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Item 1. Financial Statements

2021-07-26 compared with 2021-05-06 · 478 added, 312 removed, 780 unchanged (50% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of March 31, 2021

As of June 30, 2021

As of December 31, 2020

9 unchanged sentences

Operating lease assets

Deferred tax assets, net

Intangible assets, net

14 unchanged sentences

Stockholders’ equity:

Preferred stock, 5,000,000 shares authorized at both March 31, 2021 and

Preferred stock, 5,000,000 shares authorized at both June 30, 2021 and

December 31, 2020;

no shares were issued and outstanding at

March 31, 2021 and December 31, 2020

June 30, 2021 and December 31, 2020

Common stock, par value $ 0.01 , 90,000,000 shares authorized at both

March 31, 2021 and December 31, 2020;

June 30, 2021 and December 31, 2020;

22,695,106 shares issued and

15,847,938 shares outstanding at March 31, 2021;

15,859,820 shares outstanding at June 30, 2021;

22,647,455 shares

2 unchanged sentences

Retained earnings

Treasury stock, at cost, 6,835,286 shares at both March 31, 2021 and

Treasury stock, at cost, 6,835,286 shares at both June 30, 2021 and

December 31, 2020

Accumulated other comprehensive loss

Accumulated other comprehensive income (loss)

Total stockholders’ equity

1 unchanged sentence

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

STATEMENTS OF CONSOLIDATED INCOME (UNAUDITED)

Quarter Ended March 31,

STATEMENTS OF CONSOLIDATED (LOSS) INCOME (UNAUDITED)

Quarter Ended June 30,

Six Months Ended June 30,

(In millions of dollars, except share and per share amounts)

3 unchanged sentences

Selling, general, administrative, research and development

Restructuring benefit

Restructuring (benefit) costs

Other operating loss (income), net

Total costs and expenses

Operating income

Other expense:

Other (expense) income:

Interest expense

Other expense, net – Note 11

Income before income taxes

Other (expense) income, net – Note 11

(Loss) income before income taxes

Income tax benefit (provision)

Net income per common share:

Net (loss) income

Net (loss) income per common share:

Weighted-average number of common shares outstanding (in thousands):

1 unchanged sentence

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)

Quarter Ended March 31,

STATEMENTS OF CONSOLIDATED COMPREHENSIVE (LOSS) INCOME (UNAUDITED)

Quarter Ended June 30,

Six Months Ended June 30,

(In millions of dollars)

Net (loss) income

Other comprehensive income (loss), net of tax – Note 9:

5 unchanged sentences

Other comprehensive income (loss), net of tax

Comprehensive income

Comprehensive (loss) income

The accompanying notes to interim consolidated financial statements are an integral part of these statements.

1 unchanged sentence

STATEMENTS OF CONSOLIDATED STOCKHOLDERS ’ EQUITY (UNAUDITED)

Quarter Ended March 31, 2021

Six Months Ended June 30, 2021

Outstanding 1,2

11 unchanged sentences

BALANCE, March 31, 2021

At March 31, 2021, 232,320 shares were available for awards under the Kaiser Aluminum Corporation 2016 Equity and Incentive Compensation Plan (“2016 Plan”).

There were no repurchases of common stock during the quarter ended March 31, 2021.

At March 31, 2021, $ 93.1 million remained available to repurchase our common shares pursuant to the stock repurchase program.

Dividends declared per common share was $ 0.72 for the quarter ended March 31, 2021.

Other comprehensive income, net of tax

Common shares issued (including impacts from

Long-Term Incentive programs)

Cancellation of shares to cover employees' tax

withholdings upon vesting of non-vested shares

Cash dividends declared 3

Amortization of unearned equity compensation

BALANCE, June 30, 2021

At June 30, 2021, 729,450 shares were available for awards under the Kaiser Aluminum Corporation 2021 Equity and Incentive Compensation Plan (“2021 Plan”).

There were no repurchases of common stock during the quarters ended March 31, 2021 and June 30, 2021.

At June 30, 2021, $ 93.1 million remained available to repurchase our common shares pursuant to the stock repurchase program.

Dividends declared per common share was $ 0.72 for each of the quarters ended March 31, 2021 and June 30, 2021.

The accompanying notes to interim consolidated financial statements are an integral part of these statements.

1 unchanged sentence

STATEMENTS OF CONSOLIDATED STOCKHOLDERS ’ EQUITY CONTINUED (UNAUDITED)

Quarter Ended March 31, 2020

Six Months Ended June 30, 2020

Paid in Capital

11 unchanged sentences

BALANCE, March 31, 2020

Other comprehensive loss, net of tax

Common shares issued (including impacts from

Long-Term Incentive programs)

Cash dividends declared 2

Amortization of unearned equity compensation

BALANCE, June 30, 2020

Weighted-average repurchase price (dollars per share) for the quarter ended March 31, 2020 was $ 81.94 .

Dividends declared per common share was $ 0.67 for the quarter ended March 31, 2020.

There was no repurchase of common stock for the quarter ended June 30, 2020.

Dividends declared per common share was $ 0.67 for each of the quarters ended March 31, 2020 and June 30, 2020.

The accompanying notes to interim consolidated financial statements are an integral part of these statements.

1 unchanged sentence

STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)

Quarter Ended March 31,

Six Months Ended June 30,

(In millions of dollars)

Cash flows from operating activities 1 :

Adjustments to reconcile net income to net cash provided by operating activities:

Net (loss) income

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depreciation of property, plant and equipment

3 unchanged sentences

Non-cash equity compensation

Gain on disposition of short-term investments

Loss (gain) on disposition of short-term investments

Loss on extinguishment of debt

Loss on disposition of property, plant and equipment

Bad debt expense

Changes in operating assets and liabilities, net of effects of acquisition:

6 unchanged sentences

Long-term assets and liabilities, net

Net cash (used in) provided by operating activities

Net cash provided by operating activities

Cash flows from investing activities 1 :

Capital expenditures

Cash payment for acquisition of Warrick Rolling Mill

Cash payment for acquisition of Warrick

Purchase of short-term investments

Purchase of equity securities

Proceeds from disposition of short-term investments

1 unchanged sentence

Cash flows from financing activities 1 :

Repayment of principal and redemption premium of 6.50% Senior Notes

Issuance of 4.50 % Senior Notes

Issuance of 6.50 % Senior Notes

Cash paid for debt issuance costs

Repayment of finance lease

3 unchanged sentences

Cash dividends and dividend equivalents paid

Net cash used in financing activities

Net cash provided by financing activities

Net (decrease) increase in cash, cash equivalents and restricted cash during the period

12 unchanged sentences

Commitments and Contingencies

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income (Loss )

Restructuring

Other Expense, Net

Other (Expense) Income, Net

Income Tax Matters

Net Income Per Share

Net (Loss) Income Per Share

Supplemental Cash Flow Information

22 unchanged sentences

Supply Chain Financing .

Upon our acquisition of the Warrick Rolling Mill (as defined in Note 4 below), we became party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions without recourse.

Upon our acquisition of Warrick (as defined in Note 4 below), we became party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable to such customers’ financial institutions without recourse.

We sell our undivided interests in certain of these receivables at our discretion when we determine that the cost of these arrangements is less than the cost of servicing our receivables with existing debt.

1 unchanged sentence

As such, these transactions are being accounted for as a sale.

Discount fees related to the sale of trade accounts receivable under supply chain financing arrangements will be included in Other expense, net.

There were no such discount fees recognized during the quarter ended March 31, 2021.

During both the quarter and six months ended June 30, 2021, we sold trade accounts receivable totaling $ 316.0 million related to these supply chain financing arrangements, of which our customers’ financial institutions applied discount fees totaling $ 1.9 million.

To the extent discount fees related to the sale of trade accounts receivable under supply chain financing arrangements are not reimbursed by our customers, they are included in Other (expense) income, net.

As of June 30, 2021, we had been and/or expected to be fully reimbursed by our customers for these discount fees.

Fair Value of Goodwill and Intangible Assets.

Fair values and useful lives are determined based on, among other factors, the expected future period of benefit of the asset, the various characteristics of the asset, long‑term forecasts of the business, market prices, projected cash flows and the rate used in discounting those cash flows.

As the determination of an asset’s fair value and useful life involves management making certain estimates and because these estimates form the basis for the determination of whether or not an impairment charge should be recorded, these estimates are considered to be critical accounting estimates.

Adoption of New Accounting Pronouncements

3 unchanged sentences

Our adoption of ASU 2019-12 during the quarter ended March 31, 2021 did not result in a material impact on our consolidated financial statements.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Accounting Pronouncements Issued But Not Yet Adopted

4 unchanged sentences

We do not expect our adoption of Topic 848 to have a material impact on our consolidated financial statements.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Supplemental Balance Sheet Information

As of March 31, 2021

As of June 30, 2021

As of December 31, 2020

29 unchanged sentences

Other long-term liabilities

At March 31, 2021 and December 31, 2020 the current cost of our inventory exceeded its stated last-in, first-out (“LIFO”) value by $ 24.0 million and $ 8.4 million , respectively.

We treated inventory acquired in conjunction with the Warrick Rolling Mill acquisition (as defined in Note 4 below) as current year purchases within our existing single LIFO pool.

Based on market conditions during the quarter ended March 31, 2021, $ 20.1 million within Construction in progress as of March 31, 2021 related to temporarily idled projects, all of which are expected to resume at a future date.

At June 30, 2021 and December 31, 2020 the current cost of our inventory exceeded its stated last-in, first-out (“LIFO”) value by $ 73.4 million and $ 8.4 million , respectively.

We treated inventory acquired in conjunction with the Warrick acquisition (as defined in Note 4 below) as current year purchases within our existing single LIFO pool.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Based on market conditions during the six months ended June 30, 2021, $ 19.8 million within Construction in progress as of June 30, 2021 related to temporarily idled projects, all of which are expected to resume at a future date.

Temporary idled projects as of December 31, 2020 totaled $ 20.0 million.

We determine whether an agreement is a lease at inception.

1 unchanged sentence

Our leases have remaining lease terms of approximately one to 60 years , some of which may include options to extend the lease for up to 60 years and some of which may include options to terminate the lease within one year .

For purposes of calculating lease liabilities, these options are included within the lease term when it has become reasonably certain

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

that we will exercise such options .

For purposes of calculating lease liabilities, these options are included within the lease term when it has become reasonably certain that we will exercise such options.

Short-term leases with an initial term of 12 months or less are not recorded on our Consolidated Balance Sheets.

4 unchanged sentences

These non-lease components include items such as common area maintenance, taxes and insurance for our real estate leases, as well as maintenance charges related to our equipment leases.

We have, however, applied the practical expedient within ASU 2016-02 to not separate lease and non-lease components to our embedded supply system equipment leases and have therefore accounted for both lease and non‑lease components in determining the lease assets and liabilities.

We have, however, applied the practical expedient within ASU No.

2016-02, Leases (Topic 842):

Amendments to the Financial Accounting Standards Board Accounting Standards Codification (“ASU 2016-02”), to not separate lease and non-lease components to our embedded supply system equipment leases and have therefore accounted for both lease and non‑lease components in determining the lease assets and liabilities.

Many of our equipment leases contain clauses that require us to return the equipment with certain functionality intact.

1 unchanged sentence

Our lease agreements do not contain any material restrictive covenants.

The following table presents lease terms and discount rates as of March 31, 2021:

The following table presents lease terms and discount rates as of June 30, 2021:

Finance Leases

4 unchanged sentences

Classification

As of March 31, 2021

As of June 30, 2021

As of December 31, 2020

13 unchanged sentences

Total lease liabilities

The following table summarizes the components of lease cost on our Statements of Consolidated Income (in millions of dollars):

Quarter Ended March 31,

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The following table summarizes the components of lease cost on our Statements of Consolidated (Loss) Income (in millions of dollars):

Quarter Ended June 30,

Six Months Ended June 30,

Operating lease cost

4 unchanged sentences

Total lease cost

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The following table presents the maturity of our lease liabilities as of March 31, 2021 (in millions of dollars):

The following table presents the maturity of our lease liabilities as of June 30, 2021 (in millions of dollars):

Maturity of Lease Liabilities

6 unchanged sentences

Warrick Rolling Mill Acquisition .

On March 31, 2021, we acquired Alcoa Warrick LLC and certain assets comprising the aluminum casting and rolling mill facility located in Warrick County, Indiana (collectively, the “Warrick Rolling Mill”) for a purchase price of $ 670.0 million.

The Warrick Rolling Mill is a leading producer of can stock for the beverage and food packaging industry in North America.

On March 31, 2021, we acquired Alcoa Warrick LLC and certain assets comprising the aluminum casting and rolling mill facility located in Warrick County, Indiana (collectively, “Warrick”) for a purchase price of $ 670.0 million.

Warrick is a leading producer of can stock for the beverage and food packaging industry in North America.

The transaction provides us with non-cyclical end market diversification and re-entry into the packaging end market.

Acquisition-related costs incurred and expensed during the quarter ended March 31, 2021 were $ 11.0 million, primarily related to legal and consulting fees and included within Selling, general, administrative, research and development (“SG&A and R& D”) .

Acquisition-related costs incurred and expensed during the quarter and six months ended June 30, 2021 were $ 3.0 million and $ 14.0 million, respectively, primarily related to legal and consulting fees and included within Selling, general, administrative, research and development (“SG&A and R& D”) .

The preliminary purchase consideration to allocate was determined as follows (in millions of dollars):

7 unchanged sentences

We prepared an initial allocation of the purchase consideration as of the acquisition date based on our understanding of the fair value of the acquired assets and assumed liabilities.

As we continue to obtain additional information supporting the final valuation of inventories, property, plant and equipment, intangible assets and long-term liabilities, we will refine the estimates of fair value and may revise our allocation of the purchase consideration.

As we continue to obtain additional information supporting the final valuation of inventories, property, plant and equipment, intangible assets, other assets and long-term liabilities, we will refine the estimates of fair value and may revise our allocation of the purchase consideration.

We expect to finalize the valuation of the assets and liabilities, as well as the post-closing adjustments as soon as practicable, but in any event no later than one year from the acquisition date.

1 unchanged sentence

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed at the acquisition date (in millions of dollars):

The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the acquisition date as well as adjustments made up to June 30, 2021 (in millions of dollars):

Initial Allocation

Updated Allocation

Trade receivables

1 unchanged sentence

Inventories, including step up

Prepaid expenses and other current assets

Property, plant and equipment

9 unchanged sentences

Intangible Assets.

The following table presents the components of acquired intangible assets and their estimated useful lives as of the date of acquisition (in millions of dollars):

The following table presents the components of acquired intangible assets and their estimated useful lives (in millions of dollars):

Favorable lease contract

1 unchanged sentence

Customer relationships

Goodwill related to the Warrick Rolling Mill acquisition is primarily attributable to the assembled workforce and is expected to be deductible for income tax purposes.

The following table presents the changes to goodwill during the quarter ended March 31, 2021 (in millions of dollars):

Goodwill related to the Warrick acquisition is primarily attributable to the assembled workforce and is expected to be deductible for income tax purposes.

The following table presents the changes to goodwill during the six months ended June 30, 2021 (in millions of dollars):

Gross Carrying Value

2 unchanged sentences

Balance as of December 31, 2020

Warrick Rolling Mill acquisition

Balance as of March 31, 2021

Results of the Warrick Rolling Mill.

The acquisition of the Warrick Rolling Mill was completed after the close of business on March 31, 2021.

As such, there are no amounts to be included in our Statements of Consolidated Income.

Warrick acquisition

Balance as of June 30, 2021

Other Assets.

Represents assets to be purchased or constructed by Alcoa Corporation (“Alcoa”) following the close of the acquisition in connection with separating the rolling mill from the other businesses retained by Alcoa.

Results of Warrick.

See Note 15 for the net sales from the continuing operations of Warrick included in our Statements of Consolidated (Loss) Income for the quarter and six months ended June 30, 2021.

Net (loss) income for the quarter and six months ended June 30, 2021 are not provided as the Warrick results have been fully integrated and discrete financial information cannot be obtained without unreasonable effort.

Certain Unaudited Pro Forma Information.

The following unaudited pro forma financial information presents what our results would have been had the Warrick Rolling Mill been acquired on January 1, 2020.

The unaudited pro forma information includes adjustments and consequential tax effects related to:

The following unaudited pro forma financial information presents what our results would have been had

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Warrick been acquired on January 1, 2020.

The unaudited pro forma information include s adjustments and consequential tax effects related to :

(i) amortization and depreciation for intangible assets and property , plant and equipment acquired ;

2 unchanged sentences

The unaudited pro forma information presented below is for informational purposes only and is not necessarily indicative of our consolidated results of operations of the consolidated business had the acquisition occurred at the beginning of fiscal year 2020 or of the results of our future operations of the consolidated business .

Quarter Ended March 31,

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The Warrick Rolling Mill has historically purchased aluminum and electrical power from Alcoa Corporation's smelter in Warrick County, Indiana.

Alcoa Corporation’s Warrick smelter historically sold the aluminum to the Warrick Rolling Mill at smelter cost and electrical power from Alcoa Corporation's power plant in Warrick County, Indiana at negotiated prices between the parties.

As part of the acquisition of the Warrick Rolling Mill, we negotiated pricing for aluminum and electrical power with Alcoa Corporation at alternative rates which more closely align with market pricing.

Quarter Ended June 30,

Six Months Ended June 30,

Net (loss) income

The Warrick rolling mill has historically purchased aluminum and electrical power from Alcoa’s smelter and power plant in Warrick County, Indiana.

Alcoa’s Warrick smelter historically sold the aluminum to the Warrick rolling mill at smelter cost and electrical power from Alcoa’s power plant at negotiated prices between the parties.

As part of the acquisition of Warrick, we negotiated pricing for aluminum and electrical power with Alcoa at alternative rates which more closely align with market pricing.

The table above does not reflect the cost of aluminum and electrical power under these negotiated rates.

5 unchanged sentences

Most of our production facilities have similar programs for both hourly and salaried employees.

As of March 31, 2021, we had a liability of $ 2.7 million recorded within Accrued salaries, wages and related expenses for estimated probable future payments relating to the three month performance period of our 2021 STI Plan.

As of June 30, 2021, we had a liability of $ 6.7 million recorded within Accrued salaries, wages and related expenses for estimated probable future payments relating to the six month performance period of our 2021 STI Plan.

Pension and Similar Benefit Plans.

7 unchanged sentences

Despite the plan being an unfunded plan, we make an annual contribution to a rabbi trust to fulfill future funding obligations as contemplated by the terms of the plan.

The assets in the trust are held in various investment funds at certain registered investment companies and are accounted for as equity investments with changes in fair value recorded within Other expense, net (see Note 11).

Assets of our deferred compensation plan are included in Other assets, classified within Level 2 of the fair value hierarchy and are measured and recorded at fair value based on their quoted market prices.

The fair value of these assets at March 31, 2021 and December 31, 2020 was $ 9.5 million and $ 9.6 million, respectively.

The fair value of these assets at June 30, 2021 and December 31, 2020 was $ 10.3 million and $ 9.6 million, respectively.

Offsetting liabilities relating to the deferred compensation plan are included in Other accrued liabilities and Long-term liabilities.

6 unchanged sentences

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Warrick Rolling Mill Pension and Other Postretirement Benefits .

In conjunction with the Warrick Rolling Mill acquisition, we assumed certain defined benefit pension obligations for certain union employees hired prior to January 1, 2020 and other postretirement benefit (“OPEB”) obligations relating to retiree medical and life insurance benefits for certain union employees hired prior to July 1, 2010, and were active union employees of the Warrick Rolling Mill on March 31, 2021 and we agreed to establish new plans with respect to each.

Warrick Pension and Other Postretirement Benefits .

In conjunction with the Warrick acquisition, we assumed certain defined benefit pension obligations for certain union employees hired prior to January 1, 2020 and other postretirement benefit (“OPEB”) obligations relating to retiree medical and life insurance benefits for certain union employees hired prior to July 1, 2010, and were active union employees of the Warrick rolling mill on March 31, 2021 and we agreed to establish new plans with respect to each.

Pension and OPEB liabilities and expenses are determined using actuarial methodologies and incorporate significant assumptions, including the interest rate used to discount the future estimated liability, the expected long-term rate of return on plan assets and several assumptions relating to the employee workforce (salary increases, health care cost trend rates, retirement age and mortality).

The following data presents the key assumptions used and the amounts reflected in our consolidated financial statements with respect to the Warrick Rolling Mill’s pension plan and OPEB.

The following data presents the key assumptions used and the amounts reflected in our consolidated financial statements with respect to the Warrick pension plan and OPEB.

We used a March 31 measurement date for both of the plans.

The following table presents the assumptions used to determine the Warrick Rolling Mill pension and OPEB obligations:

The following table presents the assumptions used to determine the Warrick pension and OPEB obligations:

Warrick Pension Plan

7 unchanged sentences

Rate of compensation increase

The accumulated benefit obligation at March 31, 2021 for the Warrick Rolling Mill’s pension plan and OPEB was $ 6.7 million and $ 78.0 million, respectively, of which $ 1.0 million was recorded within Other accrued liabilities.

Our expected minimum contributions to the Warrick Rolling Mill pension plan and OPEB in 2021 is $ 0.1 million and $ 0.7 million, respectively.

The accumulated benefit obligation included in the opening balance sheet at March 31, 2021 for the Warrick pension plan and OPEB was $ 6.5 million and $ 78.1 million, respectively, of which $ 1.1 million was recorded within Accrued salaries, wages and related expenses.

Our expected minimum contributions to the Warrick pension plan and OPEB in 2021 is $ 0.1 million and $ 0.7 million, respectively.

The following table presents the minimum net benefits expected to be paid (in millions of dollars):

4 unchanged sentences

The following table presents the total expense related to all postretirement benefit plans (in millions of dollars):

Quarter Ended March 31,

Quarter Ended June 30,

Six Months Ended June 30,

Defined contribution plans 1

2 unchanged sentences

Net periodic postretirement benefit cost relating to Salaried VEBA 2

Net periodic postretirement benefit cost relating to Warrick pension plan 3

Net periodic postretirement benefit cost relating to Warrick OPEB plan 3

Substantially all of the expense related to employee benefits are in Cost of products sold, excluding depreciation and amortization and other items (“Cost of products sold” or “COGS”) with the remaining balance in SG&A and R&D.

The deferred compensation plan and the current service cost component of Net periodic postretirement benefit cost relating to Salaried VEBA are included within our Statements of Consolidated Income in SG&A and R&D for all periods presented.

All other components of Net periodic postretirement benefit cost relating to Salaried VEBA are included within Other expense, net, on our Statements of Consolidated Income.

All other components of Net periodic postretirement benefit cost relating to Salaried VEBA are included within Other (expense) income, net, on our Statements of Consolidated (Loss) Income.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The current service cost component of Net periodic postretirement benefit cost relating to both the Warrick pension plan and the Warrick OPEB plan are included within our Statements of Consolidated (Loss) Income in COGS for all periods presented.

All other components of Net periodic postretirement benefit cost relating to both the Warrick pension plan and the Warrick OPEB plan are included within Other ( expense ) income , net, on our Statements of Consolidated (Loss) Income.

Components of Net Periodic Postretirement Benefit Cost.

Our results of operations included the following impacts associated with our Canadian pension plan and the Salaried VEBA:

Our results of operations included the following impacts associated with our Canadian pension plan, the Salaried VEBA, Warrick pension plan and Warrick OPEB plan:

(i) a charge for service rendered by employees;

2 unchanged sentences

(iv) amortization of prior service costs associated with plan amendments;

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

and (v) amortization of net actuarial differences.

Net periodic benefit cost related to our Canadian pension plan was not material for the quarter ended March 31, 2021 .

Net periodic benefit cost related to our Canadian pension plan was not material for the quarter and six months ended June 30, 2021 and June 30, 2020.

The following table presents the components of Net periodic postretirement benefit cost relating to Salaried VEBA (in millions of dollars):

Quarter Ended March 31,

Quarter Ended June 30,

Six Months Ended June 30,

Salaried VEBA 1 :

6 unchanged sentences

We amortize prior service cost on a straight-line basis over the average remaining years of service to full eligibility for benefits of the active plan participants.

The following table presents the components of Net periodic postretirement benefit cost relating to Warrick Pension (in millions of dollars):

Quarter Ended June 30,

Six Months Ended June 30,

Warrick pension plan:

Interest cost

Total net periodic postretirement benefit cost relating to Warrick pension plan

The following table presents the components of Net periodic postretirement benefit cost relating to Warrick OPEB (in millions of dollars):

Quarter Ended June 30,

Six Months Ended June 30,

Warrick OPEB plan:

Interest cost

Total net periodic postretirement benefit cost relating to Warrick OPEB plan

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Derivatives, Hedging Programs and Other Financial Instruments

15 unchanged sentences

We manage this risk by allocating hedging transactions among multiple counterparties, using options as part of our hedging activities or both.

The aggregate fair value of our derivative instruments that were in a net liability position was $ 0.2 million and $ 2.7 million at March 31, 2021 and December 31, 2020, respectively, and we had no collateral posted as of those dates.

The aggregate fair value of our derivative instruments that were in a net liability position was zero at June 30, 2021 and $ 2.7 million at December 31, 2020, and we had no collateral posted as of those dates.

Additionally, our firm-price customer sales commitments create incremental customer credit risk related to metal price movements.

Under certain circumstances, we mitigate this risk by periodically requiring cash collateral from them, which we classify as deferred revenue and include as a component of Other accrued liabilities.

We had no cash collateral posted from our customers at both March 31, 2021 and December 31, 2020.

We had no cash collateral posted from our customers at June 30, 2021 and December 31, 2020.

For more information about concentration risks concerning customers and suppliers, see Note 15.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Cash Flow Hedges

1 unchanged sentence

Unrealized gains and losses associated with our cash flow hedges are deferred in Other comprehensive income (loss), net of tax, and reclassified to COGS when such hedges settle or when it is probable that the original forecasted transactions will not occur by the end of the originally specified time period.

See Note 9 for the total amount of gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments and fair value hedging instruments that was reported in Accumulated other comprehensive loss (“AOCI”), as well as the related reclassifications into earnings and tax effects.

See Note 9 for the total amount of gain or loss on derivative instruments designated and qualifying as cash flow hedging instruments and fair value hedging instruments that was reported in Accumulated other comprehensive income (loss) (“AOCI”), as well as the related reclassifications into earnings and tax effects.

Cumulative gains and losses related to cash flow hedges are reclassified out of AOCI and recorded within COGS when the associated hedged commodity purchases impact earnings.

5 unchanged sentences

We use third-party hedging instruments to limit exposure to metal price risk related to the metal pass through lag on some of our products and firm-price customer sales contracts.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Alloying Metals Hedges .

4 unchanged sentences

We, from time to time, in the ordinary course of business, enter into hedging transactions and/or physical delivery commitments with third parties to mitigate our risk from fluctuations in natural gas and electricity prices.

The following table summarizes the volume of our derivative and/or physical delivery commitments with energy companies in place to cover our exposure to price fluctuations of our expected variable priced energy purchases as of March 31, 2021:

Fair Value Hedges

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From time-to-time, we enter into commodity and foreign currency exchange contracts that are not designated as hedging instruments to mitigate certain short-term commodity and currency impacts, as identified.

For derivative instruments that are not designated as hedging instruments, the gain or loss on these derivatives is recognized within COGS or Other expense, net, depending on whether it relates to commodity risk or foreign currency risk, respectively.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

For derivative instruments that are not designated as hedging instruments, the gain or loss on these derivatives is recognized within COGS or Other (expense) income, net, depending on whether it relates to commodity risk or foreign currency risk, respectively.

Notional Amount of Derivative Contracts

The following table summarizes our derivative positions at March 31, 2021:

The following table summarizes our derivative positions at June 30, 2021:

Maturity Period

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7/21 through 12/22

Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primary aluminum.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The following table summarizes the amount of (gain) loss included on our Statements of Consolidated Income associated with all derivative contracts (in millions of dollars):

Quarter Ended March 31,

Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primary aluminum.

The following table summarizes the amount of (gain) loss included on our Statements of Consolidated (Loss) Income associated with all derivative contracts (in millions of dollars):

Quarter Ended June 30,

Six Months Ended June 30,

Statements of Consolidated

Income Classification

Total of income and expense line items presented in our Statements of Consolidated Income in which the effects of hedges are recorded:

(Loss) Income Classification

Total of income and expense line items presented in our Statements of Consolidated (Loss) Income in which the effects of hedges are recorded:

Cash flow hedges

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Depreciation and amortization

(Gain) loss recognized in our Statements of Consolidated Income related to cash flow hedges:

(Gain) loss recognized in our Statements of Consolidated (Loss) Income related to cash flow hedges:

Cost of products sold

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Cost of products sold

Alloying Metals (reclassification from AOCI due to forecasted transactions no longer probable of occurring)

Cost of products sold

Total (gain) loss recognized in our Statements of Consolidated Income related to cash flow hedges

Loss (gain) recognized in our Statements of Consolidated Income related to fair value hedges:

Cost of products sold

Total (gain) loss recognized in our Statements of Consolidated (Loss) Income related to cash flow hedges

(Gain) loss recognized in our Statements of Consolidated (Loss) Income related to fair value hedges:

Foreign exchange contracts

3 unchanged sentences

Depreciation and amortization

Total loss recognized in our Statements of Consolidated Income related to fair value hedges

Gain recognized in our Statements of Consolidated Income related to non-designated hedges:

Alloying Metals – Unrealized gain

Reclassification from AOCI related to early termination of firm commitment

Other (expense) income, net

Net settlement related to early termination of forward contracts

Other (expense) income, net

Total loss recognized in our Statements of Consolidated (Loss) Income related to fair value hedges

Loss recognized in our Statements of Consolidated (Loss) Income related to non-designated hedges:

Alloying Metals – Realized (gain) loss

Cost of products sold

Total gain recognized in our Statements of Consolidated Income related to non-designated hedges:

Alloying Metals – Unrealized loss

Cost of products sold

Total loss recognized in our Statements of Consolidated (Loss) Income related to non-designated hedges

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

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The following table presents the fair value of our derivative financial instruments (in millions of dollars):

As of March 31, 2021

As of June 30, 2021

As of December 31, 2020

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The following table presents the total amounts of derivative assets and liabilities on our Consolidated Balance Sheets (in millions of dollars):

As of March 31, 2021

As of June 30, 2021

As of December 31, 2020

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4.50% Senior Notes.

In April 2020 and May 2020, we issued $ 300.0 million and $ 50.0 million, respectively, aggregate principal amounts of our 6.50 % unsecured senior notes due May 1, 2025 at 100 % and 101 %, respectively, of the principal amounts (“6.50% Senior Notes”).

The unamortized amount of debt issuance costs relating to the 6.50% Senior Notes as of March 31, 2021 was

In May 2021, we issued $ 550.0 million aggregate principal amount of 4.50% unsecured senior notes due June 1, 2031 at 100 % of the principal amount (“4.50% Senior Notes”).

The restrictions and covenants related to our 4.50% Senior Notes are similar to those governing our pre-existing 4.625% unsecured senior notes due March 1, 2028 (“4.625% Senior Notes”).

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

$ 5.0 million .

Interest expense, including amortization of debt issuance costs and debt premium , relating to the 6.50% Senior Notes was $ 6.0 million for the quarter ended March 31, 2021 .

The unamortized amount of debt issuance costs as of June 30, 2021 was $ 8.5 million .

Interest expense, including amortization of debt issuance costs and debt premium, relating to the 4 .50% Senior Notes was $ 2.9 million for the quarter and six months ended June 30, 2021 .

Interest accrues on the 4.50 % Senior Notes beginning May 20, 2021 at a rate of 4.50% per annum and is payable semiannually on June 1 and December 1 of each year.

The first interest payment date is December 1, 2021 .

The effective interest rate of the 4 .50% Senior Notes is approximately 4.7 % per annum, taking into account the amortization of debt issuance costs.

The 4.50% Senior Notes were offered and sold in transactions not required to be registered under the Securities Act of 1933 and are not entitled to any registration rights.

The fair value of the outstanding 4.50% Senior Notes, which are Level 1 liabilities calculated based on pricing from trades around the balance sheet date, was approximately $ 566.0 million at June 30, 2021.

The 4.50% Senior Notes are unsecured obligations and are guaranteed by each of our existing and future domestic subsidiaries that is a borrower or guarantor under the revolving credit facility (see Revolving Credit Facility below).

We may redeem the 4.50% Senior Notes at our option in whole or part at any time on or after June 1, 2026 at a redemption price (expressed as a percentage of principal amount) of 102.25 %, declining to 101.50 %, 100.75 % and 100 % on or after June 1, 2027, June 1, 2028 and June 1, 2029, respectively, in each case plus any accrued and unpaid interest.

At any time prior to June 1, 2026, we may also redeem up to 40 % of the 4.50% Senior Notes using the net proceeds from certain equity offerings at a redemption price equal to 104.50 % of the principal amount plus any accrued and unpaid interest.

6.50% Senior Notes.

In April 2020 and May 2020, we issued $ 300.0 million and $ 50.0 million, respectively, aggregate principal amounts of our 6.50% unsecured senior notes due May 1, 2025 at 100 % and 101 %, respectively, of the principal amounts (“6.50% Senior Notes”).

On May 21, 2021 we redeemed in full the remaining balance of our 6.50% Senior Notes at a redemption price of 108.83 % of the principal amount plus $ 1.3 million of accrued and unpaid interest for a total net cash outflow of $ 382.2 million.

Upon redemption of the 6.50% Senior Notes, we recorded a loss on extinguishment of debt of $ 35.9 million within Other (expense) income, net on our Statements of Consolidated (Loss) Income, which included the premium payment of $ 30.9 million and a write-off of the remaining unamortized premium and debt issuance costs of $ 5.0 million (See Note 11 for details).

The effective interest rate of the 6.50% Senior Notes is approximately 6.8 % per annum, taking into account the amortization of premium and debt issuance costs.

The fair value of the outstanding 6.50% Senior Notes, which are Level 1 liabilities calculated based on pricing from trades around the balance sheet date, was approximately $ 371.3 million and $ 376.8 million at March 31, 2021 and December 31, 2020 , respectively.

Interest expense, including amortization of debt issuance costs, relating to the 6.50 % Senior Notes was $ 3.2 million and $ 9.2 million for the quarter and six months ended June 30, 2021, respectively, and was $ 4.2 million for both the quarter and six months ended June 30, 2020.

The fair value of the outstanding 6.50% Senior Notes, which are Level 1 liabilities calculated based on pricing from trades around the balance sheet date, was approximately $ 376.8 million at December 31, 2020.

4.625% Senior Notes.

In November 2019, we issued $ 500.0 million principal amount of 4.625 % unsecured senior notes due March 1, 2028 at 100 % of the principal amount (“ 4.625 % Senior Notes”).

The unamortized amount of debt issuance costs as of March 31, 2021 was $ 6.3 million.

Interest expense, including amortization of debt issuance costs, relating to the 4.625% Senior Notes was $ 6.0 million for both quarters ended March 31, 2021 and March 31, 2020.

In November 2019, we issued $ 500.0 million aggregate principal amount of 4.625 % unsecured senior notes due March 1, 2028 at 100 % of the principal amount.

The unamortized amount of debt issuance costs as of June 30, 2021 was $ 6.0 million.

Interest expense, including amortization of debt issuance costs, relating to the 4.625% Senior Notes was $ 6.0 million and $ 12.0 million for both the quarters and six months ended June 30, 2021 and June 30, 2020, respectively.

The effective interest rate of the 4.625% Senior Notes was approximately 4.8 % per annum, taking into account the amortization of debt issuance costs.

The fair value of the outstanding 4.625% Senior Notes, which are Level 1 liabilities, was approximately $ 511.7 million and $ 521.3 million at March 31, 2021 and December 31, 2020, respectively.

The amount of interest expense capitalized as construction in progress was $ 0.1 million and $ 0.3 million during the quarters ended March 31, 2021 and March 31, 2020, respectively.

The fair value of the outstanding 4.625% Senior Notes, which are Level 1 liabilities, was approximately $ 516.2 million and $ 521.3 million at June 30, 2021 and December 31, 2020, respectively.

The amount of interest expense capitalized as construction in progress was $ 0.3 million and $ 0.2 million during the quarters ended June 30, 2021 and June 30, 2020, respectively.

The amount of interest expense capitalized as construction in progress was $ 0.4 million and $ 0.5 million during the six months ended June 30, 2021 and June 30, 2020, respectively.

Revolving Credit Facility

Our credit agreement with Wells Fargo Bank, National Association, as administrative agent, and the other financial institutions party thereto (“Revolving Credit Facility”) provides us with a $ 375.0 million funding commitment through October 2024.

The following table summarizes availability and usage of our Revolving Credit Facility as determined by a borrowing base calculated as of March 31, 2021 (in millions of dollars except for borrowing rate):

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The following table summarizes availability and usage of our Revolving Credit Facility as determined by a borrowing base calculated as of June 30, 2021 (in millions of dollars except for borrowing rate):

Revolving Credit Facility borrowing commitment

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Furthermore, based on advancements in technology, we signed an Amended Agreed Order with Ecology in 2020 to evaluate and implement new technologies for PCB removal from groundwater on a pilot basis.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The primary technology we are evaluating is Ultraviolet Light Advanced Oxidation Process.

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The final remedial investigation report was approved by the OEPA during the quarter ended December 31, 2020.

We are currently preparing the required feasibility study, which we expect to submit to the OEPA for review during the quarter ending June 30, 2021.

We are currently preparing the required feasibility study, which we expect to submit to the OEPA for review during the quarter ending September 30, 2021.

The actual and final remediation cost estimates will not be fully determinable until the feasibility study has been accepted by the OEPA and the selected remediation design work plans are completed, which we expect to occur in the next 4 to 10 months.

At March 31, 2021, our environmental accrual of $ 18.0 million represented our estimate of the incremental remediation cost based on:

At June 30, 2021, our environmental accrual of $ 17.4 million represented our estimate of the incremental remediation cost based on:

(i) proposed alternatives in the final feasibility study related to the Trentwood facility;

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As additional facts are developed, feasibility studies are completed, remediation plans are modified, necessary regulatory approvals for the implementation of remediation are obtained, alternative technologies are developed and/or other factors change, there may be revisions to management’s estimates and actual costs may exceed the current environmental accruals.

We believe at this time that it is reasonably possible that undiscounted costs associated with these environmental matters may exceed current accruals by amounts that could be, in the aggregate, up to an estimated $ 11.6 million over the remediation period.

We believe at this time that it is reasonably possible that undiscounted costs associated with these environmental matters may exceed current accruals by

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

amounts that could be, in the aggregate, up to an estimated $ 11.6 million over the remediation period.

It is reasonably possible that our recorded estimate will change in the next 12 months .

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We are required to record the fair value of CAROs if they can be reasonably estimated.

As of March 31, 2021, we are in the process of evaluating and determining the fair value of a potential CARO, if any, acquired as part of the Warrick Rolling Mill acquisition.

As of June 30, 2021, we are in the process of evaluating and determining the fair value of a potential CARO, if any, acquired as part of the Warrick acquisition.

No liability has been recorded on our accompanying Consolidated Balance Sheets as the liability is currently indeterminable.

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NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in the accumulated balances for each component of AOCI (in millions of dollars):

Quarter Ended March 31,

Quarter Ended June 30,

Six Months Ended June 30,

Defined Benefit Pension Plan and Salaried VEBA:

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income tax expense 2

Net amortization reclassified from AOCI to Net income

Net amortization reclassified from AOCI to Net (loss) income

Translation impact on Canadian pension plan AOCI balance

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Unrealized gain on available for sale securities

income tax expense

income tax benefit (expense)

Net unrealized gain on available for sale securities

Reclassification of unrealized gain upon sale of available for sale securities 3

Reclassification of unrealized loss (gain) upon sale of available for sale securities 3

income tax benefit 2

Net gain reclassified from AOCI to Net income

Other comprehensive loss, net of tax

Net loss (gain) reclassified from AOCI to Net (loss) income

Other comprehensive income (loss), net of tax

Ending balance

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Reclassification of unrealized (gain) loss upon settlement of cash flow hedges 4

Reclassification due to forecasted transactions no longer probable of occurring 4

income tax benefit (expense) 2

Net (gain) loss reclassified from AOCI to Net income

Net (gain) loss reclassified from AOCI to Net (loss) income

Other comprehensive income (loss), net of tax

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Beginning balance

Unrealized loss on fair value hedges

Unrealized gain (loss) on fair value hedges

income tax benefit

Net unrealized loss on fair value hedges

Net unrealized gain (loss) on fair value hedges

Excluded component amortized from OCI to Net income

income tax expense 2

Net loss reclassified from AOCI to Net income

Other comprehensive loss, net of tax

Reclassification due to cancellation of firm commitment

income tax benefit (expense) 2

Net loss reclassified from AOCI to Net (loss) income

Other comprehensive income, net of tax

Ending balance

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Beginning balance

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax

Ending balance

Total AOCI ending balance

Amounts amortized out of AOCI relating to Salaried VEBA adjustments were included within Other expense, net, as a component of Net periodic postretirement benefit cost relating to Salaried VEBA.

Income tax amounts reclassified out of AOCI were included as a component of Income tax benefit (provision).

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Amounts reclassified out of AOCI relating to sales of available for sale securities were included as a component of Other expense, net.

Amounts amortized out of AOCI relating to Salaried VEBA adjustments were included within Other (expense) income, net, as a component of Net periodic postretirement benefit cost relating to Salaried VEBA.

Income tax amounts reclassified out of AOCI were included as a component of Income tax benefit (provision).

Amounts reclassified out of AOCI relating to sales of available for sale securities were included as a component of Other income (expense), net.

We use the specific identification method to determine the amount reclassified out of AOCI.

As of March 31, 2021, we estimate a net mark-to-market loss before tax of $ 13.3 million in AOCI will be reclassified into Net income upon settlement within the next 12 months.

As of June 30, 2021, we estimate a net mark-to-market gain before tax of $ 28.7 million in AOCI will be reclassified into Net (loss) income upon settlement within the next 12 months.

Restructuring

In order to align our projected operational requirements with reduced short and mid-term commercial aerospace demand as a result of the Coronavirus Disease 2019 (“COVID-19”) pandemic, we initiated a restructuring plan during the quarter ended June 30, 2020, which consisted primarily of reduction in force measures (“2020 Plan”).

Employee costs related to the 2020 Plan were included within Restructuring costs in our Statements of Consolidated Income and consisted of severance, voluntary buyout packages, outplacement services, estimated medical costs and associated payroll costs .

Employee costs related to the 2020 Plan were included within Restructuring costs in our Statements of Consolidated (Loss) Income and consisted of severance, voluntary buyout packages, outplacement services, estimated medical costs and associated payroll costs .

Substantially all of the costs associated with the restructuring efforts initiated under the 2020 Plan were incurred and expensed as of December 31, 2020.

We have incurred total Restructuring costs of $ 6.8 million under the 2020 Plan through the quarter ended March 31, 2021.

Cash payments associated with the restructuring plan are estimated to extend through 2022.

The following table summarizes the changes to our 2020 Plan liabilities during the quarter ended March 31, 2021 (in millions of dollars):

Quarter Ended March 31, 2021

We have incurred total Restructuring costs of $ 6.7 million under the 2020 Plan through June 30, 2021.

The following table summarizes the changes to our 2020 Plan liabilities during the six months ended June 30, 2021 (in millions of dollars):

Six Months Ended June 30, 2021

Balance as of December 31, 2020

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Other adjustments 1

Balance as of March 31, 2021

In March 2021, we revised our production forecast for 2021, thereby reducing the estimated number of headcount reductions necessary as compared with our initial restructuring plan.

Balance as of June 30, 2021

In March 2021 and May 2021, we revised our production forecast for 2021, thereby reducing the estimated number of headcount reductions necessary as compared with our initial restructuring plan.

As such, included in Other adjustments is a reduction to our estimated restructuring liability of $ 0.8 million with an offset to Restructuring costs to accommodate the revised headcount requirements.

Other Expense , Net

Other expense , net, consisted of the following (in millions of dollars):

Quarter Ended March 31,

Other ( Expense) Income, Net

Other ( expense) income, net, consisted of the following (in millions of dollars):

Quarter Ended June 30,

Six Months Ended June 30,

Interest income

Net periodic postretirement benefit cost relating to Salaried VEBA

Net periodic postretirement benefit cost

Realized gain on available for sale securities

Unrealized loss on equity securities

Unrealized gain on equity securities

(Loss) gain on extinguishment of debt

All other, net

Other expense, net

Income Tax Matters

The income tax benefit (provision) consisted of the following (in millions of dollars):

Quarter Ended March 31,

Other (expense) income, net

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The income tax benefit (provision) for the quarters ended March 31, 2021 and March 31, 2020 was $ 0.3 million and ($ 9.6 ) million, respectively, reflecting an effective tax rate of ( 6 % ) and 25 %, respectively.

The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended March 31, 2021 was primarily due to:

(i) a decrease of $ 0.6 million (or 15 % of taxable income) for a change in state tax rate due to the Warrick Rolling Mill acquisition;

(ii) a decrease of $ 0.4 million (or 10 % of taxable income) to the valuation allowance for certain state net operating losses;

and (iii) a decrease of $ 0.2 million (or 6 % of taxable income) for the recognition of excess tax benefits from stock-based compensation.

There was no material difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended March 31, 2020.

Our gross unrecognized benefits relating to uncertain tax positions were $ 4.0 million and $ 3.8 million at March 31, 2021 and December 31, 2020, respectively, of which, $ 1.5 million would be recorded through our income tax provision and thus impact the effective tax rate at both March 31, 2021 and December 31, 2020, respectively, if the gross unrecognized tax benefits were to be recognized.

Income Tax Matters

The income tax benefit (provision) consisted of the following (in millions of dollars):

Quarter Ended June 30,

Six Months Ended June 30,

The income tax benefit (provision) for the quarters ended June 30, 2021 and June 30, 2020 was $ 15.5 million and $( 1.3 ) million, respectively, reflecting an effective tax rate of 41 % and ( 24 %), respectively.

The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended June 30, 2021 was primarily due to:

(i) an increase of 22 % related to non‑deductible compensation expense;

(ii) an increase of 5 % related to foreign withholding tax;

(iii) an increase of 4 % due to various permanent items not deductible for tax purposes;

(iv) an increase of 1 % related to the valuation allowance for certain state net operating losses;

and (v) an increase of 1 % for the recognition of excess tax benefits from stock-based compensation, partially offset by a decrease of 15 % related to a Federal R&D Credit.

The difference between the effective tax rate and the projected blended statutory tax rate for the quarter ended June 30, 2020 was primarily due to:

(i) an increase of 37 % to the tax provision for a change in forecasted earnings and its impact on the annual effective tax rate and (ii) an increase of 19 % to the tax provision for an increase to the valuation allowance for certain state net operating losses.

The income tax benefit (provision) for the six months ended June 30, 2021 and June 30, 2020 was $ 15.8 million and $( 10.9 ) million, respectively, reflecting an effective tax rate of 47 % and 33 % respectively.

The difference between the effective tax rate and the projected blended statutory tax rate for the six months ended June 30, 2021 was primarily due to:

(i) an increase of 22 % related to non-deductible compensation expense;

(ii) an increase of 5 % related to foreign withholding tax;

(iii) an increase of 4 % due to various permanent items not deductible for tax purposes;

(iv) an increase of 3 % related to the valuation allowance for certain state net operating losses ;

(v) an increase of 2 % for a foreign tax rate difference ;

(vi) an increase of 2 % for the recognition of excess tax benefits from stock-based compensation;

and (vii) an increase of 2 % for a change in state tax rate due to the Warrick acquisition, partially offset by a decrease of 15 % related to a Federal R&D Credit.

The difference between the effective tax rate and the projected blended statutory tax rate for the six months ended June 30, 2020 was primarily due to:

(i) an increase of 4 % to the tax provision related to the valuation allowance for certain state net operating losses and (ii) an increase of 2 % to the tax provision related to non-deductible compensation expense, partially offset by a decrease of 2 % to the tax provision for the recognition of excess tax benefits from stock-based compensation.

Our gross unrecognized benefits relating to uncertain tax positions were $ 4.0 million and $ 3.8 million at June 30, 2021 and December 31, 2020, respectively, of which, $ 1.5 million would be recorded through our income tax provision and thus impact the effective tax rate at June 30, 2021 and December 31, 2020, respectively, if the gross unrecognized tax benefits were to be recognized.

We do not expect our gross unrecognized tax benefits to significantly change within the next 12 months.

Net Income Per Share

Basic net income per share is computed by dividing distributed and undistributed net income allocable to common shares by the weighted-average number of common shares outstanding during the applicable period.

Net (Loss) Income Per Share

Basic net (loss) income per share is computed by dividing distributed and undistributed net (loss) income allocable to common shares by the weighted-average number of common shares outstanding during the applicable period.

The basic weighted-average number of common shares outstanding during the period excludes non-vested share-based payment awards.

Diluted net income per share was calculated under the treasury stock method for the quarter ended March 31, 2021 and March 31, 2020, which in both periods was more dilutive than the two-class method.

The following table sets forth the computation of basic and diluted net income per share (in millions of dollars, except share and per share amounts):

Quarter Ended March 31,

Denominator – Weighted-average common shares outstanding (in thousands):

dilutive effect of non-vested common shares, restricted stock units and performance shares 1

Net income per common share, Basic:

Net income per common share, Diluted:

Diluted net (loss) income per share was calculated under the treasury stock method for the quarters and six months ended June 30, 2021 and June 30, 2020, which in both periods was more dilutive than the two-class method.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

Quantities in the following discussion are denoted i n whole shares .

During the quarter s ended March 31, 2021 and March 31, 2020 , approximately 22,000 shares and 2,000 shares , respectively, were excluded from the weighted-average diluted shares computation as their inclusion would have been anti-dilutive.

The following table sets forth the computation of basic and diluted net (loss) income per share (in millions of dollars, except share and per share amounts):

Quarter Ended June 30,

Six Months Ended June 30,

Net (loss) income

Denominator – Weighted-average common shares outstanding (in thousands):

dilutive effect of non-vested common shares, restricted stock units and performance shares 1

Net (loss) income per common share, Basic:

Net (loss) income per common share, Diluted:

Quantities in the following discussion are denoted in whole shares.

For the quarter ended June 30, 2021, the quarter ended June 30, 2020 and the six months ended June 30, 2021, approximately 226,000 , 71,000 and 214,000 potentially dilutive shares, respectively, were excluded from the computation of net loss per share as their effect would have been anti-dilutive.

During the six months ended June 30, 2020, approximately 38,000 shares were excluded from the weighted‑average diluted shares computation as their inclusion would have been anti-dilutive.

Supplemental Cash Flow Information

Quarter Ended March 31,

Six Months Ended June 30,

(In millions of dollars)

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Finance lease liabilities arising from obtaining finance lease assets

As of March 31,

As of June 30,

(In millions of dollars)

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Business, Product and Geographical Area Information

Our primary line of business is the production of semi-fabricated specialty aluminum mill products, such as aluminum plate and sheet and extruded and drawn products, primarily used in aerospace and high strength (“Aero/HS products”), automotive (“Automotive Extrusions”), general engineering (“GE products”) and other industrial (“Other products”).

Our acquisition of the Warrick Rolling Mill on March 31, 2021 (see Note 4) will expand our end market applications to include aluminum beverage and food packaging.

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

packaging products (“Packaging”), automotive ( “ Automotive Extrusions ” ), general engineering ( “ GE products ” ) and other industrial ( “ Other products ” ).

We operate 13 focused production facilities in the United States and one in Canada.

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The following table presents Net sales by end market applications and by timing of control transfer (in millions of dollars):

Quarter Ended March 31,

Quarter Ended June 30,

Six Months Ended June 30,

Aero/HS products

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Total net sales

KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES

NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

The following table presents geographic information for income taxes paid (in millions of dollars):

Quarter Ended March 31,

Quarter Ended June 30,

Six Months Ended June 30,

Income taxes paid:

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Dividend Declaration.

On April 13, 2021 , we announced that our Board of Directors declared a quarterly cash dividend of $ 0.72 per common share.

As such, we expect to pay approximately $ 11.6 million (including dividend equivalents) on or about May 14, 2021 to stockholders of record and the holders of certain restricted stock units at the close of business on April 23, 2021 .

On July 13, 2021 , we announced that our Board of Directors declared a quarterly cash dividend of $ 0.72 per common share.

As such, we expect to pay approximately $ 11.6 million (including dividend equivalents) on or about August 13, 2021 to stockholders of record and the holders of certain restricted stock units at the close of business on July 23, 2021 .

Management ’ s Discussion and Analysis of Financial Condition and Results of Operations

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These factors include:

(i) the effectiveness of management ’ s strategies and decisions;

(ii) general economic and business conditions, including the impact of the global outbreak of Coronavirus Disease 2019 (“COVID-19”) and governmental and other actions taken in response, cyclicality and other conditions in the aerospace, automotive and other end market applications we serve;

(iii) developments in technology;

(iv) new or modified statutory or regulatory requirements;

and (v) changing prices and market conditions.

(i) the effectiveness of management ’ s strategies and decisions, including strategic investments, capital spending strategies and the execution of those strategies;

(ii) general economic and business conditions, including the impact of the global outbreak of Coronavirus Disease 2019 (“COVID-19”) and governmental and other actions taken in response, cyclicality, reshoring, supply interruptions and other conditions that impact demand drivers in the aerospace/high strength, automotive, general engineering, packaging and other end markets we serve;

(iii) our ability to participate in mature and anticipated new automotive programs expected to launch in the future and successfully launch new automotive programs;

(iv) changes or shifts in defense spending due to competing national priorities;

(v) developments in technology;

(vi) new or modified statutory or regulatory requirements;

and (vii) changing prices and market conditions.

This Item, Part II, Item 1A.

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This information contains certain non-GAAP financial measures.

A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”) in the statements of income, balance sheets or statements of cash flows of the company.

A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles (“GAAP”) in the statements of (loss) income, balance sheets or statements of cash flows of the company.

We have provided a reconciliation of non‑GAAP financial measures to the most directly comparable financial measure in the accompanying tables.

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Our intent is to allow users of the financial statements to consider our results both in light of and separately from such items.

For a reconciliation of Adjusted EBITDA to Net income, see “Results of Operations - Selected Operational and Financial Information ” below.

For a reconciliation of Adjusted EBITDA to Net (loss) income, see “Results of Operations - Selected Operational and Financial Information ” below.

Reconciliations of certain forward-looking non-GAAP financial measures to comparable GAAP measures are not provided because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted or provided without unreasonable effort.

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However, for some of our higher VAR products sold on a spot basis, competitive dynamics may limit the amount and/or delay the timing of selling price increases to recover our increased aluminum costs, resulting in a lag up to several months during which we may be exposed to metal price risk.

As a result, we can experience an adverse impact when metal prices increase, and a favorable impact to us when metal prices decline, as we and our competitors tend to defer adjusting pricing unless market dynamics require such in a declining metal cost environment.

As a result, we can experience an adverse impact when metal prices increase, and a favorable impact to us when metal prices decline, as we and our competitors tend to defer adjusting pricing unless

market dynamics require such in a declining metal cost environment.

Additionally, we sometimes enter into firm-price customer sales agreements that specify a firm underlying metal price plus a conversion price.

Spot sales with lagged metal price pass through and

firm-price sales agreements create metal price exposure for us, which we mitigate through a hedging program with an objective to remain metal price neutral.

Spot sales with lagged metal price pass through and firm-price sales agreements create metal price exposure for us, which we mitigate through a hedging program with an objective to remain metal price neutral.

Our pricing policies and hedging program are intended to significantly reduce or eliminate the impact on our profitability of fluctuations in underlying metal price so that our earnings are predominantly associated with the conversion of aluminum to semi‑fabricated mill products.

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general engineering (“GE products”);

aluminum beverage and food packaging (“Packaging”), see “Warrick Acquisition” below;

and 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.

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

The sophistication of our products is due to the metallurgy and physical properties of the metal and the special characteristics that are required for particular end uses.

We strategically choose to serve technically challenging 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.

With respect to the global market for flat-rolled aluminum mill products, our focus is on heat treat plate and sheet for applications that require higher strength and other desired product attributes that cannot be achieved by common alloy rolled products.

With respect to flat-rolled aluminum mill products, our heat treat plate and sheet focus is on applications that require higher strength and other desired product attributes that cannot be achieved by common alloy rolled products.

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 addition, we also produce flat-rolled aluminum products for the beverage and food-packaging industry, primarily serving the North America can market.

Our Packaging products require demanding attributes and can be further processed to include a coating and slitting depending on customer specifications.

Similarly, in the areas of aluminum extrusions, 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.

We primarily serve North American demand for extruded mill products.

Our rolling mill in Spokane, Washington (“Trentwood”) produces heat treat plate and sheet for aerospace and general engineering end market applications.

Our rolling mill in Spokane, Washington (“Trentwood”) produces heat treat plate and sheet for aerospace and general engineering end market applications and our rolling mill in Warrick County, Indiana (“Warrick”) produces flat rolled aluminum coil for packaging applications.

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.

Additionally, we have a facility in Columbia, New Jersey that 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 consolidated Net sales for the quarter ended March 31, 2021 totaled $324.0 million on 136.9 million pounds shipped from our facilities.

We employed approximately 2,590 people at March 31, 2021.

We have long-standing relationships with our customers, which consist primarily of blue-chip companies including leading aerospace and automotive manufacturers, tier one aerospace and automotive suppliers and metal service centers.

Historically, approximately 43% of our shipments has been sold direct to manufacturers or tier one suppliers and approximately 57% has been sold to metal service centers.

Our consolidated Net sales for the six months ended June 30, 2021 totaled $1,065.0 million on 473.5 million pounds shipped from our facilities.

We employed 3,780 people at June 30, 2021.

As of June 30, 2021, approximately 65% of our shipments has been sold direct to manufacturers or tier one suppliers and approximately 35% has been sold to metal service centers.

In our served markets, we seek to be the supplier of choice by pursuing “Best in Class” customer satisfaction driven by quality, availability, service and delivery performance.

We strive to differentiate our product portfolio through our broad product offering and our KaiserSelect ® products, which are engineered and manufactured to deliver enhanced product characteristics with improved consistency, so as to result in better performance, lower waste and, in many cases, lower production cost for our customers.

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.

Demand for Automotive Extrusions is driven by factors that include automotive build rates in North America, aluminum content and the success and customer acceptance of automotive platforms our products are produced for, which may be significantly different than overall automotive build rates.

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 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.

We believe that these attributes are not easily replicated by our competitors and are important to our customers, who are typically tier one automotive suppliers.

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.

Warrick Rolling Mill Acquisition

On March 31, 2021, after the close of business, we completed our purchase 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”) from Alcoa Corporation.

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

Warrick Acquisition

This acquisition will

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

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.

Highlights of the quarter ended March 31, 2021 include:

Completed our $670.0 million purchase of the Warrick Rolling Mill from Alcoa Corporation;

For the quarter ended March 31, 2021, we reported Operating income of $16.9 million, VAR of $171.7 million and Adjusted EBITDA of $37.5 million, all of which excluded Warrick Rolling Mill results;

Automotive Extrusions experienced robust demand with multiple new programs successfully launched and underway;

GE products remains strong with solid underlying demand and re-stocking in the supply chain;

Commercial aerospace demand has stabilized but remains weak, while demand for defense applications remains strong;

Combined cash and cash equivalents and net borrowing availability under our revolving credit facility with Wells Fargo Bank, National Association, as administrative agent, and the other financial institutions party thereto (”Revolving Credit Facility”) was $495.2 million as of March 31, 2021;

We paid cash dividends and dividend equivalents of $0.72 per share or $11.7 million during the quarter ended March 31, 2021.

The acquisition of Warrick 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.

Highlights of the quarter ended June 30, 2021 include:

For the quarter ended June 30, 2021, reported Operating income was $11.1 million, VAR was $317.9 million and Adjusted EBITDA was $58.7 million, all of which included the first full quarter of Warrick results, including costs associated with integrating the business;

Improving Aero/HS products demand as commercial aerospace begins to recover with recovery in air travel and continuing strong demand for business jets and defense applications;

GE products experienced strong service center customer demand supported by continuing re-stocking in the supply chain and strong demand for semi-conductor, industrial and machine tool applications;

Automotive Extrusions demand improved slightly, temporarily impacted by semi-conductor shortages in the automotive industry;

Issued $550.0 million aggregate principal amounts of 4.50% unsecured senior notes due June 1, 2031 (“4.50% Senior Notes”) resulting in proceeds of $541.4 million, net of $8.6 million of transaction fees;

Redeemed all outstanding 6.50% unsecured senior notes due May 2025 (“6.50% Senior Notes”) using proceeds from our 4.50% Senior Notes offering, resulting in a cash outflow for principal, redemption premium and accrued interest of $382.2 million;

Paid cash dividends and dividend equivalents of $0.72 per share or $11.7 million during the quarter ended June 30, 2021.

Results of Operations

Consolidated Results of Operations

Net sales totaled $324.0 million and $369.3 million for the quarters ended March 31, 2021 and March 31, 2020, respectively, reflecting an 18.7 million pound (12%) decrease in shipment volume.

The shipment volume decrease reflected:

(i) a 30.3 million pound (46%) decrease in Aero/HS products compared to the quarter ended March 31, 2020, primarily due to the impact of the COVID-19 pandemic on commercial aerospace demand and (ii) a 0.1 million pound (4%) decrease in Other products reflecting our planned exit from non-strategic applications, partially offset by:

(i) an 8.8 million pound (14%) increase in GE products reflecting the impacts of customer restocking and demand for semi-conductor and other applications and (ii) a 2.9 million pound (12%) increase in Automotive Extrusions reflecting new program launches.

The average realized sales price per pound reflected a $0.14/lb (14%) increase in average Hedged Cost of Alloyed Metal price per pound and a $0.14/lb (10%) decrease in VAR per pound due to the mix within Aero/HS and GE products.

Net sales totaled $741.0 million and $275.7 million for the quarters ended June 30, 2021 and June 30, 2020, respectively, reflecting a 218.0 million pound (184%) increase in shipment volume and a $(0.12)/lb (5%) decrease in average realized sales price per pound.

The shipment volume increase reflected:

(i) a 185.9 million pound addition in Packaging due to our Warrick acquisition;

(ii) a 21.5 million pound (37%) increase in GE products reflecting the impacts of customer restocking, reshoring of supply lines in North America and stronger demand as the industrial markets recover from the COVID-19 pandemic;

(iii) a 14.1 million pound (148%) increase in Automotive Extrusions reflecting the launch and ramp up of new programs, as well as the COVID‑19 pandemic related automotive production shutdowns that occurred during the quarter ended June 30, 2020;

and (iv) a 3.9 million pound (144%) increase in Other products reflecting an increase of non-strategic rolled products acquired with the Warrick acquisition, partially offset by a 7.4 million pound (15%) decrease in Aero/HS products compared to the quarter ended June 30, 2020, primarily due to the impact of the COVID-19 pandemic on commercial aerospace demand.

The average realized sales price per pound reflected a $0.41/lb (48%) increase in average Hedged Cost of Alloyed Metal price per pound offset by a $0.53/lb (36%) decrease in VAR per pound due primarily to the introduction of lower VAR per pound Packaging products.

See the table in “ Selected Operational and Financial Information” below for further details.

Net sales totaled $1,065.0 million and $645.0 million for the six months ended June 30, 2021 and June 30, 2020, respectively, reflecting a 199.3 million pound (73%) increase in shipment volume and a $0.10/lb (4%) decrease in average realized sales price per pound.

The shipment volume increase primarily reflected:

(i) 185.9 million pound addition in Packaging due to our Warrick acquisition;

(ii) a 30.3 million pound (25%) increase in GE products reflecting continued strong underlying demand and restocking in the supply chain;

(iii) a 17.0 million pound (50%) increase in Automotive Extrusions reflecting the launch and ramp up of new programs, as well as the COVID‑19 pandemic related automotive production shutdowns that occurred during the quarter ended June 30, 2020;

and (iv) a 3.8 million pound (73%) increase in Other products reflecting an increase of non-strategic rolled products acquired with the Warrick acquisition, partially offset by a 37.7 million pound (33%) decrease in Aero/HS products reflecting

COVID ‑19 pandemic related lower demand for our commercial aerospace products .

The decrease in average realized sales price per pound reflected a $0.30 /lb ( 33% ) increase in average Hedged Cost of Alloyed Metal prices per pound offset by a $0.40 /lb ( 28% ) decrease in VAR per pound due primarily to the introduction of lower VAR per pound Packaging products.

See the table in “ Selected Operational and Financial Information ” below for further details.

Cost of Products Sold, Excluding Depreciation and Amortization and Other Items.

Cost of products sold, excluding depreciation and amortization and other items for the quarter ended March 31, 2021 totaled $262.5 million, or 81% of Net sales, compared to $286.6 million , or 78% of Net sales, for the quarter ended March 31, 2020.

The decrease of $24.1 million reflected:

(i) a $23.8 million decrease in net manufacturing conversion and other costs and (ii) a $0.3 million decrease in Hedged Cost of Alloyed Metal.

8 million decrease in net manufacturing conversion and other costs reflected :

(i) a $ 20.1 million decrease related to lower sales and a reduction of manufacturing costs to meet reduced end market application demand and (ii) $ 5.

2 million of lower benefits and overhead costs , partially offset by a $ 1.7 million increase in other manufacturing costs due to lower manufacturing efficiencies .

Of the $0.3 million decrease in Hedged Cost of Alloyed Metal, $18.3 million was due to lower shipment volume, as discussed above in “ Net Sales,” offset by $18.0 million due to higher hedged metal prices .

See “ Selected Operational and Financial Information ” below for a further discussion of the comparative results of operations for the quarters ended March 31, 2021 and March 31, 2020 .

Cost of products sold, excluding depreciation and amortization and other items for the quarter ended June 30, 2021 totaled $673.3 million, or 91% of Net sales, compared to $224.5 million, or 81% of Net sales, for the quarter ended June 30, 2020.

The increase of $448.8 million reflected:

(i) a $321.8 million increase in Hedged Cost of Alloyed Metal and (ii) a $127.0 million increase in net manufacturing conversion and other.

Of the $321.8 million increase in Hedged Cost of Alloyed Metal, $186.2 million was due to higher shipment volume, as discussed above in “ Net Sales,” and $135.6 million was due to higher hedged metal prices .

The $127.0 million increase in net manufacturing conversion and other costs reflected:

(i) a $73.8 million increase related to higher sales and an increase of manufacturing costs to meet increased end market application demand;

(ii) $24.5 million of higher benefits and overhead costs;

(iii) a $7.9 million increase in other manufacturing costs due to lower manufacturing efficiencies;

(iv) a $5.6 million increase in other fixed costs;

(v) a $5.3 million increase in freight costs;

(vi) a $4.4 million increase in acquisition costs;

(vii) a $3.8 million increase in major maintenance costs;

and (viii) a $1.2 million increase in other variable costs.

See “ Selected Operational and Financial Information” below for a further discussion of the comparative results of operations for the quarters ended June 30, 2021 and June 30, 2020.

Cost of products sold, excluding depreciation and amortization and other items for the six months ended June 30, 2021 totaled $935.8 million, or 88% of Net sales, compared to $511.1 million, or 79% of Net sales, for the six months ended June 30, 2020.

The increase of $424.7 million reflected a $321.5 million increase in Hedged Cost of Alloyed Metal and a $103.2 million increase in net manufacturing conversion and other costs.

Of the $321.5 million increase in Hedged Cost of Alloyed Metal, $184.6 million was due to higher shipment volume and $136.9 million was due to higher hedged metal prices, as discussed above in “ Net Sales.

” The $103.2 million increase in net manufacturing conversion and other costs reflected:

(i) a $53.6 million increase related to higher sales and an increase of manufacturing costs to meet increased end market application demand;

(ii) $19.3 million of higher benefits and overhead costs;

(iii) a $9.5 million increase in other manufacturing costs due to lower manufacturing efficiencies;

(iv) a $7.0 million increase in other fixed costs;

(v) a $4.6 million increase in freight costs;

(vi) a $4.4 million increase in acquisition costs;

(vii) a $3.2 million increase in major maintenance costs;

and (viii) $1.6 million in higher energy costs.

See “ Selected Operational and Financial Information” below for a further discussion of the comparative results of operations for the six months ended June 30, 2021 and June 30, 2020.

Selling, General, Administrative, Research and Development ( “ SG&A and R&D ” ).

SG&A and R&D expense totaled $31.8 million and $23.9 million for the quarters ended March 31, 2021 and March 31, 2020, respectively.

The increase during the quarter ended March 31, 2021 was due primarily to a $10.5 million increase in legal and consulting expense primarily related to the Warrick Rolling Mill acquisition, partially offset by:

(i) a $1.1 million reduction in salaries and benefits and (ii) a $0.7 million reduction in travel expense.

Restructuring Benefit.

SG&A and R&D expense totaled $30.9 million and $22.7 million for the quarters ended June 30, 2021 and June 30, 2020, respectively and $62.7 million and $46.6 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

The increase during the quarter ended June 30, 2021 was due primarily to:

(i) a $4.7 million increase in legal, consulting and outsourced services expense primarily related to the Warrick acquisition;

(ii) a $2.9 million increase in employee incentive programs;

and (iii) a $1.1 million increase in salaries and benefits, partially offset by a $1.5 million reduction in environmental expenses.

The increase for the six months ended June 30, 2021 compared with June 30, 2020 was due primarily to:

(i) a $14.9 million increase in legal, consulting and outsourced services expense primarily related to the Warrick acquisition and (ii) a $3.3 million increase in employee incentive programs, partially offset by a $1.9 million reduction in environmental expenses.

Restructuring (Benefit) Cost.

See Note 10 of Notes to Interim Consolidated Financial Statements included in this Report for further information regarding the restructuring plan.

Other Operating Income, net .

During the quarter and six months ended June 30, 2020, our London, Ontario facility recognized a total of $1.1 million of payroll subsidies under the Canada Emergency Wage Subsidy Program.

Interest Expense.

Interest expense represents cash and non-cash interest expense incurred on our unsecured senior notes and our Revolving Credit Facility, net of capitalized interest.

Interest expense was $12.3 million and $6.1 million for the quarters ended March 31, 2021 and March 31, 2020, respectively.

Interest expense was $12.4 million and $10.5 million for the quarters ended June 30, 2021 and June 30, 2020, respectively and $24.7 million and $16.6 million for the six months ended June 30, 2021 and June 30, 2020, respectively.

See Note 7 of Notes to Interim Consolidated Financial Statements included in this Report for a discussion of:

(i) our debt and credit facilities that were in effect during each of the quarters ended March 31, 2021 and March 31, 2020 and (ii) interest expense capitalized as part of construction in progress.

Other Expense, Net.

(i) our debt and credit facilities that were in effect during the quarters and six months ended June 30, 2021 and June 30, 2020 and (ii) interest expense capitalized as part of construction in progress.

Other (Expense) Income, Net.

See Note 11 of Notes to Interim Consolidated Financial Statements included in this Report for details.

Income Tax Provision.

See Note 12 of Notes to Interim Consolidated Financial Statements included in this Report for disclosure regarding our income tax provision.

Income Tax Benefit (Provision).

See Note 12 of Notes to Interim Consolidated Financial Statements included in this Report for disclosure regarding our income tax benefit (provision).

Selected Operational and Financial Information

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The table below provides selected operational and financial information (in millions of dollars):

Quarter Ended March 31,

Quarter Ended June 30,

Six Months Ended June 30,

Net (loss) income

Interest expense

Other expense, net

Other expense (income) , net

Income tax (benefit) provision

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Non-run-rate items:

Restructuring benefit

Restructuring (benefit) cost

Adjustments to plant-level LIFO 1

Mark-to-market (gain) loss on derivative instruments 2

Mark-to-market loss on derivative instruments 2

Workers' compensation cost due to discounting

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This line item represents the conversion from GAAP LIFO applied on a consolidated basis to monthly LIFO applied on a plant-by-plant basis.

Mark-to-market (gain) loss on derivative instruments for 2021 and 2020 represents:

For the quarter and six months ended June 30, 2021, this line item reflects a $7.8 million non-run-rate LIFO charge that resulted from a purchase accounting adjustment to step-up Warrick’s inventory to fair value.

Mark-to-market loss on derivative instruments for 2021 and 2020 represents:

(i) the reversal of mark-to-market (gain) loss on commodity hedges entered into prior to the adoption of Accounting Standards Update (“ASU”) No.

2017-12, Derivatives and Hedging (Topic 815):

Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) and

settled in the periods presented above and (ii) (gain) loss on non-designated commodity hedges .

Adjusted EBITDA reflects the realized gains and loss es related to these derivatives upon settlement.

Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”) and settled in the periods presented above;

(ii) (gain) loss on non-designated commodity hedges;

and (iii) reclassifications out of Accumulated other comprehensive loss due to forecasted transactions no longer probable of occurring.

Adjusted EBITDA reflects the realized gains and losses related to these derivatives upon settlement.

Non-run-rate environmental expenses are related to legacy activities at operating facilities prior to July 6, 2006.

See Note 8 of Notes to Interim Consolidated Financial Statements included in this Report for additional information relating to the environmental expenses.

Non-run-rate acquisition costs are acquisition-related transaction costs primarily comprised of legal and consulting fees.

Adjusted EBITDA for the quarter ended March 31, 2021 was $21.9 million lower than Adjusted EBITDA for the quarter ended March 31, 2020, primarily reflecting a $26.4 million sales impact, partially offset by a $5.7 million reduction in plant and corporate overhead.

The table below provides our shipment and VAR information (in millions of dollars, except shipments and VAR per pound) by end market applications:

Quarter Ended March 31,

Acquisition costs are non-run-rate acquisition-related transaction costs, which include legal and consulting fees, as well non‑cash hedging charges recorded in connection with our Warrick acquisition.

Adjusted EBITDA for the quarter ended June 30, 2021 was $24.3 million higher than Adjusted EBITDA for the quarter ended June 30, 2020, primarily reflecting a $75.0 million sales impact driven by the addition of Packaging and improvements in our other end markets, partially offset by:

(i) an $18.3 million increase in plant and corporate overhead;

(ii) $18.0 million in manufacturing inefficiencies as we continue to incorporate the Warrick operation into our systems;

(iii) a $4.8 million increase in incentive compensation;

(iv) $3.8 million of major maintenance;

and (v) $3.2 million of increased lease and insurance costs.

Adjusted EBITDA for the six months ended June 30, 2021 was $2.4 million higher than Adjusted EBITDA for the six months ended June 30, 2020, primarily reflecting a $48.6 million sales impact driven by the addition of Packaging and improvements in our other end markets, partially offset by:

(i) $17.3 million in manufacturing inefficiencies as we continue to incorporate the Warrick operation into our systems;

(ii) a $12.7 million increase in plant and corporate overhead;

(iii) a $4.9 million increase in incentive compensation;

(iv) $4.6 million of increased lease and insurance costs;

and (v) $3.2 million of major maintenance.

The table below provides our shipment and VAR information (in millions of dollars, except shipments and VAR per po und) by end market applications :

Quarter Ended June 30,

Six Months Ended June 30,

Aero/HS Products:

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Hedged Cost of Alloyed Metal

Shipments (mmlbs)

Hedged Cost of Alloyed Metal

Automotive Extrusions:

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Hedged Cost of Alloyed Metal

Prior to the completion of the Warrick Rolling Mill acquisition, our outlook for the full year 2021 anticipated total VAR up 5% to 10% year-over-year and an EBITDA margin (Adjusted EBITDA as a percentage of VAR) comparable to 2020 driven by strong growth in Automotive Extrusions, defense applications and GE products.

With the Warrick Rolling Mill acquisition now completed,

we have updated the full year outlook for 2021 to reflect approximately $375 .0 million to $400 .0 million of additional VAR for the remainder of the year and reiterate our expectation of an EBITDA margin comparable to 2020.

We anticipate Aero/HS products demand to continue improving through the balance of the year driven by growth in defense related programs and business jet production.

Demand for our products related to large commercial airframe production appears to have stabilized with continued recovery through 2023 to 2024.

We continue to anticipate improving trends across our end markets with strong secular demand growth for Aero/HS products, Packaging and Automotive Extrusions and solid market dynamics continuing to support growth in our GE Products.

Aero/HS products is beginning to build positive momentum as commercial air travel recovers and aerospace/high strength demand is expected to continue improving through the balance of 2021 driven by growth in defense related programs and business jet production.

We continue to expect the aerospace market to recover to record 2019 levels by the 2023/2024 timeframe and then resume its pre-pandemic 3% to 4% compound annual growth rate (“CAGR”).

Demand for our Automotive Extrusions remains robust with multiple new programs successfully launched and underway.

We have experienced slight delays in some programs mainly due to the semiconductor chip shortage anticipated to continue through the first half of 2021.

If the shortage is not recoverable in the second half of 2021, Automotive Extrusions VAR for 2021 could be slightly lower than previously anticipated.

Strength in demand for our GE products continues to reflect strong underlying demand driven by growth in semiconductor and automotive applications, strong service center demand and restocking in the supply chain as lead-times from mills continue to extend.

The outlook for aluminum packaging is very promising with favorable demand and industry dynamics.

North American can demand was up 5% year-over-year in 2020 and projected to increase an additional 3% to 5% in 2021 and beyond.

Can stock demand is driven by sustainability trends and the secular shift from plastic to aluminum in the packaging industry and growing consumer preference for crafted beer and spiked seltzer.

In addition, capacity for beverage and food can stock has shifted from aluminum packaging into other end markets including Automotive Extrusions and other industrial applications.

As we look forward, we are well positioned for continued long-term growth with a diversified portfolio and strong secular growth trends in each of our served end markets:

• Packaging with sustainability-driven conversion from plastics in beverage and food can applications,

• Aero/HS products with a return in global passenger air travel,

• Automotive Extrusions with continued light weighting of vehicles to achieve fuel economy and

• GE products with strong demand for domestic supply of our broad offering of fabricated products.

We have identified multiple expansion opportunities to accelerate our growth in our served markets and we have solid liquidity and financial flexibility to support these opportunities for profitable growth.

Automotive Extrusions demand is temporarily dampened as ongoing shortages of semi-conductor chips has affected North American light vehicle production, we anticipate this issue will abate and volume will recover in the second half of 2021.

Over the longer term, we anticipate a greater than 5% CAGR for automotive demand growth driven by light weighting and fuel efficiency with further opportunities as the shift to electric vehicles continues.

Demand for our GE Products remains strong, led by service center restocking and stronger demand as the markets recover from the pandemic.

In addition, as we have previously noted, reshoring of supply lines in North America as original equipment manufacturers (“OEMs”) shift supply strategies to have a larger portion of their material needs sourced domestically provides significant upside for further growth opportunities.

In addition to diversifying the business, our re-entry into Packaging through Warrick provides a significant opportunity for further long-term growth as food and beverage packaging continues to shift to aluminum in response to growing consumer demand.

North American aluminum packaging markets are expected to remain in deficit for the foreseeable future as the strongly preferred, North American supply struggles to keep pace with North American demand.

We anticipate a 3% to 5% CAGR over the next several years.

Liquidity and Capital Resources

The following table summarizes our liquidity (in millions of dollars):

As of March 31, 2021

As of June 30, 2021

As of December 31, 2020

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Total liquidity

Borrowing availability under the Revolving Credit Facility as determined by a borrowing base calculated as of March 31, 2021 and December 31, 2020.

Borrowing availability under the Revolving Credit Facility as determined by a borrowing base calculated as of June 30, 2021 and December 31, 2020.

We place our cash in bank deposits and money market funds with high credit quality financial institutions.

Cash equivalents consist primarily of investment-grade commercial paper, money market accounts and investments which, when purchased, have a maturity of 90 days or less.

See Note 14 of Notes to Interim Consolidated Financial Statements included in this Report for information regarding restricted cash at March 31, 2021.

There were no borrowings under our Revolving Credit Facility (see Note 7 of Notes to Interim Consolidated Financial Statements included in this Report) as of March 31, 2021, or as of December 31, 2020.

See Note 14 of Notes to Interim Consolidated Financial Statements included in this Report for information regarding restricted cash at June 30, 2021.

There were no borrowings under our Revolving Credit Facility (see Note 7 of Notes to Interim Consolidated Financial Statements included in this Report) as of June 30, 2021 or as of December 31, 2020.

The following table summarizes our cash flows from operating, investing and financing activities (in millions of dollars):

Quarter Ended March 31,

Six Months Ended June 30,

Total cash (used in) provided by:

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Financing activities

Cash used in operating activities for the quarter ended March 31, 2021 reflected:

(i) an increase in accounts payable of $33.0 million driven predominantly by the volume of metal purchases;

(ii) an increase in trade and other receivables of $31.7 million driven primarily by improved Net sales;

(iii) an increase in inventory of $24.3 million;

and (iv) an increase in spending of $11.0 million for acquisition costs, primarily comprised of legal and consulting fees.

Cash provided by operating activities for the quarter ended March 31, 2020 reflected an increase in accounts payable of $21.7 million driven by increases in the quantity of metal purchases with an offsetting increase in inventory of $17.0 million partially to meet aerospace demand and partially due to our automotive customers temporarily curtailing operations late in the quarter.

See Statements of Consolidated Cash Flows included in this Report for further details on our cash flows from operating, investing and financing activities for the quarters ended March 31, 2021 and March 31, 2020.

Cash provided by operating activities for the six months ended June 30, 2021 reflected:

(i) an increase in trade and other receivables of $130.5 million, the majority of which was driven by Warrick receivables added during the quarter ended June 30, 2021 and the remainder of which was due to the timing and mix of sales with extended terms and an increase in metal price;

(ii) an increase in accounts payable of $115.5 million, the majority of which was driven by Warrick payables added during the quarter ended June 30, 2021 and the remainder of which was driven by the volume of metal purchases;

and (iii) an increase in inventory of $21.2 million due primarily to higher inventory pounds to satisfy increased demand.

Cash provided by operating activities for the six months ended June 30, 2020 reflected:

(i) a decrease in trade and other receivables of $36.5 million driven primarily by lower Net sales;

(ii) a decrease in accounts payable of $28.7 million driven predominantly by the volume of metal purchases ;

and (iii) a reduction in contract assets of $13.0 million driven primarily by timing of shipments related to revenue on products recognized over-time .

See Statements of Consolidated Cash Flows included in this Report for further details on our cash flows from operating, investing and financing activities for the six months ended June 30, 2021 and June 30, 2020.

Sources of Liquidity

We believe our available cash and cash equivalents, borrowing availability under the Revolving Credit Facility and funds generated from operations are our most significant sources of liquidity and that our Revolving Credit Facility and unsecured notes have covenants that allow us to operate our business with limited restrictions and significant flexibility for the foreseeable future.

While we believe these sources will be sufficient to finance our working capital requirements, planned capital expenditures, investments, debt service obligations and other cash requirements for at least the next twelve months, and while we also believe that alternative sources of liquidity will remain available in the event we seek to add liquidity for opportunistic or other reasons in the future, our ability to fund such cash requirements will depend upon our future operating performance (which will be affected by prevailing economic conditions) and financial, business and other factors, some of which are beyond our control.

While we believe these sources will be sufficient to finance our working capital requirements, planned capital expenditures, investments, debt service obligations and other cash requirements for at least the next 12 months, and while we also believe that alternative sources of liquidity will remain available in the event we seek to add liquidity for opportunistic or other reasons in the future, our ability to fund such cash requirements will depend upon our future operating performance (which will be affected by prevailing economic conditions) and financial, business and other factors, some of which are beyond our control.

We do not believe that covenants contained in the Revolving Credit Facility are reasonably likely to limit our ability to raise additional debt or equity should we choose to do so during the next 12 months, nor do we believe it is likely that during the next 12 months we will trigger the availability threshold that would require measuring and maintaining a fixed charge coverage ratio.

At May 3, 2021, there were no borrowings under the Revolving Credit Facility.

At July 19, 2021, there were no borrowings under the Revolving Credit Facility.

See Note 9 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 for a description of our Revolving Credit Facility.

We engage in certain customer-based supply chain financing programs to accelerate the receipt of payment for outstanding accounts receivable from certain customers.

Costs of these programs are typically reimbursed to us by the customer.

Receivables transferred under these customer-based supply chain financing programs generally meet the requirements to be accounted for as sales resulting in the derecognition of such receivables from our consolidated balance sheets.

Receivables involved with these customer‑based supply chain finance programs for the quarter ended June 30, 2021 constitute approximately 40% of our net sales.

See Note 1 of Notes to Interim Consolidated Financial Statements included in this Report for further details with respect to these supply chain financing programs.

See “Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements – Contractual Obligations and Commercial Commitments ” included in Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 for mandatory principal and cash interest payments on the outstanding borrowings.

The following table provides an update to our contractual obligations and commercial commitments table in Part II, Item 7.

“Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10‑K for the year ended December 31, 2020 with respect to our 4.50% Senior Notes, consisting of mandatory principal and cash interest payments (in millions of dollars):

Payments Due by Period

Principal and interest on 4.50% Senior Notes

See Note 7 of Notes to Interim Consolidated Financial Statements included in this Report for further details with respect to the 4.50% Senior Notes.

We do not believe that covenants in the indentures governing the unsecured senior notes are likely to limit our ability to obtain additional debt or equity financing should we choose to do so during the next 12 months.

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We strive to strengthen our competitive position across our end markets through strategic capital investment.

Significant investments over the past decade have positioned us well with increased capacity and expanded manufacturing capabilities while more recent capital projects have focused on further enhancing manufacturing cost efficiency, improving product quality and promoting operational security, which we believe are critical to maintaining and strengthening our position in an increasingly competitive market

A significant portion of our capital spending over the past several years related to the modernization project at our Trentwood facility, which focused on equipment upgrades throughout the process flow to reduce conversion costs, increase efficiency and further improve our competitive cost position on all products produced at our Trentwood facility.

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These improvements have allowed us to gain incremental manufacturing capacity to enable future sales growth.

As a response to the COVID-19 pandemic and in order to preserve liquidity, in April 2020 we adjusted our capital spending plans to focus on critical sustaining projects and modest investment opportunities to further support our automotive growth and enhance efficiencies throughout our operations.

As such, our $375.0 million multi-year expansion and operational security investment project at our Trentwood facility has been deferred pending changes in market conditions and demand for our Aero/HS products.

Following the Warrick Rolling Mill acquisition, we anticipate that total capital spending in 2021 will be approximately $75.0 million to $85.0 million.

During the quarter ended June 30, 2021, we initiated our first growth capital investment in the Warrick facility of $150.0 million for an additional roll coat line that is expected to be qualified and operational by early 2024.

In addition, we continue to spend capital for sustainability and efficiency improvements throughout the portfolio.

Excluding our cash payment for the acquisition of Warrick, we anticipate that total capital spending in 2021 will be approximately $80.0 million to $90.0 million.

Capital investments will be funded using cash generated from operations, available cash and cash equivalents, short‑term investments, borrowings under the Revolving Credit Facility and/or other third-party financing arrangements.

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Holders of performance shares are not paid a quarterly dividend equivalent, but instead are entitled to receive, in connection with the issuance of underlying shares of common stock for performance shares that ultimately vest, a one-time payment equal to the dividends such holder would have received if the number of such shares of common stock so issued had been held of record by such holder from the date of grant of such performance shares through the date of such issuance.

See our Statements of Consolidated Stockholders’ Equity and Note 16 of Notes to Interim Consolidated Financial Statements included in this Report for information regarding dividends paid during the quarters ended March 31, 2021 and March 31, 2020, and declared subsequent to March 31, 2021.

See our Statements of Consolidated Stockholders’ Equity and Note 16 of Notes to Interim Consolidated Financial Statements included in this Report for information regarding dividends paid during the quarters ended June 30, 2021 and June 30, 2020, and declared subsequent to June 30, 2021.

Repurchases of Common Stock

In response to prevailing economic conditions, we suspended repurchases of common stock as of March 18, 2020.

See our Statements of Consolidated Stockholders’ Equity included in this Report for information regarding repurchases of common stock during the quarters ended March 31, 2021 and March 31, 2020 and the amount authorized and available for future repurchases of common stock under our stock repurchase program.

See our Statements of Consolidated Stockholders’ Equity included in this Report for information regarding minimum statutory tax withholding obligations arising during the quarters ended March 31, 2021 and March 31, 2020, in connection with the vesting of non-vested shares, restricted stock units and performance shares.

See our Statements of Consolidated Stockholders’ Equity included in this Report for information regarding repurchases of common stock during the quarters ended June 30, 2021 and June 30, 2020 and the amount authorized and available for future repurchases of common stock under our stock repurchase program.

See our Statements of Consolidated Stockholders’ Equity included in this Report for information regarding minimum statutory tax withholding obligations arising during the quarters and six months ended June 30, 2021 and June 30, 2020, in connection with the vesting of non-vested shares, restricted stock units and performance shares.

Environmental Commitments and Contingencies

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Contractual Obligations, Commercial Commitments and Off-Balance Sheet Arrangements

During the quarter ended March 31, 2021, we granted additional stock-based awards to executive officers, certain key employees and non-employee directors under our equity incentive plan.

During the six months ended June 30, 2021, we granted additional stock-based awards to executive officers, certain key employees and non-employee directors under our equity incentive plan.

Additional awards are expected to be made in future years.

As of March 31, 2021, we assumed the contractual obligations and commercial commitments of the Warrick Rolling Mill.

Beginning March 31, 2021, we assumed $500.0 million to $550.0 million of contractual obligations and commercial commitments of Warrick, for which the majority of spending will be completed by December 31, 2021.

These commitments related primarily to the purchase of aluminum and related alloys used in their production process in the ordinary course of business.

We anticipate spending for minimum volumes on these commitments of $400.0 million to $500.0 million during the remainder of 2021.

For updated maturities of lease liabilities, as well as net benefits expected to be paid for pension and other postretirement benefit obligations that include the Warrick Rolling Mill, see Note 3 and Note 5, respectively, of Notes to Interim Consolidated Financial Statements included in this Report.

For updated maturities of lease liabilities, as well as net benefits expected to be paid for pension and other postretirement benefit obligations that include Warrick, see Note 3 and Note 5, respectively, of Notes to Interim Consolidated Financial Statements included in this Report.

Except as otherwise disclosed herein, there has been no material change in our contractual obligations, commercial commitments or off-balance sheet arrangements other than in the ordinary course of business since December 31, 2020.

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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 1. Financial Statements