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“Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2020 for information concerning risk factors.
−Removed: In addition to the risk factors discussed below, the impact of the Coronavirus Disease 2019 (“COVID-19”) may also exacerbate other risks discussed in Item 1A.
−Removed: Risk Factors in our Annual Report on Form 10-K, any of which could have a material effect on us.
−Removed: The COVID-19 pandemic has impacted and could in the future materially and adversely affect our business.
−Removed: The novel strain of the coronavirus identified in China in late 2019 and now affecting the global community has impacted and is expected to continue to impact our operations.
−Removed: The full nature and extent of the impact is highly uncertain and may be beyond our control.
−Removed: Among other things, uncertainties relating to COVID-19 include the duration of the pandemic, the severity of the virus and the actions, or perception of actions that may be taken, to contain or treat its impact, by governments and others, including declarations of states of emergency, business closures, manufacturing restrictions and a prolonged period of travel, commercial and/or other similar restrictions and limitations.
−Removed: Furthermore, as a result of COVID-19 and the measures implemented that are designed to contain its spread, our customers, have been and could continue to be negatively impacted as a result of disruption in demand, which could negatively impact our sales and have a material adverse effect on our business, results of operations and financial condition.
−Removed: Similarly, as a result of COVID-19 and measures implemented that are designed to contain its spread, our suppliers may not have the materials, capacity or capability to enable the manufacture of our products according to our schedule and specifications.
−Removed: Because of impacts to suppliers’ operations, we may need to seek alternate suppliers, which may be more expensive, may not be available or may result in delays in shipments to us and subsequently to our customers, each of which would affect our results of operations.
−Removed: The COVID-19 pandemic has also disrupted our internal operations, including by heightening the risk that a significant portion of our workforce will suffer illness or otherwise not be permitted or be unable to work and exposing us to cyber and other risks associated with a large number of our employees working remotely.
−Removed: Certain of our facilities have experienced temporary work disruptions as a result of the COVID-19 pandemic, and we cannot predict whether these will continue or our facilities will experience more significant or frequent disruptions in the future.
−Removed: We may need to further reduce our workforce as a result of declines in our business caused by the COVID-19 pandemic, and any such reduction would cause us to incur costs.
−Removed: Moreover, there can be no assurance that we would be able to rehire our workforce in the event our business experiences a subsequent recovery.
−Removed: The impact of the COVID-19 pandemic continues to evolve and its duration and ultimate disruption to our customers and to our supply chain, and related financial impact to us, cannot be estimated at this time.
−Removed: Should such disruption continue for an extended period of time, the impact could have a more severe adverse effect on our business, results of operations and financial condition.
−Removed: Additionally, weaker economic conditions generally could result in impairment in value of our tangible or intangible assets, or our ability to raise additional capital, if needed.
−Removed: On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”).
−Removed: The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property.
−Removed: Although we continue to examine the impacts the CARES Act may have on our business, results of operations, financial condition and liquidity, it is currently unclear if and how we will benefit from the CARES Act.
−Removed: The COVID-19 pandemic could cause downturns in the commercial aerospace industry and/or the automotive and ground transportation industries, which could adversely affect our business.
−Removed: We derive a significant portion of our revenue from products sold to the aerospace and automotive and ground transportation industries.
−Removed: Concerns regarding and measures implemented in response to pandemics of infectious disease have and could further cause changes in global travel patterns, negatively influencing demand for new commercial aircraft and other vehicles, resulting in
−Removed: cancellations or deferrals of orders and/or decreases in new deliveries.
−Removed: Moreover, because new automotive vehicle demand is tied closely to overall economic strength, economic uncertainty and/or increased unemployment that results from the COVID-19 pandemic or measures undertaken in response could lead to weak demand for, or lower production of, new cars, light trucks, SUVs and heavy duty vehicles and trailers, which, in turn could adversely affect demand for our products.
−Removed: For example, several of our automotive customers have temporarily suspended operations in response to the COVID-19 pandemic and/or in accordance with governmental requirements.
−Removed: Despite existing backlogs, adverse developments resulting from the pandemic may lead to reduced demand for our products, which could adversely affect our financial position, results of operations and cash flows.
−Removed: Our hedging programs have been and could continue to be adversely impacted by fluctuations as a result of the impacts of the COVID-19 pandemic.
−Removed: We use forward contracts to protect against fluctuations in commodity price and currency exchange rate risks.
−Removed: The effectiveness of these hedges depends, in part, on our ability to accurately forecast future product demand and related cash flow.
−Removed: Due to the economic impacts of the COVID-19 pandemic and related governmental responses, our customers’ businesses are subject to many uncertainties and, as a result, we have experienced and may continue to experience unanticipated volatility in product demand and related cash flows.
−Removed: When we experience such volatility or are otherwise unable to make accurate predictions with respect to our forward swaps designated as cash flow or fair value hedges, such hedging activities may become ineffective.
−Removed: The early settlement, reclassification of cumulative losses and/or the periodic adjustment to fair value through Net income associated with ineffective hedging activities could have a material negative impact on our financial position, results of operations and cash flows.
+Added: The following additional risk factors were during the quarter ended March 31, 2021.
+Added: Aluminum beverage and food packaging products are subject to competition from substitute products and decreases in demand, which could result in lower profits and reduced cash flows.
+Added: On March 31, 2021, we completed our acquisition of the Warrick Rolling Mill (as defined in Note 4 of Notes to Interim Consolidated Financial Statements included in this Report), pursuant to the terms of the Purchase Agreement between Kaiser Aluminum Corporation and Alcoa Corporation (“Alcoa”) dated November 30, 2020.
+Added: The Warrick Rolling Mill 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.
+Added: Such product offerings are subject to substantial competition from producers of alternative packaging made from glass, paper, flexible materials, plastic and organic or compostable materials, which may compare favorably to aluminum with respect to preservation of food and beverage quality and/or sustainability.
+Added: Changes in the volume of sales by our customers in the food and beverage markets and preferences for products and packaging by consumers of prepackaged food and beverage cans may significantly influence our sales and our ability to realize the benefits of the Warrick Rolling Mill acquisition.
+Added: Changes in packaging preferences by our customers may require us to re-tool manufacturing operations, which could require material expenditures.
+Added: In addition, a decrease in the costs of, or a further increase in consumer demand for, alternative packaging could result in lower profits and reduced cash flows for us.
+Added: For example, increases in the price of aluminum and decreases in the price of plastic resin, which is a petrochemical product and may fluctuate with prices in the oil and gas market, may increase substitution of plastic food and beverage containers for metal containers.
+Added: Moreover, due to associated high percentage of fixed costs, we may be unable to maintain the gross margin of aluminum packaging products at past levels if we are not able to achieve high capacity utilization rates for our production equipment.
+Added: In periods of low demand for aluminum packaging products or in situations where industry expansion created excess capacity, we may experience relatively low capacity utilization rates, which can lead to reduced margins during that period and can have an adverse effect on our business.
+Added: We are dependent upon Alcoa for certain resources essential to the day-to-day operation of our business at the Warrick Rolling Mill.
+Added: We are dependent upon Alcoa for certain resources essential to the day-to-day operation of our business at the Warrick Rolling Mill, which include “support services” such as the provision of potable water, compressed air, laboratory services, electricity, steam and hot water.
+Added: In order to transition the Warrick Rolling Mill from dependence upon the support services to independence as a facility with its own self-sufficient infrastructure, Alcoa has agreed to provide “transition services,” including providing infrastructure and equipment for the production of steam, hot water and compressed air and conveying the filtration plant currently utilized for the supply of potable water.
+Added: In addition, Alcoa has agreed to pay for the development of infrastructure necessary for the Warrick Rolling Mill to obtain electricity from a third party power supplier, subject to certain conditions.
+Added: Alcoa has agreed to provide the support services through a period to extend no later than June 30, 2024, by which date Alcoa must complete its transition services.
+Added: A failure by Alcoa to provide support services or transition services within the time frames and upon the terms agreed to could cause us to incur substantial costs to keep the Warrick Rolling Mill operational or result in the temporary or permanent shutdown of the Warrick Rolling Mill’s operations.
+Added: In the event that production of the Warrick Rolling Mill is negatively impacted by the failure to provide support or transition services, our business, financial condition and results of operations could be adversely affected.
+Added: We are exposed to risks related to our receivables supply chain financing arrangements.
+Added: We are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable without recourse to such customers’ financial institutions.
+Added: To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, delays or failures in collecting trade accounts receivables.
+Added: The utility of the supply chain financing arrangements also depends upon the LIBOR rate, as it is a component of the discount rate applicable to each arrangement.
+Added: If the LIBOR rate increases significantly, we may be
+Added: negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition, results of operations and cash flows.
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.