Vanalco, Inc., a Delaware S Corporation, Richard L. Smith, Tax Matters Person - Page 8




                                        - 8 -                                         

          Ring bus                 511,000             59.0                           
          Riser                    56,400              59.0                           
          Ore bin                  53,000                   654.0                     
          Superstructure             535,100                654.0                     
          Alumina feeder             53,500                 732.0                     
          Total                   $99,666                                            
               1 In addition to this cost for installing a replacement cell           
          lining, Vanalco paid approximately $5,401 per failed cell to tear           
          out the exhausted lining plus some miscellaneous costs.                     
               2 Substantial repairs have been made to the cell cradles               
          since                                                                       
          they were placed in service.                                                
               3 The end sections of each shell have been in service for              
          approximately 59 years and have been repaired.  Many of the                 
          center sections have been replaced within the last 10 years.                
               4 The carbon anodes have a useful life of 14 days.  The                
          expense of this component is not at issue.                                  
               5 These components were not replaced during the years at               
          issue.  The dollar amounts reflect the 1998 replacement costs.              
               6 Vanalco extended the length of the ore bins and the                  
          superstructures by approximately 3 feet.  Except for the                    
          extensions, the ore bins and superstructures have been in service           
          for approximately 54 years.                                                 
               7 Approximately 30 percent of the alumina feeder must be               
          replaced every 3 or 4 years.  The remaining portion has been in             
          service for approximately 32 years.                                         
               Vanalco reported a repair expense of $4,411,245 for the cost           
          of replacing the linings of 206 cells in 1992 and $4,224,991 for            
          the cost of replacing the linings of 192 cells in 1993.                     
          The Cell Room Floors                                                        
               Vanalco has 10 cell rooms,5 which are each approximately 722           
          feet in length and 47 feet in width.  Each cell room is divided             
          lengthwise into three sections--a center section with the cells,            
          a section to one side called the "tap end", and a narrower                  


               5The cell rooms are numbered 4, 6, 8, 10, 12, 14, 16, 18,              
          20, and 22.                                                                 




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  Next

Last modified: May 25, 2011