What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-02 compared with 2021-11-05 · 138 added, 121 removed, 124 unchanged (68% of the section changed)

6 unchanged sentences

• the cost of goods sold, the principal components of which are electrical power, alumina, carbon products and labor, which in aggregate represent more than 75% of our cost of goods sold;

• our production volume.

• our production volume and product mix.

Recent Developments

On February 16, 2022, we detected a cyber incursion affecting some of the servers supporting our global operations.

The Company took immediate action by shutting down all impacted information systems and activating the Company's internal response procedures and mobilizing both internal resources and third-party experts to address the situation as quickly as possible.

We have since fully restored all of our information systems and rectified all impacts of the incursion.

We are still quantifying the expected total financial statement impact of the cyber incursion, both with respect to costs incurred in response and impacts to production, but we do not expect the impact to be material to the financial statements.

Pricing of aluminum

1 unchanged sentence

(i) the base commodity price, which is based on quoted prices on the LME and other exchanges;

plus (ii) any regional premium (e.g., the Midwest premium for metal sold in the United States ("MWP") and the European Duty Paid premium for metal sold into Europe);

plus (iii) any product premium.

plus (ii) any regional premium (e.g., the Midwest premium for metal sold in the United States ("MWP") and the European Duty Paid premium for metal sold into Europe ("EDPP"));

plus (iii) any value-added product premium.

Each of these price components has its own drivers and variability.

4 unchanged sentences

Information regarding financial contracts is included in Note 13.

Derivatives and risks affiliated with such financial contracts are disclosed specifically in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

We have seen increases in the pricing of aluminum throughout 2021.

The average LME price for primary aluminum was $2,004 per tonne for January 2021, increasing to an average LME price for primary aluminum of $2,439 in June 2021 and then to $2,840 per tonne in September 2021.

The average MWP price was $330 per tonne in January 2021, increasing to $608 in June 2021 and then to $765 in September 2021.

The average European Duty Paid premium was $152 per tonne in January 2021, increasing to $251 in June 2021 and then to $383 in September 2021.

Derivatives and risks associated with such financial contracts are disclosed specifically in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

We saw meaningful increases in the pricing of aluminum throughout 2021, which has continued through the first quarter of 2022.

The average LME price for primary aluminum was $3,267 per tonne for the first quarter of 2022 compared to $2,475 per tonne in 2021, and $1,702 per tonne in 2020.

The average MWP price was $794 per tonne for the first quarter of 2022, compared to $581 per tonne in 2021, and $267 per tonne in 2020.

The average EDPP price was $489 per tonne for the first quarter of 2022 compared to $272 per tonne in 2021, and $126 per tonne in 2020.

Results of Operations

The following discussion for the three and nine months ended September 30, 2021 reflects no change in production capacities at our operating facilities.

In accordance with the recently adopted amendments to Item 303 of Regulation S-K, management has revised its comparison of interim periods to compare the results of the most recent quarter against the results of the immediately preceding quarter.

We believe that, due to the non-seasonal nature of our business, this sequential presentation is more useful in identifying current business trends, provides a more meaningful analysis and aligns the discussion with how management reviews the results of the Company.

The Company will continue to present a comparison of the most recent year-to-date period and the corresponding year-to-date period of the preceding fiscal year.

The following discussion for the three months ended March 31, 2022 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.

1 unchanged sentence

Electrical power, alumina, carbon products and labor are the principal components of our cost of goods sold.

Power costs can be volatile as a result of a number of factors beyond our control.

See “Item 1A.

Risk Factors - Increases in energy costs adversely affect our business, financial position, results of operations and liquidity” in our Annual Report on Form 10-K for the year ended December 31, 2021.

Our power costs at our Kentucky plants are impacted by capacity demand charges, which are determined based on available power generating capacity in MISO, from which we purchase our energy.

The price of such capacity is set by auction in April.

Because the clearing price of the 2022-23 auction was higher than in the prior period, capacity demand charges with respect to power usage for our Hawesville and Sebree facilities will be increased during the twelve month period commencing June 1, 2022.

The expected combined capacity demand costs for these two facilities are expected to be approximately $11.5 million per quarter after June 1, 2022, as compared to average combined capacity demand costs for these two facilities of $0.4 million per quarter for the four quarters ended March 31, 2022.

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,

2021 2020 2021 2020

Quarter ended

Three months ended

March 31, 2022 December 31, 2021 March 31, 2022 March 31, 2021

(in millions, except per share data)

4 unchanged sentences

Net income (loss) 17.7 60.4 17.7 (140.0)

EARNINGS (LOSS) PER COMMON SHARE:

Basic and Diluted $ (0.58) $ (0.65) $ (2.52) $ (0.98)

INCOME (LOSS) PER COMMON SHARE:

Basic $ 0.18 $ 0.62 $ 0.18 $ (1.55)

Diluted $ 0.18 $ 0.59 $ 0.18 $ (1.55)

SHIPMENTS - PRIMARY ALUMINUM (1)

United States Iceland Total

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

3rd Quarter 117,951 $ 366.6 78,144 $ 207.6 196,095 $ 574.2

2nd Quarter 112,792 314.0 78,102 180.1 190,894 494.1

Tonnes Sales $

(in millions)

Tonnes Sales $

(in millions)

Tonnes Sales $

(in millions)

1st Quarter 134,953 $ 494.8 76,458 $ 247.5 211,411 $ 742.3

Total 347,180 $ 956.2 235,506 $ 551.9 582,686 $ 1,508.1

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

4th Quarter 121,549 $ 411.8 79,412 $ 238.9 200,961 $ 650.7

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

Total 378,594 $ 742.2 237,642 $ 425.3 616,236 $ 1,167.5

(1) Excludes scrap aluminum and alumina sales.

Net sales (in millions) 2021 2020

Three months ended September 30, $ 581.4 $ 392.9

Nine months ended September 30, $ 1,553.4 $ 1,216.0

Net sales (excluding alumina sales) increased by $215.7 million for the three months ended September 30, 2021, compared to the same period in 2020, primarily driven by favorable LME and regional premium price realizations of $222.1 million, offset by unfavorable volume of $6.4 million.

Net sales (excluding alumina sales) increased by $339.7 million for the nine months ended September 30, 2021, compared to the same period in 2020, primarily driven by favorable LME and regional premium price realizations of $336.9 million.

Gross profit (loss) (in millions) 2021 2020

Three months ended September 30, $ 54.6 $ (27.1)

Nine months ended September 30, $ 54.8 $ (35.3)

Gross profit increased by $81.7 million for the three months ended September 30, 2021, compared to the same period in 2020, primarily driven by favorable LME and regional premium price realizations of $222.1 million partially offset by unfavorable power price realizations of $64.6 million, unfavorable alumina price realizations of $25.4 million, unfavorable volume impacts of $6.6 million and increased operating costs.

Gross profit increased by $90.1 million for the nine months ended September 30, 2021, compared to the same period in 2020, primarily driven by favorable LME and regional premium price realizations of $336.9 million as well as favorable sales mix of $28.8 million, partially offset by unfavorable power price realizations of $146.3 million, unfavorable alumina price realizations of $51.5 million, and increased operating costs.

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

Three months ended September 30, $ 14.2 $ 11.0

Nine months ended September 30, $ 39.0 $ 31.7

Selling, general and administrative expenses increased by $3.2 million for the three months ended September 30, 2021 compared to the same period in 2020, primarily driven by an increase in share-based compensation costs due to fluctuations of the stock price period over period and other compensation costs.

Selling, general and administrative expenses increased by $7.3 million for the nine months ended September 30, 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, $ (76.7) $ (9.4)

Nine months ended September 30, $ (239.2) $ (1.9)

For the three months ended September 30, 2021, net loss on forward and derivative contracts increased by $67.3 million compared to the same period in 2020 primarily due to increases in LME and MWP prices from June 30, 2021 to September 30, 2021, and partially offset by gains in respect of derivative contracts due to Nord Pool power price increases.

For the nine months ended September 30, 2021, net loss on forward and derivative contracts increased by $237.3 million compared to the same period in 2020 primarily due to increases in LME and MWP prices in the first nine months of 2021, and partially offset by gains in respect of derivative contracts due to Nord Pool power price increases.

Quarter ended

Three months ended

(in millions) March 31, 2022 December 31, 2021 March 31, 2022 March 31, 2021

Net sales $ 753.6 $ 659.1 $ 753.6 $ 444.0

Net sales (excluding alumina sales) increased by $100.7 million for the three months ended March 31, 2022, compared to the three months ended December 31, 2021, primarily driven by favorable volume and sales mix of $64.7 million as well as favorable LME price realizations of $36.8 million.

Net sales (excluding alumina sales) increased by $315.9 million for the three months ended March 31, 2022, compared to the same period in 2021, primarily driven by favorable LME and regional premium price realizations of $246.0 million as well as favorable volume and sales mix of $69.9 million.

Quarter ended

Three months ended

(in millions) March 31, 2022 December 31, 2021 March 31, 2022 March 31, 2021

Gross profit (loss) $ 93.2 $ 69.4 $ 93.2 $ (20.7)

Gross profit increased by $23.8 million for the three months ended March 31, 2022, compared to the three months ended December 31, 2021, primarily driven by favorable LME and regional premium price realizations of $36.0 million as well as favorable volume and sales mix of $33.1 million, partially offset by unfavorable raw material price realizations of $43.7 million, and increased operating costs.

Gross profit increased by $113.9 million for the three months ended March 31, 2022, compared to the same period in 2021, primarily driven by favorable LME and regional premium price realizations of $246.0 million and favorable volume and sales mix impacts of $14.2 million, partially offset by unfavorable raw material price realizations of $81.3 million, unfavorable power price realizations of $63.2 million, and increased operating costs.

Quarter ended

Three months ended

(in millions) March 31, 2022 December 31, 2021 March 31, 2022 March 31, 2021

Selling, general and administrative expenses $ 11.7 $ 18.6 $ 11.7 $ 16.1

Selling, general and administrative expenses decreased by $6.9 million for the three months ended March 31, 2022 compared to the three months ended December 31, 2021, primarily driven by a reduction in share-based compensation costs following retirements and other departures amongst our executive team during the current period.

Selling, general and administrative expenses decreased by $4.4 million for the three months ended March 31, 2022 compared to the same period in 2021, primarily driven by a reduction in share-based compensation costs following retirements and other departures amongst our executive team during the current period.

Quarter ended

Three months ended

(in millions) March 31, 2022 December 31, 2021 March 31, 2022 March 31, 2021

Net gain (loss) on forward and derivative contracts $ (56.7) $ 26.8 $ (56.7) $ (98.1)

Net gain (loss) on forward and derivative contracts decreased by $83.5 million from a gain of $26.8 million for the three months ended December 31, 2021 to a loss of $56.7 million for the three months ended March 31, 2022, primarily driven by increases in LME and MWP forward prices, partially offset by gains on Nord Pool derivative contracts due to Nord Pool power price increases.

For the three months ended March 31, 2022, net loss on forward and derivative contracts decreased by $41.4 million compared to the same period in 2021 primarily due to a decrease in total volume hedged as well as gains on Nord Pool derivative contracts due to Nord Pool power price increases.

Derivatives to the consolidated financial statements included herein for additional information.

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

Three months ended September 30, $ (6.8) $ (0.3)

Nine months ended September 30, $ 43.8 $ 1.6

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 a discrete tax benefit of $49.8 million in the second quarter tax provision related to the recognition of certain foreign deferred tax assets.

The deferred tax asset represents the future tax benefit we expect to realize for deductible costs related to our historical investment in Nordural Helguvik ehf (“Helguvik”).

During the period, it became apparent this deferred tax asset would be realized in the foreseeable future.

As this deferred tax asset is expected to be realized prior to expiration, we have not recorded a valuation allowance.

Quarter ended

Three months ended

(in millions) March 31, 2022 December 31, 2021 March 31, 2022 March 31, 2021

Income tax benefit (expense) $ (1.7) $ (13.2) $ (1.7) $ 2.3

For the three months ended March 31, 2022, income tax expense decreased by $11.5 million compared to the three months ended December 31, 2021, primarily driven by net losses from our consolidated U.S.

results, which were driven by net loss on forward and derivative contracts recognized during the current quarter.

We recognized a $1.7 million income tax expense for the three months ended March 31, 2022 as compared to income tax benefit of $2.3 million in the same period in 2021 primarily driven by improved operational results from both U.S.

and foreign operations during the current quarter .

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

1 unchanged sentence

Our principal sources of liquidity are available cash and cash flow from operations.

We also have access to our existing revolving credit facilities and have raised capital in the past through public equity and debt markets.

We also have access to our existing U.S.

and Iceland revolving credit facilities (collectively, the "revolving credit facilities") and have raised capital in the past through public equity and debt markets.

We regularly explore various other financing alternatives.

1 unchanged sentence

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 September 30, 2021, we had cash and cash equivalents of approximately $57.6 million and unused availability under our revolving credit facilities of $69.2 million, resulting in a total liquidity position of approximately $126.8 million.

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 the 2025 Notes.

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 proceeds from the issuance of the Convertible Notes were 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.

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 the Convertible Notes.

As of March 31, 2022, we had cash and cash equivalents of approximately $26.6 million and unused availability under our revolving credit facilities of $127.7 million, resulting in a total liquidity position of approximately $154.3 million.

Available Cash

Our available cash and cash equivalents balance at September 30, 2021, was $57.6 million compared to $81.6 million at December 31, 2020.

Our available cash and cash equivalents balance at March 31, 2022 was $26.6 million compared to $29.0 million at December 31, 2021.

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)

Net cash provided by (used in) operating activities $ 37.4 $ (49.8)

Net cash provided by (used in) investing activities (45.7) (11.4)

Net cash used in investing activities (26.0) (7.4)

Net cash provided by (used in) financing activities (3.9) 0.4

Change in cash, cash equivalents and restricted cash $ 7.5 $ (56.8)

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 nine months ended September 30, 2021, driven by capital investments in the Mt.

Holly restart project.

The increase in net cash provided by financing activities was primarily due to increased borrowings on the revolving credit facilities and issuance of the Convertible Notes.

The change from net cash used in operating activities during the three months ended March 31, 2021 to net cash provided by operating activities during the three months ended March 31, 2022 was primarily driven by net income during the current quarter, partially offset by changes in working capital.

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

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, 2022, driven by capital investments in the Mt.

Holly restart project and the Grundartangi casthouse project.

The change from net cash provided by financing activities to net cash used in financing activities was primarily due to increased repayments on the revolving credit facilities.

Availability Under Our Credit Facilities

revolving credit facility, dated May 2018, as amended, provides for borrowings of up to $175.0 million in the aggregate including up to $110.0 million under a letter of credit sub-facility, and also includes an uncommitted accordion feature whereby borrowers may increase the capacity of the U.S.

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

revolving credit facility, dated May 2018 (as amended, the "U.S.

revolving credit facility"), provides for borrowings of up to $220.0 million in the aggregate including up to $110.0 million under a letter of credit sub-facility.

revolving credit facility matures in May 2023.

2 unchanged sentences

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").

On February 4, 2022, we further amended this Iceland revolving credit facility and increased the facility amount to $80.0 million in the aggregate.

The Iceland revolving credit facility matures in November 2024.

On November 2, 2021, Grundartangi entered into an eight-year Term Facility Agreement with Arion Bank hf, to provide for borrowings up to $130 million in connection with the casthouse project at Grundartangi (the “Casthouse Facility”).

Under the Casthouse Facility, repayments of principal amounts will be made in equal quarterly installments, the first payment occurring 30 months after the first drawdown by Grundartangi.

The availability of funds under our credit facilities is limited by a specified borrowing base consisting of certain accounts receivable, inventory and qualified cash deposits which meet the lenders' eligibility criteria.

1 unchanged sentence

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 September 30, 2021, our U.S.

As of March 31, 2022, our U.S.

revolving credit facility had a borrowing base of $220.0 million, $35.3 million in borrowings and $102.1 million in letters of credit outstanding.

Of the outstanding letters of credit, $12.3 million are related to our power commitments, $71.2 million are related to hedging collateral, and the remainder are primarily for the purpose of securing certain debt and workers’ compensation commitments.

As of September 30, 2021, our Iceland revolving credit facility had a borrowing base of $50.0 million and $30.0 million in outstanding borrowings.

As of September 30, 2021, our credit facilities had $69.2 million of net availability after consideration of our outstanding borrowings and letters of credit.

As of March 31, 2022, our Iceland revolving credit facility had a borrowing base of $80.0 million and $35.0 million in outstanding borrowings.

As of March 31, 2022, our credit facilities had $127.7 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 in the U.S.

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, 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 on which availability under the U.S.

revolving credit facility is less than or equal to $22.0 million, or 10% of the borrowing base but not less than $12.5 million.

1 unchanged sentence

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

As of September 30, 2021, we were in compliance with all such covenants or maintained availability above such covenant triggers.

As of March 31, 2022, we were in compliance with all such covenants or maintained availability above such covenant triggers.

Grundartangi Casthouse Facility

Under the Casthouse Facility, repayments of principal amounts will be made in equal quarterly installments equal to 1.739% of the principal amount, the first payment occurring in July 2024, with the remaining 60% of the principal amount to be paid no later than the termination date.

The Casthouse Facility shall mature in December 2029.

The Casthouse Facility bears interest at a rate equal to USD LIBOR 3 month plus an applicable margin.

As of March 31, 2022 there were $40.0 million in borrowings outstanding under the Casthouse Facility.

The Casthouse Facility also contains customary covenants, including restrictions on mergers and acquisitions, indebtedness, preservation of assets, and dispositions of assets and contains a covenant that requires Grundartangi to maintain a minimum equity ratio.

As of March 31, 2022, we were in compliance with all such covenants.

Senior Notes and Convertible Senior Notes

On April 14, 2021, we issued $250.0 million principal of senior secured notes that will mature on April 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.

In April 2021, we issued $250.0 million principal of senior secured notes that will mature on April 1, 2028 (the "2028 Notes"), 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, 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.

On April 9, 2021, we issued $86.3 million in aggregate principal amount of Convertible Notes, unless earlier converted, repurchased or redeemed.

In April 2021, we issued $86.3 million in aggregate principal amount of Convertible Notes (the "Convertible Notes"), that will mature on May 1, 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 Convertible m 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”).

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 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 September 30, 2021, the outstanding balance of the Hawesville Term Loan was $5.0 million.

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

Supplemental Guarantor Financial Information

The Company has filed a Registration Statement on Form S-3 (the "Universal Shelf Registration Statement") with the SEC 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 September 30, 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.

As of March 31, 2022, we have not issued any debt securities pursuant to the Universal Shelf Registration Statement.

However, any 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.

7 unchanged sentences

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

September 30, 2021 December 31, 2020

March 31, 2022 December 31, 2021

Current assets $ 455.9 $ 395.3

2 unchanged sentences

Non-current liabilities 550.4 556.1

Nine months ended September 30, 2021

Three Months Ended

March 31, 2022

Net sales $ 506.1

2 unchanged sentences

Net income (loss) 17.7

As of September 30, 2021 and December 31, 2020, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $16.9 million and $14.6 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $540.2 million and $554.9 million, respectively.

As of March 31, 2022 and December 31, 2021, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $10.2 million and $15.1 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $485.0 million and $544.2 million, respectively.

Contingent Commitments

We have a contingent obligation in connection with the "unwind" of a contractual arrangement between Century Aluminum of Kentucky ("CAKY"), Big Rivers Electric Corporation and a third party and the execution of a long-term cost-based power contract with Kenergy, a member of a cooperative of Big Rivers in July 2009.

We have a contingent obligation in connection with the "unwind" of a contractual arrangement between Century Aluminum of Kentucky ("CAKY"), Big Rivers Electric Corporation and a third party and the execution in July 2009 of a long-term cost-based power contract with Kenergy, a member of a cooperative of Big Rivers.

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, 2021, the principal and accrued interest for the contingent obligation was $27.7 million, which was fully offset by a derivative asset.

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

As of March 31, 2022, the principal and accrued interest for the contingent obligation was $28.4 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, 2021 and current level of Hawesville's operations, we do not believe it is likely that we will be required to make payments on the contingent obligation during the term of the agreement, which expires in 2028.

As of March 31, 2022, the LME forward market prices exceeded the threshold for payment, however, based on the current level of Hawesville's operations, 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.

Employee Benefit Plan Contributions

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

Pursuant to the terms of the PBGC Settlement 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 were able to defer one or more of these payments, provided that we provide the PBGC with acceptable security for such deferred payments.

We did not make any contributions for the three or nine month periods ended September 30, 2021, and 2020.

We historically elected to defer certain payments under the PBGC Settlement Agreement and provided the PBGC with the appropri ate security.

On October 1, 2021, we amended the PBGC Settlement Agreement such that we removed the deferral mechanism and agreed to contribute approximately $2.4 million per year to our defined benefit pension plans for a total of approximately $9.6 million, over the next four years beginning on November 30, 2022 and ending on November 30, 2025, subject to acceleration if certain terms and conditions are met in such amendment.

We did not make any contributions for the three months ended March 31, 2022, and 2021.

We historically elected to defer certain payments under the PBGC Settlement Agreement and provided the PBGC with the appropriate security.

In October 2021, we amended the PBGC Settlement Agreement such that we removed the deferral mechanism and agreed to contribute approximately $2.4 million per year to our defined benefit pension plans for a total of approximately $9.6 million, over the next four years beginning on November 30, 2022 and ending on November 30, 2025, subject to acceleration if certain terms and conditions are met in such amendment.

Section 232 Aluminum Tariff

2 unchanged sentences

These tariffs are intended to protect U.S.

national security by incentivizing the restart of primary aluminum production in the U.S., reducing reliance on imports and ensuring that domestic producers, like Century, can supply all the aluminum necessary for critical industries and national defense.

national security and incentivize the restart of primary aluminum production in the U.S., reducing reliance on imports and ensuring that domestic producers, like Century, can supply all the aluminum necessary for critical industries and national defense.

In addition to primary aluminum products, the tariffs also cover certain other semi-finished products.

All imports that directly compete with our products are covered by the tariff, with the exception of imports from Australia, Argentina, Canada and Mexico and imports from the European Union up to a quota limit of 18,000 metric tonnes or imports that receive a product exclusion from the Department of Commerce.

In March 2018, we announced our intention to return our Hawesville smelter, which since 2015 had been operating at approximately 40% capacity, to full production and upgrade its existing reduction technology.

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 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, and 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, the process of returning to our planned operating level of 80% of capacity began in the second quarter of 2021 and continues to progress.

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 .

Our power contract with Santee Cooper for the Mt.

Holly smelter began on 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.

All imports that directly compete with our products are covered by the tariff, with the exception of imports from Australia, Canada and Mexico.

Additionally, primary aluminum imports from Argentina are allowed up to an annual quota limit of 169,000 metric tonnes, the first 18,000 metric tonnes of imports from the European Union and the first 900 metric tonnes of imports from the United Kingdom are also allowed duty free.

Imports that receive a product exclusion from the Department of Commerce may also enter the US duty free.

We implemented a multi-year project that began in 2018 to restart Hawesville's previously curtailed capacity and return the plant to a production level of approximately 200,000 MT per annum (80% of capacity).

We finished these efforts in late 2021 and are producing at approximately 80% of Hawesville’s capacity.

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

During 2021, we initiated efforts to restart the curtailed capacity at our Mt.

Holly facility, resulting in total production of 75% of Mt.

Holly’s full capacity once the restart project is completed.

Restart work at the Mt.

Holly smelter is progressing on schedule and is expected to be completed in the fourth quarter of 2021.

Holly smelter is progressing and is expected to be completed in the second quarter of 2022, subject to market conditions.

During 2021, we announced plans for construction of a new billet casthouse at Grundartangi.

The Grundartangi casthouse project began in late 2021 and is expected to continue through the second half of 2023.

The Grundartangi casthouse project will be fully funded through the Casthouse Facility.

The project is progressing and is expected to be completed on-time, subject to market conditions.

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.

2 unchanged sentences

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

As of September 30, 2021, we had $43.7 million remaining under the repurchase program authorization.

As of March 31, 2022, 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.

1 unchanged sentence

("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, 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.

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, 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, 2021, we had $2.0 million in other current liabilities and $6.0 million in other liabilities related to this agreement.

At March 31, 2022, we had $2.0 million in other current liabilities and $6.3 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, 2021 were $12.9 million, excluding expenditures of $38.9 million associated with the restart project at Mt.

Capital expenditures incurred for the three months ended March 31, 2022 were $5.4 million, excluding expenditures of $10.2 million associated with the restart project at Mt.

Holly and $3.3 million associated with the Grundartangi casthouse project.

We estimate our total capital spending in 2022, excluding the Mt.

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

Holly restart project and the Grundartangi casthouse project, will be approximately $40.0 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