What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-08 compared with 2024-05-01 · 108 added, 94 removed, 238 unchanged (46% of the section changed)

11 unchanged sentences

Recent Developments

Hurricane Beryl

In early July 2024, Hurricane Beryl temporarily impacted our operations at Jamalco.

The production facilities were not materially impacted by the storm with full production resuming shortly after the storm.

The port facility was impacted by the storm, where a portion of the alumina conveyor was damaged.

Jamalco has secured alternative port arrangements to allow for alumina shipments to its customers while the repairs to the conveyor are ongoing.

Department of Energy Award

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The government has incentivized the production of aluminum by offering a tax credit equal to 10% of eligible domestic production costs.

Based on the proposed regulations, for the three months ended March 31, 2024, we recognized $11.9 million as a reduction in Cost of goods sold and $0.7 million as a reduction in Selling, general and administrative expenses within the Consolidated Statements of Operations, resulting in an equally offsetting receivable.

As of March 31, 2024 and December 31, 2023, we recognized a Manufacturing credit receivable of $57.9 million and $59.3 million, respectively, and as of March 31, 2024, we recognized a non-current receivable of $14.0 million within Other assets on the Consolidated Balance Sheets.

Based on the proposed regulations, for the three and six months ended June 30, 2024, we recognized $10.7 million and $22.6 million as a reduction in Cost of goods sold and $0.5 million and $1.2 million, respectively, as a reduction in Selling, general and administrative expenses within the Consolidated Statements of Operations, resulting in an equally offsetting receivable.

As of June 30, 2024 and December 31, 2023, we recognized a Manufacturing credit receivable of $57.1 million and $59.3 million, respectively, and as of June 30, 2024, we recognized a Non-current Manufacturing credit receivable of $26.0 million within Other assets on the Consolidated Balance Sheets.

Hawesville curtailment

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.

For the three months ended March 31, 2024 and 2023, we incurred curtailment charges of approximately $0.6 million and $7.0 million, respectively.

These charges were partially offset by income related to scrap and materials sales of $0.5 million and $0.7 million for the March 31, 2024 and 2023 recognized in Other operating expense - net within the Consolidated Statements of Operations.

For the three and six months ended June 30, 2024, we incurred curtailment charges of approximately $1.7 million and $2.4 million, respectively.

These charges were partially offset by income related to scrap and materials sales of $0.5 million for the six months ended June 30, 2024.

There were no scrap and materials sales as of the three months ended June 30, 2024.

Comparatively, 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 demand capacity charges for power, 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.

Acquisition of 55% interest in Jamalco

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.

On May 2, 2023, our wholly-owned subsidiary, CAJH, acquired for $1.00 all of the outstanding share capital of GAHL, the indirect holder of a 55% interest in Jamalco, an unincorporated joint venture with CAP, which is owned by the Government of Jamaica.

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

The Company's 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 tonnes.

We finalized the purchase accounting and recognized a bargain purchase gain of $245.9 million within the Consolidated Statements of Operations for the three months ended March 31, 2024.

The Company's indirect wholly-owned subsidiary, GAJL, is the manager of Jamalco.

Jamalco has alumina production capacity of approximately 1.4 million tonnes.

We finalized the purchase accounting and recognized a bargain purchase gain of $245.9 million within the Consolidated Statements of Operations for the six months ended June 30, 2024.

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

3 unchanged sentences

Starting in June 2023, we experienced power disruptions due to damage to the Jamalco power generation unit.

The equipment returned to full capacity as of the end of October 2023, but we continued to experience some inefficiencies into the three months ended March 31, 2024.

The equipment returned to full capacity as of the end of October 2023, but we continued to experience some inefficiencies into the six months ended June 30, 2024.

These inefficiencies led to higher production costs of alumina capitalized into inventory, some of which was shipped in the period.

The cumulative impact of the equipment failure from the second quarter of 2023 through March 31, 2024 was approximately $38.8 million.

The cumulative impact of the equipment failure from the second quarter of 2023 through June 30, 2024 was approximately $38.8 million.

We are actively engaged with our insurance carriers in connection with this equipment failure to determine the specific amount of coverage available to us, including any applicable deductibles.

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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, 2023.

We saw continued declines in the pricing of aluminum through the first quarter of 2024, which was a continuation of Western demand challenges despite global LME inventory levels near all-time lows in 2023.

The following table summarizes the average price for primary aluminum per tonne for the three months ended March 31, 2024 and 2023.

Three months ended

($ per tonne) March 31, 2024 March 31, 2023

We saw continued increases in the pricing of aluminum through the second quarter of 2024, which is driven by limited supply growth and year over year global demand increases keeping inventory levels near historic lows.

The following table summarizes the average price for primary aluminum per tonne for the three months ended June 30, 2024 and March 31, 2024 compared to the average price for primary aluminum per tonne for the six months ended June 30, 2024 and 2023 .

Quarter ended Six months ended

($ per tonne) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Average LME $ 2,520 $ 2,199 $ 2,360 $ 2,331

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Results of Operations

The following discussion for the three months ended March 31, 2024 reflects no change in production capacities, other than the continued curtailment of the Hawesville smelter, at our operating facilities.

The following discussion for the three and six months ended June 30, 2024 reflects no change in production capacities.

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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See “Item 1A.

Risk Factors — Increases in energy costs may 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, 2023.

Factors — Increases in energy costs may 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, 2023.

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 energy.

The price of such capacity is set by auction annually in April, with the April 2023 auction resulting in capacity prices returning towards normalized levels which has reduced our capacity costs significantly from the prior year.

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

Our expected capacity demand costs for power were approximately $2 million for the twelve months ending May 31, 2024 , in addition to the market price of power used.

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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, 2024 December 31, 2023 March 31, 2024 March 31, 2023

June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Related parties $ 324.2 $ 315.0 $ 639.2 $ 839.4

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Net income (loss) attributable to Century stockholders (2.5) 246.8 244.3 (31.1)

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

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

Basic $ (0.03) $ 2.52 $ 2.50 $ (0.34)

11 unchanged sentences

97,224 $ 296.4 76,425 $ 212.3 173,649 $ 508.7

102,430 317.6 78,735 210.1 181,165 527.7

(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, 2024 December 31, 2023 March 31, 2024 March 31, 2023

(in millions) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Net sales $ 560.8 $ 489.5 $ 1,050.3 $ 1,127.9

Net sales decreased by $22.8 million for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, primarily driven by unfavorable volume and sales mix of $16.0 million and unfavorable LME and regional premium price realizations of $4.5 million.

Net sales decreased by $62.9 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily driven by unfavorable volume and sales mix of $53.4 million and unfavorable LME and regional premium price realizations of $49.4 million.

The change in net sales of aluminum was offset by $40.1 million attributable to alumina sales by Jamalco, whose operations were not reflected in our results of operations for the three months ended March 31, 2023.

Quarter ended Three months ended

Net sales increased by $71.3 million for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, primarily driven by favorable realized LME and regional price premiums of $21.8 million and alumina sales of $65.8 million.

The change in net sales was offset by an unfavorable volume and sales mix of $15.7 million.

Net sales decreased by $77.6 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily driven by unfavorable realized LME and regional price premiums of $78.3 million.

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2024 December 31, 2023 March 31, 2024 March 31, 2023

(in millions) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Gross profit $ 20.4 $ 16.5 $ 36.9 $ 64.0

Gross profit decreased by $22.9 million for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, primarily attributable to the full-year 2023 IRA Section 45X credit recorded in the prior quarter and only one quarter of credit recorded in the current period, resulting in a decrease of $44.6 million, and unfavorable LME and regional price realizations of $4.5 million.

These factors were partially offset by favorable raw material price realization of $22.1 million and favorable power price realization of $3.8 million.

Gross profit decreased by $31.6 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily driven by unfavorable LME and regional price realization of $49.4 million and unfavorable volume and sales mix of $36.9 million.

These factors were partially offset by favorable raw material price realization of $32.3 million and power price realization of $22.4 million, and $11.9 million attributable to the IRA Section 45X credit.

Gross profit increased by $3.9 million for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, primarily attributable to favorable realized LME and regional price premiums of $21.8 million, partially offset by lower volume of $7.2 million, unfavorable power price realization of $3.6 million, and additional operating expenses related to deferred first quarter maintenance of $5.4 million.

Gross profit decreased by $27.1 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, driven by unfavorable realized LME and regional price premiums of $78.3 million, partially offset by favorable power price realization of $25.6 million and $23.8 million attributable to the IRA Section 45X credit.

Selling, general and administrative expenses

Quarter ended Three months ended

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2024 December 31, 2023 March 31, 2024 March 31, 2023

(in millions) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Selling, general and administrative expenses $ 12.3 $ 14.1 $ 26.4 $ 25.4

Selling, general and administrative expenses increased by $6.0 million for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, primarily driven by share-based compensation costs as a result of quarter over quarter changes in the Company's stock price and partially offset by recognition of the full-year 2023 IRA Section 45X tax credit recorded in the prior quarter and only one quarter of credit recorded in the current period .

Selling, general and administrative expenses increased by $0.7 million for the three months ended March 31, 2024, compared to the three months ended March 31, 2023, primarily driven by an increase in share-based compensation costs resulting from the increase of the Company's stock price between periods.

and partially offset by $0.7 million reduction for Section 45X tax credit.

Selling, general and administrative expenses decreased by $1.8 million for the three months ended June 30, 2024, compared to the three months ended March 31, 2024, primarily driven by decreased compensation costs during the period.

Selling, general and administrative expenses increased by $1.0 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily driven by an increase in share-based compensation costs resulting from the increase of the Company's stock price between periods .

Net gain (loss) on forward and derivative contracts

Quarter ended Three months ended

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2024 December 31, 2023 March 31, 2024 March 31, 2023

(in millions) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Net gain (loss) on forward and derivative contracts $ (4.0) $ 7.4 $ 3.4 $ (48.5)

Net gain on forward and derivative contracts was $7.4 million for the three months ended March 31, 2024, a decrease of $4.5 million as compared to the three months ended December 31, 2023.

The change was primarily driven by decreased losses on LME and heavy fuel oil forward contracts, attributable to favorable fluctuations in the forward prices and volume of contracts settled.

Net gain on forward and derivative contracts was $7.4 million for the three months ended March 31, 2024, a change of $65.0 million as compared to the three months ended March 31, 2023.

Net loss on forward and derivative contracts was $4.0 million for the three months ended June 30, 2024, a difference of $11.4 million as compared to the three months ended March 31, 2024.

The change was primarily driven by increased losses on LME and heavy fuel oil forward contracts, attributable to unfavorable fluctuations in the forward prices and volume of contracts settled.

Net gain on forward and derivative contracts was $3.4 million for the six months ended June 30, 2024, a difference of $51.9 million as compared to the six months ended June 30, 2023.

The transition from loss to gain was primarily driven by reduced losses on Nord Pool derivative contracts which were settled in December 2023.

Bargain purchase gain

Quarter ended Three months ended

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2024 December 31, 2023 March 31, 2024 March 31, 2023

(in millions) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Bargain purchase gain $ — $ 245.9 $ 245.9 $ —

We finalized the purchase accounting related to the acquisition of 55% interest in Jamalco, which was acquired on May 2, 2023, and recognized a bargain purchase gain of $245.9 million for the three months ended March 31, 2024.

We finalized the purchase accounting related to the acquisition of General Alumina Holdings Limited and subsidiaries, which was acquired on May 2, 2023, and recognized no bargain purchase gain for the three months ended June 30, 2024 and recognized $245.9 million for the six months ended June 30, 2024.

Income tax (expense) benefit

Quarter ended Three months ended

Quarter ended Six months ended

Sequential Year-to-date

(in millions) March 31, 2024 December 31, 2023 March 31, 2024 March 31, 2023

(in millions) June 30, 2024 March 31, 2024 June 30, 2024 June 30, 2023

Income tax (expense) benefit $ (0.5) $ (0.5) $ (1.0) $ 10.2

Income tax expense decreased by $6.1 million for the three months ended March 31, 2024, compared to the three months ended December 31, 2023, primarily driven by changes in the jurisdictional mix of earnings.

Income tax changed to expense of $0.5 million for the three months ended March 31, 2024, compared to a benefit of $0.2 million for the three months ended March 31, 2023, primarily driven by changes in the jurisdictional mix of earnings on a year-over-year basis.

Income tax expense remained consistent for the three months ended June 30, 2024, compared to the three months ended March 31, 2024.

Income tax changed to expense of $1.0 million for the six months ended June 30, 2024, compared to a benefit of $10.2 million for the six months ended June 30, 2023, primarily driven by changes in the jurisdictional mix of earnings 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, 2024, we had cash and cash equivalents of approximately $93.5 million and unused availability under our revolving credit facilities of $208.5 million (including $80.0 million under the Vlissingen Facility Agreement referred to below).

Our cash and cash equivalents and unused availability under our revolving credit facilities comprise our liquidity position, which was $302.0 million as of March 31, 2024.

As of June 30, 2024, we had cash and cash equivalents of approximately $41.3 million and unused availability under our revolving credit facilities of $301.3 million (including $80 million under the Vlissingen Facility Agreement referred to below, which expires in December 2024).

Our cash and cash equivalents and unused availability under our revolving credit facilities comprise our liquidity position, which was $342.6 million as of June 30, 2024.

Available Cash

Our available cash and cash equivalents balance at March 31, 2024 was $93.5 million compared to $88.8 million at December 31, 2023.

Our available cash and cash equivalents balance at June 30, 2024 was $41.3 million compared to $88.8 million at December 31, 2023.

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) 2024 2023

1 unchanged sentence

Net cash used in investing activities (44.3) (17.2)

Net cash provided by (used in) financing activities 49.2 (9.4)

Net cash provided by financing activities 0.1 25.1

Change in cash, cash equivalents and restricted cash $ (47.5) $ 6.0

The increase in net cash used in operating activities during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily driven by timing of payments and receipts.

The increase in net cash used in investing activities during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to higher cash spend on the purchase of property, plant and equipment in the current year attributable to the Grundartangi casthouse project and Jamalco, which was not acquired until the second quarter of 2023.

The change in net cash used in financing activities to net cash provided by financing activities during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily due to net borrowings on our revolving credit facilities and Grundartangi Casthouse Facility.

The increase in net cash used in operating activities during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily driven by timing of payments and receipts.

The increase in net cash used in investing activities during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to higher cash spend on the purchase of property, plant and equipment in the current year attributable to the Grundartangi casthouse project.

Additionally, in the six months ended June 30, 2023, the Company received cash inflows of $19.4 million from the acquisition of subsidiary, net of cash acquired.

The change in net cash provided by financing activities during the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to reduction in net borrowings on our revolving credit facilities and Grundartangi Casthouse Facility.

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, 2024, our U.S.

As of June 30, 2024, our U.S.

revolving credit facility had a borrowing availability of $162.1 million , outstanding borrowings of $0.0 million , and $40.8 million of outstanding letters of credit with total availability of $121.3 million .

Of the outstanding letters of credit, $13.7 million are related to our power commitments, $17.3 million are related to raw material security, and the remaining $27.1 are primarily for the purpose of securing certain debt and workers’ compensation commitments.

As of March 31, 2024, our Iceland revolving credit facility had a borrowing base of $94.3 million and $32.0 million outstanding borrowings, with total availability of $62.3 million .

As of March 31, 2024, our credit facilities (including the Vlissingen Facility Agreement referred to below) had $208.5 million of net availability after consideration of our outstanding borrowings and letters of credit.

Of the outstanding letters of credit, $13.7 million are related to our power commitments and the remaining $27.1 million are primarily for the purpose of securing certain debt and workers’ compensation commitments.

As of June 30, 2024, our Iceland revolving credit facility had a borrowing base of $100.0 million and no outstanding borrowings, with total availability of $100.0 million .

As of June 30, 2024, our credit facilities (including the Vlissingen Facility Agreement referred to below, which facility expires in December 2024) had $301.3 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.

2 unchanged sentences

revolving credit facility is less than or equal to $25.0 million, or 10% of the borrowing base, but not less than $17.85 million.

We intend to maintain

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

We intend to maintain availability to comply with these levels any time we would not meet the ratio, which could limit our ability to access the full

amount of our availability under our U.S revolving credit facility.

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

As of March 31, 2024, we were in compliance with all such covenants or maintained availability above such covenant triggers.

As of June 30, 2024, 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 plus applicable margin as defined within the agreement.

As of March 31, 2024 there were $130.0 million in outstanding borrowings under the Casthouse Facility.

As of June 30, 2024 there were $130.0 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, 2024, we were in compliance with all such covenants.

As of June 30, 2024, we were in compliance with all such covenants.

Senior Notes and Convertible Senior Notes

26 unchanged sentences

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, 2024, there were $10.0 million in outstanding borrowings under the Vlissingen Facility Agreement.

As of June 30, 2024, there were $10.0 million in 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, 2024, we have not issued any debt securities pursuant to the Universal Shelf Registration Statement.

As of June 30, 2024, 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.

9 unchanged sentences

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

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Current assets $ 393.2 $ 361.5

2 unchanged sentences

Non-current liabilities 503.4 485.7

Three months ended March 31, 2024

Six months ended June 30, 2024

Net sales $ 831.3

1 unchanged sentence

Income before income taxes 26.1

Net loss 246.7

As of March 31, 2024 and December 31, 2023, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $40.7 million and $48.7 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $392.6 million and $384.9 million, respectively.

As of March 31, 2024 and December 31, 2023, an intercompany current loan due to the Company from the Non-Guarantors totaled $3.0 million and $2.9 million, respectively.

As of March 31, 2024, an intercompany current loan due from the Non-Guarantors to the Company totaled $50.3 million.

There was no intercompany current loan due from the Non-Guarantors to the Company as of December 31, 2023.

Net income 244.3

As of June 30, 2024 and December 31, 2023, an intercompany receivable due to the Company and Guarantors from the Non-Guarantors totaled $48.6 million and $48.7 million, respectively, and an intercompany non-current loan due to the Company from the Non-Guarantors totaled $344.1 million and $384.9 million, respectively.

An intercompany current loan due to the Company from the Non-Guarantors totaled $2.9 million as of December 31, 2023, and as of June 30, 2024 there was no outstanding balance on this loan.

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, 2024, the principal and accrued interest for the contingent obligation was $31.2 million, which was fully offset by a derivative asset.

As of June 30, 2024, the principal and accrued interest for the contingent obligation was $31.6 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, 2024, 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, 2024, 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.

2 unchanged sentences

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.

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 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, 2024, we made contributions of $6.9 million rela ted to the Amended PBGC Settlement Agreement.

We did not make any contributions for the three months ended March 31, 2024 and 2023.

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 June 30, 2024, we made contributions of $6.9 million rela ted to the Amended PBGC Settlement Agreement.

We did not make any contributions for the three months ended June 30, 2024 and 2024.

Section 232 Aluminum Tariff

11 unchanged sentences

Accordingly, we do not believe there will be any material changes to the current tariffs in the near future.

Section 301 Tariffs

On May 22, 2024, the United States Trade Representative (USTR) issued a proposal (the “Proposal”) to implement new

tariffs on certain items and increase existing tariffs on other items imported from China pursuant to USTR’s authority under

Section 301 of the Trade Act of 1974.

The new and increased tariffs were adopted pursuant to the USTR’s authority to

investigate unfair trade barriers and impose measures to counteract a foreign country’s unfair or discriminatory trade practices.

Under the Proposal, tariffs on aluminum imported from China are expected to increase to 25% from the current 7.5% tariff

imposed in 2018.

The increased tariff is in addition to the 10% tariff imposed under Section 232 of the Trade Expansion Act.

The new and increased Section 301 tariffs are only applicable to imports with China as the country of origin.

In August 2022, President Biden signed the IRA into law.

4 unchanged sentences

The Proposed Regulations provide guidance on rules that taxpayers must satisfy to qualify for the Section 45X tax credit.

For the quarter ended March 31, 2024, we recognized $11.9 million as a reduction in Cost of goods sold and $0.7 million as a reduction in Selling, general and administrative expenses within the Consolidated Statements of Operations, resulting in an equally offsetting receivable.

As of March 31, 2024 and December 31, 2023, we recognized a Manufacturing credit receivable of $57.9 million and $59.3 million, respectively, and as of March 31, 2024, we recognized a noncurrent receivable of $14.0 million within Other assets on the Consolidated Balance Sheets.

For the three and six months ended June 30, 2024, we recognized $10.7 million and $22.6 million as a reduction in Cost of goods sold and $0.5 million and $1.2 million, respectively, as a reduction in Selling, general and administrative expenses within the Consolidated Statements of Operations, resulting in an equally offsetting receivable.

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 first half of 2024.

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

The project is progressing and is expected to ship first billets out of the casthouse during the second half of 2024, subject to market conditions.

The Grundartangi casthouse project began in late 2021 and was completed during the second quarter of 2024.

The Grundartangi casthouse project was fully funded through the Casthouse Facility.

The project is expected to ship first billets out of the casthouse during the second half of 2024, subject to market conditions.

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.

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We made no repurchases during the years ended 2021, 2022, and 2023.

As of March 31, 2024, we had $43.7 million remaining under the repurchase program authorization.

As of June 30, 2024, 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.

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("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.

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 March 31, 2024, we had $2.0 million in other current liabilities and $3.4 million in other liabilities related to this agreement.

At June 30, 2024, we had $2.0 million in other current liabilities and $3.5 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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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, 2024 were $12.8 million, excluding expenditures of $16.8 million associated with the Grundartangi casthouse project.

Capital expenditures incurred for the six months ended June 30, 2024 were $17.7 million, excluding expenditures of $27.8 million associated with the Grundartangi casthouse project.

We estimate our total capital spending in 2024, excluding the Grundartangi casthouse project, will be approximately $20 to $30 million, related to our ongoing investment and sustainability projects at our aluminum smelters and alumina refinery.

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