What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-07 compared with 2022-08-09 · 83 added, 75 removed, 199 unchanged (44% of the section changed)

3 unchanged sentences

We are a global producer of primary aluminum with aluminum reduction facilities, or "smelters," in the United States and Iceland.

The key determinants of our results of operations and cash flow from operations are as follows:

The key determinants of our results of operations and cash flows from operations are as follows:

• the price of primary aluminum, which is based on the London Metal Exchange ("LME") and other exchanges, plus any regional premiums and value-added product premiums;

3 unchanged sentences

Hawesville temporary curtailment

On June 22, 2022, we announced that we would temporarily idle our Hawesville smelter, as a direct result of historically high energy costs and declining LME prices.

On June 22, 2022, we announced that we would temporarily idle all of our production capacity at our Hawesville smelter, as a direct result of historically high energy costs and declining LME prices.

As part of this action, we issued a notice to most of the employees at the facility pursuant to the Worker Adjustment and Retraining Notification (“WARN”) Act regarding our intentions to temporarily curtail Hawesville plant operations by no later than August 20, 2022.

We have since fully curtailed production at the facility and expect to continue to maintain the plant with the intention of restarting operations when market conditions permit, including energy prices returning to more normalized levels and aluminum prices maintaining levels that can support the on-going costs and capital expenditures necessary to restart and operate the plant.

We have since fully curtailed all of our production at the facility and expect to continue to maintain the plant with the intention of restarting operations when market conditions permit, including energy prices returning to more normalized levels and aluminum prices maintaining levels that can support the on-going costs and capital expenditures necessary to restart and operate the plant.

As the curtailment represents a significant adverse change in the extent and manner in which the Hawesville smelter will be used, we accordingly evaluated the Hawesville asset group for recoverability.

As the carrying value of the Hawesville asset group was determined to not be recoverable based on the estimated undiscounted cash flows expected to be generated over the life of the asset group, an impairment charge of $159.4 million was recognized to write down the asset group to its estimated fair value.

We also recognized $8.2 million of expense during the second quarter related to accrual of payouts to employees for wages and severance, triggered by our issuance of the WARN notice.

We recognized $12.6 million of expense through the third quarter related to wages and severance triggered by our issuance of the WARN notice and excess capacity charges, partially offset by final plant idling activities.

We also recognized a non-cash OPEB curtailment gain, net totaling $8.0 million for the three and nine months ended September 30, 2022.

Components of net periodic benefit cost to the consolidated financial statements included herein for additional information.

Pricing of aluminum

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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 have seen a decline in the pricing of aluminum in the second quarter of 2022, when compared to the aluminum prices that were generally increasing throughout 2021 and during the first quarter of 2022.

The average LME price for primary aluminum was $2,882 per tonne for the second quarter of 2022, compared to $3,267 per tonne in the first quarter of 2022, $2,475 per tonne in 2021, and $1,702 per tonne in 2020.

The average MWP price was $805 per tonne for the second quarter of 2022, compared to $794 per tonne for the first quarter of 2022, $581 per tonne in 2021, and $267 per tonne in 2020.

average EDPP price was $604 per tonne for the second quarter of 2022, compared to $489 per tonne for the first quarter of 2022, $272 per tonne in 2021, and $126 per tonne in 2020.

Cyber incursion

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 quickly restored all of our information systems and rectified all impacts of the incursion.

The total financial statement impact of the cyber incursion, both with respect to costs incurred in response and impacts to production, is not material.

We have seen declines in the pricing of aluminum through the third quarter of 2022, when compared to the aluminum prices that were generally increasing throughout 2021 and during the first quarter of 2022.

The quarterly average LME price for primary aluminum was $3,267 per tonne in the first quarter of 2022, decreasing to $2,882 per tonne for the second quarter of 2022 and then to $2,354 in the third quarter of 2022 compared to annual average of $2,475 per tonne in 2021 and $1,702 per

tonne in 2020.

The quarterly average MWP price was $583 per tonne for the third quarter of 2022, compared to $805 per tonne for the second quarter of 2022, $794 per tonne for the first quarter of 2022, and to annual average of $581 per tonne in 2021 and $267 per tonne in 2020.

The quarterly average EDPP price was $501 per tonne for the third quarter of 2022, compared to $604 per tonne for the second quarter of 2022, $489 per tonne for the first quarter of 2022 and to annual average of $272 per tonne in 2021 and $126 per tonne in 2020.

Results of Operations

The following discussion for the three and six months ended June 30, 2022 reflects no change in production capacities at our operating facilities.

The following discussion for the three and nine months ended September 30, 2022 reflects no change in production capacities, other than the curtailment of the Hawesville smelter, 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.

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Our expected capacity demand costs for power are expected to be approximately $11.5 million per quarter after June 1, 2022 (notwithstanding the curtailment at Hawesville), in addition to the market price of power used .

The recent increase in energy costs have adversely affected our business, and are expected to continue to adversely affect our business over the near term until power prices return to more normalized levels and/or LME prices improve.

The recent increase in energy costs has adversely affected our business, and is expected to continue to adversely affect our business over the near term until power prices return to more normalized levels and/or LME prices improve.

Increased domestic energy costs have resulted in the curtailment of our Hawesville facility as described above.

In Europe, increased energy prices affect both our Grundartangi operations (a portion of our power is linked to the Nord Pool power market) and our Vlissengen facility in the Netherlands, which utilizes natural gas to produce anodes used in our Grundartangi operations.

In Europe, increased energy prices affect both our Grundartangi operations (a portion of our power is linked to the Nord Pool power market) and our Vlissingen facility in the Netherlands, which utilizes natural gas to produce anodes used in our Grundartangi operations.

The energy market in Europe is materially dependent upon imported natural gas from Russia, and the threat of Russia further reducing or terminating natural gas supply to Europe creates uncertainty with respect to the price and availability of natural gas, which could adversely affect operations at Vlissingen, and in turn operations at Grundartangi, if we are not able to source an alternative supply of anodes.

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.

Quarter ended Six months ended

Quarter ended Nine months ended

Sequential Year-to-date

June 30, 2022 March 31, 2022 June 30, 2022 June 30, 2021

September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021

(in millions, except per share data)

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117,951 $ 366.6 78,144 $ 207.6 196,095 $ 574.2

(1) Excludes scrap aluminum and alumina sales.

Quarter ended Six months ended

112,792 $ 314.0 78,102 $ 180.1 190,894 $ 494.1

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

(1) Excludes scrap aluminum, purchased aluminum and alumina sales.

Quarter ended Nine months ended

Sequential Year-to-date

(in millions) June 30, 2022 March 31, 2022 June 30, 2022 June 30, 2021

(in millions) September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021

Net sales $ 637.2 $ 856.6 $ 2,247.4 $ 1,553.4

Net sales (excluding alumina sales) increased by $89.3 million for the three months ended June 30, 2022, compared to the three months ended March 31, 2022, primarily driven by favorable LME and premium price realizations of $92.9 million and favorable volume of $5.7 million, offset by unfavorable sales mix of $9.4 million.

Net sales (excluding alumina sales) increased by $638.2 million for the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily driven by favorable LME and premium price realizations of $512.0 million and favorable volume of $130.2 million.

Quarter ended Six months ended

Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) decreased by $234.0 million for the three months ended September 30, 2022, compared to the three months ended June 30, 2022, primarily driven by unfavorable LME and premium price realizations of $81.6 million and unfavorable volume of $152.2 million primarily attributable to the full curtailment of our Hawesville smelter.

Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) increased by $676.2 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily driven by favorable LME and premium price realizations of $569.3 million and favorable volume and sales mix of $106.9 million driven by the restart at our Mt.

Holly facility and higher value-added product premiums, partially offset by full the curtailment of our Hawesville smelter.

Quarter ended Nine months ended

Sequential Year-to-date

(in millions) June 30, 2022 March 31, 2022 June 30, 2022 June 30, 2021

(in millions) September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021

Gross profit (loss) $ (43.0) $ 15.9 $ 66.1 $ 54.8

Gross profit decreased by $77.4 million for the three months ended June 30, 2022, compared to the three months ended March 31, 2022, primarily driven by unfavorable raw material price realization of $69.4 million, unfavorable power price realization of $58.3 million, unfavorable sales mix of $8.4 million, and increased operating costs of $39.3 million, partially offset by favorable metal price realization of $92.9 million and favorable volume of $1.3 million.

Gross profit increased by $108.9 million for the six months ended June 30, 2022 compared to the six months ended June 30, 2021, primarily driven by favorable metal price realization of $512.0 million, favorable sales mix of $39.1 million, and favorable volume of $26.3 million, offset by unfavorable raw material price realization of $225.0 million, unfavorable power price realization of $192.0 million, and increased operating costs of $56.0 million.

Quarter ended Six months ended

Gross profit decreased by $58.9 million for the three months ended September 30, 2022, compared to the three months ended June 30, 2022, primarily driven by unfavorable metal price realization of $81.6 million, unfavorable volume mix of $44.9 million primarily attributable to the full curtailment of our Hawesville smelter, and unfavorable power price realization of $29.1 million, partially offset by decreased operating costs of $57.6 million as a result of the full curtailment of our Hawesville smelter and other cost savings from our remaining operating smelters and favorable raw material price realization of $30.3 million.

Gross profit increased by $11.3 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021, primarily driven by favorable metal price realization of $569.3 million and favorable volume and sales mix of $70.2 million driven by the restart at our Mt.

Holly facility and higher value-added product premiums, net of the $27.4 million impact of the full curtailment of our Hawesville smelter.

The change is partially offset by unfavorable raw material price realization of $298.7 million, unfavorable power price realization of $281.8 million and higher operating costs of $48.0 million.

Quarter ended Nine months ended

Sequential Year-to-date

(in millions) June 30, 2022 March 31, 2022 June 30, 2022 June 30, 2021

(in millions) September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021

Asset impairment charge $ — $ 159.4 $ 159.4 $ —

An asset impairment charge of $159.4 million was recognized in the period ended June 30, 2022 as a result of the temporary curtailment of the Hawesville facility, announced during June 2022.

An asset impairment charge of $159.4 million was recognized in the period ended September 30, 2022 as a result of the temporary curtailment of the Hawesville facility, announced during June 2022.

As the curtailment represents a significant adverse change in the extent and manner in which Hawesville will be used, we accordingly evaluated the Hawesville asset group for recoverability which resulted in the recognized impairment charge of $159.4 million.

Quarter ended Six months ended

Quarter ended Nine months ended

Sequential Year-to-date

(in millions) June 30, 2022 March 31, 2022 June 30, 2022 June 30, 2021

(in millions) September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021

Selling, general and administrative expenses $ 8.7 $ 5.8 $ 26.2 $ 39.0

Selling, general and administrative expenses decreased by $5.9 million for the three months ended June 30, 2022, compared to the three months ended March 31, 2022, primarily driven by a reduction in share-based compensation costs resulting from the reduction the Company's stock price quarter over quarter.

Selling, general and administrative expenses decreased by $7.3 million for the six months ended June 30, 2022, compared to the six months ended June 30, 2021, primarily driven by a reduction in share-based compensation costs during 2022 resulting from the reduction the Company's stock price quarter over quarter.

Quarter ended Six months ended

Selling, general and administrative expenses increased by $2.9 million for the three months ended September 30, 2022, compared to the three months ended June 30, 2022, primarily driven by share-based compensation costs as a result of quarter over quarter changes in the Company's stock price.

Selling, general and administrative expenses decreased by $12.8 million for the nine months ended September 30, 2022, compared to the nine months ended September 30, 2021, primarily driven by a reduction in share-based compensation costs during 2022 resulting from the reduction in the Company's stock price year over year.

Quarter ended Nine months ended

Sequential Year-to-date

(in millions) June 30, 2022 March 31, 2022 June 30, 2022 June 30, 2021

(in millions) September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021

Net gain (loss) on forward and derivative contracts $ 112.6 $ 231.8 $ 287.7 $ (239.2)

Net gain (loss) on forward and derivative contracts increased by $288.5 million from a loss of $56.7 million for the three months ended March 31, 2022 to a gain of $231.8 million for the three months ended June 30, 2022, primarily driven by decreases in LME and MWP forward prices, and increased gains on Nord Pool derivative contracts due to Nord Pool power forward price increases.

Net gain (loss) on forward and derivative contracts increased by $337.6 million from a loss of $162.5 million for the six months ended June 30, 2021 to a gain of $175.1 million for the six months ended June 30, 2022, primarily driven by decreases in LME and MWP forward prices, and increased gains on Nord Pool derivative contracts due to Nord Pool power forward price increases.

Quarter ended Six months ended

For the three months ended September 30, 2022, net gain (loss) on forward and derivative contracts decreased by $119.2 million primarily driven by smaller quarter over quarter decreases in LME, MWP, and Nord Pool forward prices as compared to prior quarter over quarter changes in forward prices.

Net gain (loss) on forward and derivative contracts improved by $526.9 million from a loss of $239.2 million for the nine months ended September 30, 2021 to a gain of $287.7 million for the nine months ended September 30, 2022, primarily driven by decreases in LME and MWP forward prices, and increased gains on Nord Pool derivative contracts due to Nord Pool power forward price increases.

Quarter ended Nine months ended

Sequential Year-to-date

(in millions) June 30, 2022 March 31, 2022 June 30, 2022 June 30, 2021

(in millions) September 30, 2022 June 30, 2022 September 30, 2022 September 30, 2021

Income tax benefit (expense) $ (20.6) $ (42.3) $ (64.6) $ 43.8

For the three months ended June 30, 2022, income tax expense increased by $40.6 million compared to the three months ended March 31, 2022, primarily driven by improved operating results at Grundartangi and favorable LME price realization.

For the six months ended June 30, 2022, income tax expense increased by $94.6 million compared to the six months ended June 30, 2021, primarily driven by favorable LME price realization.

For the three months ended September 30, 2022, income tax expense decreased by $21.7 million compared to the three months ended June 30, 2022, primarily driven by higher power prices at Grundartangi and unfavorable LME price realization.

For the nine months ended September 30, 2022, income tax expense increased by $108.4 million compared to the nine months ended September 30, 2021, primarily driven by favorable LME price realization.

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

Liquidity and Capital Resources

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

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

We also have access to our existing U.S.

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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 June 30, 2022, we had cash and cash equivalents of approximately $30.0 million and unused availability under our revolving credit facilities of $195.6 million, resulting in a total liquidity position of approximately $225.6 million.

As of September 30, 2022, we had cash and cash equivalents of approximately $64.8 million and unused availability under our revolving credit facilities of $136.9 million and Iceland Term Facility of €13.6 million, resulting in a total liquidity position of approximately $215.1 million.

Available Cash

Our available cash and cash equivalents balance at June 30, 2022 was $30.0 million compared to $29.0 million at December 31, 2021.

Our available cash and cash equivalents balance at September 30, 2022 was $64.8 million compared to $29.0 million at December 31, 2021.

Sources and Uses of Cash

Our statements of cash flows are summarized below:

Six months ended June 30,

Nine Months Ended September 30,

(in millions)

1 unchanged sentence

Net cash used in investing activities (70.1) (45.7)

Net cash provided by (used in) financing activities (25.1) 39.7

Net cash provided by financing activities 38.2 42.4

Change in cash, cash equivalents and restricted cash $ 25.3 $ (15.4)

The change from net cash used in operating activities during the six months ended June 30, 2021 to net cash provided by operating activities during the six months ended June 30, 2022 was primarily driven by net income during the first half of 2022, partially offset by changes in working capital.

The change from net cash used in operating activities during the nine months ended September 30, 2021 to net cash provided by operating activities during the nine months ended September 30, 2022 was primarily driven by net income during the first three quarters, 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 six months ended June 30, 2022, driven by capital investments in the Mt.

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, 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.

The change in net cash provided by financing activities was primarily due to borrowings under the Grundartangi casthouse debt facility in 2022 as compared to net borrowing on our revolving credit facilities in 2021.

Availability Under Our Credit Facilities

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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.

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

September 28, 2022, we further amended the Iceland revolving credit facility and increased the facility amount to $100.0 million in the aggregate.

The Iceland revolving credit facility matures in November 2024.

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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.

We are still evaluating the impact of the Hawesville curtailment on the borrowing base.

As of June 30, 2022, our U.S.

As of September 30, 2022, our U.S.

revolving credit facility had a borrowing base of $190.3 million, $63.5 million in borrowings and $39.9 million in letters of credit outstanding.

Of the outstanding letters of credit, $49.1 million are related to our power commitments, $15.4 million are related to hedging collateral, and the remainder

are primarily for the purpose of securing certain debt and workers’ compensation commitments.

As of June 30, 2022, our Iceland revolving credit facility had a borrowing base of $80.0 million and $35.0 million in outstanding borrowings.

As of June 30, 2022, our credit facilities had $195.6 million of net availability after consideration of our outstanding borrowings and letters of credit.

Of the outstanding letters of credit, $26.6 million are related to our power commitments and $13.3 million are primarily for the purpose of securing certain debt and workers’ compensation commitments.

As of September 30, 2022, our Iceland revolving credit facility had a borrowing base of $100.0 million and $50.0 million in outstanding borrowings.

As of September 30, 2022, our credit facilities had $136.9 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.

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

As of June 30, 2022, we were in compliance with all such covenants or maintained availability above such covenant triggers.

As of September 30, 2022, we were in compliance with all such covenants or maintained availability above such covenant triggers.

Grundartangi Casthouse Facility

3 unchanged sentences

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

As of June 30, 2022 there were $40.0 million in borrowings outstanding under the Casthouse Facility.

As of September 30, 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 June 30, 2022, we were in compliance with all such covenants.

As of September 30, 2022, we were in compliance with all such covenants.

Senior Notes and Convertible Senior Notes

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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.

Iceland Term Facility

Our wholly-owned subsidiary, Grundartangi, has entered into a Term Facility Agreement with Arion Bank hf, dated September 2022, (the "Iceland Term Facility") to provide for borrowings up to €13.6 million.

Under the Iceland Term Facility,

repayments of principal amounts will be made in equal monthly installments, the first payment occurring in February 2023, with the remainder of the principal amount to be paid no later than the termination date in January 2024.

Borrowings under the Iceland Term Facility will bear interest at a rate equal to 3.2% plus EUR EURIBOR 1 month as published at any time by the European Money Markets Institute.

As of September 30, 2022, there were no outstanding borrowings under the Iceland Term Facility.

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 June 30, 2022, we have not issued any debt securities pursuant to the Universal Shelf Registration Statement.

As of September 30, 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.

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Current assets $ 300.7 $ 395.3

2 unchanged sentences

Non-current liabilities 491.6 556.1

Six months ended June 30, 2022

Nine Months Ended September 30, 2022

Net sales $ 1,443.0

2 unchanged sentences

Net income (loss) 99.4

As of June 30, 2022 and December 31, 2021, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $14.2 million and $15.1 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $488.6 million and $544.2 million, respectively.

As of September 30, 2022 and December 31, 2021, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $ 6.4 million and $15.1 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $ 498.6 million and $544.2 million, respectively.

Contingent Commitments

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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 June 30, 2022, the principal and accrued interest for the contingent obligation was $28.8 million, which was fully offset by a derivative asset.

As of September 30, 2022, the principal and accrued interest for the contingent obligation was $29.1 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.

As of June 30, 2022, based on the LME forward market prices and our expected level of Hawesville 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.

As of September 30, 2022, based on the LME forward market prices and our expected level of Hawesville 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 facility (the "PBGC Settlement Agreement").

In 2013, we entered into a settlement agreement with the Pension Benefit Guaranty Corporation (the "PBGC") regarding an alleged "cessation of operations" at our Ravenswood facility (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 months ended June 30, 2022, and 2021.

We did not make any contributions for the three months ended September 30, 2022, and 2021.

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

23 unchanged sentences

We made no repurchases during the years ended 2019, 2020, and 2021.

As of June 30, 2022, we had $43.7 million remaining under the repurchase program authorization.

As of September 30, 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.

4 unchanged sentences

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 June 30, 2022, we had $2.0 million in other current liabilities and $6.5 million in other liabilities related to this agreement.

At September 30, 2022, we had $2.0 million in other current liabilities and $4.7 million in other liabilities related to this agreement.

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

While it is impossible to predict the ultimate disposition of any litigation, we do not believe that any of these lawsuits, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or liquidity.

See Note 1 1 .

Commitments and Contingencies to the consolidated financial statements included herein for additional information.

Capital Resources

We intend to finance our future capital expenditures from available cash, cash flow from operations and if necessary, borrowing under our existing revolving credit facilities.

We intend to finance our future capital expenditures from available cash, cash flows from operations and if necessary, borrowing under our existing revolving credit facilities.

For major investment projects we would likely seek financing from various capital and loan markets and may potentially pursue the formation of strategic alliances.

We may be unable, however, to issue additional debt or equity securities, or enter into other financing arrangements on attractive terms, or at all, due to a number of factors including a lack of demand, unfavorable pricing, poor economic conditions, unfavorable interest rates, or our

financial condition or credit rating at the time.

Future uncertainty in the U.S.

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 six months ended June 30, 2022 were $11.5 million, excluding expenditures of $15.8 million associated with the restart project at Mt.

Capital expenditures incurred for the nine months ended September 30, 2022 were $14.6 million, excluding expenditures of $16.2 million associated with the restart project at Mt.

Holly and $28.5 million associated with the Grundartangi casthouse project.

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

Holly restart project and the Grundartangi casthouse project, will be approximately $30.0 million related to our ongoing investment and sustainability projects at our plants.

Holly restart project and the Grundartangi casthouse project, will be approximately $25.0 to $30.0 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