What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-09 compared with 2023-05-09 · 119 added, 89 removed, 199 unchanged (51% of the section changed)

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

In addition to our primary aluminum assets, we have a 55% joint venture interest in the Jamalco bauxite mining operation and alumina refinery in Jamaica.

The Jamalco refinery will supply a substantial amount of the alumina used for the production of primary aluminum at our Grundartangi, Iceland facility.

We also own a carbon anode production facility located in the Netherlands.

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;

• the cost of goods sold, the principal components of which are electrical power, alumina, carbon products and labor, which in aggregate represent more than 87% of our cost of goods sold;

• the cost of goods sold, the principal components of which are electrical power, alumina, carbon products, caustic soda, natural gas, heavy fuel oil and labor, which in aggregate represent more than 81% of our cost of goods sold;

• our production volume and product mix.

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In August 2022 we fully curtailed production at the Hawesville 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.

In the first quarter of 2023, we incurred curtailment charges of approximately $7.0 million, including $5.4 million related to excess capacity charges, partially offset by $0.7 million of income related to scrap and materials sales, which are reported in Other operating expense - net, in the Consolidated Statements of Operations.

For the three and six months ended June 30, 2023, we incurred curtailment charges of approximately $4.4 million and $11.4 million, including $3.6 million and $9.0 million related to excess capacity charges, respectively.

These charges were partially offset by income related to scrap and materials sales of $0.5 million and $1.2 million for the three and six months ended June 30, 2023.

Comparatively, for the three and six months ended June 30, 2022 we recognized $8.2 million of expenses related to accrued wages and severance, triggered by our issuance of the WARN notice.

Acquisition of 55% interest in Jamalco

On May 2, 2023, the Company's wholly-owned subsidiary, Century Aluminum Jamaica Holdings, Inc., acquired for $1.00 a 55% interest in Jamalco, an unincorporated joint venture with Clarendon Alumina Production Limited ("CAP"), which is owned by the Government of Jamaica.

On May 2, 2023, our wholly-owned subsidiary, Century Aluminum Jamaica Holdings, Inc., acquired for $1.00 a 55% interest in Jamalco, an unincorporated joint venture with Clarendon Alumina Production Limited ("CAP"), which is owned by the Government of Jamaica.

Jamalco is engaged in bauxite mining and alumina refining in Jamaica.

The Company's newly acquired, wholly-owned subsidiary, General Alumina Jamaica Limited, is the manager of the Jamalco joint venture.

Jamalco has alumina production capacity of approximately 1.4 million tons.

Jamalco's operations will be consolidated with Century Aluminum Company in accordance with generally accepted accounting principles in the United States ("U.S.

GAAP"), with CAP's interest in Jamalco reflected as noncontrolling interest.

We anticipate making additional investments in Jamalco to fund Century's proportionate share of capital expenditures.

Jamalco has alumina production capacity of approximately 1.4 million tonnes.

Our historical financial statements for periods prior to May 2, 2023 do not include the results of Jamalco.

Refer to Note 2.

Acquisition of Jamalco for further information.

Pricing of aluminum

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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, 2022.

We saw declines in the pricing of aluminum through the first quarter of 2023, when compared to the aluminum prices that were increasing throughout 2021 and peaked during the first quarter of 2022.

The average LME price for primary aluminum was $2,399 per tonne in the first quarter of 2023 compared to $3,267 per tonne in 2022, and $2,475 per tonne in 2021.

The quarterly average MWP price was $618 per tonne for the first quarter of 2023, compared to $794 per tonne in 2022, and $581 per tonne in 2021.

The quarterly average EDPP price was $302 per tonne for the first quarter of 2023, compared to $489 per tonne in 2022, and $272 per tonne in 2021.

We saw declines in the pricing of aluminum through the second quarter of 2023, when compared to the aluminum prices which peaked during the first quarter of 2022 and began declining during the second quarter of 2022.

The following table summarizes the average price for primary aluminum per tonne in second quarter of 2023, the first quarter of 2023, and the second quarter of 2022.

Quarter ended Six months ended

($ per tonne) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Average LME $ 2,263 $ 2,399 $ 2,331 $ 3,075

Average MWP $ 548 $ 618 $ 582 $ 799

Average EDPP $ 325 $ 302 $ 314 $ 547

Results of Operations

The following discussion for the three months ended March 31, 2023 reflects no change in production capacities, other than the curtailment of the Hawesville smelter, at our operating facilities.

The following discussion for the three and six months ended June 30, 2023 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.

In general, our results reflect the LME and regional premium pricing on an approximately one to three month lag basis reflecting contractual terms with our customers.

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

Electrical power, alumina, carbon products, caustic soda, natural gas, heavy fuel oil 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.

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

Our expected capacity demand costs for power are approximately $11.5 million per quarter through May 31, 2023 (notwithstanding the curtailment at Hawesville), in addition to the market price of power used.

The price of capacity per quarter after June 1, 2023 is expected to be announced during the second quarter.

This year's auction saw capacity prices return towards normalized levels and will reduce our capacity costs significantly from prior year.

Our expected capacity demand costs for power are approximately $1.5 million for the twelve months ending May 31, 2024, in addition to the market price of power used.

The increase in energy costs had adversely affected our business in 2022, and resulted in the curtailment of our Hawesville facility as described above.

So far in 2023, energy prices in the U.S.

have reverted to historical levels, while Europe remains elevated.

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.

and Europe have reverted to historical levels.

In Europe, 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 has historically been dependent upon imported natural gas from Russia, and the significant reduction in Russian 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 Three months ended

Quarter ended Six months ended

Sequential Year-to-date

March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022

June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

(in millions, except per share data)

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Gross profit 15.9 48.1 64.0 109.1

Net (loss) income (38.6) (113.5) (38.6) 17.7

(LOSS) INCOME PER COMMON SHARE:

Net income (loss) 6.6 (38.6) (32.0) 55.1

Net loss attributable to noncontrolling interests (0.9) — (0.9) —

Net income (loss) attributable to Century stockholders 7.5 (38.6) (31.1) 55.1

INCOME (LOSS) ATTRIBUTABLE TO CENTURY STOCKHOLDERS PER COMMON SHARE:

Basic $ 0.1 $ (0.42) $ (0.34) $ 0.57

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139,630 $ 564.8 74,454 $ 273.2 214,084 $ 838.0

134,953 494.8 76,458 247.5 211,411 742.3

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

Quarter ended Three months ended

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022

(in millions) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Net sales $ 575.5 $ 552.4 $ 1,127.9 $ 1,610.2

Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) increased by $23.2 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by favorable volume and sales mix of $20.7 million and favorable LME and premium price realizations of $3.5 million.

Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) decreased by $211.8 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, primarily driven by unfavorable volume and sales mix of $122.6 million, which was driven by the curtailment of our Hawesville smelter, and unfavorable LME and premium price realizations of $89.1 million

Quarter ended Three months ended

Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) decreased by $20.3 million for the three months ended June 30, 2023, compared to the three months ended March 31, 2023, primarily driven by unfavorable volume and sales mix of $23.3 million, partially offset by favorable LME and regional premium price realizations of $3.0 million.

Net sales (excluding scrap aluminum, purchased aluminum and alumina sales) decreased by $539.7 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily driven by unfavorable volume and sales mix of $294.0 million, which was driven by the curtailment of our Hawesville smelter, and unfavorable LME and regional premium price realizations of $245.7 million.

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022

Gross profit (loss) $ 48.1 $ (19.4) $ 48.1 $ 93.2

Gross profit increased by $67.5 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by favorable power price realization of $38.6 million, favorable raw material price realization of $20.5 million, and favorable metal price realization of $3.5 million, offset partially by unfavorable volume and sales mix of $8.6 million.

Gross profit decreased by $45.1 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022, primarily driven by unfavorable metal price realization of $89.1 million and unfavorable volume and sales mix of $51.5 million, driven by curtailment of our Hawesville smelter.

The change is partially offset by lower operating costs of $38.4 million, favorable power price realization of $36.9 million, and favorable raw material price realization of $10.8 million.

(in millions) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Gross profit $ 15.9 $ 48.1 $ 64.0 $ 109.1

Gross profit decreased by $32.2 million for the three months ended June 30, 2023, compared to the three months ended March 31, 2023, primarily driven by unfavorable raw material price realization of $33.8 million, unfavorable volume and sales mix of $4.4 million and higher operating costs of $9.0 million.

The change is partially offset by favorable power price realization of $17.0 million, and favorable metal price realization of $3.2 million.

Gross profit decreased by $45.1 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily driven by unfavorable metal price realization of $245.8 million and unfavorable volume and sales mix of $107.1 million, driven by curtailment of our Hawesville smelter.

The change is partially offset by favorable power price realization of $120.1 million, lower operating costs of $108.5 million, and favorable raw material price realization of $65.5 million.

Asset impairment charge

Quarter ended Six months ended

Sequential Year-to-date

(in millions) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Asset impairment charge $ — $ — $ — $ 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.

As the curtailment represented 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.

Selling, general and administrative expenses

Quarter ended Three months ended

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022

(in millions) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Selling, general and administrative expenses $ 12.0 $ 13.4 $ 25.4 $ 17.5

Selling, general and administrative expenses increased by $2.1 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by share-based compensation costs as a result of quarter over quarter changes in the Company's stock price and incentive payout during the quarter.

Selling, general and administrative expenses increased by $1.7 million for the three months ended March 31, 2023, compared to the three months ended March 31, 2022, primarily driven by incentive payout compared to 2022.

Net loss on forward and derivative contracts

Quarter ended Three months ended

Selling, general and administrative expenses decreased by $1.4 million for the three months ended June 30, 2023, compared to the three months ended March 31, 2023, primarily driven by share-based compensation costs as a result of quarter over quarter changes in the Company's stock price, partially offset by costs related to the Jamalco acquisition of $0.7 million.

Selling, general and administrative expenses increased by $7.9 million for the six months ended June 30, 2023, compared to the six months ended June 30, 2022, primarily driven by an increase in share-based compensation costs resulting from the increase of the Company's stock price between periods and costs related to the Jamalco acquisition of $1.6 million.

Net gain (loss) on forward and derivative contracts

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022

Net loss on forward and derivative contracts $ (57.6) $ (90.6) $ (57.6) $ (56.7)

Net loss on forward and derivative contracts improved by $33.0 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by decreased losses on LME and Nord Pool forward contracts, attributable to fluctuations in forward pricing and volume of contracts, and decreased losses from MWP derivative contracts, which fully settled in December 2022.

Net loss on forward and derivative contracts increased by $0.9 million for the three months ended March 31, 2023 compared to the three months ended March 31, 2022 primarily driven by increased losses on Nord Pool derivative contracts due to Nord Pool power forward price decreases, offset by improved LME forward prices and decreased losses from MWP derivative contracts, which fully settled in December 2022.

(in millions) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Net gain (loss) on forward and derivative contracts $ 9.1 $ (57.6) $ (48.5) $ 175.1

Net gain on forward and derivative contracts was $9.1 million for the three months ended June 30, 2023, an improvement of $66.7 million as compared to the three months ended March 31, 2023 The improvement was primarily driven by decreased losses on LME and Nord Pool forward contracts, attributable to fluctuations in the LME and Nord Pool forward prices and volume of contracts.

Net loss on forward and derivative contracts was $48.5 million for the six months ended June 30, 2023, a decrease of $223.6 million as compared to the six months ended June 30, 2022.

The transition from gain to loss was primarily driven by

increased losses on LME and Nord Pool derivative contracts due to LME and Nord Pool forward price decreases, offset by decreased losses from MWP derivative contracts, which fully settled in December 2022.

Income tax benefit (expense)

Quarter ended Three months ended

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2023 December 31, 2022 March 31, 2023 March 31, 2022

(in millions) June 30, 2023 March 31, 2023 June 30, 2023 June 30, 2022

Income tax benefit (expense) $ 10.0 $ 0.2 $ 10.2 $ (44.0)

Income tax benefit changed by $17.0 million for the three months ended March 31, 2023, compared to the three months ended December 31, 2022, primarily driven by net income from our consolidated U.S.

results, which was attributable to favorable sales volume and pricing.

Income tax changed from to a benefit of $0.2 million for the three months ended March 31, 2023, compared to expense of $1.7 million for the three months ended March 31, 2022, primarily driven by net losses from our foreign operations, attributable to unfavorable price realization and volume mix.

Income tax benefit increased by $9.8 million for the three months ended June 30, 2023, compared to the three months ended March 31, 2023, primarily driven by changes in the jurisdictional mix of earnings and the improvement in net gain on forward and derivative contracts between periods.

Income tax benefit was $10.2 million for the six months ended June 30, 2023, compared to an expense of $44.0 million for the six months ended June 30, 2022, primarily driven by favorable power pricing on a year-over-year basis.

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

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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 March 31, 2023, we had cash and cash equivalents of approximately $30.4 million and unused availability under our revolving credit facilities of $210.6 million (including $90.0 million under the Vlissingen Facility Agreement referred to below) resulting in a total liquidity position of approximately $241.0 million.

As of June 30, 2023, we had cash and cash equivalents of approximately $50.6 million and unused availability under our revolving credit facilities of $180.5 million (including $90.0 million under the Vlissingen Facility Agreement referred to below) resulting in a total liquidity position of approximately $231.1 million.

Available Cash

Our available cash and cash equivalents balance at March 31, 2023 was $30.4 million compared to $54.3 million at December 31, 2022.

Our available cash and cash equivalents balance at June 30, 2023 was $50.6 million compared to $54.3 million at December 31, 2022.

Sources and Uses of Cash

Our statements of cash flows are summarized below:

Three months ended March 31,

Six months ended June 30,

(in millions) 2023 2022

1 unchanged sentence

Net cash used in investing activities (17.2) (51.7)

Net cash used in financing activities (9.4) (3.9)

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

Change in cash, cash equivalents and restricted cash $ 6.0 $ (8.2)

The change from net cash provided by operating activities during the three months ended March 31, 2022 to net cash used in operating activities during the three months ended March 31, 2023 was primarily driven by net loss during the quarter attributable to lower shipments compared to 2022 attributable to the curtailment of our Hawesville smelter, pricing decreases, and timing of payables, partially offset by timing of receivables payment in 2023 compared to 2022.

The decrease in net cash used in investing activities was primarily due to reduced spending on capital projects during the three months ended March 31, 2023, driven by the completion of the Mt.

Holly restart project in 2022 and partially offset by spending on the Grundartangi casthouse project.

The change in net cash used in financing activities was primarily due to a reduction in borrowings under the Grundartangi casthouse debt facility and net repayment on our revolving credit facilities compared to 2022.

The change in net cash provided by operating activities during the six months ended June 30, 2023 compared to net cash provided by operating activities during the six months ended June 30, 2022 was primarily driven by favorable power pricing and timing of payments and receipts.

The change in net cash used in investing activities during the six months ended June 30, 2023 compared to net cash used in investing activities during the six months ended June 30, 2022 was primarily due to spending on capital projects, driven by the Grundartangi casthouse project, and partially offset by cash acquired in excess of cash paid for the acquisition of Jamalco.

The change in net cash provided by financing activities during the six months ended June 30, 2023 from net cash used in financing activities during the six months ended June 30, 2022 was primarily due to net borrowings on our revolving credit

facilities, partially offset by a reduction in borrowings on the Grundartangi casthouse facility and repayments of the Iceland Term Facility compared to 2022.

Availability Under Our Credit Facilities

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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.

As of March 31, 2023, our U.S.

revolving credit facility had a borrowing base of $169.8 million, $63.1 million in borrowings and $41.1 million in letters of credit outstanding with total availability of $65.6 million.

As of June 30, 2023, our U.S.

revolving credit facility had a borrowing availability of $160.0 million, outstanding borrowings of $63.2 million, and $33.3 million of outstanding letters of credit with total availability of $63.5 million.

Of the outstanding letters of credit, $13.7 million are related to our power commitments and $19.6 million are primarily for the purpose of securing certain debt and workers’ compensation commitments.

As of March 31, 2023, our Iceland revolving credit facility had a borrowing base of $100.0 million and $45.0 million in outstanding borrowings, with total availability of $55.0 million.

As of March 31, 2023, our credit facilities (including the Vlissingen Facility Agreement referred to below) had $210.6 million of net availability after consideration of our outstanding borrowings and letters of credit.

As of June 30, 2023, our Iceland revolving credit facility had a borrowing base of $100.0 million and $73.0 million in outstanding borrowings, with total availability of $27.0 million.

As of June 30, 2023, our credit facilities (including the Vlissingen Facility Agreement referred to below) had $180.5 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 on which availability under the U.S.

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

As of March 31, 2023, we were in compliance with all such covenants or maintained availability above such covenant triggers.

As of June 30, 2023, we were in compliance with all such covenants or maintained availability above such covenant triggers.

Grundartangi Casthouse Facility

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The Casthouse Facility will 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, 2023 there were $60.0 million in borrowings outstanding under the Casthouse Facility.

The Casthouse Facility bears interest at a rate plus applicable margin as defined within the agreement.

As of June 30, 2023 there were $70.0 million in outstanding borrowings 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, 2023, we were in compliance with all such covenants.

As of June 30, 2023, we were in compliance with all such covenants.

Senior Notes and Convertible Senior Notes

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Borrowings under the Iceland Term Facility 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 March 31, 2023, there were €11.3 million ( $12.3 million, based on the prevailing exchange rate on March 31, 2023 ) in outstanding borrowings under the Iceland Term Facility.

As of June 30, 2023, there were €8.0 million ($8.6 million , based on the prevailing exchange rate on June 30, 2023) in outstanding borrowings under the Iceland Term Facility.

Vlissingen Facility Agreement

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Amounts drawn, if any, under the Vlissingen Facility Agreement are expected to be used for general corporate and working capital purposes of Century and its subsidiaries.

As of March 31, 2023, there were no outstanding borrowings under the Vlissingen Facility Agreement.

As of June 30, 2023, there were no outstanding borrowings under the Vlissingen Facility Agreement.

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 March 31, 2023, we have not issued any debt securities pursuant to the Universal Shelf Registration Statement.

As of June 30, 2023, 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.

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

and Century Aluminum Jamaica Holdings, Inc.

The Guarantor Subsidiaries are 100% owned by Century.

1 unchanged sentence

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.

Our foreign subsidiaries, together with Nordural US LLC, Century Aluminum Development LLC, Century Aluminum of West Virginia, Inc.

and Century Aluminum Jamaica Holdings, 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 Guarantor 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").

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, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Current assets $ 327.5 $ 305.7

2 unchanged sentences

Non-current liabilities 488.8 487.1

Three months ended March 31, 2023

Six months ended June 30, 2023

Net sales $ 673.1

Gross profit (loss) 44.6

Income (loss) before income taxes 21.0

Net income (loss) (38.6)

As of March 31, 2023 and December 31, 2022, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $ 11.4 million and $18.2 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $ 435.4 million and $466.3 million, respectively.

Gross profit 59.3

Income before income taxes 26.5

Net loss (31.2)

As of June 30, 2023 and December 31, 2022, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $10.4 million and $18.2 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $413.9 million and $466.3 million, respectively.

As of June 30, 2023, an intercompany current loan due to the Company from the Non-Guarantors totaled $10.1 million.

There was no intercompany current loan as of December 31, 2022.

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 March 31, 2023, the principal and accrued interest for the contingent obligation was $29.8 million, which was fully offset by a derivative asset.

As of June 30, 2023, the principal and accrued interest for the contingent obligation was $30.2 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 March 31, 2023, 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 June 30, 2023, 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.

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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 March 31, 2023, and 2022.

We did not make any contributions for the three months ended June 30, 2023, and 2022.

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 (the "Amended 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 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.

As of March 31, 2023, we made contributions of $2.4 million related to the Amended PBGC Settlement Agreement.

As of June 30, 2023, we made contributions of $2.4 million related to the Amended PBGC Settlement Agreement.

Section 232 Aluminum Tariff

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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, Canada and Mexico.

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.

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On January 17, 2023, our wholly owned subsidiary, Mt.

Holly Commerce Park LLC, entered into a binding agreement, subject to ordinary course conditions, to sell approximately 133 acres of land for approximately $28.5 million.

Holly Commerce Park LLC, entered into a binding agreement (the "Mt.

Holly Land Sale Agreement"), subject to ordinary course conditions, to sell approximately 133 acres of land for approximately $28.5 million.

On May 18, 2023, the Mt.

Holly Land Sale Agreement was amended to extend the buyer's option term into the third quarter, 2023, and revise the purchase price to approximately $25.8 million.

We previously formed the commerce park, located near our Mt.

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In 2011, our Board of Directors authorized a $60.0 million common stock repurchase program and during the first quarter of 2015, our Board of Directors increased the size of the program by $70.0 million.

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.

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 2020, 2021, and 2022.

As of March 31, 2023, we had $43.7 million remaining under the repurchase program authorization.

As of June 30, 2023, 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.

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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 March 31, 2023, we had $2.0 million in other current liabilities and $4.9 million in other liabilities related to this agreement.

At June 30, 2023, we had $2.0 million in other current liabilities and $5.0 million in other liabilities related to this agreement.

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

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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.

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 three months ended March 31, 2023 were $2.8 million, excluding expenditures of $10.8 million associated with the Grundartangi casthouse project.

Capital expenditures incurred for the six months ended June 30, 2023 were $5.1 million, excluding expenditures of $33.3 million associated with the Grundartangi casthouse project.

We estimate our total capital spending in 2023, excluding the Grundartangi casthouse project and Jamalco acquisition, will be approximately $20 to $30 million, related to our ongoing investment and sustainability projects at our plants.

1 unchanged sentence

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis