What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2021-03-04 compared with 2020-02-27 · 207 added, 136 removed, 175 unchanged (66% of the section changed)

2 unchanged sentences

Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere herein.

This list of significant risk factors is not all-inclusive or necessarily in order of importance.

This list of material risk factors is not all-inclusive or necessarily in order of importance.

Risk Related to our Industry and Business

Declines in aluminum prices could have a material adverse effect on our business, financial condition, results of operations and cash flows.

8 unchanged sentences

A deterioration in global economic conditions or a worldwide financial downturn also has the potential to adversely affect future demand and prices for aluminum.

Geopolitical uncertainty of any kind, including the United Kingdom’s exit from the European Union (commonly referred to as Brexit), major public health issues (such as an outbreak of a pandemic or epidemic like the novel coronavirus COVID-19) or other unexpected events have the potential to negatively impact business confidence and increase price volatility.

Such events may also impact prices by causing disruptions in our operations, supply chain, or workforce.

3 unchanged sentences

These factors may have a material adverse effect on our liquidity, the amount of cash flow we have available for our capital expenditures and other operating expenses, our ability to access the credit and capital markets and our results of operations.

Curtailment of aluminum production at our facilities could have a material adverse effect on our business, financial position, results of operations and liquidity.

The continued operation of our smelters depends on the market for primary aluminum and our underlying cost of production.

Due to significant declines in the aluminum price during 2015, we made the decision to curtail three potlines representing 60% of production at our Hawesville smelter, which potlines have recently been rebuilt and returned to production.

We are also currently operating our Mt.

Holly smelter at 50% capacity as a result of uncompetitive power prices.

There can be no assurance that future deterioration in the price of aluminum or increases in our costs of production will not result in additional production curtailments at our smelters.

Curtailing production requires us to incur substantial expenses, both at the time of the curtailment and on an ongoing basis.

Our facilities are subject to contractual and other fixed costs that continue even if we curtail operations at these facilities.

These costs reduce the cost saving advantages of curtailing unprofitable aluminum production.

If we are unable to realize the intended cost saving effects of any production curtailment, we may have to seek bankruptcy protection or be forced to divest some or all of our assets.

The process of restarting production following curtailment is also expensive and time consuming.

As a result, any decision to restart production would likely require market conditions significantly better than the market conditions at the time the decision to curtail was made.

Any curtailments of our operations, or actions taken to seek bankruptcy protection or divest some or all of our assets, could have a material adverse effect on our business, financial position, results of operations and liquidity.

Excess capacity and over production of aluminum products may materially disrupt world aluminum markets causing price deterioration which, in turn, could adversely impact our sales, margins and profitability.

World aluminum prices have been significantly depressed in recent years primarily due to large amounts of excess capacity and over production in China and other regions.

Significant portions of world aluminum production would not be possible without financial and other support from governments and state-owned entities.

This oversupply has caused world aluminum prices to be adversely impacted.

Over production and the improper export of heavily subsidized aluminum products may result in depressed prices and, in turn, have a material adverse impact on our operating results, sales, margins and profitability.

Changes in trade laws or regulation may have an adverse effect on our sales margins and profitability.

Our businesses compete in a global marketplace and are subject to international and national trade laws and regulations.

The breadth of these laws and regulations continues to expand.

For example, both the European Union and the U.S.

impose import tariffs on primary aluminum from certain foreign producers.

Our Icelandic and U.S.

businesses are currently able to access these respective markets duty-free.

Any change to these import duties, including the granting of exemptions, a reduction in the tariff rate or a full repeal of the tariff scheme, could lessen or potentially eliminate the benefit we realize from these tariffs and could negatively impact our profitability.

These or other changes in trade laws and regulations could affect the ultimate price we receive for our products, the prices and availability of our raw materials or our ability to access certain markets and could have a material adverse effect on our business, financial position, results of operations and liquidity.

Increases in our raw material costs and disruptions in our supply adversely affect our business .

Our business depends upon the adequate supply of alumina, aluminum fluoride, calcined petroleum coke, pitch, carbon anodes and cathodes and other materials.

The availability of our raw materials at competitive prices is critical to the profitability of our operations and increases in pricing and/or disruptions in our supply could have a material adverse effect on our business, financial position, results of operations and liquidity.

For some of these production inputs, such as alumina, coke and pitch, we do not have any internal production and rely on a limited number of suppliers for all of our requirements.

Many of our supply agreements are short term or expire in the next few years.

There is no assurance that we will be able to renew such agreements on commercially favorable terms, if at all.

Certain of our principal raw materials are commodities for which, at times, availability and pricing can be volatile due to a number of factors beyond our control, including general economic conditions, domestic and worldwide demand, labor costs, competition, weather conditions and other transportation delays, major force majeure events, tariffs, sanctions and currency exchange rates.

Because we rely on a limited number of suppliers, if our suppliers cannot meet their contracted volume commitments or other contractual requirements, it may be difficult for us to source our raw materials from alternative suppliers at commercially reasonable prices or within the time periods required by our operations.

If we are unable to source from alternative suppliers, we could be forced to curtail production or use raw materials that do not meet our requirements, which could cause inefficiencies in our operations, increase costs or impact our production capabilities, any of which could have a material adverse effect on our business, financial position, results of operations and liquidity.

We are also exposed to price risk for each of these commodities.

For example, the pricing under certain of our current alumina supply contracts is based on a published alumina index.

As a result, our cost structure is exposed to market fluctuations and price volatility.

During 2018, for example, external events in the alumina markets, including the partial curtailment of the Alunorte alumina refinery in Brazil due to environmental concerns following severe weather and U.S.

sanctions impacting UC Rusal’s ability to supply alumina to the market, caused significant price volatility.

As a result of these events, the alumina index price reached a high of $710 per tonne in April 2018 compared to an average price of $332 per tonne for 2019 and $ 354 per tonne for 2017.

Because we sell our products based on the LME price for primary aluminum, we are not able to pass on to our customers any increased cost of raw materials that are not linked to the LME price.

Material disruptions in availability of our raw materials at competitive prices could impact our ability to operate our smelters which may have a material adverse effect on our business, financial position, results of operations and liquidity.

Excess capacity and overproduction of aluminum products may materially disrupt world aluminum markets causing price deterioration which, in turn, could adversely impact our sales, margins and profitability.

Global aluminum prices have been significantly depressed in recent years primarily due to large amounts of excess capacity and overproduction in China and other regions.

Significant portions of global aluminum production would not be possible without financial and other support and incentives from governments and state-owned entities.

This oversupply has caused global aluminum prices to be adversely impacted.

Overproduction and the export of heavily subsidized aluminum products may result in depressed prices and, in turn, have a material adverse impact on our operating results, sales, margins and profitability.

Increases in energy costs adversely affect our business, financial position, results of operations and liquidity.

1 unchanged sentence

As a result, the availability of electricity at competitive prices is critical to the profitability of our operations.

In the U.S., our Hawesville and Sebree plants receive all of their electricity requirements under market-based electricity

contracts, and our Mt.

Holly plant receives 75% of its electricity requirements under a market-based electricity contract.

Starting in November 2019, the price of approximately thirty percent (30%) of Grundartangi’s power requirements is linked to the market price for power in the Nord Pool power market, which exposes us to price volatility and fluctuations due to factors beyond our control and without any direct relationship to the price of primary aluminum.

Market-based electricity contracts expose us to market price volatility and fluctuations driven by, among other things, coal and natural gas prices, renewable energy production, regulatory changes and weather events, in each case, without any direct relationship to the price of aluminum.

In the U.S., our Hawesville and Sebree plants receive all of their electricity requirements under market-based electricity contracts, and our Mt.

Holly plant currently receives 75% of its electricity requirements under a market-based electricity contract that is set to expire March 31, 2021.

Since November 2019, the price of approximately 30% of Grundartangi’s power requirements has been linked to the market price for power in the Nord Pool power market, which exposes us to price

volatility and fluctuations due to factors beyond our control and without any direct relationship to the price of primary aluminum.

For example, extreme weather events in mid-February 2021 across the United States resulted in increases to power prices for our Kentucky plants, which could have an adverse effect on our results in the first quarter of 2021.

There can be no assurance that our market-based power supply arrangements will result in favorable electricity costs.

Any increase in our electricity and energy prices not tied to corresponding increases in the LME price could have a material adverse effect on our business, financial position, results of operations and liquidity.

If we are unable to enter into a long term, market-based, power arrangement for Mt.

Holly, we may choose, or be forced, to further curtail operations at the Mt.

Holly is currently required to purchase 25% of its power requirements from Santee Cooper's generation at a standard cost-based industrial rate, which is substantially higher than the market-based rate Mt.

Holly pays for the remaining 75% of its power.

Holly's inability to access the open market for 100% of its power requirements significantly impacts its ability to be competitive in the aluminum industry.

As a result of such uncompetitive power prices, Mt.

Holly has curtailed approximately 50% of its production capacity.

We continue to seek the ability to access the open market for 100% of our power requirements at Mt.

Holly and to pursue every reasonable alternative available to us to achieve this objective.

There can be no assurance, however, that we will be successful in these efforts.

If we are unable to secure a long term power arrangement for 100% of Mt.

Holly's power requirements on competitive terms, we may choose, or be forced, to further curtail operations at the plant.

Closure of the Mt.

Holly facility would impose various costs on us that could have a material adverse effect on our business, financial condition, results of operations and liquidity and could cause us to write down the book value of the Mt.

Holly facility.

In addition, the ongoing uncertainty regarding the future operation of Mt.

Holly may damage our relationships with our customers, suppliers, employees and other stakeholders and decrease the price we receive for our products, whether or not Mt.

Holly is ultimately closed.

Such actions and events could have a material adverse effect on our business, financial condition, results of operations and liquidity.

Disruptions in our supply of power and other events could adversely affect our operations.

1 unchanged sentence

Any loss or disruption of the power supply which reduces the amperage to our equipment or causes an equipment shutdown would result in a reduction in the volume of molten aluminum produced, and prolonged losses of power may result in the hardening or "freezing" of molten aluminum in the pots where it is produced, which could require an expensive and time consuming restart process.

Disruptions in the supply of electrical power to our facilities can be caused by a number of circumstances, including unusually high demand, blackouts, equipment or transformer failure, human error, malicious acts, natural disasters or other catastrophic events.

Disruptions in the supply of electrical power to our facilities can be caused by a number of circumstances, including, but not limited to, unusually high demand, blackouts, equipment or transformer failure, human error, malicious acts, natural disasters, weather events or other catastrophic events.

Our market-based power supply arrangements further increase the risk that disruptions in the supply of electrical power to our domestic operations could occur.

1 unchanged sentence

An alternative supply of power in the event of a disruption may not be feasible.

Power disruptions have had a material negative impact on our results of operations.

Power disruptions have had a material negative impact on our results of operations in the past.

An equipment failure at our Sebree smelter in May 2018, for example, caused us to lose power to one of the three potlines at Sebree and forced us to temporarily stop production from that potline.

6 unchanged sentences

Certain losses or prolonged interruptions in our operations may trigger a default under certain of our outstanding indebtedness and could have a material adverse effect on our business, financial position, results of operations and liquidity.

We may be unable to continue to compete successfully in the highly competitive markets in which we operate.

We are engaged in a highly competitive industry.

Aluminum also competes with other materials, such as steel, copper, plastics, composite materials and glass, among others, for various applications.

Many of our competitors are larger than we are and have greater financial and technical resources than we do.

These larger competitors may be better able to withstand reductions in price or other adverse industry or economic conditions.

Similarly, many of our competitors have vertically integrated upstream operations with resulting superior cost positions to ours and may be better able to withstand reductions in price or other adverse industry or economic conditions.

If we are not able to compete successfully, our business, financial position, results of operations and cash flows could be materially and adversely affected.

Public health pandemics, epidemics or similar public health threats, including the novel coronavirus disease (COVID-19), could have a material adverse effect on our business, outlook, financial condition, results of operations and liquidity.

The global markets in which we operate have been impacted by the recent COVID-19 pandemic.

Our business could be adversely affected by the COVID-19 pandemic or other health pandemics, epidemics or similar public health threats in the future.

Our operating results depend on the market for primary aluminum which can be volatile and subject to many factors beyond our control.

The COVID-19 pandemic has disrupted the global economy and created significant volatility in the primary aluminum industry.

Such adverse impacts to the global market include the drop in the LME price for primary aluminum to $1,457 in April 2020 from $1,772 at the start of 2020.

However, we have seen some measurable improvement in the global market for aluminum along with an increase in the price for our product and a return to more stability in the market

in which we operate in recent months.

The LME price for primary aluminum averaged $1,702 per tonne for 2020 as compared to an average of $1,792 for 2019, due in part to the impacts that COVID-19 had on the LME price during 2020.

Because we sell our product on a one- to three-month lag to current prices, our results reflect the LME price on this one to three month lag basis.

Future deterioration in economic conditions and global markets arising from the COVID-19 pandemic could materially and adversely affect future demand and prices for aluminum which could have a material adverse effect on our financial condition and liquidity.

Our business also depends on the ability of our employees to travel to our aluminum smelting facilities and operate our facilities.

Since the outbreak of COVID-19, we have implemented several new policies and procedures to protect the health and safety of our workforce.

We restricted both personal and business travel for a period of time during the pandemic, implemented continuous disinfecting of our workplaces, and set up employees whose jobs allow them to work remotely.

We have advised all of our employees in proper care and hygiene to prevent the spread of the virus.

While these measures serve to reduce the possibility of transmission of the virus within our workplaces, they do not assure that our employees will not contract the virus or bring it into the workplace.

Were such an event to be widespread enough, our operations could be disrupted to varying degrees up to and including a shutdown, which could have a material adverse effect on our business, outlook, financial condition, results of operations and liquidity.

The COVID-19 pandemic could also interfere with general commercial activity related to our supply chain and customer base, which could have an adverse effect on our financial condition and operational results.

Raw material suppliers, including those we currently use, may not be available or may be delayed in shipments to us, impacting our ability to deliver our products to our customers thereby negatively impacting our operational results and financial condition.

Further, if our customers’ businesses are similarly affected, they might delay, reduce or even eliminate purchases from us, which could adversely affect our results of operations.

The COVID-19 pandemic has also created substantial uncertainty and volatility in the financial markets which may impact our ability to access capital and the terms under which we can do so.

Our ability to pay interest on and to repay or refinance our debt will depend upon our access to financial markets or other alternative sources of liquidity and future operating performance, any of which may be negatively impacted by the effects of the COVID-19 pandemic.

The ultimate severity, magnitude and duration of COVID-19 is uncertain, rapidly changing and hard to predict.

The extent to which COVID-19 may adversely impact our business depends on future developments, which are highly uncertain and unpredictable, such as the ultimate duration and scope of the outbreak, the availability and distribution of vaccines domestically and globally, the spread and rise of any different variants of the COVID-19 virus, the pandemic’s impact on our customers and suppliers, how quickly normal economic conditions, operations, and the demand for our products can resume, and whether the pandemic leads to recessionary conditions in any of our key markets or in global markets generally.

The potential future impact of the COVID-19 pandemic on our business, results of operations and financial performance is difficult to predict and will depend on future developments, and such effects could exist for an extended period of time.

While we expect the COVID-19 pandemic to continue to impact our results of operations, cash flows and financial position, the current level of uncertainty over the economic and operational impacts of COVID-19 means the related impact to our business cannot be reasonably estimated at this time.

To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described herein.

Curtailment of aluminum production at our facilities could have a material adverse effect on our business, financial position, results of operations and liquidity.

The continued operation of our smelters depends on the market for primary aluminum and our underlying costs of production.

There can be no assurance that future deterioration in the price of aluminum or increases in our costs of production, including power, will not result in additional production curtailments at our smelters.

Curtailing production requires us to incur substantial expenses, both at the time of the curtailment and on an ongoing basis.

Our facilities are subject to contractual and other fixed costs that continue even if we curtail operations at these facilities.

These costs reduce the cost saving advantages of curtailing unprofitable aluminum production.

If we are unable to realize the intended cost saving effects of any production curtailment, we may have to seek bankruptcy protection or be forced to divest some or all of our assets.

The process of restarting production following curtailment is also expensive and time consuming.

As a result, any decision to restart production would likely require market conditions significantly better than the market conditions at the time the decision to curtail was made.

If we are unable to enter into a new power arrangement for Mt.

Holly and/or obtain necessary government approvals, we may choose, or be forced, to further curtail operations at the Mt.

CASC is currently party to both a power agreement with a third-party supplier (providing 75% of Mt.

Holly's power) and Santee Cooper (providing 25% of Mt.

Holly's power) to supply the Mt.

Holly smelter with all its power needs.

Both of these power agreements were set to expire on December 31, 2020 but were extended through March 31, 2021 as we finalize a new three-year power agreement with Santee Cooper that is expected to be effective April 1, 2021.

It is expected that under the new power contract with Santee Cooper, 100% of Mt.

Holly's electrical power requirements will be supplied from Santee Cooper's generation at cost of service-based rates.

The new power with Santee Cooper is expected to provide sufficient energy to allow the smelter to increase its current production to 75% of Mt.

Holly's full production capacity.

There can be no assurance, however, that we will be successful in finalizing this proposed agreement with Santee Cooper or obtaining all governmental approvals needed in connection therewith.

We issued a Working Adjustment and Retraining Notification Act (WARN) Notice to employees at Mt.

Holly in October 2020, which has since been extended through March 31, 2021, of our intent to curtail plant operations if the smelter cannot secure a new power arrangement with Santee Cooper to delivery energy to the plant.

If we are unable to secure and finalize this new power agreement with Santee Cooper and obtain all necessary governmental approvals for Mt.

Holly, we may choose, or be forced, to further curtail operations at the plant.

Closure of the Mt.

Holly facility.

In addition, the ongoing uncertainty regarding the future operation of Mt.

Holly may damage our relationships with our customers, suppliers, employees and other stakeholders, whether or not Mt.

Holly is ultimately closed.

We may need to take actions to terminate certain customer and supply contracts or curtail additional production in advance of any plant closure.

Customers and suppliers may also become unwilling to renew existing contracts or enter into new contracts with us.

It may also become more difficult to attract and retain employees.

Such actions and events could have a material adverse effect on our business, financial condition, results of operations and liquidity.

The restart of curtailed capacity at our Mt.

Holly smelter upon the finalization of the new power agreement with Santee Cooper is subject to certain risks and uncertainties.

Upon finalization of the proposed new, three-year agreement with Santee Cooper for power at our Mt.

Holly smelter and receipt of all necessary governmental approvals, we plan to restart capacity at Mt.

Holly that had been previously curtailed.

The new power contract with Santee Cooper is expected to provide sufficient energy to allow the smelter to increase its current production to 75% of Mt.

Holly's full production capacity.

The decision to move forward with this restart is based on certain market assumptions that are subject to risks outside of our control, specifically the LME price of aluminum, raw materials and premiums.

Changes in these inputs may result in actual costs and returns that materially differ from the estimated costs and returns and our financial position and results of operations may be negatively affected as a result.

Changes in these inputs may

also make the Mt.

Holly restart project uneconomic and we may decide at any time not to continue to fund this investment.

There can be no assurance that we will be able to restart capacity at Mt.

Holly within our projected budget and schedule.

In addition to changes in market assumptions, other unforeseen difficulties could increase the cost of the project, delay the project or render the project not feasible.

Our ability to finance the project could also be impacted by our cash position and results of operations.

Any delay in the completion of the project, unexpected or increased costs or inability to fund the project could have a material adverse effect on our business, financial position, results of operations and liquidity.

The restart of production at our Hawesville smelter is subject to certain risks and uncertainties.

We are currently in the process of a multi-year project at our Hawesville, Kentucky aluminum smelter to restart

previously curtailed capacity, rebuild two potlines that we had continued to operate past their expected life cycle, and implement new technology across all production.

In early 2019, we completed the first phase of this project, which involved restarting production on the three potlines that had been curtailed since the fourth quarter of 2015 and upgrading the cell technology on these potlines.

The second phase of this project involves rebuilding the two potlines that had been continuously operating and implementation of certain new technology across all production at Hawesville.

The first of these potlines is currently in the process of being rebuilt and is expected to return to production in early 2020.

We are currently in the process of a multi-year project at our Hawesville, Kentucky aluminum smelter to restart previously curtailed capacity, rebuild two potlines that we had continued to operate past their expected life cycle, and implement new technology across all production.

In early 2019, we completed the first phase of this project, which involved restarting production on the three potlines that had been curtailed since 2015 and upgrading the cell technology on these potlines.

The second phase of the project involves the rebuilding of the pots from the two potlines that had continued to operate past their expected life cycle and the implementation of certain new technology across all production.

These two potlines were taken out of production in February and September 2019, respectively.

The rebuild of the first of these potlines was completed in the second quarter of 2020.

With the restart of this potline, the Hawesville smelter is currently operating at approximately 80% production capacity.

The rebuild of the fifth and final potline at Hawesville is expected to be completed over the next several years, subject to market conditions.

6 unchanged sentences

Increases in our raw material costs and disruptions in our supply could adversely affect our business .

Our business depends upon the adequate supply of alumina, aluminum fluoride, calcined petroleum coke, pitch, carbon anodes and cathodes and other raw materials.

For some of these production inputs, such as alumina, coke and pitch, we do not have any internal production and rely on a limited number of suppliers for all of our requirements.

Many of our supply agreements are short term or expire in the next few years.

There is no assurance that we will be able to renew such agreements on commercially favorable terms, if at all.

We are also exposed to price risk for each of these commodities.

For example, the pricing under certain of our current alumina supply contracts is based on a published alumina index.

As a result, our cost structure is exposed to market fluctuations and price volatility.

sanctions impacting UC Rusal’s ability to supply alumina to the market, caused significant price volatility.

As a result of these events, the alumina index price reached a high of $710 per tonne in April 2018 compared to an average price of $271 per tonne for 2020 and $332 per

tonne for 2019.

From time to time, we manage our exposure to fluctuations in our alumina costs by purchasing certain of our alumina requirements under supply contracts with prices tied to the LME price of aluminum.

Because we sell our products based on the LME price for primary aluminum, we are not able to pass on to our customers any increased cost of raw materials that are not linked to the LME price.

We may be unable to realize the expected benefits of our capital projects.

From time to time, we undertake strategic capital projects in order to enhance, expand and/or upgrade our facilities and operational capabilities.

For instance, within the past several years, we have undertaken expansion projects at our Sebree, Hawesville, Grundartangi and Vlissingen facilities.

For instance, within the past several years, we have undertaken expansion projects at our Sebree, Hawesville, Grundartangi and Vlissingen facilities and are set to begin another project at Mt.

Holly upon finalization of the new power agreement.

Our ability to complete these projects and the timing and costs of doing so are subject to various risks, many of which are beyond our control.

4 unchanged sentences

The bargaining unit employees at our Grundartangi, Hawesville, Sebree and Vlissingen facilities are represented by labor unions, representing approximately 67% of our total workforce as of December 31, 2020.

Our Grundartangi labor agreement expired on December 31, 2019.

Since such time, we have been operating under the terms of the expired agreement while we engage in negotiations with the unions regarding the terms of a new agreement.

In addition, our Vlissingen labor agreement is scheduled to expire on December 1, 2020.

Our Grundartangi labor agreement is effective through December 31, 2024.

Our Vlissingen labor agreement e xpired on December 1, 2020.

Since such time, we have been operating under the terms of the expired agreement while we engage in negotiations regarding the terms of a new agreement.

Our Hawesville and Sebree labor agreements are scheduled to expire April 1, 2021 and October 28, 2023, respectively.

8 unchanged sentences

Our financial position and results of operations may also be adversely affected by the market price for such materials or services as we will continue to incur costs under these contracts to meet or settle our contractual take-or-pay obligations.

If we were unable to use such materials or services in our operations or sell them at prices consistent with or greater than our contract costs, we could incur significant losses under these

If we were unable to use such materials or services in our operations or sell them at prices consistent with or greater than our contract costs, we could incur significant losses under these contracts.

In addition, these commitments may also limit our ability to take advantage of favorable changes in the market prices for such materials and may have a material adverse effect on our business, financial position, results of operations and liquidity.

2 unchanged sentences

For the year ended December 31, 2020, we derived approximately 76% of our consolidated net sales from two major customers and we currently have agreements in place to sell a substantial portion of our 2021 production to these same customers.

We expect that the rest of our 2020 customer base will remain fairly concentrated among a small number of customers under short-term contracts.

We expect that

the rest of our 2021 customer base will remain fairly concentrated among a small number of customers under short-term contracts.

Any material non-payment or non-performance by one of these customers, a significant dispute with one of these customers, a significant downturn or deterioration in the business or financial condition of any of these customers, early termination of our sales agreement with any of these customers, or any other event significantly negatively impacting the contractual relationship with one of these customers could adversely affect our financial condition and results of operations.

If, in such an event, we are unable to sell the affected production volume to another customer, or we sell the affected production to another customer on terms that are materially less advantageous to us, our revenues could be negatively impacted.

We require substantial resources to pay our operating expenses and fund our capital expenditures.

If we are unable to generate funds from our operations to pay our operating expenses and fund our capital expenditures and other obligations, our ability to continue to meet these cash requirements in the future could require substantial liquidity and access to sources of funds, including from capital and credit markets.

If funding is not available when needed, or is available only on unacceptable terms, we may be unable to respond to competitive pressures, take advantage of market opportunities or fund operations, capital expenditure or other obligations, any of which could have a material adverse effect on our business, financial position, results of operations and liquidity.

International operations expose us to political, regulatory, currency and other related risks.

7 unchanged sentences

To the extent we explore additional opportunities outside the U.S., our currency risk with respect to foreign currencies may increase.

We require substantial resources to pay our operating expenses and fund our capital expenditures.

Unpredictable events may interrupt our operations, which may adversely affect our business.

Our operations may be susceptible to unpredictable events, including accidents, transportation and supply interruptions, labor disputes, equipment failure, information system breakdowns, natural disasters, dangerous weather conditions, river conditions, political unrest and other events.

Operational malfunctions or interruptions at one or more of our facilities could result in substantial losses in our production capacity, personal injury or death, damage to our properties or the properties of others, monetary losses and potential legal liability.

Our market-based power supply arrangements further increase the risk that unpredictable events could lead to changes in the price and/or availability of market power which could significantly impact the profitability and viability of our operations.

For example, extreme weather events in mid-February 2021 across the United States resulted in increases to power prices for our Kentucky plants after the occurrence of such events, which could have an adverse effect on our results in the first quarter of 2021.

Power generation curtailments, transmission line outages, or limitations on energy import capability that arise from such unpredictable events could also increase power prices, disrupt production or force a curtailment of all or part of the production at our facilities.

In addition, unpredictable events that lead to power cost increases may adversely affect our financial condition, results of operations and liquidity.

Iceland, for example, has suffered several natural disasters and extreme weather events, including significant volcanic eruptions and earthquakes which can lead to disruption in power transmission or other impacts to our operations.

rain in Iceland has and could in the future lead to low water levels in the reservoirs which has resulted and may again result in curtailments in power which is provided to our Grundartangi smelter from hydroelectric and geothermal sources.

We accept delivery of necessary raw materials to our operations using public infrastructure such as river systems and seaports.

Deterioration of such infrastructure and/or other adverse conditions could result in transportation delays or interruptions and increased costs, as occurred during the third quarter of 2017 when lock closures on the Ohio River impacted our alumina supply and forced us to find alternative means to transport alumina to our Kentucky operations at increased cost.

Any delay in the delivery of raw materials necessary for our production could impact our ability to operate our plants and have a material adverse effect on our business, financial condition or results of operation.

Future unpredictable events may adversely affect our ability to conduct business and may require substantial capital expenditures and operating expenses to remediate damage and restore operations at our production facilities.

Although we maintain insurance to mitigate losses resulting from such events, our coverage may not be sufficient to cover all losses, may have high deductibles or may not cover certain events at all.

To the extent these losses are not covered by insurance, our financial condition, results of operations and cash flows could be materially and adversely affected.

We engage in hedging transactions which involve risks that could have a material adverse effect on our business, financial position and liquidity.

As a global producer of primary aluminum, our business is subject to risk of fluctuations in the market prices of primary aluminum, power and foreign currencies, among other things.

Therefore, from time to time, we may seek to manage our exposure to these risks through entering into different types of hedging arrangements designed to reduce such risk exposure.

However, there can be no assurance that our hedging activities will successfully reduce our risk exposure to these factors.

In addition, there may be unforeseen events affecting our business that could lead us to be long in positions that we did not anticipate when such hedging transactions were put into place which in turn could lead to adverse effects on our financial position.

Further, we may be required to use a significant amount of liquidity to satisfy collateral margin calls required by our hedging counterparties.

Utilizing liquidity to satisfy collateral margin calls may have an impact on the liquidity we have available for our operations and lead to adverse impacts on our financial position

Risks Related to Indebtedness and Financing

A deterioration in our financial condition or credit rating could limit our ability to access the credit and capital markets on acceptable terms or to enter into hedging and financial transactions, lead to our inability to access liquidity facilities, and could adversely affect our financial condition and our business relationships.

3 unchanged sentences

We may be unable to generate sufficient cash flow to meet our debt service requirements which may have a material adverse effect on our business, financial position, results of operations and liquidity.

As of December 31, 2019, we had an aggregate of approximately $301.0 million of outstanding debt (including $250.0 million aggregate principal amount of senior secured notes due June 2021).

As of December 31, 2020, we had an aggregate of approximately $315.9 million of outstanding debt (including $250.0 million aggregate principal amount of senior secured notes due July 1, 2025).

Our ability to pay interest on and to repay or refinance our debt will depend upon our access to additional sources of liquidity and 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.

1 unchanged sentence

If we are unable to meet our debt service obligations or fund our other liquidity needs, we could attempt to restructure or refinance our debt or seek additional equity or debt capital.

There can be no assurance that we would be able to accomplish those actions on satisfactory terms, or at all.

There can be no assurance that we would be able to accomplish those actions on satisfactory terms, or at

If we are unable to ultimately meet our debt service obligations and fund our other liquidity needs, it may have a material adverse effect on our business, financial position, results of operations and liquidity.

7 unchanged sentences

Our industrial revenue bonds ("IRBs") and borrowings on our U.S.

and Iceland revolving credit facilities as well as the Hawesville Term Loan are currently at variable interest rates, and future borrowings required to fund working capital at our businesses, capital expenditures, acquisitions, or other strategic opportunities may be at variable rates, which exposes us to interest rate risk.

and Iceland revolving credit facilities as well as the term loan agreement with Glencore Ltd.

pursuant to which the Company borrowed $40.0 million (the "Hawesville Term Loan") are currently at variable interest rates, and future borrowings required to fund working capital at our businesses, capital expenditures, acquisitions, or other strategic opportunities may be at variable rates, which exposes us to interest rate risk.

An increase in interest rates would increase our debt service obligations under our existing debt instruments and potentially any future debt instruments, further limiting cash flow available for other uses.

10 unchanged sentences

The ability of our subsidiaries to pay dividends or make other payments or advances to us will depend on their operating results and will be subject to applicable laws and any restrictions or prohibitions on intercompany transfers by those subsidiaries contained in agreements governing the debt or other obligations of such subsidiaries.

The failure of our information technology systems, network disruptions, cyber-attacks or other breaches in data

security could have a material adverse effect on our business, results of operations and financial position.

Risks Related to Cybersecurity

The failure of our information technology systems, network disruptions, cyber-attacks or other breaches in data security could have a material adverse effect on our business, results of operations and financial position.

We depend on our information technology systems to effectively manage significant aspects of our business including, without limitation, production process control, metal inventory management, shipping and receiving, and reporting financial and operational results.

Any disruptions, delays, or deficiencies in our information systems or network connectivity could result in increased costs, disruptions in our business, and/or adversely affect our ability to timely report our financial results.

Our information technology systems are vulnerable to damage or interruption from circumstances largely beyond our control, including, without limitation, fire, natural disasters, power outages, systems failure, security breaches, and cyber- attacks, which include viruses, malware, and ransomware attacks.

attacks, which include viruses, malware, and ransomware attacks.

While we have disaster recovery and business continuity plans in place, if our information technology systems are damaged or interrupted for any reason, and, if the disaster recovery and business continuity plans do not effectively resolve such issues on a timely basis, we may be unable to manage or conduct our business operations, suffer reputational harm, and may be subject to governmental investigations and litigation, any of which may adversely impact our business, results of operations, cash flows and financial condition.

6 unchanged sentences

Such security breaches could also result in a violation of applicable U.S.

and international privacy and other laws and could have a material adverse effect on our business, results of operations and financial position.

and international

privacy and other laws and could have a material adverse effect on our business, results of operations and financial position.

Risks Related to Legal, Regulatory and Compliance Matters

Climate change, climate change legislation or environmental regulations may adversely impact our operations.

2 unchanged sentences

For example, electricity represents our single largest operating cost and the availability of electricity at competitive prices is critical to the profitability of our operations.

Some of the power we purchase in the United States is generated at coal-based power plants, which have been, and are likely to continue to be, significantly impacted by these regulations.

Some of the power we purchase in the United States is generated at coal-based power plants, which have been, and are likely to continue to be, significantly impacted by these regulations, including the Paris Agreement, which the United States re-entered on February 19, 2021.

Any resulting increase in our operating costs could have a material adverse effect on our business, financial position, results of operations and liquidity.

5 unchanged sentences

We may incur increased capital expenditures resulting from compliance with such regulatory changes, increased energy costs, costs associated with a "cap and trade" system, increased insurance premiums and deductibles, a change in competitive position relative to industry peers and changes to profit or loss arising from increased or decreased demand for goods produced by us and indirectly, from changes in cost of goods sold.

For example, "cap and trade" legislation may impose significant additional costs to our power suppliers that

could lead to significant increases in our energy costs.

For example, "cap and trade" legislation may impose significant additional costs to our power suppliers that could lead to significant increases in our energy costs.

In addition, the potential physical impacts of climate change on our operations are highly uncertain and will be particular to the geographic circumstances.

These may include changes in rainfall patterns, shortages of water or other natural resources, changing sea levels, changing storm patterns and intensities, and changing temperature levels.

These may include changes in rainfall patterns, shortages of water or other natural resources, changing sea levels, changing storm patterns and intensities, and

changing temperature levels.

Any adverse regulatory and physical changes may have a material adverse effect on our business, financial position, results of operations and liquidity.

20 unchanged sentences

Companies are required to comply with various elements of the new standard between March 2018 and March 2020;

however, we have filed a petition with the U.S.

Court of Appeals for the Eighth Circuit to review the final rule and are in negotiations with OSHA regarding certain changes to the rule and its application to us.

In the event we are unable to reach an agreement with OSHA, we will proceed with our petition challenging the rule.

Compliance with the new standard could require significant capital expenditure and would likely increase our production costs.

The ultimate impact, if any, of this new standard will depend on the nature and extent of the final rule as implemented, the cost of and our ability to meet the new standard, the potential impact on alumina costs, and other factors.

Failure to comply with applicable laws and regulations that regulate the protection of the health and safety of our workers may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, which may require corrective measures including capital expenditures, installation of additional equipment or remedial actions.

however, we filed a petition with the U.S.

Court of Appeals for the Eighth Circuit to review the final rule and entered into negotiations with OSHA regarding certain changes to the rule and its application to us.

In September 2020, we reached an agreement with OSHA resolving this litigation and addressing all issues related to compliance with the beryllium standard.

Failure to comply with applicable laws and regulations that regulate the protection of the health and safety of our workers, including the beryllium standard, may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, which may require corrective measures including capital expenditures, installation of additional equipment or remedial actions.

Any such penalties, fines, sanctions or shutdowns could have a material adverse effect on our business and results of operations.

Changes in trade laws or regulation may have an adverse effect on our sales margins and profitability.

Our businesses compete in a global marketplace and are subject to international and national trade laws and regulations.

The breadth of these laws and regulations continues to expand.

For example, both the European Union and the U.S.

import tariffs on primary aluminum from certain foreign producers.

Our Icelandic and U.S.

businesses are currently able to access these respective markets duty-free.

We are subject to litigation and may be subject to additional litigation in the future.

9 unchanged sentences

Our inability to enforce our rights and the enforcement of rights on a prejudicial basis by foreign courts or arbitral panels could have an adverse effect on our results of operations and financial position.

Our ability to utilize certain net operating loss carryforwards to offset future taxable income may be significantly limited if we experience an "ownership change" under the Internal Revenue Code.

As of December 31, 2020, we had federal net operating loss carryforwards of approximately $1,572.9 million which could offset future taxable income.

Our ability to utilize our deferred tax assets to offset future federal taxable income may be significantly limited if we experience an "ownership change" as defined in Section 382 of the Internal Revenue Code of 1986, as amended (the "Code").

In general, an ownership change would occur if our "five-percent shareholders," as defined under the Code, collectively increase their ownership in us by more than fifty percentage points over a rolling three-year period.

Future transactions in our stock that may not be in our control may cause us to experience such an ownership change and thus limit our ability to utilize net operating losses, tax credits and other tax assets to offset future taxable income.

Risks Related to Acquisitions

Acquisitions could disrupt our operations and harm our operating results.

We have a history of making acquisitions and we expect to opportunistically seek to make acquisitions in the future.

We are subject to numerous risks as a result of our acquisition strategy, including the following:

• we may spend time and money pursuing acquisitions that do not close;

• acquired companies may have contingent or unidentified liabilities;

• it may be challenging for us to manage our existing business as we integrate acquired operations;

• we may not achieve the anticipated benefits from our acquisitions.

We are subject to numerous risks following the consummation of any acquisition, including, for example, that we may incur costs and expenses associated with any unidentified or potential liabilities, we may not achieve anticipated revenue and cost benefits from the acquisitions and unforeseen difficulties may arise in integrating the acquired operations into our existing operations.

Accordingly, our past or future acquisitions might not ultimately improve our competitive position and business

prospects as anticipated and may subject us to additional liabilities that could have a material adverse effect on our business, financial position, results of operations and liquidity.

Risks Related to Stock Ownership in the Company

Glencore may exercise substantial influence over us, and they may have interests that differ from those of our other stockholders.

7 unchanged sentences

Glencore may also make investments in businesses that directly or indirectly compete with us, or may pursue acquisition opportunities that may be complementary to our business and, as a result, those acquisition opportunities may not be available to us.

Acquisitions could disrupt our operations and harm our operating results.

We have a history of making acquisitions and we expect to opportunistically seek to make acquisitions in the future.

We are subject to numerous risks as a result of our acquisition strategy, including the following:

• we may spend time and money pursuing acquisitions that do not close;

• acquired companies may have contingent or unidentified liabilities;

• it may be challenging for us to manage our existing business as we integrate acquired operations;

• we may not achieve the anticipated benefits from our acquisitions.

Accordingly, our past or future acquisitions might not ultimately improve our competitive position and business prospects as anticipated and may subject us to additional liabilities that could have a material adverse effect on our business, financial position, results of operations and liquidity.

Our ability to utilize certain net operating loss carryforwards to offset future taxable income may be significantly limited if we experience an "ownership change" under the Internal Revenue Code.

As of December 31, 2019, we had federal net operating loss carryforwards of approximately $1,519.9 million which could offset future taxable income.

We may be unable to continue to compete successfully in the highly competitive markets in which we operate.

We are engaged in a highly competitive industry.

Aluminum also competes with other materials, such as steel, copper, plastics, composite materials and glass, among others, for various applications.

Many of our competitors are larger than we are and have greater financial and technical resources than we do.

These larger competitors may be better able to withstand reductions in price or other adverse industry or economic conditions.

If we are not able to compete successfully, our business, financial position, results of operations and cash flows could be materially and adversely affected.

Unpredictable events may interrupt our operations, which, may adversely affect our business.

Insufficient rain in Iceland has and could in the future lead to low water levels in the reservoirs which has resulted and may again result in curtailments in power which is provided to our Grundartangi smelter from hydroelectric and geothermal sources.

We accept delivery of necessary raw materials to our operations using public infrastructure such as river systems and seaports.

Although we maintain insurance to mitigate losses resulting from such events, our coverage may not be sufficient to cover all losses, may have high deductibles or may not cover certain events at all.

To the extent these losses are not covered by insurance, our financial condition, results of operations and cash flows could be materially and adversely affected.

Unresolved Staff Comments

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors