waived their rights to assert certain claims in respect of
past interruptible service by the BPA, and (v) the BPA agreed to allow
each DSI to supply a portion of its requirement for electric power
from sources other than the BPA, up to 50% of its top quartile
(interruptible) service beginning October 1, 1995, and up to 100% of
its top quartile service beginning October 1, 1996, which will help to
assure the supply of power and encourage more competitive power rates.
Separately, the BPA has offered to contract with each of the DSIs
to provide transmission services for power purchased from sources
other than the BPA to replace all or any portion of the power now
purchased from the BPA under its existing power contract. The amount
of power available from the BPA under such an existing power contract
would be permanently reduced by the amount of power purchased from
such other sources. KACC has entered into a transmission services
contract with the BPA, but has not now elected to replace any portion
of the power which it purchases from the BPA with power from another
source. These new arrangements may help to assure the supply of power
and encourage more competitive power rates.
- 10 -
KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
-----------------
On March 27, 1995, the United States Department of Justice issued
Civil Investigative Demand No. 12503 (the "CID"), as part of an
industry-wide investigation requesting information from KACC regarding
(i) any actual or contemplated changes in its method of pricing can
stock from January 1, 1994, through March 31, 1995, (ii) the percentage
of aluminum scrap and primary aluminum ingot used by KACC to produce
can stock and the manner in which KACC's cost of acquiring aluminum
scrap is factored into its can stock prices, and (iii) any
communications with others regarding any actual or contemplated
changes in its method of pricing can stock from January 1, 1994,
through March 31, 1995. KACC is gathering documents and
preparing interrogatory answers in order to comply with the CID.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits.
Exhibit No. Exhibit
---------- -------
10.1 Kaiser 1995 Employee Incentive Compensation Program
27 Financial Data Schedule
(b) Reports on Form 8-K.
No report on Form 8-K was filed by the Company during the quarter
ended March 31, 1995.
SIGNATURE
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, who has signed
this report on behalf of the registrant and as the principal financial
officer of the registrant.
KAISER ALUMINUM CORPORATION
/s/ John T. La Duc
By:-------------------------
John T. La Duc
Vice President and
Chief Financial Officer
Dated: May 12, 1995
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