Important metrics and events for the quarter include:

Second quarter 2009 revenues were $157.7 million, operating income was $12.4 million and net loss was $12.1 million.

Year to date revenues were $322.0 million, operating loss was $72.8 million, and net income was $32.2 million for the first six months of 2009.

Operating cash flows provided $108.1 million in the first six months of 2009, including $70.1 million from hedge terminations under the hedge settlement agreement and $18.1 million of cash generated from working capital reductions (excluding the impact of the $34.1 million insurance receivable).

Adjusted EBITDA was $33.6 million for second quarter 2009 and $41.2 million for the first six months of 2009.

In June and July 2009, the Company reached final insurance settlements relating to storm damage to the New Madrid smelter totaling $67.5 million, including $15.0 million of previous advances.

The New Madrid smelter operated above 55% capacity throughout the second quarter.

During second quarter 2009, the Company repurchased $33.9 million aggregate principal amount of outstanding debt for a price of $20.3 million, plus fees. These repurchases were funded through the hedge settlement agreement announced in March 2009.

Cash totaled $182.3 million at June 30, 2009, which does not include the $52.5 million of insurance settlement proceeds received in July 2009.

Noranda to Become Sole Owner of Gramercy and St. Ann

Noranda today announced that it has reached an agreement with Century Aluminum Company (together with its subsidiaries, "Century") whereby Noranda will become the sole owner of each of its current joint ventures, Gramercy Alumina LLC ("Gramercy") and St. Ann Bauxite Limited ("St. Ann"). As consideration in the transaction, Noranda has agreed to release Century from certain obligations. The transaction is expected to close in August, at which point Century will have no ownership interest in either Gramercy or St. Ann. In connection with this transaction, Century and Noranda will enter into an agreement under which Century will purchase alumina from Gramercy in 2009 and 2010.

"Century has been a valuable partner for Noranda in this shared alumina production operation. We wish them the best going forward," said Layle K. "Kip" Smith, Noranda's President and Chief Executive Officer. "Our action to become the sole owner of the Gramercy alumina refinery and the St. Ann bauxite mining operations is consistent with our vertical integration strategy and our continuing desire to have a secure strategic supply of alumina. We also believe owning 100% of these two operations represents an opportunity to enhance profitability as market pricing improves."

Second Quarter 2009 Results

Operating income in second quarter 2009 was $12.4 million, compared to an $85.2 million operating loss in first quarter 2009 and a $35.0 million operating profit in second quarter 2008.

Comparing second quarter 2009 to first quarter 2009, operating income for both upstream and downstream segments reflects improvements in gross margin (sales minus cost of sales) due to slightly higher LME levels and the CORE productivity program, which has generated decreases in costs of sales and selling, general and administrative expenses. Quarter-over-quarter gross margin was $6.9 million higher in the upstream business despite lower revenues and $7.0 million higher in the downstream business with comparable revenues.

In addition to the quarter-over-quarter improvements in gross margin, the comparison of second quarter 2009 to first quarter 2009 is affected by the recognition of insurance proceeds in second quarter that exceeded costs incurred by $29.2 million. First quarter 2009 also included a $43.0 million impairment charge for goodwill and other intangible assets.

The Company has reached settlements with its insurance carriers for its pot line freeze claim from the January 2009 New Madrid smelter outage. These settlements will result in proceeds totaling $67.5 million, including $15 million of advances received as of June 30, 2009. In second quarter 2009, based on advances received and the announcement of its $43.875 million settlement agreement with Factory Mutual Insurance Company ("FM Global"), the Company recognized $49.1 million of gross insurance proceeds. These proceeds were offset against claim costs and losses incurred through June 30, 2009, with a $29.2 million residual recognized as income. In first quarter 2009, claim-related costs exceeded recognized proceeds by $4.1 million, which was recovered in second quarter 2009 with the FM Global settlement. Second quarter 2009 results do not reflect the $23.625 million settlement reached in July 2009 with the remaining insurance carriers. Those proceeds will be recognized in third quarter 2009, and additional claim-related costs and losses will be recognized in periods after June 30, 2009.

Second quarter 2009 operating income is significantly lower than second quarter 2008 operating income, reflecting the continued impact of the global economic contraction that began in the second half of 2008.

Consolidated sales in second quarter 2009 were $157.7 million, representing a 4.0% decrease from first quarter 2009 and a 54.6% decrease from second quarter 2008.

Second quarter 2009 upstream revenues were $59.8 million, a 10.9% decrease from first quarter 2009 and a 67.0% decrease from second quarter 2008. Comparing second quarter 2009 to first quarter 2009, volume had a $7.0 million unfavorable impact and price had a $0.3 million unfavorable impact.

Second quarter 2009 downstream revenues were $97.9 million, a 0.7% decrease from first quarter 2009 and a 41.1% decrease from second quarter 2008. Comparing second quarter 2009 to first quarter 2009, volume had a $10.2 million favorable impact, and price had a $9.5 million unfavorable impact.

Total upstream shipments for second quarter 2009 were 84.1 million pounds and included 68.7 million pounds of external shipments. Shipments of value-added products totaled 66.9 million pounds in second quarter 2009 and represented a 6.7% decrease against first quarter 2009. The shipment levels are substantially lower than those from second quarter 2008, reflecting the continued impact of the global economic contraction that began in the second half of 2008, which has adversely affected end-market demand in the transportation and building markets. Upstream shipment levels were also impacted by lower sow volumes related to the power outage.

The New Madrid smelter operated above 55% of capacity throughout second quarter 2009, generating production sufficient to meet all external demand and to ship 15.4 million pounds of sow to the downstream business.

For the upstream business in second quarter 2009, the average realized MWTP was $0.71, compared to $0.70 in first quarter 2009.

The pricing impact on downstream revenues resulted from a decrease in average per pound fabrication premiums to $0.48 in second quarter 2009 compared to $0.53 in first quarter 2009.

The Company's second quarter 2009 net loss was $12.1 million, compared to a $44.3 million net income in first quarter 2009, and a $3.5 million net income for second quarter 2008. In addition to the operating income factors discussed above, the second quarter 2009 net loss reflects the following:

In second quarter 2009, the Company repurchased $33.9 million principal aggregate amount of the Company's outstanding notes, term B loan and revolving credit facility borrowings for a price of $20.3 million, plus fees. The Company recorded gains of $12.4 million on these repurchases.

In second quarter 2009, the Company recorded a $35.0 million impairment charge related to its equity-method investment in St. Ann. This impairment reflects second quarter 2009 revisions to the Company's assumptions about St. Ann's future profitability and cash flows.

In second quarter 2009, the Company reported $53.2 million of net gains on hedging activities. For second quarter 2009, the amount reclassified from accumulated other comprehensive income to earnings was $69.8 million including $43.9 million reclassified into earnings because it is probable that the original forecasted transactions will not occur. These reclassifications reflect the Company's best estimates of forecasts of 2010-2012 sales by product type and pricing structure.

The provision for income taxes resulted in an effective tax rate for continuing operations of 140.5% for the three months ended June 30, 2009, compared with an effective tax rate of 31.4% for the three months ended June 30, 2008. The increase in the effective tax rate for the three months ended June 30, 2009 was primarily impacted by goodwill impairment, state income taxes, equity method investee income, and the Internal Revenue Code Section 199 manufacturing deduction. The second quarter effective rate was also impacted by changing from using the estimated annual effective tax rate in first quarter 2009 to using the actual year-to-date effective tax rate to calculate the Company's year-to-date tax provision at June 30, 2009. This change was necessary because the Company expects near break-even pre-tax income for all of 2009 and has a significant permanent difference (i.e., goodwill impairment) such that a minor change in the estimated ordinary income could result in a material change in the estimated annual effective tax rate.

Year-to-Date 2009 Results

Operating loss in the first six months of 2009 was $72.8 million, compared to operating income of $76.9 million in the first six months of 2008. The decrease relates to gross margin (sales minus cost of sales) reductions of $139.7 million, as well as a $3.8 million decrease in selling, general and administrative and other expenses.

Gross margin for the six months ended June 30, 2009 was a $26.1 million loss compared to income of $113.6 million in the first six months of 2008, a decrease of $139.7 million. The change resulted from the impact of a 46.2% decrease in realized MWTP coupled with a decrease in higher-margin sales of value-added products and higher production costs (as a percentage of sales) in the upstream business.

Consolidated sales for the six months ended June 30, 2009 were $322.0 million compared to $647.5 million in the same period of 2008, a decrease of 50.3%. Sales to external customers in our upstream business were $126.9 million during the six months ended June 30, 2009; a 62.7% decrease from the $340.3 million reported for the same period last year, driven primarily by the continued decline in the LME aluminum price, lower volumes of value-added shipments due to declining end-market demand and lower sow volumes related to the power outage. Sales in our downstream business were $195.1 million for the first six months of 2009, a decrease of 36.5% compared to sales of $307.2 million for the first six months of 2008. The decrease was primarily due to negative impact from pricing, as well as lower shipments to external customers. Decreased shipment volumes impacted revenues by $47.4 million. Downstream shipment volumes decreased 15.4% to 150.9 million pounds in the first six months of 2009 from 178.4 million pounds in the first six months of 2008, primarily due to lower end-market demand in the building and construction markets.

Selling, general and administrative expenses were $32.9 million in the first six months of 2009 compared to $36.7 million in the first six months of 2008. The first six months of 2009 included additional pension expense offset by reduced professional and consulting fees and stock compensation expense.

Operating income was also impacted by the goodwill and other intangible assets impairment charge in the first six months of 2009 of $43.0 million offset by excess insurance proceeds, as discussed above.

Net income for the first six months of 2009 was $32.2 million, compared to $20.7 million in second quarter 2008. The first six months of 2009 results include:

$164.7 million gains from the repurchase of debt. For the six months ended June 30, 2009, the Company has repurchased $239.7 million principal aggregate amount of its outstanding notes, term B loan and revolving credit facility indebtedness for a price of $70.8 million, plus fees.

The Company reported $98.3 million of net gains on hedging activities. Year-to-date in 2009, the Company has reclassified $125.0 million from accumulated other comprehensive income to earnings, including $77.8 million reclassified into earnings because it is probable that the original forecasted transactions will not occur.

$80.3 million of impairment charges related to the Company's equity-method investments in Gramercy and St. Ann.

$30.0 million of interest expense, which represents a $15.2 million decrease compared to the first six months of 2008. Decreased interest expense is related to lower LIBOR interest rates as well as lower average debt outstanding on the term B loan and the Company's notes (due to the $239.7 million of aggregate principal amount of debt repurchases). These reductions in principal balance were partially offset by the increased revolver balance; however, the revolver maintains a lower interest rate than the Company's notes.

Income taxes for the first six months of 2009 reflect an effective tax rate of 60.8% on pre-tax income, compared with an effective tax rate of 33.2% in the six months ended June 30, 2008. The increase in the effective tax rate for the six months ended June 30, 2009 was primarily impacted by goodwill impairment, state income taxes, equity method investee income, and the Internal Revenue Code Section199 manufacturing deduction.

Liquidity

Operating cash flows provided $108.1 million in the first six months of 2009, compared to $100.6 million provided during the first six months of 2008. Adjusted EBITDA was $33.6 million for second quarter 2009 and $41.2 million for the first six months of 2009, compared to $80.3 million for second quarter 2008 and $165.0 million for first six months 2008. The 2009 year-to-date results reflect the continued impact of the global economic contraction that began in the second half of 2008. The improvement in operating cash flows is primarily attributable to the Company's efforts to drive productivity by reducing expenses and managing working capital and to manage its financial structure. Operating cash flow for 2009 includes $70.1 million from hedge terminations under the hedge settlement agreement and $18.1 million generated through reductions of working capital, excluding the impact of $34.1 million insurance receivable. These improvements were realized despite a $16 million unfavorable working capital impact from the power outage, driven primarily by higher than normal alumina and metal inventories.

Management believes cash flows from operating activities, including the proceeds from the insurance claim, together with cash and cash equivalents, will be sufficient to meet the Company's short-term liquidity needs, including restoring its New Madrid smelter to full capacity. Cash flows from operating activities are also supported by favorable aluminum hedge positions. Despite monetizing a portion of the Company's hedges to deleverage the balance sheet, Noranda continues to have attractive aluminum hedge positions. In addition to proceeds received from settling hedges to repurchase debt, Noranda received $56.1 million of net hedge settlements on fixed-price aluminum sale swaps during the first six months of 2009 compared to $8.2 million paid during the comparable 2008 period.

During the first six months of 2009, the Company entered into fixed-price aluminum purchase swaps to lock-in the value of a portion of its existing fixed-price aluminum sale swaps. Through the end of the quarter, the Company had locked in the value of its hedges on approximately 75% of its 2009 through 2012 forward aluminum hedges. In March 2009 the Company entered into a hedge settlement agreement with Merrill Lynch. The agreement provides a mechanism for the Company to monetize up to $400 million of the favorable net position of its long-term hedges to fund debt repurchases. During the first six months of 2009, Noranda received $70.1 million in proceeds under the hedge settlement agreement and used those proceeds to fund the repurchase of $239.7 million aggregate principal amount of debt at a cost of $70.8 million, plus fees.

The Company ended the second quarter of 2009 with total debt of $1.1 billion and $182.3 million in cash. The Company has no financial maintenance covenants on any of its borrowings. In May 2009, the Company made a permitted election under the indentures governing its HoldCo Notes and its AcquisitionCo Notes to pay all interest under the notes that are due on November 15, 2009 entirely in kind.

At June 30, 2009, the Company's Adjusted EBITDA to fixed charge ratio was 1.3 to 1 at the HoldCo level, and 1.7 to 1 at the AcquisitionCo level, while AcquisitionCo's net debt to Adjusted EBITDA ratio for its senior secured credit facilities was 3.6 to 1. These ratios fall outside of the minimum and maximum levels established in the Company's indentures and credit agreements. As a result of not meetingcertain minimum and maximum financial levels established by the indentures as conditions to the execution of certain transactions, the Company's ability to incur future indebtedness, grow through acquisitions, make certain investments, pay dividends and retain proceeds from asset sales may be limited.

"Despite the difficult environment and the effects of the New Madrid smelter outage," said Kip Smith, "we have maintained a stable cash position from the end of 2008, ending the second quarter with $182.3 million in cash. Our recent $67.5 million insurance settlement will provide liquidity and flexibility for our operation to rebuild the idled portions of the New Madrid smelter while we continue to serve our customers from current operating capacity. We remain dedicated to our key priorities: returning the smelter to its operating capability, implementing our CORE productivity programs to reduce costs, taking care of our customers through exceptional quality and service, and continuing to improve our financial structure. We believe that driving these priorities will provide the best support for our company during the uncertain times ahead."

Forward-looking Statements

This press release contains "forward-looking statements" which involve risks and uncertainties. You can identify forward-looking statements because they contain words such as "believes," "expects," "may," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or similar expressions that relate to Noranda's strategy, plans or intentions. All statements Noranda makes relating to its estimated and projected earnings, margins, costs, expenditures, cash flows, growth rates and financial results or to the Company's expectations regarding future industry trends are forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made and which reflect management's current estimates, projections, expectations or beliefs and which are subject to risks and uncertainties that may cause actual results to differ materially. Noranda undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

Noranda's actual results or performance may differ materially from those suggested, expressed or implied by forward-looking statements due to a wide range of factors including, but not limited to, the general business environment, fluctuating commodity prices and the Company's ability to return the New Madrid smelter to full capacity. For a discussion of additional risks and uncertainties that may affect the future results of Noranda, please see the Company's SEC filings and its annual report on Form 10-K.

Conference Call Information

Noranda has scheduled a conference call on August 5, 2009, at 10:00 AM EDT, to be followed by a question-and-answer period. The call is accessible to the media and general public. To listen to the conference call, dial the appropriate number at least 10 minutes prior to the scheduled start of the call.

U.S. participants: 1-888-562-3356

International participants: 1-973-582-2700

Conference ID #: 22396456

The conference call also will be webcast at http://w.on24.com/clients/norandaaluminum/157382.