What changed in this filing

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Item 1. Business

2021-02-26 compared with 2020-02-25 · 144 added, 95 removed, 159 unchanged (60% of the section changed)

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Kaiser Aluminum Corporation, a Delaware corporation, manufactures and sells semi-fabricated specialty aluminum mill products for the following end market applications:

aerospace and high strength ("Aero/HS products");

automotive ("Automotive Extrusions");

general engineering ("GE products");

and other industrial ("Other products").

(i) aerospace and high strength (“Aero/HS products”);

(ii) automotive (“Automotive Extrusions”);

(iii) general engineering (“GE products”);

and (iv) other industrial (“Other products”).

Our fabricated aluminum mill products include flat-rolled (plate and sheet), extruded (rod, bar, hollows and shapes), drawn (rod, bar, pipe, tube and wire) and certain cast aluminum products.

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The primary end market applications of flat-rolled heat treat plate and sheet are Aero/HS products (which we sell globally) and GE products (which we predominantly sell within North America).

In November 2020, we announced our pending acquisition of Alcoa Warrick LLC and certain assets comprising the aluminum casting and rolling mill facility located in Warrick County, Indiana (collectively, the “Warrick Rolling Mill”).

The Warrick Rolling Mill acquisition serves to expand our flat-rolled product offering to include aluminum sheet produced for demanding end market applications in the beverage and food packaging industry in North America (see “Pending Warrick Rolling Mill Acquisition” below for further details).

Similarly, in the areas of extruded and drawn aluminum mill products, we focus on demanding Aero/HS products, Automotive Extrusions and GE products that require high strength, machinability or other specific properties where we can create and maintain a defensible competitive position because of our technical expertise, strong production capability and high product quality.

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Our 11 extrusion/drawing facilities, 10 of which are in the United States and one of which is in Canada, serve aerospace, automotive or general engineering applications.

Our newest facility, which we acquired on September 19, 2018, is located in Columbia, New Jersey and focuses on multi-material advanced manufacturing methods and techniques which include multi-axis computer numerical control ("CNC") machining, additive manufacturing ("3D Printing"), welding and fabrication for demanding aerospace and defense, automotive, high tech and general industrial applications.

Our newest facility, acquired in 2018 and located in the United States, focuses on multi-material advanced manufacturing methods and techniques which include multi-axis computer numerical control (“CNC”) machining, additive manufacturing (“3D Printing”), welding and fabrication for demanding aerospace and defense, automotive, high tech and general industrial applications.

In 2020, our consolidated Net sales totaled $1.2 billion on 502.4 million pounds shipped from our facilities.

We employed approximately 2,820 people at December 31, 2019 .

A fundamental part of our business model is to remain neutral to the impact from fluctuations in the market price for aluminum, thereby earning profit predominately from the conversion of aluminum into semi-fabricated mill products.

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We further strive to enhance the efficiency of product flow to our customers and our status as a supplier of choice by tightly integrating the management of our operations across multiple production facilities, product lines and target markets.

Additionally, our strategy to be a supplier of choice and low cost producer is facilitated by a culture of continuous improvement that is facilitated by the Kaiser Production System ("KPS"), an integrated application of tools such as Lean Manufacturing, Six Sigma and Total Productive Manufacturing.

Additionally, our strategy to be the supplier of choice and a low cost producer is enabled by a culture of continuous improvement that is facilitated by the Kaiser Production System (“KPS”), an integrated application of tools such as Lean Manufacturing, Six Sigma and Total Productive Manufacturing.

Using KPS, we seek to continuously reduce our own manufacturing costs and eliminate waste throughout the value chain.

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We manage and monitor our financial strength through routine analysis of our liquidity position under scenarios of varying business and economic cycles.

Kaiser Aluminum was founded by Henry J.

Kaiser in 1946 with the lease and eventual purchase of three aluminum facilities from the United States government.

Over the ensuing decades, Kaiser Aluminum grew to become a fully-integrated aluminum company involved in all aspects of the aluminum industry.

From 2000 to 2010, as a result of a strategic reassessment of our

competitive positions in the upstream and downstream portions of the aluminum industry, we divested or closed our non-strategic bauxite mining, alumina refining and primary aluminum operations and focused on downstream operations where we had a competitive advantage.

Consequently, we no longer participate in commodity segments within the aluminum industry and focus solely on the production of semi-fabricated specialty aluminum products for major suppliers and manufacturers for applications in our chosen aerospace/high strength, automotive, general engineering and other industrial end market applications.

Business Operations

Pending Warrick Rolling Mill Acquisition

On November 30, 2020, we entered into a purchase agreement with Alcoa Corporation to acquire the Warrick Rolling Mill.

This acquisition will provide us entry into the North American aluminum packaging industry, which is a strong and growing non-cyclical end market driven by sustainability trends and the secular shift from plastic to aluminum in the packaging industry.

We believe the addition of this non‑cyclical end market will be highly complementary to our existing aerospace, automotive and general engineering cyclical end markets and will provide excellent opportunities for long-term growth.

The acquisition of the Warrick Rolling Mill further demonstrates our strategy to serve technically challenging end market applications for which we can deploy our core metallurgical and process technology capabilities to produce highly engineered mill products with differentiated characteristics that present opportunities for us to receive premium pricing and to create long-term profitable growth.

The Warrick Rolling Mill acquisition is subject to a number of closing conditions and there can be no assurance that such conditions will be satisfied or that we will be able to complete the Warrick Rolling Mill acquisition within the planned timeframe or at all.

Our business focuses on producing rolled, extruded and drawn aluminum products used principally for aerospace and defense, automotive and general engineering products that include consumer durables, electronics and products for electrical and machinery and equipment applications.

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While competing materials such as titanium and composites have displaced aluminum for certain applications on several newer aircraft designs, aluminum continues to be the material used most extensively for structural aerospace and defense applications because it is light weight, can meet demanding performance requirements and is cost effective relative to other materials.

Overall, the aerospace and defense industries' consumption of fabricated aluminum products is driven by factors that include airframe build rates, the mix of aircraft models being built and defense spending.

Unanticipated changes in build rates and mix of aircraft models being built can trigger restocking or destocking throughout the long aerospace supply chain, temporarily impacting demand for our Aero/HS products.

Growth in demand for aerospace plate has exceeded demand growth for other forms of Aero/HS products as aircraft manufacturers have migrated to monolithic component design, where a single piece of aluminum, usually a plate, is heavily machined to form a desired part rather than creating the same part by assembling sub-components made of aluminum sheet, extrusions or forgings that are affixed to one another using rivets, bolts or welds.

As more applications convert to monolithic design, we expect aerospace plate demand to continue to grow at a pace higher than our other Aero/HS products.

Automotive Extrusions.

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For some Automotive Extrusions, we perform limited fabrication, including sawing and cutting to length.

Demand for Automotive Extrusions is determined based upon automotive build rates in North America and aluminum content.

In recent years, automotive original equipment manufacturers (“OEMs”) and their suppliers have, at an increasing pace, been converting many automotive components that historically were made of steel to aluminum to decrease weight without sacrificing structural integrity and safety performance and thereby achieve greater fuel efficiency standards mandated by stringent United States’ Corporate Average Fuel Economy (“CAFE”) or equivalent state regulations.

We believe fuel efficiency standards along with consumer preference for larger vehicles will continue to drive growth in demand for aluminum extruded components in passenger vehicles as a replacement for the heavier weight of steel components.

Our Automotive Extrusions are designed and produced to provide specific mechanical properties and performance attributes required in automotive applications across a broad mix of North American OEMs and automotive platforms.

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Our GE products have a wide range of uses and applications, many of which involve further fabrication for numerous transportation and other industrial end market applications where machining of plate, rod and bar is intensive.

For example, our GE products are used to produce armor for military vehicles, ordnances, manufacturing cells for semiconductor production, numerous electronic devices, after-market motor sport parts, tooling plate, parts for machinery and equipment,

bolts, screws, nails and rivets.

Demand growth and cyclicality for GE products tend to mirror broad economic patterns and industrial activity in North America.

Demand is also impacted by the destocking and restocking of inventory throughout the supply chain.

Other Products.

Other products consist of extruded, drawn and cast billet aluminum products for a variety of North American industrial end uses.

Demand for Other products tends to mirror broad economic patterns and industrial activity in North America.

We continue to exit these non-core applications and redirect our resources and production capacity to focus on strategic Aero/HS products, Automotive Extrusions and GE products.

We continue to exit these non-core applications and focus our resources and production capacity on strategic Aero/HS products, Automotive Extrusions and GE products.

Sales, Marketing and Distribution

Industry sales for fabricated products fluctuate in response to competitive and market dynamics.

Sales are made directly to customers by our sales personnel located in the United States, Canada, Western Europe and China and by independent sales agents in other regions of Asia, Latin America and the Middle East.

Our sales and marketing efforts are focused on the markets for Aero/HS products, Automotive Extrusions and GE products.

Aero/HS Products.

We sell our Aero/HS products to metal service centers, as well as directly to aerospace manufacturers and tier one suppliers.

Sales are made primarily under long-term agreements, but also on an order-by-order basis.

We serve this market with a North American sales force focused on Aero/HS and GE products and our sales personnel in Western Europe and China.

Growth in demand for aerospace plate has exceeded demand growth for other forms of Aero/HS products, as aircraft manufacturers have migrated to monolithic component design, where a single piece of aluminum, usually a plate, is heavily machined to form a desired part rather than creating the same part by assembling sub-components made of aluminum sheet, extrusions or forgings that are affixed to one another using rivets, bolts or welds.

Demand for our Aero/HS products is heavily impacted by commercial airframe build rates and, to a lesser degree, by defense related airframes and other products.

In addition, unanticipated changes in build rates and mix of aircraft models being built can trigger restocking or destocking throughout the long aerospace supply chain, temporarily impacting demand.

While commercial airframe build rates can be subject to certain short-terms events (see Part I, Item 1A.

“Risk Factors” included in this Report), we believe the long-term demand for air travel and fuel efficiency will continue to drive long-term growth for our products.

Automotive Extrusions.

Our Automotive Extrusions are sold primarily to tier one automotive suppliers.

Almost all sales of Automotive Extrusions occur through direct channels using a North American direct sales force that works closely with our technical sales support organization.

Demand for Automotive Extrusions is determined based upon automotive build rates in North America and aluminum content.

We believe fuel efficiency standards, along with consumer preference for larger vehicles and the growing conversion to electric vehicles, will continue to drive growth in demand for aluminum extruded components in passenger vehicles as a replacement for the heavier weight of steel components.

A majority of our GE products are sold to large metal service centers in North America on an order-by-order basis, with orders primarily consisting of standard catalog type items shipped with a relatively short lead-time.

We service this market with a North American sales force focused on GE and Aero/HS products.

Demand for our GE products is closely related to the North America general industrial growth and the recent desire of many companies to lessen their risk of supply chain disruptions by reshoring suppliers and shortening the supply chain.

Demand is also impacted by the destocking and restocking of inventory throughout the supply chain.

In 2020, we had over 680 customers, of which, our two largest customers were Reliance Steel & Aluminum Co.

(“Reliance”) and The Boeing Company (“Boeing”).

While the loss of Reliance or Boeing as customers could have a material adverse effect on us, we believe that our long-standing relationship with each is good and that the risk of losing either as a customer is remote.

See Note 17 of Notes to Consolidated Financial Statements included in this Report for information about our significant concentrations.

The fabricated aluminum industry is highly competitive.

We focus our fabricating operations on technically challenging applications for flat-rolled heat treat plate and sheet and extruded/drawn products that allow us to apply our core metallurgical and process technology capabilities to produce highly engineered products with differentiated characteristics.

We seek to further differentiate ourselves from our competitors by providing a broad product offering and striving to deliver “Best in Class” customer satisfaction.

Our primary competitors in the global market for Aero/HS products are Arconic, Inc., Constellium N.V.

and Novelis Inc.

In serving our North American customers for both Automotive Extrusions and GE products, our primary competitors are Arconic, Inc.

and Norsk Hydro ASA, and for certain of these products, we also compete with smaller, regional participants.

In North America, we also compete with general engineering heat treat plate products imported from South Africa, Europe and China.

Some of our competitors are substantially larger, have greater financial resources and may have other strategic advantages.

Because many of our products are used in safety critical applications, our customers have demanding standards for product quality and consistency that make it difficult to become a qualified supplier.

Suppliers must pass a rigorous qualification process to sell to both airframe and automotive manufacturers and must also make significant investments in infrastructure and specialized equipment to supply products for these high strength applications.

Further, sophisticated manufacturing processes make it difficult to

become a qualified supplier, even with proper equipment.

For example, producing heat treat plate and sheet products, particularly for aerospace applications, requires technological expertise that only a few companies have developed through significant investment in research and development and decades of operating experience.

Research and Development

We operate three research and development centers.

Our Rolling and Heat Treat Center and our Metallurgical Analysis Center are both located at our Trentwood facility.

The Rolling and Heat Treat Center has complete hot rolling, cold rolling and heat treat capabilities to simulate, in small lots, processing of flat-rolled products for process and product development on an experimental scale.

The Metallurgical Analysis Center consists of a full metallographic laboratory and a scanning electron microscope to support research and development programs as well as respond to plant technical service requests.

The third center, our Solidification and Casting Center, is located in Newark, Ohio, and has a developmental casting unit capable of casting billets and ingots for extrusion and rolling experiments.

The casting unit is also capable of casting full size billets and ingots for processing on the production extrusion presses and rolling mills.

A significant amount of our research and development is devoted to product and process development within our production operations, largely focused on controlling the manufacturing process to improve product quality, ensure consistency and enhance one or more specific product attributes.

This has resulted in the creation and delivery of our highly differentiated KaiserSelect ® products.

Our Imperial Machine & Tool Co.

(“IMT”) subsidiary, located in Columbia, New Jersey, provides us with significant technology and intellectual property that complements our metallurgical and application engineering expertise to further advance our capability to deliver highly engineered solutions for our customers.

IMT’s multi-material expertise in aluminum, titanium, tantalum, molybdenum, nickel alloys, tungsten, cobalt chromium and stainless steel offers a differentiated approach by combining traditional machining know-how and related technical capabilities with additive manufacturing expertise to drive innovative solutions over the longer term.

We hold numerous patents, trademarks, trade secrets and copyrights that relate to the design, use and marketing of products.

We consider this intellectual property to be important, but no single property is material to the overall conduct of our business.

Manufacturing Processes

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Initially in solid form, aluminum is heated in a vessel to a temperature at which it melts.

While in molten form, additional metals (aluminum alloyed scrap, alloy metals, primary aluminum or high purity aluminum) are introduced to achieve the proper mixture of chemical elements for a particular alloy.

While in molten form, additional metals (aluminum alloyed scrap, alloy metals, primary aluminum or high purity aluminum) are

introduced to achieve the proper mixture of chemical elements for a particular alloy.

When the desired chemical composition of the molten metal has been achieved, it is poured into a mold in which the molten metal cools in a controlled manner and solidifies into a rolling ingot or extrusion log.

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Our Trentwood facility casts rolling ingot for its own consumption.

On September 19, 2018, we acquired Imperial Machine & Tool Co.

("IMT"), a leader in advanced manufacturing methods and techniques, which include multi-axis CNC machining, 3D Printing, welding and fabrication for aerospace and defense, automotive, high tech and general industrial applications.

A description of the manufacturing processes and category of products at each of our production facilities at December 31, 2019 is shown below:

IMT is a leader in advanced manufacturing methods and techniques, which include multi-axis CNC machining, 3D Printing, welding and fabrication for aerospace and defense, automotive, high tech and general industrial applications.

The following table provides a description of the manufacturing process(es) and type(s) of products at each of our production facilities as of December 31, 2020:

Types of Products

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As noted above, we purchase primary and scrap, or recycled, aluminum, our principal raw material, on a floating price basis typically based on the average Midwest Price.

Our pricing of fabricated aluminum products is generally intended to lock in a conversion margin (representing the value added from the fabrication process(es)) and to pass metal price fluctuation through to our customers.

In order to meet our objective to be metal price neutral, we manage the risk of fluctuations in the price of aluminum through our pricing policies and use of financial derivatives.

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Fluctuation in the underlying aluminum price is a significant factor influencing changes in competitive spot prices.

Through spot pricing,

we generally can pass metal price risk through to customers.

Through spot pricing, we generally can pass metal price risk through to customers.

For some of our higher value added revenue products sold on a spot basis, however, the pass through of metal price movements can lag by several months (the timing of which depends in part on market conditions), with a favorable impact to us when metal prices decline and an adverse impact to us when metal prices increase.

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Hedging activities are conducted in compliance with a policy approved by our Board of Directors and administered by our hedging committee (members of which include our principal executive officer, principal financial officer and principal accounting officer).

Sales, Marketing and Distribution

Industry sales for fabricated products fluctuate in response to competitive and market dynamics.

Our sales and marketing efforts are focused on the markets for Aero/HS products, Automotive Extrusions and GE products.

Aero/HS Products.

We sell our Aero/HS products to metal service centers, as well as directly to aerospace manufacturers and tier one suppliers.

Sales are made primarily under long-term agreements as well as on an order-by-order basis.

We serve this market with a North American sales force focused on Aero/HS and GE products and our sales personnel in Western Europe and China.

Automotive Extrusions.

Our Automotive Extrusions are sold primarily to tier one automotive suppliers.

Almost all sales of Automotive Extrusions occur through direct channels using a North American direct sales force that works closely with our technical sales support organization.

We service this market with a North American sales force focused on GE and Aero/HS products.

In 2019 , we had over 730 customers, of which, our two largest customers were Reliance Steel & Aluminum Co.

("Reliance") and The Boeing Company ("Boeing").

See Note 16 of Notes to Consolidated Financial Statements included in this Report for information about our significant concentrations.

Research and Development

We operate three research and development centers.

Our Rolling and Heat Treat Center and our Metallurgical Analysis Center are both located at our Trentwood facility.

The third center, our Solidification and Casting Center, is located in Newark, Ohio and has a developmental casting unit capable of casting billets and ingots for extrusion and rolling experiments.

The casting unit is also capable of casting full size billets and ingots for processing on the production extrusion presses and rolling mills.

This has resulted in the creation and delivery of our highly differentiated KaiserSelect ® products.

The acquisition of IMT with its facility in Columbia, New Jersey provides us with significant technology and intellectual property that complements our metallurgical and application engineering expertise to further advance our capability to deliver highly engineered solutions for our customers.

IMT's multi-material expertise in aluminum, titanium, tantalum, molybdenum, nickel alloys, tungsten, cobalt chromium and stainless steel offers a differentiated approach by combining traditional machining know-how and related technical capabilities with additive manufacturing expertise to drive innovative solutions over the longer term.

We hold numerous patents, trademarks, trade secrets and copyrights that relate to the design, use and marketing of products.

We consider this intellectual property to be important, but no single property is material to the overall conduct of our business.

The fabricated aluminum industry is highly competitive.

We seek to further differentiate ourselves from our competitors by providing a broad product offering and striving to deliver "Best in Class" customer satisfaction.

Our primary competitors in the global market for Aero/HS products are Arconic, Inc., Constellium N.V.

and Aleris Corporation.

In serving our North American customers for both Automotive Extrusions and GE products, our primary competitors are Arconic, Inc.

and Norsk Hydro ASA, and for certain of these products, we also compete with smaller, regional participants.

In North America, we also compete with general engineering heat treat plate products imported from South Africa, Europe and China.

Some of our competitors are substantially larger, have greater financial resources and may have other strategic advantages.

Further, sophisticated manufacturing processes make it difficult to become a qualified supplier, even with proper equipment.

Under normal operating and economic conditions, we generally have immaterial fluctuations in our quarter-over-quarter results, with shipments being weighted slightly more toward the first half of the year as compared to the second half.

This fluctuation in demand is usually caused by the timing of summer vacation and year-end holiday shut downs and year-end inventory rebalancing by our end customers.

In addition, during these lower demand periods, we take the opportunity to perform major maintenance at our facilities, which can affect cost and operating results.

Government Regulation

Our operations are subject to numerous federal, state and local employment, import/export, reporting, environmental, health and safety laws and regulations.

While we are subject to a wide variety of government regulations, generally those most impactful to our results of operations and capital expenditures are those environmental laws and regulations that impose limitations on the discharge of hazardous materials and pollutants and establish standards for the handling, transportation, distribution, treatment, storage and disposal of hazardous materials and solid and hazardous wastes.

These regulations may require the investigation, assessment, cleanup or monitoring of, or compensation for, environmental impacts, including natural resource damages.

We continually monitor our operations with respect to potential environmental issues, including changes in legal requirements and remediation technologies.

We have established procedures for regularly evaluating environmental loss contingencies.

Our environmental accruals represent our undiscounted estimate of costs reasonably expected to be incurred based on presently enacted laws and regulations, existing requirements, currently available facts, existing technology and our assessment of the likely remediation actions to be taken.

See Note 10 of Notes to Consolidated Financial Statements included in this Report.

Environmental Protection Agency (“USEPA”) issued an Endangerment Finding under the Clean Air Act, determining that emissions of carbon dioxide, methane and four other greenhouse gases (“GHGs”) threaten the public health and welfare of current and future generations.

Based on these findings, the USEPA has begun adopting and implementing regulations to restrict emissions of GHGs from certain industries and require reporting by certain regulated facilities.

We have invested and continue to invest in our manufacturing operations in order to minimize our air emissions.

The GHG intensity of our products is minimized through maximizing our process efficiencies through technologies such as heat recovery from combustion exhaust gases.

Government Contracts

We are one of the few remaining United States based aluminum semi-fabricated producers that supply the American defense industry.

Although our products are used in a wide variety of military applications, including military aircraft, armored vehicles and

ordnance, these products are typically sourced from us by a number of service centers and machine shops that are suppliers to the defense industry.

As we generally sell to the chain of suppliers who either subcontract with direct contractors or directly contract with the government, we do not have significant direct government agreements.

Human Capital

At December 31, 2020, we employed approximately 2,575 people, of which approximately 2,515 were employed in our manufacturing locations and approximately 60 were employed in our corporate office in Foothill Ranch, California.

Our talented workforce is a key factor underlying our success.

We strive to be the employer of choice by providing equal employment and a non‑discriminatory workplace, protecting the health and safety of our employees, providing training programs and maintaining a positive and constructive relationship with labor unions of which our employees are members.

Safety and Health

We believe employee safety begins with a strong and consistent tone at the top through our executive leadership with oversight provided by our Corporate Health and Safety team, led by our Chief Legal/Compliance Officer.

To help us achieve and maintain a strong safety culture, we have robust compliance and assessment programs and we partner with the United Steelworkers and various industry groups, including the Aluminum Association, to share and identify best practices.

We use both internal and external resources to assess our compliance with regulatory and internal standards, providing training, performing risk assessments, audits and loss control inspections and developing mitigation strategies with particular emphasis on risks with a greater potential for severe injury.

We stress risk awareness and job safe practices and engage our employees in conversations about safety and safety training using a variety of communication channels, including one-on-one communications.

We also believe that having a culture of health and safety involves every employee at every level throughout the organization assuming responsibility to guard against workplace injuries by recognizing risks and taking other actions to minimize injury risk and severity.

Risk reduction is a key initiative at each of our facilities and part of our annual planning process and we are committed to nurturing a culture consistent with being a preferred employer.

In addition, safety modifiers requiring demanding safety performance are included in each of our short-term incentive compensation plans, including the corporate plan applicable to each of our executive officers and members of senior management.

Over the years, we have implemented programs on a Company-wide basis to increase awareness of the importance of employee wellness.

We have continued to introduce programs to educate and assist employees to make healthy lifestyle choices and have offered incentives and discounts to encourage participation across the organization.

In response to the Coronavirus Disease 2019 (“COVID-19”) pandemic, we implemented local, state and federal recommendations to reduce the spread of the virus at all of our facilities and continue to work closely with our employees and local unions to stress the importance of following Center for Disease Control and Prevention guidelines to mitigate the risk of exposure.

We took initiatives to support our employees by:

(i) engaging with our workforce and implementing protocols and procedures at each of our manufacturing facilities to mitigate the risk of exposure and facilitate contract tracing in the event of potential exposures;

(ii) implementing remote working conditions where possible;

(iii) waiving deductibles for COVID-19 related care under our medical plans;

and (iv) revising our policies to extend our benefits coverage for employees experiencing job interruption.

Additionally, we implemented health and safety protocols for all outside contractors and service providers required to enter our facilities.

Talent Development

Kaiser Aluminum is a learning organization committed to incorporating on-the-job training and development through the Kaiser Leadership Program, the Front Line Leader Development Program, Kaiser University, the Metallurgy Excellence Program, a Skilled Trades Development initiative and through internal and external resources provided to our employees and next generation leaders.

We continue to expand our talent management initiatives to pursue the significant long-term potential for our continued success.

Our success is dependent on the knowledge, skills and abilities of our current and future leaders.

The Kaiser Leadership Program is a full year program that accelerates the readiness of key talent and combines personalized leadership development and Kaiser-management system focused curriculum with a unique opportunity to build relationships with an internal network of leaders across locations and functions.

The Front Line Leader Development Program is a six-month program that strengthens organizational performance through ethical, effective and sustaining tactical leadership for both new and experienced frontline supervisors.

Kaiser University is our web-based learning and development platform offering a catalog of thousands of on-demand courses to employees across a broad range of topics including metallurgy, maintenance, health and safety, Lean Six Sigma, business and computer skills and Kaiser Aluminum policies.

The Metallurgy Excellence Program provides a mentor-centric professional development program for our talented metallurgical professionals providing opportunities for metallurgists to partner with industry icons while helping us keep our competitive advantage.

The Skilled Trades Development initiative enables participating Kaiser facilities or locations to evaluate and build trade skills, in alignment with industry-wide standards, to attract, retain and motivate skilled talent that meets the unique needs of the location.

Diversity, Equity and Inclusion

Our five corporate values include being the preferred employer.

Our efforts to be the preferred employer include:

(i) attracting, developing and retaining the best people from all cultures and segments of the population;

(ii) treating all employees with dignity and respect;

(iii) providing an environment of inclusion, empowerment, responsibility and accountability;

and (iv) offering competitive and equal pay and benefits that attract and retain employees.

As part of our efforts to continue to emphasize our values, we implemented social media and human rights policies reinforcing our values.

As we move forward, our focus areas include:

(i) continuing to consider ethnic and gender diversity as we identify training cohorts and opportunities;

(ii) leveraging the views and perspectives of our diverse employees and leaders;

(iii) developing meaningful metrics and benchmarks by location and job function to measure the effectiveness of our efforts;

(iv) fostering relationships with educational institutions, employment agencies and professional groups to expand the pool of potential candidates and employees to achieve a more diverse workforce;

(v) focusing on diverse candidates for internships, entry-level positions and scholarships;

and (vi) actively recruiting from military bases for military and veteran hiring.

Labor Union Affiliations

Approximately 63% of our employees are represented by labor unions under labor contracts with varying durations and expiration dates.

The following table shows each manufacturing location, the primary union affiliation, if any, and the expiration date for the current union contracts as of December 31, 2020.

As indicated in the table, union affiliations are with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (“USW”), International Association of Machinists (“IAM”) and International Brotherhood of Teamsters (“Teamsters”).

See Note 16 of Notes to Consolidated Financial Statements in this Report for additional information about concentration of labor subject to collective bargaining agreements.

See Note 17 of Notes to Consolidated Financial Statements included in this Report for additional information about concentration of labor subject to collective bargaining agreements.

Expiration Date

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Spokane, Washington (Trentwood)

Environmental Matters

We are subject to a number of environmental laws and regulations, to potential fines or penalties assessed for alleged breaches of such environmental laws and regulations and to potential claims and litigation based upon such laws and regulations.

We have established procedures for regularly evaluating environmental loss contingencies.

See Note 10 of Notes to Consolidated Financial Statements included in this Report.

Legal Structure

Our current corporate structure is summarized as follows:

We directly own 100% of the issued and outstanding shares of capital stock of Kaiser Aluminum Investments Company, a Delaware corporation ("KAIC"), which functions as an intermediate holding company.

We directly own 100% of the ownership interest in Kaiser Aluminum Beijing Trading Company, which was formed in China for the primary purpose of engaging in market development and commercialization and distribution of our products in Asia.

KAIC owns 100% of the ownership interests of each of:

Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability company, which directly holds the assets and liabilities associated with our manufacturing operations (excluding those assets and liabilities associated with our Columbia, New Jersey and London, Ontario facilities and certain of the assets and liabilities associated with our operations in the State of Washington) and owns 100% of the ownership interest of:

Kaiser Aluminum Washington, LLC, a Delaware limited liability company, which holds certain of the assets and liabilities associated with our operations in the State of Washington.

Kaiser Aluminum Canada Limited, an Ontario corporation, which holds the assets and liabilities associated with our London, Ontario facility;

Kaiser Aluminum Mill Products, Inc., a Delaware corporation, which engages in market development and commercialization and distribution of our products in the United Kingdom;

Trochus Insurance Co., Ltd., a corporation formed in Bermuda, which has historically functioned as a captive insurance company;

Kaiser Aluminum France, SAS, a corporation formed in France for the primary purpose of engaging in market development and commercialization and distribution of our products in Europe;

Imperial Machine & Tool, Co, a New Jersey corporation, which holds certain of the assets and liabilities associated with our Columbia, New Jersey facility and owns 100% of the ownership interest of:

Solid Innovations, LLC, a Pennsylvania limited liability company, which holds certain of the assets and liabilities associated with our Columbia, New Jersey facility.

In February 2021, the Kalamazoo, Michigan agreement was extended through February 2026.

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-K

Item 1. Business