What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-05-07 compared with 2020-11-05 · 127 added, 109 removed, 114 unchanged (67% of the section changed)

8 unchanged sentences

Recent Developments

On October 20, 2020, we issued a notice to employees at our Mt.

Holly, South Carolina aluminum smelter of our intent to curtail the Mt.

Holly plant operations by no later than December 31, 2020, when our current power contracts at Mt.

Holly expire, if we are unable to secure a competitively priced power arrangement to deliver energy to the plant.

The announcement was made pursuant to the federal Worker Adjustment and Retraining Notification Act.

If a decision is made to curtail the Mt.

Holly facility, we would be subject to various costs and it could cause us to write down the book value of the Mt.

Holly facility .

Holly Restart

We have finalized and received all necessary approvals for a new power contract with Santee Cooper for the Mt.

Holly aluminum smelter.

The contract was effective April 1, 2021, and runs through December 2023.

It is expected to provide sufficient energy to allow the Mt.

Holly smelter to increase its production by 50% (resulting in total production of 75% of Mt.

Holly’s full capacity once the restart project is completed) at cost of service based rates.

Restart work at the Mt.

Holly smelter is already underway and is expected to be completed in the fourth quarter of 2021.

Hawesville Restart Activity

Our Hawesville facility experienced several equipment issues in late December 2020 that partially reduced the plant’s production level;

however, we began the process of returning to our planned operating level of 80% of production capacity early in the second quarter of 2021.

We expect the various major maintenance and other projects associated with these equipment issues will result in approximately $10.0 to $12.0 million of one-time additional operating costs during the last three quarters of 2021, with over half of this amount anticipated to be spent during the second quarter of 2021 and declining amounts in each of the third and fourth quarters.

Refinancing Activity

On April 14, 2021, we issued $250.0 million in aggregate principal amount of our senior secured notes that will mature in 2028 (the "2028 Notes") and used a portion of the proceeds to purchase $195.9 million of our 12.0% senior secured notes due 2025 (the "2025 Notes") pursuant to a cash tender offer for any and all of the 2025 Notes.

We also called for redemption on May 14, 2021 of all of $54.1 million aggregate principal amount of the 2025 Notes not tendered in the tender offer.

On April 9, 2021, we issued $86.3 million in aggregate principal amount of convertible senior notes due 2028 (the "Convertible Notes").

The remaining proceeds from the issuance of the 2028 Notes and a portion of the net proceeds of the Convertible Notes will be used to redeem the remaining 2025 Notes on May 14, 2021.

With these transactions, we have effectively extended the maturities of our principal debt obligations, reduced the interest rate on these obligations, and raised additional liquidity through the issuance of convertible senior notes.

COVID-19 Update

1 unchanged sentence

As a result, our plants have not experienced any disruption in operations as a result of the pandemic, and we continue to sell all of our metal essentially as it is cast.

The impact of the COVID-19 pandemic on the broader economy, however, resulted in decreased prices for our product.

For example, the LME price for primary aluminum averaged $1,494 per tonne for the three months ended June 30, 2020 and $1,592 per tonne for the six months ended June 30, 2020, as compared to an average of $1,792 for 2019.

We have recently continued to see some improvement in the global economy resulting in an increase in the price for our product.

For example, the LME price for primary aluminum averaged $1,706 for the three months ended September 30, 2020 and $1,803 per tonne for October 2020.

However, 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.

Customer demand for value-added aluminum products and, in turn, the product premium we receive for such products, also have generally returned to first quarter levels after having been negatively impacted by the COVID-19 pandemic.

We have taken actions to mitigate the financial impact of the COVID-19 pandemic, including reducing discretionary spending, optimizing working capital and deferring non-essential capital projects.

Decreases in the prices of our products have also been partially offset by decreases in the prices of our key cost inputs.

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.

Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Part II, Item 1A.

Risk Factors of our quarterly reports on Form 10-Q for additional information on the potential risks associated with the COVID-19 pandemic.

Since the outbreak of the COVID-19 pandemic in early 2020, we have seen disruptions to the global economy and the COVID-19 pandemic created significant volatility in the primary aluminum industry;

however, in recent months, we have seen some measurable improvement in the global market for primary aluminum along with an increase in the price for our product and continued stability in the market in which we operate.

The LME price for primary aluminum averaged $2,192 per tonne for the three months ended March 31, 2021, as compared to an average of $1,702 for calendar year 2020, due in part to the impacts that the COVID-19 pandemic had on the LME price for primary aluminum 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.

Generally, customer demand for value-added aluminum products and, in turn, the product premium we receive for such products have returned to first quarter 2020 levels after having been negatively impacted by the COVID-19 pandemic throughout the last three quarters of 2020.

Since early 2020, we have taken actions to mitigate the financial impact of the COVID-19 pandemic, including reducing discretionary spending, optimizing working capital and deferring non-essential capital projects.

The potential further 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.

Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020 for additional information on the potential risks associated with the COVID-19 pandemic.

Results of Operations

The following discussion for the three and nine months ended September 30, 2020 reflects restart activity at Hawesville and no change in production capacities at our other operating facilities.

The following discussion for the three months ended March 31, 2021, reflects no change in production capacities at our operating facilities.

Our net sales are impacted primarily by the LME price for aluminum, regional and value-added premiums, and the volume and product mix of aluminum we ship during the period.

2 unchanged sentences

In general, our results reflect the market cost of alumina on an approximately three-month lag reflecting the terms of our alumina contracts and inventory levels.

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

Three months ended March 31,

(in millions, except per share data)

9 unchanged sentences

Tonnes Net Sales (in millions) Tonnes Net Sales (in millions) Tonnes Net Sales (in millions)

3rd Quarter 118,835 $ 221.8 84,187 $ 138.4 203,022 $ 360.2

2nd Quarter 130,645 $ 246.6 79,664 $ 145.9 210,309 $ 392.5

1st Quarter 116,437 $ 275.6 79,260 $ 164.2 195,697 $ 439.8

Total 116,437 $ 275.6 79,260 $ 164.2 195,697 $ 439.8

3rd Quarter 119,916 $ 272.0 78,627 $ 152.1 198,543 $ 424.1

2nd Quarter 125,154 $ 295.0 78,226 $ 157.7 203,380 $ 452.7

1st Quarter 129,114 $ 273.8 73,791 $ 141.0 202,905 $ 414.8

2 unchanged sentences

Net sales (in millions) 2021 2020

Three months ended September 30, $ 392.9 $ 438.0

Nine months ended September 30, $ 1,216.0 $ 1,401.2

Net sales (excluding alumina sales) decreased by $63.9 million for the three months ended September 30, 2020, compared to the same period in 2019, primarily driven by unfavorable LME and regional premium price realizations of $65.1 million.

Net sales decreased by $185.2 million for the nine months ended September 30, 2020 compared to the same period in 2019, primarily driven by unfavorable LME and regional premium price realizations of $175.4 million.

Three months ended March 31, $ 444.0 $ 421.2

Net sales (excluding alumina sales) increased by $25.1 million for the three months ended March 31, 2021, compared to the same period in 2020, primarily driven by favorable LME and regional premium price realizations of $40.0 million, partially offset by unfavorable volume of $15.0 million.

Gross profit (loss) (in millions) 2021 2020

Three months ended September 30, $ (27.1) $ (13.7)

Nine months ended September 30, $ (35.3) $ (30.6)

Gross loss increased by $13.4 million for the three months ended September 30, 2020 compared to the same period in 2019 primarily due to unfavorable LME and regional premium price realizations of $65.1 million and unfavorable operating expenses of $8.9 million, partially offset by favorable raw material price realizations of $64.4 million.

Gross loss for the nine months ended September 30, 2020 increased by $4.7 million compared to the same period in 2019 primarily due to unfavorable LME and regional premium price realizations of $175.4 million and unfavorable operating expenses of $20.6 million, partially offset by favorable raw material and power price realizations of $192.7 million.

Three months ended March 31, $ (20.7) $ 4.8

Gross profit decreased by $25.5 million for the three months ended March 31, 2021 compared to the same period in 2020, primarily due to unfavorable power price realizations of $41.6 million, primarily related to extraordinarily cold temperatures in the U.S.

Midwest and South during February 2021, unfavorable alumina price realizations of $10.7 million, and unfavorable volume impacts of $10.9 million.

These unfavorable impacts were partially offset by favorable LME and regional premium price realizations of $40.0 million.

Selling, general and administrative expenses (in millions) 2021 2020

Three months ended September 30, $ 11.0 $ 11.6

Nine months ended September 30, $ 31.7 $ 38.2

Selling, general and administrative expenses decreased by $0.6 million for the three months ended September 30, 2020 compared to the same period in 2019 primarily driven by a decrease in compensation costs.

Selling, general and administrative expenses for the nine months ended September 30, 2020 decreased by $6.5 million compared to the same period in 2019 primarily driven by a decrease in compensation costs.

Three months ended March 31, $ 16.1 $ 8.9

Selling, general and administrative expenses increased by $7.2 million for the three months ended March 31, 2021 compared to the same period in 2020 primarily driven by an increase in share-based compensation costs.

Net gain (loss) on forward and derivative contracts (in millions) 2021 2020

Three months ended September 30, $ (9.4) $ 10.3

Nine months ended September 30, $ (1.9) $ 10.7

For the three months ended September 30, 2020, net gain on forward and derivative contracts decreased by $19.7 million compared to that for the three months ended September 30, 2019.

The period to period change is primarily due to increases in LME and MWP prices from June 30, 2020 to September 30, 2020, as compared to those from June 30, 2019 to September 30, 2019.

For the nine months ended September 30, 2020 , net gain on our forward and derivative contracts decreased by $12.6 million compared to that for the nine months ended September 30, 2019.

The decrease in gain relates to the impact of increases in LME and MWP prices.

Three months ended March 31, $ (98.1) $ 3.8

For the three months ended March 31, 2021, net loss on forward and derivative contracts increased by $101.9 million compared to the same period in 2020 primarily due to increases in LME and MWP prices.

Derivatives .

Income tax benefit (expense) (in millions) 2021 2020

Three months ended September 30, $ (0.3) $ 1.3

Nine months ended September 30, $ 1.6 $ 5.7

Three months ended March 31, $ 2.3 $ 2.8

We have a valuation allowance against all of our U.S.

and certain foreign deferred tax assets.

The period to period change is primarily due to the change in earnings at our foreign entities that are not subject to a valuation allowance.

The period to period change is primarily due to improved operational results at our foreign entities that are not subject to a valuation allowance.

Income Taxes to the consolidated financial statements included herein for additional information.

4 unchanged sentences

Our principal uses of cash include the funding of operating costs (including post-retirement benefits), debt service requirements, capital expenditures, investments in our growth activities and in related businesses, working capital and other general corporate requirements.

We believe that cash provided from operations and financing activities will be adequate to cover our operations and business needs over the next 12 months.

As of September 30, 2020, we had cash and cash equivalents of approximately $81.4 million and unused availability under our revolving credit facilities of $88.0 million, resulting in a total liquidity position of approximately $169.4 million.

Adverse changes in the price of aluminum or our principal costs of production could materially impact our ability to generate and raise cash.

Furthermore, the COVID-19 pandemic could continue to impact the economy which may impact the price of our products as well as our ability to access capital and/or the terms under which we can do so.

As noted above, we have taken preemptive action to preserve our liquidity and manage our cash flow.

Such actions include reducing discretionary spending, optimizing working capital and deferring non-essential capital projects.

To preserve liquidity in light of the uncertainty in the global markets due to COVID-19, in March 2020, we drew down a total of $90.0 million under our U.S.

and Iceland revolving credit facilities.

In the third quarter, we repaid $40.0 million on our U.S.

revolving credit facility.

As of September 30, 2020, the remaining outstanding borrowings on the U.S.

and Iceland revolving credit facilities were $50.0 million.

We also effectively extended the maturities of our principal debt obligations.

On July 1, 2020, we issued $250.0 million in aggregate principal amount of our 2025 Notes and used the proceeds, together with cash on hand, to purchase all 2021 Notes tendered in a tender offer and to redeem all 2021 Notes that were not tendered.

In connection with the offering of the 2025 Notes, we also entered into Amendment No.1 to our U.S.

revolving credit facility extending the maturity date to May 16, 2023.

As the impact of the COVID-19 pandemic on the economy and our operations is fluid and constantly evolving, we will continue to assess a variety of measures to improve our financial performance and liquidity.

Risk Factors in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 and Part II, Item 1A.

Risk Factors of our quarterly report on Form 10-Q for the three months ended March 31, 2020 for additional information.

We believe that cash provided from operations and financing activities will be adequate to cover our operations and business needs over the next twelve months.

As of March 31, 2021, we had cash and cash equivalents of approximately $26.3 million and unused availability under our revolving credit facilities o f $63.8 million, r esulting in a total liquidity position of approximately $90.1 million.

On April 14, 2021, we issued $250.0 million in aggregate principal amount of our 2028 Notes and used a portion of the proceeds to purchase $195.9 million of our 2025 Notes pursuant to a cash tender offer for any and all of the 2025 Notes.

We also called for redemption on May 14, 2021 of all of $54.1 million aggregate principal amount of the 2025 Notes not tendered in the tender offer.

On April 9, 2021, we issued $86.3 million in aggregate principal amount of Convertible Notes .

The remaining proceeds from the issuance of the 2028 Notes and a portion of the proceeds from the issuance of the Convertible Notes will be used to redeem the remaining 2025 Notes on May 14, 2021.

The remaining proceeds from the Convertible Notes offering were used to repay borrowings under our revolving credit facilities and to pay for the cost of the capped call transactions in connection with the issuance of the Convertible Notes.

Available Cash

Our available cash and cash equivalents balance at September 30, 2020 was $81.4 million compared to $38.9 million at December 31, 2019.

Our available cash and cash equivalents balance at March 31, 2021, was $26.3 million compared to $81.6 million at December 31, 2020.

Sources and Uses of Cash

Our statements of cash flows are summarized below:

Nine months ended September 30,

Three months ended March 31,

(in millions)

3 unchanged sentences

Change in cash, cash equivalents and restricted cash $ (56.8) $ 109.7

The increase in net cash provided by operating activities was primarily driven by improvements in working capital.

The improvements in working capital were primarily attributable to lower raw material prices, timing of raw material receipts and the timing of trade receivable collection.

The decrease in net cash used in investing activities was primarily due to higher spending on capital projects during the nine months ended September 30, 2019, driven by a higher level of capital investments in the Hawesville restart project during that period, as compared to the nine months ended September 30, 2020.

The increase in net cash provided by financing activities was primarily due to outstanding borrowings on our U.S.

revolving credit facility and Iceland revolving credit facility at September 30, 2020 compared to September 30, 2019, partially offset by payments on our Hawesville Term Loan.

Borrowings on our revolving credit facilities are available, if needed, for working capital requirements, general corporate or other purposes.

The increase in net cash used in operating activities was primarily driven by an increase in net loss and changes in working capital.

The changes in working capital are primarily attributable to timing of receivable collections and timing of raw material receipts.

The increase in net cash used in investing activities was primarily due to higher spending on capital projects during the three months ended March 31, 2021, driven by capital investments in the Mt.

Holly restart project.

The decrease in net cash provided by financing activities was primarily due to lower net borrowings on our revolving credit facilities.

Availability Under Our Credit Facilities

1 unchanged sentence

revolving credit facility by up to $50.0 million, subject to agreement with the lenders.

revolving credit facility matures on May 16, 2023.

revolving credit facility matures in May 2023.

Any letters of credit issued and outstanding under the U.S.

revolving credit facility reduce our borrowing availability on a dollar-for-dollar basis.

We have also entered into, through our wholly-owned subsidiary Nordural Grundartangi ehf ("Grundartangi"), a $50.0 million revolving credit facility, dated November 2013, as amended.

We have also entered into, through our wholly-owned subsidiary Nordural Grundartangi ehf ("Grundartangi"), a $50.0 million revolving credit facility, dated November 2013, as amended (the "Iceland revolving credit facility").

The Iceland revolving credit facility matures in November 2022.

1 unchanged sentence

Increases in the price of aluminum and/or restarts of previously curtailed operations, for example, increase our borrowing base by increasing our accounts receivable and inventory balances;

decreases in the price of aluminum and/or curtailment of production capacity would decrease our borrowing base by reducing our accounts receivable and inventory balances.

As of September 30, 2020, our U.S.

decreases in the price of aluminum and/or curtailments of production capacity would decrease our borrowing base by reducing our accounts receivable and inventory balances.

As of March 31, 2021, our U.S.

revolving credit facility had a borrowing base of $139.6 million, $50.4 million in borrowings and $75.4 million in letters of credit outstanding.

Of the outstanding letters of credit, $15.7 million related to our domestic power commitments and the remainder secured certain debt and workers’ compensation commitments.

As of September 30, 2020, our Iceland revolving credit facility had a borrowing base of $50.0 million an d $45.0 million in borrowing s.

As of September 30, 2020, our credit facilities had $88.0 million of net availability after consideration of our outstanding borrowings and letters of credit.

Of the outstanding letters of credit, $16.2 million are related to our power commitments, $41.1 million are related to hedging collateral, and the remainder are primarily for the purpose of securing certain debt and workers’

compensation commitments.

As of March 31, 2021, our Iceland revolving credit facility had a borrowing base of $50.0 million an d no outstanding borrowing s.

As of March 31, 2021, our credit facilitie s had $63.8 million of net availability after consideration of our outstanding borrowings and letters of credit.

We may borrow and make repayments under our credit facilities in the ordinary course based on a number of factors, including the timing of payments from our customers and payments to our suppliers.

Our credit facilities contain customary covenants, including restrictions on mergers and acquisitions, indebtedness, affiliate transactions, liens, dividends and distributions, dispositions of collateral, investments and prepayments of indebtedness, including, a springing financial covenant that requires us to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 any time availability under the U.S.

revolving credit facility is less than or equal to the lower of $17.5 million or 10% of the borrowing base but not less than $12.5 million.

revolving credit facility, a springing financial covenant that requires us to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 as of any date of determination availability under the U.S.

revolving credit facility is less than or equal to $17.5 million, or 10% of the borrowing base but not less than $12.5 million.

We intend to maintain availability to comply with these levels any time we would not meet the ratio, which could limit our ability to access the full amount of our availability under our U.S revolving credit facility.

Our Iceland revolving credit facility also contains a covenant that requires Grundartangi to maintain a minimum equity ratio.

As of September 30, 2020, we were in compliance with all such covenants or maintained availability above such covenant triggers.

Senior Secured Notes

We have $250.0 million aggregate principal of senior secured notes that will mature in June 2025 (the "2025 Notes"), unless earlier refinanced in accordance with their terms.

Interest on the 2025 Notes is payable semi-annually on January 1 and July 1 of each year, beginning on January 1, 2021, at a rate of (i) 10.00% per annum in cash and (ii) 2.00% per annum in the form of additional notes or in cash, at Century's option.

Our Iceland revolving credit facility contains a covenant that requires Grundartangi to maintain a minimum equity ratio.

As of March 31, 2021, we were in compliance with all such covenants or maintained availability above such covenant triggers.

On April 14, 2021, we issued $250.0 million principal of senior secured notes that will mature on May 1, 2028, unless earlier refinanced in accordance with their terms.

Interest on the 2028 Notes is payable semi-annually on April 1 and October 1 of each year, beginning on October 1, 2021, at a rate of 7.5% per year.

The indenture governing the 2028 Notes contains customary covenants which may limit our ability, and the ability of certain of our subsidiaries, to:

8 unchanged sentences

and (ix) effect a consolidation or merger.

We applied the net proceeds from the offering of the 2025 Notes described above, together with cash on hand, toward payment of the total consideration amount to holders whose 2021 Notes were accepted and purchased in the tender offer and to fund the redemption of any remaining 2021 Notes.

As a result, the Company's and the guarantors' obligations under the indenture governing the 2021 Notes have been fully discharged.

On April 9, 2021, we issued $86.3 million in aggregate principal amount of convertible senior notes due 2028, unless earlier converted, repurchased or redeemed.

The principal included the full exercise of the option by the initial purchasers of the Convertible Notes to purchase $11.3 million of additional principal amount.

The Notes bear interest semi-annually in arrears on May 1 and November 1 of each year, beginning on November 1, 2021, at a rate of 2.75% per annum in cash.

We applied the net proceeds from the offering of the 2028 Notes and a portion of the net proceeds from the Convertible Notes described above toward payment of the total consideration amount to holders whose 2025 Notes were accepted and purchased in the tender offer and to fund the redemption of any remaining 2025 Notes.

Hawesville Term Loan

On April 29, 2019, we entered into a term loan agreement with Glencore Ltd.

pursuant to which the Company borrowed $40.0 million (the "Hawesville Term Loan").

pursuant to which the Company borrowed $40.0 million.

Borrowings under the Hawesville Term Loan were used to partially finance the second phase of the Hawesville restart project.

The Hawesville Term Loan matures on December 31, 2021, and is to be repaid in twenty-four (24) equal monthly installments of principal that began on January 31, 2020.

The Hawesville Term Loan matures on December 31, 2021, and is being repaid in 24 equal monthly installments of principal that began on January 31, 2020.

The Hawesville Term Loan bears interest, due monthly, at a floating rate equal to LIBOR plus 5.375% per annum.

The Hawesville Term Loan is not secured by any collateral.

As of March 31, 2021, the outstanding balance of the Hawesville Term Loan was $15.0 million.

Supplemental Guarantor Financial Information

The Company has filed a Registration Statement on Form S-3 (the "Universal Shelf Registration Statement") with the Securities and Exchange Commission pursuant to which the Company may, from time to time, offer an indeterminate amount of securities, which may include securities that are guaranteed by certain of the Company's subsidiaries.

As of March 31, 2021, we have not issued any debt securities pursuant to the Universal Shelf Registration Statement.

However, the securities that we may issue in the future may limit our ability, and the ability of certain of our subsidiaries to pay dividends or make distributions in respect of capital stock.

"Guarantor Subsidiaries" refers to all of our material domestic subsidiaries except for Nordural US LLC, Century Aluminum Development LLC and Century Aluminum of West Virginia, Inc.

The Guarantor Subsidiaries are 100% owned by Century.

All guarantees will be full and unconditional;

all guarantees will be joint and several.

Our foreign subsidiaries, together with Nordural US LLC, Century Aluminum Development LLC and Century Aluminum of West Virginia, Inc., are collectively referred to as the "Non-Guarantor Subsidiaries".

We allocate corporate expenses or income to our subsidiaries and charge interest on certain intercompany balances.

The following summarized financial information of both the Company and the Guarantors Subsidiaries ("Guarantors") is presented on a combined basis.

Intercompany balances and transactions between the Company and the Guarantors have been eliminated and the summarized financial information does not reflect investments of the Company or the Guarantors in the Non-Guarantor Subsidiaries ("Non-Guarantors").

The Company’s or Guarantors’ amounts due from, amounts due to, and transactions with the Non-Guarantors are disclosed below:

March 31, 2021 December 31, 2020

Current assets $ 266.6 $ 252.4

Non-current assets 971.6 972.3

Current liabilities 270.3 169.2

Non-current liabilities 516.2 483.7

Three months ended March 31, 2021

Net sales $ 276.2

Gross profit (loss) (19.7)

Income (loss) before income taxes (121.5)

Net income (loss) (140.0)

As of March 31, 2021 and December 31, 2020, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $13.2 million and $14.6 million, respectively, and an intercompany long term loan due to the Parent from the Non-Guarantors totaled $555.7 million and $554.9 million, respectively.

Contingent Commitments

1 unchanged sentence

This contingent obligation consists of the aggregate payments made to Big Rivers by the third party on CAKY’s behalf in excess of the agreed upon base amount under the long-term cost-based power contract with Kenergy.

As of September 30, 2020, the principal and accrued interest for the contingent obligation was $26.3 million, which was fully offset by a derivative asset.

As of March 31, 2021, the principal and accrued interest for the contingent obligation was $27.0 million, which was fully offset by a derivative asset.

We may be required to make installment payments for the contingent obligation in the future.

These payments are contingent based on the LME price of primary aluminum and

the level of Hawesville’s operations.

Based on the LME forward market at September 30, 2020 and management’s estimate of the LME forward market beyond the quoted market period, we believe that we will not be required to make payments on the contingent obligation during the term of the agreement, which expires in 2028.

These payments are contingent based on the LME price of primary aluminum and the level of Hawesville’s operations.

Based on the LME forward market at March 31, 2021, we believe that we will not be required to make payments on the contingent obligation during the term of the agreement, which expires in 2028.

There can be no assurance that circumstances will not change thus accelerating the timing of such payments.

1 unchanged sentence

In 2013, we entered into a settlement agreement with the Pension Benefit Guarantee Corporation ("PBGC") regarding an alleged "cessation of operations" at our Ravenswood facility.

Pursuant to the terms of the agreement, we will make additional contributions (above any minimum required contributions) to our defined benefit pension plans totaling approximately $17.4 million.

Pursuant to the terms of the agreement, we agreed to make additional contributions (above any minimum required contributions) to our defined benefit pension plans totaling approximately $17.4 million.

Under certain circumstances, in periods of lower primary aluminum prices relative to our cost of operations, we are able to defer one or more of these payments, but would then be required to provide the PBGC with acceptable security for deferred payments.

We did not make any contributions in the three month periods ended September 30, 2020 and 2019.

We did not make any contributions in the three month periods ended March 31, 2021 and 2020.

We have elected to defer certain payments under the PBGC agreement and have provided the PBGC with the appropriate security.

9 unchanged sentences

The first phase of the project, which involved the restart of the three potlines and approximately 150,000 tonnes of production capacity that had been curtailed in 2015, was successfully completed on budget and ahead of schedule in early 2019.

The second phase of the project involves the rebuilding of the pots associated with the 100,000 tonnes of production from the two potlines that had continued to operate past their expected life cycle and the implementation of certain new technology across all production.

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 with total project costs to date of approximately $107.4 million .

The rebuild of the first of these potlines was completed in the second quarter of 2020 with total project costs to date of approximately $108.3 million .

Our Hawesville facility experienced several equipment issues in late December 2020 that partially reduced the plant’s production level;

however, we expect the process of returning to our planned operating level of 80% of capacity will begin early in the second quarter of 2021.

The rebuild of the fifth and final potline and the completion of the technology upgrades is expected to be completed over the next several years subject to market conditions.

1 unchanged sentence

Sebree was returned to full capacity by the end of the third quarter of 2018.

We expect that all losses arising from the Sebree equipment failure will be covered under our insurance policies, less $7.0 million in deductibles.

As of September 30, 2020, we have received $19.1 million in insurance proceeds to offset against such losses.

In November 2009, Century Aluminum of West Virginia ("CAWV") filed a class action complaint for declaratory judgment against the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union ("USW"), the USW’s local and certain CAWV retirees, individually and as class representatives ("CAWV Retirees"), seeking a declaration of CAWV’s rights to modify/terminate retiree medical benefits.

As of March 31, 2021, the claims process was concluded and we received all $21.3 million in insurance proceeds to offset against such losses.

In 2011, our Board of Directors approved a $60.0 million common stock repurchase program and subsequently increased this program by $70.0 million in the first quarter of 2015.

Under the program, Century is authorized to repurchase up to $130.0 million of our outstanding shares of common stock, from time to time, on the open market at prevailing market prices, in block trades or otherwise.

The timing and amount of any shares repurchased will be determined by our management based on its evaluation of market conditions, the trading price of our common stock and other factors.

We made no repurchases during the years ended 2018, 2019, and 2020.

As of March 31, 2021 we had $43.7 million remaining under the repurchase program authorization.

The repurchase program may be expanded, suspended or discontinued by our Board, in its sole discretion, at any time.

In November 2009, Century Aluminum of West Virginia, Inc.

("CAWV") filed a class action complaint for declaratory judgment against the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union ("USW"), the USW’s local and certain CAWV retirees, individually and as class representatives ("CAWV Retirees"), seeking a declaration of CAWV’s rights to modify/terminate retiree medical benefits.

Later in November 2009, the USW and representatives of a retiree class filed a separate suit against CAWV, Century Aluminum Company, Century Aluminum Master Welfare Benefit Plan, and various John Does with respect to the foregoing.

On August 18, 2017, the District Court for the Southern District of West Virginia approved a settlement agreement in respect of these actions.

Under the terms of the settlement agreement, CAWV agreed to make payments into a trust for the benefit of the CAWV Retirees in the aggregate amount of $23.0 million over the course of ten years.

On August 18, 2017, the District Court for the Southern District of West Virginia approved a settlement agreement in respect of these actions, pursuant to which, CAWV agreed to make payments into a trust for the benefit of the CAWV Retirees in the aggregate amount of $23.0 million over the course of ten years.

Upon approval of the settlement, we paid $5.0 million to the aforementioned trust in September 2017 and agreed to pay the remaining amounts under the settlement agreement in annual increments of $2.0 million for nine years.

At September 30, 2020, we had $2.0 million in other current liabilities and $7.3 million in other liabilities related to this agreement.

At March 31, 2021, we had $2.0 million in other current liabilities and $7.7 million in other liabilities related to this agreement.

We are a defendant in several actions relating to various aspects of our business.

7 unchanged sentences

and international markets and economies may adversely affect our liquidity, our ability to access the debt or capital markets and our financial condition.

Capital expenditures incurred for the nine months ended September 30, 2020 were $7.2 million, excluding expenditures of $4.7 million associated with the restart project at Hawesville.

We estimate our total capital spending in 2020, excluding the Hawesville restart project, will be approximately $10.0 million related to ongoing investment projects at our plants.

Capital expenditures incurred for the three months ended March 31, 2021 were $2.3 million, excluding expenditures of $5.1 million associated with the restart project at Mt.

We estimate our total capital spending in 2021, excluding the Mt.

Holly restart project, will be approximately $25.0 million related to our ongoing investment and sustainability projects at our plants.

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-Q

Item 2. Management’s Discussion and Analysis