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What changed in KAISER ALUMINUM CORP's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of KAISER ALUMINUM CORP's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+223 added−267 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-23)

Top changes in KAISER ALUMINUM CORP's 2024 10-K

223 paragraphs added · 267 removed · 196 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

58 edited+7 added−4 removed103 unchanged
Biggest changeDiversity, Equity, Inclusion and Belonging We are committed to diversity, equity, inclusion and belonging and strive to be the preferred employer by, among other things: (i) attracting, developing and retaining the best people from all cultures and segments of the population based on ability; (ii) treating all employees with dignity and respect; (iii) providing an environment of diversity, inclusion, belonging, empowerment, responsibility and accountability; and (iv) offering competitive and equal pay and benefits that attract and retain employees.
Biggest changePreferred Employer We are committed to being a preferred employer by, among other things: (i) attracting, developing and retaining the best people from all cultures and segments of the population based on ability; (ii) providing a safe and clean workplace; (iii) treating all employees with dignity and respect; (iv) being responsive to all employees; (v) providing an environment of diversity, inclusion, belonging, empowerment, responsibility and accountability; (vi) assuring effective, open two-way individual and group communications; (vii) developing and maintaining a positive relationship with all employees and their designated representatives; and (viii) offering competitive and equal pay and benefits that attract and retain employees.
We use high-strength 2000-, 7000-series and certain 6000-series aluminum alloys and apply a variety of thermal practices to manufacture our Aero/HS products to meet the demanding specifications required for such safety-critical applications.
We use high-strength 2000, 7000, and certain 6000-series aluminum alloys and apply a variety of thermal practices to manufacture our Aero/HS products to meet the demanding specifications required for such safety-critical applications.
Demand for our GE products is closely related to the North America general industrial and semi-conductor growth and the recent desire of many companies to lessen their risk of supply chain disruptions by reshoring suppliers and shortening the supply chain. Demand is also impacted by the destocking and restocking of inventory throughout the supply chain. Automotive Extrusions.
Demand for our GE products is closely related to North America general industrial and semi-conductor growth and the recent desire of many companies to lessen their risk of supply chain disruptions by reshoring suppliers and shortening the supply chain. Demand is also impacted by the destocking and restocking of inventory throughout the supply chain. Automotive Extrusions.
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 or equivalent state regulations.
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 6 safety performance and thereby achieve greater fuel efficiency standards mandated by stringent United States’ Corporate Average Fuel Economy or equivalent state regulations.
Additionally, our strategy to be the supplier of choice and a low cost producer is enabled by a culture of continuous improvement that is facilitated by the 5 Kaiser Production System (“KPS”), an integrated application of tools such as Lean Manufacturing, Six Sigma, and Total Productive Manufacturing.
Additionally, our strategy to be the supplier of choice and a low cost producer is enabled by a culture of continuous improvement that is facilitated by the Kaiser Production System (“KPS”), an integrated application of tools such as Lean Manufacturing, Six Sigma, and Total Productive Manufacturing.
However, as scrap aluminum availability and the discount to the index price at which it is sold is subject to market dynamics, in periods of lower availability, we may experience adverse impacts to our results and favorable impacts when scrap is more readily available.
However, as scrap aluminum availability and the discount to the index price at which it is sold are subject to market dynamics, in periods of lower availability, we may experience adverse impacts to our results and favorable impacts when scrap is more readily available.
The Packaging Coating Center is focused on the forming and coating of our packaging products and has the capability on laboratory-scaled equipment to produce beverage end and food cans enabling the evaluation of new coatings and processes for packaging products. 8 Our Imperial Machine & Tool Co.
The Packaging Coating Center is focused on the forming and coating of our packaging products and has the capability on laboratory-scaled equipment to produce beverage end and food cans enabling the evaluation of new coatings and processes for packaging products. Our Imperial Machine & Tool Co.
Some of our customers for Aero/HS products and a majority of our customers for GE products pay a product price that incorporates the spot price of primary aluminum (MWTP) in effect at the time of shipment to a customer. Spot prices for these products change regularly based on competitive dynamics.
Some of our customers for Aero/HS Products and a majority of our customers for GE Products end markets pay a product price that incorporates the spot price of primary aluminum (MWTP) in effect at the time of shipment to a customer. Spot prices for these products change regularly based on competitive dynamics.
We are committed to the development of our employees through a broad mix of internal and external program resources incorporating on-the-job training and development through the Kaiser Leadership Program, the Front Line Leader Development Program, the Kaiser Aluminum Women’s Leadership Program (“KWLP”), Kaiser University, the Tuition Assistance Program, and the Metallurgy Excellence and Technical Strength Program.
We are committed to the development of our employees through a broad mix of internal and external program resources incorporating on-the-job training and development through the Kaiser Leadership Program (“KLP”), the Front Line Leader Development Program (“FLLDP”), the Kaiser Aluminum Women’s Leadership Program (“KWLP”), Kaiser University, the Tuition Assistance Program, and the Metallurgy Excellence and Technical Strength Program.
Approximately 65% of our employees are represented by labor unions under labor contracts with varying durations and expiration dates. The following table shows each manufacturing location, the primary union affiliation, if any, and the expiration date for the current union contracts as of December 31, 2023.
Approximately 65% of our employees are represented by labor unions under labor contracts with varying durations and expiration dates. The following table shows each manufacturing location, the primary union affiliation, if any, and the expiration date for the current union contracts as of December 31, 2024.
Our casting operations at our facilities in Kalamazoo, Michigan; London, Ontario; Los Angeles, California; Heath, Ohio; and Sherman, Texas produce extrusion log and cut billet for their operations and for our other facilities that do not have casting operations. Our Trentwood and Warrick facilities cast rolling ingot for their own consumption.
Our casting operations at our facilities in Kalamazoo, Michigan; London, Ontario; Los Angeles, California; and Heath, Ohio produce extrusion log and cut billet for their operations and for our other facilities that do not have casting operations. Our Trentwood and Warrick facilities cast rolling ingot for their own consumption.
We have continued to introduce programs to educate and assist employees to make healthy lifestyle choices and have offered incentives and discounts to encourage participation across the organization, including: • annual onsite health biometric screenings; • providing flu shots and the Coronavirus Disease (“COVID”) vaccination; • an employee assistance program, providing confidential assistance with healthcare issues and the healthcare system, including crisis and emergency help; • a smoking/tobacco cessation program; • internal, as well as third-party, online wellness workshops, including workshops on nutrition and fitness; and 12 • wellness coaching.
We have continued to introduce programs to educate and assist employees to make healthy lifestyle choices and have offered incentives and discounts to encourage participation across the organization, including: • annual onsite health biometric screenings; • providing flu shots and the COVID vaccination; 12 • an employee assistance program, providing confidential assistance with healthcare issues and the healthcare system, including crisis and emergency help; • a smoking/tobacco cessation program; • internal, as well as third-party, online wellness workshops, including workshops on nutrition and fitness; and • wellness coaching.
Some of our competitors are substantially larger, have greater financial resources and may have other strategic advantages. Because many of our products are used in critical safety applications, our customers have demanding standards for product quality and consistency that make it difficult to become a qualified supplier.
Some of our competitors are substantially larger, have greater financial resources and may have other strategic advantages. Because many of our products are used in food, beverage and critical safety related applications, our customers have demanding standards for product quality and consistency that make it difficult to become a qualified supplier.
We primarily serve North American demand for extruded and drawn aluminum mill products. Our rolling mill Trentwood facility produces heat treat plate and sheet for aerospace and general engineering end market applications and our Warrick facility produces bare and coated aluminum coil used for can stock applications in the beverage and food packaging industry.
We primarily serve North American demand for extruded and drawn aluminum mill products. Trentwood produces heat treat plate and sheet for aerospace and general engineering end market applications and Warrick produces bare and coated aluminum coil used for can stock applications in the beverage and food packaging industry.
While trailing indicators, such as total case incident rate (“TCIR”), lost-time case incident rate (“LTIR”) and days away, restricted and transfer rate, help us monitor our safety performance, leading indicators, such as significant injury and fatality potential and actual incident rate, near‑misses, timely correction action of internal and external audit findings, on-time safety plan execution information and safety culture risk, help us monitor and assess risks and the effectiveness of our safety plans and processes.
While trailing indicators, such as total case incident rate (“TCIR”), lost-time case incident rate (“LTIR”) and days away, restricted and transfer rate, help us monitor our safety performance, leading indicators, such as significant injury and fatality potential and actual incident rate, near‑misses, timely addressing of internal and external audit findings, safety plan execution information and safety culture risk, help us monitor and assess risks and the effectiveness of our safety plans and processes.
Our 11 extrusion/drawing facilities, 10 of which are in the United States and one of which is in Canada, serve aerospace, general engineering or automotive applications.
Our 10 extrusion/drawing facilities, 9 of which are in the United States and one of which is in Canada, serve aerospace, general engineering or automotive applications.
Demand for our Aero/HS products is heavily impacted by commercial airframe build rates and, to a lesser degree, by defense related airframes and other products. In addition, unanticipated changes in build rates and mix of aircraft models being built can trigger restocking or destocking throughout the aerospace supply chain, temporarily impacting demand.
Demand for our Aero/HS products is heavily impacted by commercial airframe build rates and, to a lesser degree, by business jets, space applications, defense related airframes, and other products. In addition, unanticipated changes in build rates and mix of aircraft models being built can trigger restocking or destocking throughout the aerospace supply chain, temporarily impacting demand.
The ESG committee of our board oversees, among other things, the succession planning for our executive officers and the leadership, progression, and development of key employees. Training, Development and Retention.
The Sustainability committee of our board oversees, among other things, the succession planning for our executive officers and the leadership, progression, and development of key employees. Training, Development, and Retention.
Consistent with our corporate values, we promote fair business practices and a culture of accountability, responsibility, and ethical behavior through: • strong emphasis on the importance of integrity and competence; • conducting annual governance surveys to assess our culture and the effectiveness of our training; • adopting and enforcing our policies, including Corporate Governance Guidelines, Code of Business Conduct and Ethics, Human Rights Policy and Diversity, Equity and Inclusion Policy and compliance with applicable laws and regulations; and • encouraging the reporting of illegal or unethical behavior, including the use of In-Touch, a third-party compliance feedback program. 11 We believe respecting human rights is a fundamental part of our values and corporate responsibility.
Consistent with our corporate values, we promote fair business practices and a culture of accountability, responsibility, and ethical behavior through: • strong emphasis on the importance of integrity and competence; • conducting annual governance surveys to assess our culture and the effectiveness of our training; • adopting and enforcing our policies, including Corporate Governance Guidelines, Code of Business Conduct and Ethics, Human Rights Policy, and Diversity, Equity, Inclusion and Belonging Policy and compliance with applicable laws and regulations; and 11 • encouraging the reporting of illegal or unethical behavior, including the use of In-Touch, a third-party compliance feedback program.
We focus on: (i) continuing to consider ethnic and gender diversity as we identify training cohorts and opportunities; (ii) leveraging the views and perspectives of our diverse employees and leaders; (iii) developing meaningful metrics and benchmarks by location and job function to measure the effectiveness of our efforts; (iv) fostering relationships with educational institutions, employment agencies, and professional groups to expand the pool of potential candidates and employees to achieve a more diverse workforce; (v) focusing on diverse candidates for internships, entry-level positions, and scholarships; and (vi) actively recruiting from military bases for military and veteran hiring.
We focus on: (i) continuing to consider ethnic and gender diversity as we identify training cohorts and opportunities; (ii) leveraging the views and perspectives of our diverse employees and leaders; (iii) developing meaningful metrics and benchmarks by location and job function to measure the effectiveness of our efforts; (iv) fostering relationships with educational institutions, employment agencies, and professional groups to expand the pool of potential candidates and employees to achieve a more diverse workforce; and (v) actively recruiting from military bases for military and veteran hiring.
For the years ended December 31, 2023, and December 31, 2022, our largest customer accounted for 18% and 19%, respectively, of Net sales. While the loss of this customer could have a material adverse effect on us, we believe that our long-standing relationship with the customer is good and that the risk of losing the customer is remote.
For the years ended December 31, 2024 and December 31, 2023, our largest customer accounted for 16% and 18%, respectively, of Net sales. While the loss of this customer could have a material adverse effect on us, we believe that our long-standing relationship with the customer is good and that 7 the risk of losing the customer is remote.
Our facility located in Columbia, New Jersey 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, high tech and general industrial and automotive applications. In 2023, our consolidated Net sales totaled $3,087.0 million on 1,196.4 million pounds shipped from our facilities.
Our facility located in Columbia, New Jersey 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, high tech and general industrial and automotive applications. In 2024, our consolidated Net sales totaled $3,024.0 million on 1,172.3 million pounds shipped from our facilities.
For example, our GE products are used to produce armor for military vehicles, ordnances, manufacturing cells for semiconductor production, numerous electronic devices, after-market motor sport parts, tooling plate, parts for machinery and equipment, bolts, screws, and rivets. 6 Automotive Extrusions. Automotive Extrusions consist of extruded aluminum products for many North American automotive applications.
For example, our GE products are used to produce armor for military vehicles, ordnances, manufacturing cells for semiconductor production, numerous electronic devices, after-market motor sport parts, tooling plate, parts for machinery and equipment, bolts, screws, and rivets. Automotive Extrusions. Automotive Extrusions consists primarily of 6000-series extruded aluminum products for many North American automotive applications.
(“IMT”) subsidiary, located in Columbia, New Jersey, provides us with significant technology and intellectual property that complements our metallurgical and application engineering expertise to further advance our capability to deliver highly engineered solutions for our customers. We hold numerous patents, trademarks, trade secrets, and copyrights that relate to the design, use, and marketing of products.
(“IMT”) subsidiary provides us with significant technology and intellectual property that complements our metallurgical and application engineering expertise to further advance our capability to deliver highly engineered solutions for our customers. 8 We hold numerous patents, trademarks, trade secrets, and copyrights that relate to the design, use, and marketing of products.
As examples, our London, Ontario facility supplies billet to our Richmond, Virginia facility, and our Heath, Ohio facility supplies log and billet to our Jackson, Tennessee facility. Suppliers We purchase raw materials from a wide array of vendors.
As examples, our London, Ontario facility supplies billet to our Richmond, Virginia facility, and our Heath, Ohio facility supplies log and billet to our Jackson, Tennessee facility and redraw rod to our Florence, Alabama facility. Suppliers We purchase raw materials from a wide array of vendors.
We believe fuel efficiency standards, along with consumer preference for larger vehicles and the 7 growing conversion to electric and other alternative 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. Customers In 2023, we had approximately 520 customers.
We believe fuel efficiency standards, along with consumer preference for larger vehicles and the growing conversion to electric and other alternative 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.
Similar to the Kaiser Leadership Program, the KWLP uses in-person events, program meetings, self-directed learning and assignments, mentoring meetings, and cohort collective meetings.
Similar to the KLP, the KWLP uses in-person events, program meetings, self-directed learning and assignments, mentoring meetings, and cohort collective meetings.
Human Capital At December 31, 2023, we employed approximately 4,000 people, of which approximately 3,910 were employed in our manufacturing, sales, and support office locations and approximately 90 were employed in a corporate capacity. Governance and Culture Our talented workforce is a key factor underlying our success.
Human Capital At December 31, 2024, we employed approximately 4,000 people, of which approximately 3,920 were employed in our manufacturing, sales, and support office locations and approximately 80 were employed in a corporate capacity. Governance and Culture Our talented workforce is a key factor underlying our success.
The price we pay for primary aluminum is typically based on the average MWTP, which reflects the primary aluminum supply/demand dynamics in North America. The average LME and the average Midwest Premium for 2023, 2022 and 2021 were $1.02 + $0.23, $1.23 + $0.30 and $1.12 + $0.26, respectively.
The price we pay for primary aluminum is typically based on the average MWTP, which reflects the primary aluminum supply/demand dynamics in North America. The average LME and the average Midwest Premium for 2024, 2023 and 2022 were $1.10 + $0.19, $1.02 + $0.23 and $1.23 + $0.30, respectively.
Through the collective bargaining process, we contribute to four multiemployer pension plans under the terms of certain collective bargaining agreements for a majority of our union-represented employees. Certain union employees at our Warrick facility participate in a defined benefit pension plan, as well as a postretirement benefit plan relating to retiree medical and life insurance benefits.
Through the collective bargaining process, we contribute to four multiemployer pension plans under the terms of certain collective bargaining agreements for a majority of our union-represented employees. Certain union employees at Warrick participate in a defined benefit pension plan, as well as an OPEB plan offering medical and life insurance benefits.
While commercial airframe build rates can be subject to certain short-terms events (see Part I, Item 1A. “Risk Factors” included in this Form 10-K), we believe the long-term demand for air travel and fuel efficiency will continue to drive long-term growth for our products. Packaging.
While commercial airframe build rates can be subject to certain short-term events (see Part I, Item 1A. “Risk Factors” included in this Form 10-K), we believe the long-term demand for air travel and fuel efficiency will continue to drive long-term growth for our products. Packaging. Our Packaging products are sold primarily to North American beverage and food can manufacturers.
Contract Location Union Expiration Date Chandler, Arizona (Extrusion) Non-union — Chandler, Arizona (Tube) USW Apr 2024 Columbia, New Jersey Non-union — Florence, Alabama USW Mar 2026 Jackson, Tennessee Non-union — Kalamazoo, Michigan USW Feb 2026 London, Ontario USW Canada Feb 2026 Los Angeles, California Teamsters Apr 2026 Heath, Ohio USW Sep 2025 Newburgh, Indiana USW May 2027 Richland, Washington Non-union — Richmond, Virginia USW/IAM Nov 2026/Nov 2026 Sherman, Texas IAM May 2027 Spokane Valley, Washington USW Sep 2025 Recruiting, Training, Development and Retention Recruiting.
Contract Location Union Expiration Date Chandler, Arizona (Extrusion) Non-union — Chandler, Arizona (Tube) USW Apr 2028 Columbia, New Jersey Non-union — Florence, Alabama USW Mar 2026 Jackson, Tennessee Non-union — Kalamazoo, Michigan USW Feb 2026 London, Ontario USW Canada Feb 2026 Los Angeles, California Teamsters Apr 2026 Heath, Ohio 1 USW Sep 2025 Newburgh, Indiana USW May 2027 Richland, Washington Non-union — Richmond, Virginia USW/IAM Nov 2026/Nov 2026 Sherman, Texas 2 N/A — Spokane Valley, Washington 1 USW Sep 2025 1.
Producing coated end, tab, and body stock for the can market requires the development of alloys and application of coatings that must pass stringent customer qualifications and be compliant with Food and Drug Administration regulations.
Producing coated end, tab, and body stock for the can market requires the development of alloys and application of coatings that must pass stringent customer qualifications, some which take multiple years to complete, and be compliant with Food and Drug Administration regulations.
Using KPS, we seek to continuously reduce our own manufacturing costs and eliminate waste throughout the value chain. A key component of our business model is to maintain financial strength and flexibility through the business and economic cycles. We manage and monitor our financial strength through routine analysis of our liquidity position under scenarios of varying business and economic cycles.
Using KPS, we seek to continuously reduce our own manufacturing costs and eliminate waste throughout the value chain. 5 A key component of our business model is to maintain financial strength and flexibility through the business and economic cycles.
The Kaiser Leadership Program is a full year program that accelerates the readiness of key talent and combines personalized leadership development and Kaiser-management system focused curriculum with a unique opportunity to build relationships with an internal network of leaders across locations and functions.
Our success is dependent on the knowledge, skills, and abilities of our current and future leaders and employees. 13 The KLP is a full year program that accelerates the readiness of key talent and combines personalized leadership development and Kaiser-management system focused curriculum with a unique opportunity to build relationships with an internal network of leaders across locations and functions.
The mission of the Kaiser Leadership Program is to strengthen performance, develop bench strength, and accelerate the readiness of key talent across our company. The program blends classroom, online modules and live web events using a cohort model to deliver a flexible, convenient learning environment and includes training and coaching conducted by Thayer Leadership at West Point.
The mission of the KLP is to strengthen performance, develop bench strength, and accelerate the readiness of key talent across our company. The program blends classroom, online modules and live web events using a cohort model to deliver a flexible, convenient learning environment.
In addition, unanticipated changes in end consumer preferences for certain canned beverages and/or foods and pet foods, can trigger restocking or destocking throughout the packaging supply chain, temporarily impacting demand. GE Products.
Short-term demand can be impacted by unanticipated changes in end consumer preferences for certain canned beverages and/or foods and pet foods which can trigger restocking or destocking throughout the packaging supply chain. GE Products.
We anticipate further growth will be underpinned by sustainability trends, the secular shift from plastic to aluminum and the fact that North American packaging capacity has been reallocated towards other end markets, including automotive and industrial.
Major players have already transitioned some plastic bottled water and carbonated soft drink production to aluminum. We anticipate further growth will be underpinned by sustainability trends, the secular shift from plastic to aluminum and the fact that North American packaging capacity has been reallocated towards other end markets, including automotive and industrial.
Our Human Rights Policy is communicated to our employees as part of their annual code of conduct training, and we expect our employees to uphold this policy.
Our Human Rights Policy is communicated to our employees as part of their annual code of conduct training, and we expect our employees to uphold this policy. In addition, our suppliers should manage relationships consistent with our Supplier Code of Conduct and we expect our suppliers to uphold this policy.
Hedging activities are conducted in compliance with a policy approved by our Board of Directors and administered by our hedging committee (members of which include our Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Treasurer, Executive Vice President of Manufacturing and other officers and employees selected by the Chief Executive Officer). 10 Seasonality Under normal operating and economic conditions, we generally have immaterial fluctuations in our overall portfolio quarter‑over‑quarter results.
Hedging activities are conducted in compliance with a policy approved by our Board of Directors and administered by our hedging committee (members of which include our Chief Executive Officer, Chief 10 Financial Officer, Chief Accounting Officer, Treasurer, Executive Vice President of Manufacturing and other officers and employees selected by the Chief Executive Officer).
Our Warrick rolling mill is one of four major aluminum rolling mills currently dedicated to the packaging industry in North America, with one of the world’s largest ingot casting facilities, hot and cold rolling, coated finishing, and slitting capacity.
Warrick is one of four major aluminum rolling mills currently dedicated to the packaging industry in North America, with one of the world’s largest ingot casting facilities, hot and cold rolling, coated finishing, and slitting capacity. Warrick has a unique capability to produce high-margin coated packaging products representing approximately 65% of our total Packaging shipments in 2024. GE Products.
The program uses a cohort model to encourage collaboration and team-building and to ensure accountability, facilitated group discussions, and effective best practice sharing. 13 The KWLP provides a female-focused professional development curriculum, mentorship, and networking opportunities designed to elevate the visibility of women at Kaiser Aluminum, to increase female representation in all levels of leadership and to enhance the inclusion and sense of belonging for current and potential female leaders.
The KWLP provides a female-focused professional development curriculum, mentorship, and networking opportunities designed to elevate the visibility of women at Kaiser Aluminum, to increase female representation in all levels of leadership and to enhance the inclusion and sense of belonging for current and potential female leaders.
The 6000-series alloy is an extremely versatile, medium-strength, heat treatable alloy that can be both extruded and rolled. Our GE products have a wide range of uses and applications, many of which involve further fabrication for numerous transportation and other industrial end market applications where the machining of plate, rod and bar is intensive.
Our GE products have a wide range of uses and applications, many of which involve further fabrication for numerous transportation and other industrial end market applications where the machining of plate, rod and bar is intensive.
Markets Sales, Marketing, and Distribution Industry sales for fabricated products fluctuate in response to competitive and market dynamics. Sales are made directly to customers by our sales personnel located in the United States, Canada, and Western Europe and by independent sales agents in other regions of Asia, Latin America, and the Middle East.
Sales are made directly to customers by our sales personnel located in the United States, Canada, and Western Europe and by independent sales agents in other regions of Asia, Latin America, and the Middle East. Our sales and marketing efforts are focused on the markets for Aero/HS Products, Packaging, GE Products, and Automotive Extrusions. Aero/HS Products.
Index-based pricing typically allows us to pass aluminum price risk through to the customer and applies to the majority of our Aero/HS products and Packaging sales and virtually all of our Automotive Extrusions sales. • Firm-price. Some of our customers who commit to volumes and timing of delivery pay a firm-price, creating aluminum price risk that we must hedge.
Index-based pricing typically allows us to pass aluminum price risk through to the customer and applies to the majority of our Aero/HS Products and Packaging end market sales and virtually all of our Automotive Extrusions end market sales. • Firm-price.
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).
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). Our flat‑rolled aluminum products also include bare and coated aluminum coil for can stock applications in the beverage and food packaging industry in North America.
Our sales and marketing efforts are focused on the markets for Aero/HS Products, Packaging, GE Products, and Automotive Extrusions. Aero/HS Products. We sell our Aero/HS products to metal service centers, as well as directly to aerospace manufacturers and tier one suppliers. Sales are made primarily under long-term agreements, but also on an order-by-order basis.
We sell our Aero/HS products to metal service centers, as well as directly to aerospace OEMs and tier one manufacturers. Sales are made primarily under long-term agreements, but also on an order-by-order basis. We serve this market with a North American and Western Europe sales force focused on Aero/HS products.
We also prioritize our capital allocation toward organic growth, such as efficiencies and quality in each of our end markets, while maintaining a strong balance sheet for inorganic opportunities and market growth potential and providing return to shareholders. Details of these capital projects are discussed in Part II, Item 7.
We manage and monitor our financial strength through routine analysis of our liquidity position under scenarios of varying business and economic cycles. We also prioritize our capital allocation toward organic growth, such as efficiencies and quality in each of our end markets, while maintaining a strong balance sheet for inorganic opportunities and market growth potential and providing return to shareholders.
We continue to expand our talent management initiatives to pursue the significant long-term potential for our continued success. Our success is dependent on the knowledge, skills, and abilities of our current and future leaders and employees.
We continue to expand our talent management initiatives to pursue the significant long-term potential for our continued success.
We make a significant effort to tightly integrate the management of our multiple manufacturing locations, product lines, and end market applications to most efficiently and effectively serve the needs of our customers. We centralize purchasing of our primary, rolling ingot and scrap, or recycled, aluminum requirements and related alloying agents in order to better manage price, credit, and other benefits.
We make a significant effort to tightly integrate the management of our multiple manufacturing locations, product lines, and end market applications to most efficiently and effectively serve the needs of our customers.
Aluminum can demand is driven by the packaging industry’s shift towards environmentally sustainable materials due to the fact that aluminum is infinitely recyclable and has the highest consumer recycling rate among beverage containers. Major players have already transitioned some plastic bottled water and carbonated soft drink production to aluminum.
Sales are made primarily under long-term agreements by a North American direct sales force. Aluminum can demand is driven by the packaging industry’s shift towards environmentally sustainable materials due to the fact that aluminum is infinitely recyclable and has the highest consumer recycling rate among beverage containers.
The Front Line Leader Development Program is a six-month program that strengthens organizational performance through ethical, effective, and sustaining tactical leadership for both new and experienced frontline supervisors.
The FLLDP is a six-month program that strengthens organizational performance through ethical, effective, and sustaining tactical leadership for both new and experienced frontline supervisors. The program uses a cohort model to encourage collaboration and team-building and to ensure accountability, facilitated group discussions, and effective best practice sharing.
Our initiatives, which go beyond legal compliance, include: (i) identifying and recruiting diverse talent, including military veterans; (ii) fostering relationships with universities, employment agencies, and professional groups that work with more diverse populations; (iii) leveraging inclusive job-posting sites; and (iv) concentrating on diverse candidates for internships, entry‑level positions, and scholarships.
We are committed to recruiting a workforce that reflects people from all cultures and segments of the population based on ability. Our initiatives include: (i) identifying and recruiting diverse talent, including military veterans; (ii) fostering relationships with universities, employment agencies, and professional groups that work with more diverse populations; and (iii) leveraging inclusive job-posting sites.
In addition to the aluminum pricing mechanisms described above, we also strive to pass through the cost of certain alloys through either pricing adders or surcharge mechanisms.
Total fabricated product shipments for which we were subject to price risk were, in millions of pounds, 154.9, 207.5, and 271.9 during 2024, 2023, and 2022, respectively. In addition to the aluminum pricing mechanisms described above, we also strive to pass through the cost of certain alloys through either pricing adders or surcharge mechanisms.
Other products consist of rerolled, extruded, drawn and cast billet aluminum products for a variety of North American industrial end uses. We continue to exit these non-core applications and focus our resources and production capacity on strategic Aero/HS Products, Packaging, GE Products, and Automotive Extrusions.
Other products consist of rerolled, extruded, drawn and cast billet aluminum products for a variety of North American industrial end uses. These products are non-core to our strategic focus and immaterial to our results. Markets Sales, Marketing, and Distribution Industry sales for fabricated products fluctuate in response to competitive and market dynamics.
The Warrick rolling mill has a unique capability to produce high-margin coated packaging products representing approximately 64% of our total Packaging shipments. GE Products. Our broad portfolio of GE products consists primarily of 6000-series aluminum alloy plate, sheet, rod, bar, tube, wire and standard extruded shapes.
Our broad portfolio of GE products consists primarily of 6000-series aluminum alloy plate, sheet, rod, bar, tube, wire and standard extruded shapes. The 6000-series alloy is an extremely versatile, medium-strength, heat treatable alloy that can be both extruded and rolled.
On March 31, 2021, with the completion of our acquisition of Warrick, we expanded our flat‑rolled aluminum products to include bare and coated aluminum coil for can stock applications in the beverage and food packaging industry in North America. Our Packaging products require demanding attributes and can be further processed to include coating and slitting depending on customer specifications.
Our Packaging products require demanding attributes and can be further processed to include coating and slitting depending on customer specifications.
We are able to limit exposure to aluminum price risks created by firm-price customer sales contracts by using third-party hedging instruments. Total fabricated product shipments for which we were subject to price risk were, in millions of pounds, 207.5, 271.9 and 187.2 during 2023, 2022 and 2021, respectively.
Some of our customers who commit to volumes and timing of delivery pay a firm-price, creating aluminum price risk that we must hedge. We are able to limit exposure to aluminum price risks created by firm-price customer sales contracts by using third-party hedging instruments.
Removed
Furthermore, due to manufacturing requirements, supply chain disruptions, or rapid changes in market demands for our products, we may not be able to utilize scrap efficiently, thereby causing an adverse impact to our margins, which we refer to as an inventory imbalance.
Added
Details of these capital projects are discussed in Part II, Item 7.
Removed
We serve this market with a North American and Western Europe sales force focused on Aero/HS products.
Added
Customers Our customer base is made up of a combination of key manufacturers and tier one suppliers in the Aero/HS Products, Packaging and Automotive Extrusions end markets and large metal service centers in the GE Products end market.
Removed
Our Packaging products are sold primarily to North American beverage can manufacturers and fillers and food packaging manufacturers. Sales are made primarily under long-term agreements by a North American direct sales force.
Added
We centralize purchasing of our primary, rolling ingot and scrap, or recycled, aluminum requirements and related alloys used in the production process in order to better manage price, credit, and other benefits.
Removed
We are committed to recruiting a workforce that reflects people from all cultures and segments of the population based on ability.
Added
Seasonality Under normal operating and economic conditions, we generally have immaterial fluctuations in our overall portfolio quarter‑over‑quarter results.
Added
We believe respecting human rights is a fundamental part of our values and corporate responsibility.
Added
In February 2025, we renewed our collective bargaining agreements with the USW. See Note 18 of Notes to Consolidated Financial Statements included in this Form 10-K for additional information. 2. During the quarter ended June 30, 2024, we initiated a plan to exit our soft alloy aluminum extrusion facility located in Sherman, Texas.
Added
As a result, there were no bargaining unit employees at the facility as of December 31, 2024. See Note 12 of Notes to Consolidated Financial Statements included in this Form 10-K for a description of our 2024 Restructuring Plan. Recruiting, Training, Development, and Retention Recruiting.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

51 edited+7 added−20 removed127 unchanged
Biggest changeThe increase or decrease in our contributions to these multiemployer pension plans will depend on our future collective bargaining, actions taken by trustees who manage the plans, actions of other participating employers, government regulations and the actual return on assets held in the plans, among other factors.
Biggest changeThe increase or decrease in our contributions to these multiemployer pension plans will depend on our future collective bargaining, actions taken by trustees who manage the plans, actions of other participating employers, government regulations and the actual return on assets held in the plans, among other factors. 22 An adverse decline in the liability discount rate, lower-than-expected investment return on pension assets and other factors could affect our business, financial condition, results of operations or amount of pension funding contributions in future periods.
In addition, newly elected and/or changing administrations could accelerate efforts to not only limit, but reduce, fossil fuel usage and carbon emissions beyond what may be technologically possible for certain products and manufacturing processes and revisit or reverse the environmental agendas of previous administrations with respect to previously established fuel efficiency standards.
In addition, newly elected and/or changing administrations could accelerate efforts to not only limit, but reduce, fossil fuel usage and carbon emissions beyond what may be technologically possible for certain products and manufacturing processes and/or revisit or reverse the environmental agendas of previous administrations with respect to previously established fuel efficiency standards.
Our Revolving Credit Facility and the indentures governing our Senior Notes contain a number of restrictive covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions or repurchase or redeem capital stock; • prepay, redeem or repurchase certain debt; • issue certain preferred stock or similar equity securities; • make loans and investments; • sell assets; • incur liens; • enter into transactions with affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of our assets.
Our Revolving Credit Facility and the indentures governing our Senior Notes contain a number of restrictive covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on our ability to: • incur additional indebtedness and guarantee indebtedness; • pay dividends or make other distributions or repurchase or redeem capital stock; • prepay, redeem or repurchase certain debt; • issue certain preferred stock or similar equity securities; • make loans and investments; • sell assets; • incur liens; 20 • enter into transactions with affiliates; • alter the businesses we conduct; • enter into agreements restricting our subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of our assets.
Such factors include but are not limited to: • the adoption of tariffs, duties and other forms of taxation; • trade disputes; • the implementation of controls on prices, exports and/or imports, including quotas; • the implementation of other restrictions on supply chains in connection with global health pandemics; • the imposition of currency restrictions; • inflation relative to the United States and related fluctuations in currency and interest rates; • government regulation in the countries in which we operate, service customers or purchase raw materials; • acts or threats of war or terrorism; • sanctions, including those in response to acts or threats of war or terrorism; • civil unrest and labor problems; and • the nationalization or appropriation of rights or other assets.
Such factors include but are not limited to: 17 • the adoption of tariffs, duties and other forms of taxation; • trade disputes; • the implementation of controls on prices, exports and/or imports, including quotas; • the implementation of other restrictions on supply chains in connection with global health pandemics; • the imposition of currency restrictions; • inflation relative to the United States and related fluctuations in currency and interest rates; • government regulation in the countries in which we operate, service customers or purchase raw materials; • acts or threats of war or terrorism; • sanctions, including those in response to acts or threats of war or terrorism; • civil unrest and labor problems; and • the nationalization or appropriation of rights or other assets.
Our inability to receive distributions from our subsidiaries, otherwise generate sufficient cash flows to satisfy our debt obligations or refinance our indebtedness on commercially reasonable terms, or at all, would adversely affect our financial position and results of operations. 22 RISKS RELATED TO OUR COLLECTIVE BARGAINING AGREEMENTS. Our failure to maintain satisfactory labor relations could adversely affect our business.
Our inability to receive distributions from our subsidiaries, otherwise generate sufficient cash flows to satisfy our debt obligations or refinance our indebtedness on commercially reasonable terms, or at all, would adversely affect our financial position and results of operations. RISKS RELATED TO OUR COLLECTIVE BARGAINING AGREEMENTS. Our failure to maintain satisfactory labor relations could adversely affect our business.
Aluminum coil produced for demanding end market applications in the beverage and food packaging industry in North America are subject to substantial competition from producers of alternative packaging made from glass, paper, flexible materials, plastic and organic or compostable materials, which may compare favorably to aluminum with respect to preservation of food and beverage quality and/or sustainability.
Aluminum coil produced for demanding end market applications in the beverage and food packaging industry in North America are subject to substantial competition from producers of alternative packaging made from glass, paper, flexible materials, plastic and organic or compostable materials, which may compare favorably to aluminum with respect to preservation of food and beverage quality, cost, and/or sustainability.
In the event that production of Warrick is negatively impacted by Alcoa’s failure to provide support or transition services, our operations, business, financial condition and results of operations could be adversely affected. 19 RISKS RELATED TO COMMODITY-RELATED PRICE FLUCTUATIONS. Our business could be adversely affected by pricing and availability of primary aluminum.
In the event that production of Warrick is negatively impacted by Alcoa’s failure to provide support or transition services, our operations, business, financial condition, and results of operations could be adversely affected. RISKS RELATED TO COMMODITY-RELATED PRICE FLUCTUATIONS. Our business could be adversely affected by pricing and availability of primary aluminum.
As a result of these restrictions, we may be: • limited in how we conduct our business and grow in accordance with our strategy; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or 21 • unable to compete effectively or to take advantage of new business opportunities.
As a result of these restrictions, we may be: • limited in how we conduct our business and grow in accordance with our strategy; • unable to raise additional debt or equity financing to operate during general economic or business downturns; or • unable to compete effectively or to take advantage of new business opportunities.
To the extent these losses are not covered by insurance, our financial position, results of operations and cash flows could be adversely affected by such events. 18 We may face challenges to our intellectual property rights which could adversely affect our reputation, business and competitive position.
To the extent these losses are not covered by insurance, our financial position, results of operations, and cash flows could be adversely affected by such events. We may face challenges to our intellectual property rights which could adversely affect our reputation, business and competitive position.
Our results of operations may be negatively affected by the amount of expense we record for our pension and other postretirement benefit plans, reductions in the fair value of plan assets and other factors. We calculate income or expense for our plans using actuarial valuations in accordance with GAAP.
Our results of operations may be negatively affected by the amount of expense we record for our pension and other postretirement and postemployment benefit plans, reductions in the fair value of plan assets and other factors. We calculate income or expense for our plans using actuarial valuations in accordance with GAAP.
These potential impacts could have an adverse effect on our operations, financial position, results of operations and cash flows. 24 Expectations relating to sustainability considerations expose us to potential liabilities, increased costs and reporting requirements, reputational harm and other adverse effects on our business .
These potential impacts could have an adverse effect on our operations, financial position, results of operations, and cash flows. Expectations relating to sustainability considerations expose us to potential liabilities, increased costs and reporting requirements, reputational harm and other adverse effects on our business .
Our business could be adversely affected by the pricing and availability of alloying metals. We use certain alloying metals, such as copper, zinc, magnesium and silicon, in our operations in order to achieve the required performance properties in our products.
Our business could be adversely affected by the pricing and availability of alloying metals. 19 We use certain alloying metals, such as copper, zinc, magnesium, and silicon, in our operations in order to achieve the required performance properties in our products.
“Management’s Discussion and Analysis of Financial Condition” under caption “Critical Accounting Estimates and Policies – Pension and Other Postretirement Benefits” included in this Form 10-K, as well as Note 5 of Notes to Consolidated Financial Statements included in this Form 10-K.
“Management’s Discussion and Analysis of Financial Condition” under caption “Critical Accounting Estimates and Policies – Pension and Other Postretirement and Postemployment Benefits” included in this Form 10-K, as well as Note 5 of Notes to Consolidated Financial Statements included in this Form 10-K.
Due to the impacts of supply chain disruptions, geopolitical activity, general economic conditions and other factors, our customers’ businesses are subject to many uncertainties and, as a result, we have experienced, and may continue to experience, unanticipated volatility in product demand and related cash flows.
Due to the impacts of supply chain disruptions, geopolitical activity, general economic conditions, and other factors, the businesses of our customers are subject to many uncertainties and, as a result, we have experienced, and may continue to experience, unanticipated volatility in product demand and related cash flows.
A significant effect of a classified Board of Directors may be to deter hostile takeover attempts because an acquirer could experience delays in replacing a majority of directors. Moreover, stockholders are not permitted to call a special meeting. 26 RISKS RELATED TO PUBLICLY TRADED U.S. MANUFACTURING COMPANIES.
A significant effect of a classified Board of Directors may be to deter hostile takeover attempts because an acquirer could experience delays in replacing a majority of directors. Moreover, stockholders are not permitted to call a special meeting. 25 RISKS RELATED TO PUBLICLY TRADED U.S. MANUFACTURING COMPANIES.
Our customers may reduce their demand for our products if the government relaxes fuel efficiency standards or if oil prices remain low for a protracted period of time. Efficient use of fossil fuels partially drives demand for aluminum in transportation applications.
Our customers may reduce their demand for our products if the government relaxes fuel efficiency standards or if oil prices remain low for a protracted period of time. Efficient use of fossil fuels partially drives demand for aluminum in transportation applications. The U.S.
Military programs that currently use or in the future could use our products may be subject to changes in military strategy and government priorities. Further, while many of the U.S. government programs span several years, they are often funded annually, and funding is generally subject to congressional appropriations.
Military programs that currently use or in the future could use our products may be subject to changes in military strategy and government priorities. Further, while many of the U.S. government programs span several years, they are often funded annually, and funding is generally subject to congressional appropriations and may be subject to other reduction efforts.
It is possible that the USW may seek to extend the term of the agreement and its right to nominate board members beyond 2025. 23 RISKS RELATED TO ENVIRONMENTAL LAWS AND REGULATIONS AND SUSTAINABILITY INITIATIVES. Environmental compliance, cleanup and damage claims may decrease our cash flow and adversely affect our business.
It is possible that the USW and the Company may extend the term of the agreement and its right to nominate board members beyond 2025. RISKS RELATED TO ENVIRONMENTAL LAWS AND REGULATIONS AND SUSTAINABILITY INITIATIVES. Environmental compliance, cleanup and damage claims may decrease our cash flow and adversely affect our business.
Our contribution amounts to these plans were established by collective bargaining and, along with benefit levels and related items, will be issues in our future collective bargaining negotiations.
Our contribution amounts to these plans were established by collective bargaining and, along with benefit levels and related items, will be topics in our future collective bargaining negotiations.
Stakeholders also may have very different views on where sustainability focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
Parties also may have very different views on where sustainability focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
The commercial aerospace industry is cyclical and downturns in the commercial aerospace industry could adversely affect our business. We derive a significant portion of our revenue from products sold to the aerospace industry. Notwithstanding a secular growth trend spanning nearly two decades, the aerospace industry is highly cyclical.
The commercial aerospace industry is cyclical and subject to disruption. Downturns in the commercial aerospace industry could adversely affect our business. We derive a significant portion of our revenue from products sold to the aerospace industry. Notwithstanding a secular growth trend spanning nearly two decades, the aerospace industry is highly cyclical and furthermore, is subject to disruption.
These factors include but are not limited to: (i) declines or reduced growth trends in global travel and airline passenger traffic; (ii) the rate of replacement of older aircraft with more fuel efficient aircraft; (iii) changing airline strategies affecting preferences for single-aisle aircraft models as opposed to twin-aisle or jumbo aircraft models; (iv) airline industry profitability; (v) the state of regional and global economies; (vi) concerns regarding terrorism or the threat of terrorism; (vii) concerns regarding new pandemics of infectious disease; and (viii) safety concerns with newly introduced and existing aircraft.
These factors include but are not limited to: (i) declines or reduced growth trends in global travel and airline passenger traffic; (ii) the rate of replacement of older aircraft with more fuel efficient aircraft; (iii) changing airline strategies affecting preferences for single-aisle aircraft models as opposed to twin-aisle or jumbo aircraft models; (iv) airline industry profitability; (v) the state of regional and global economies; (vi) concerns regarding terrorism or the threat of terrorism; (vii) concerns regarding new pandemics of infectious disease; (viii) labor disputes involving airline or aerospace manufacturers; and (ix) safety concerns with newly introduced and existing aircraft.
Numerous factors that influence demand for new commercial aircraft could result in cancellations or deferrals of aircraft orders and a global decrease in new commercial aircraft deliveries.
Numerous factors, including those that influence demand for new commercial aircraft, could result in cancellations or deferrals of aircraft orders and a global decrease in new commercial aircraft deliveries.
Responding to these sustainability considerations and implementation of these goals and initiatives involves risks and uncertainties, including those described under “Forward-Looking Statements,” requires investments and is impacted by factors that may be outside our control. In addition, some stakeholders may disagree with our goals and initiatives and the focus of stakeholders may change and evolve over time.
Responding to these sustainability considerations and implementation of these goals and initiatives involves risks and uncertainties, including those described under “Forward-Looking Statements,” requires investments and is impacted by factors that may be outside our control. In addition, some of these parties may disagree with our goals and initiatives and their focus may change and evolve over time.
RISKS RELATED TO GEO-POLITICAL FACTORS. Our industry is very sensitive to foreign economic, regulatory and political factors that may adversely affect our business. We import primary aluminum and certain alloy metals from, and manufacture fabricated products used in, foreign countries.
Our industry is very sensitive to foreign economic, regulatory and political factors that may adversely affect our business. We import primary aluminum and certain alloy metals from, and manufacture fabricated products used in, foreign countries.
We have redundant capacity and capability to produce many of our extruded products within our manufacturing platform to mitigate our business risk from such interruptions, but interruptions at our Trentwood facility where our production of plate and sheet is concentrated or at our Warrick facility where our production of packaging material is concentrated, could significantly compromise our ability to meet our customers’ needs.
We have redundant capacity and capability to produce many of our extruded products within our manufacturing platform to mitigate our business risk from such interruptions, but interruptions at Trentwood where our production of plate and sheet is concentrated or at Warrick where our production of packaging material is concentrated, could significantly compromise our ability to meet the needs of our customers.
Additionally, we may not be able to reduce our cost structure and our selling prices to be competitive with others, and tariffs introduced to protect manufacturers in the United States and Canada from foreign price competition may not be fully effective.
Additionally, we may not be able to reduce our cost structure and our selling prices to be competitive with others, and tariffs introduced to protect manufacturers in the United States from foreign price competition may not be fully effective or increase our costs.
When U.S. and foreign allied governments are faced with competing national priorities, such as addressing financial or spending crises or public health emergencies, there can be significant pressure to reduce defense spending, which could reduce the demand for our products and adversely affect our financial position, results of operations and cash flows. 16 Downturns in the automotive and ground transportation industries could adversely affect our business.
When U.S. and foreign allied governments are faced with competing national priorities, such as addressing financial or spending crises or public health emergencies, there can be significant pressure to reduce defense spending, which could reduce the demand for our products and adversely affect our financial position, results of operations, and cash flows.
Our five largest customers in total accounted for approximately 53% of our 2023 net sales. Most of these customers have one or more sizable sales agreements with us.
Our five largest customers in total accounted for approximately 55% of our 2024 net sales. Most of these customers have one or more sizable sales agreements with us.
The USEPA, other federal regulatory agencies, and regulatory agencies of certain states have generally sought to limit growth of fossil fuel usage by establishing stricter fuel efficiency standards.
Environmental Protection Agency, other federal regulatory agencies, and regulatory agencies of certain states have generally sought to limit growth of fossil fuel usage by establishing stricter fuel efficiency standards.
If we are unable to generate sufficient productivity improvements and cost savings in the future to offset reductions in our selling prices and increases in our costs that we cannot pass through to our customers, our financial position, results of operations and cash flows could be adversely affected. 17 We are exposed to risks related to our receivables supply chain financing arrangements.
If we are unable to generate sufficient productivity improvements and cost savings in the future to offset reductions in our selling prices and increases in our costs that we cannot pass through to our customers, our financial position, results of operations, and cash flows could be adversely affected. RISKS RELATED TO GEO-POLITICAL FACTORS.
At December 31, 2023, approximately 65% of our employees were represented by labor unions under labor contracts with varying durations and expiration dates. Employees at our Trentwood and Newark facilities are represented by the USW under a single contract that extends through September 2025.
At December 31, 2024, approximately 65% of our employees were represented by labor unions under labor contracts with varying durations and expiration dates. Employees at our Trentwood and Newark facilities are represented by the USW under a single contract that extends through September 2025, with a separate agreement with the USW for another operation related to Trentwood.
Laws enacted by government agencies, or policies of regulators, including the USEPA and the SEC, could regulate greenhouse gas emissions through cap-and-trade systems, carbon taxes, or other programs under which emitters would be required to buy allowances to offset emissions of greenhouse gas, pay carbon based taxes, make certain disclosures about emissions, which may be extensive, make significant capital investments, alter manufacturing practices or curtail production.
Environmental Protection Agency and the SEC, could regulate greenhouse gas emissions through cap-and-trade systems, carbon taxes, or other programs under which emitters would be required to buy allowances to offset emissions of greenhouse gas, pay carbon based taxes, make certain disclosures about emissions, which may be extensive, make significant capital investments, alter manufacturing practices or curtail production.
We are dependent upon Alcoa for certain resources required for the day-to-day operation of our business at Warrick, which include “support services” such as the provision of potable water, compressed air, laboratory services, electricity, steam and hot water.
We are dependent upon Alcoa for certain resources essential to the day-to-day operation of our business at Warrick. We are dependent upon Alcoa for certain resources required for the day-to-day operation of our business at Warrick, which include “support services” such as the provision of potable water and certain environmental services.
The demand for our Automotive Extrusions and many of our general engineering and other industrial products is dependent on the production of cars, light trucks, SUVs, and heavy-duty vehicles and trailers in North America.
Downturns in the automotive and ground transportation industries could adversely affect our business. 16 The demand for our Automotive Extrusions and many of our general engineering and other industrial products is dependent on the production of cars, light trucks, SUVs, and heavy-duty vehicles and trailers in North America.
We may not be able to successfully implement our productivity enhancement and cost reduction initiatives that are necessary to offset competitive price pressure. Over time, we have experienced pricing pressure on many of our products and anticipate continued pricing pressure in the future. Ongoing and heightened competitive price pressure makes it increasingly important for us to be a low-cost producer.
We may not be able to successfully implement our productivity enhancement and cost reduction initiatives that are necessary to offset competitive price pressure. 18 Over time, we have experienced pricing pressure on many of our products and anticipate continued pricing pressure in the future.
Recent macroeconomic factors including labor shortages, supply chain disruptions, inflation and recession risks have adversely affected our business, and could cause additional downturns in the aerospace, automotive, and ground transportation industries, which would further adversely affect our business. We derive a significant portion of our revenue from products sold to the aerospace and automotive and ground transportation industries.
Recent macroeconomic factors including labor shortages, supply chain disruptions, inflation and recession risks have adversely affected our business, and could cause additional downturns in the aerospace, packaging, automotive, and ground transportation industries, which would further adversely affect our business and the business of our customers.
A breach in cybersecurity on our systems or any of our third-party service providers could result in manipulation and destruction of sensitive data, cause critical systems to malfunction, be damaged or shut down and lead to disruption of our operations and production downtimes, potentially for lengthy periods of time.
Accordingly, preventing intrusions and detecting successful intrusions and defending against them continues to be more difficult and requires ever-increasing vigilance. 24 A breach in cybersecurity on our systems or any of our third-party service providers could result in manipulation and destruction of sensitive data, cause critical systems to malfunction, be damaged or shut down and lead to disruption of our operations and production downtimes, potentially for lengthy periods of time.
A failure by Alcoa to provide support services or transition services within the time frames and upon the terms agreed to, including quality and performance standards, could cause us to incur substantial costs to keep the Warrick rolling mill operational or result in the temporary or permanent shutdown of Warrick’s operations.
Although some of these assets have been developed and the Company has taken possession of certain assets from Alcoa, a failure by Alcoa to provide support services or transition services upon the terms agreed to, including quality and performance standards, could cause us to incur substantial costs to keep the Warrick rolling mill operational or result in the temporary or permanent shutdown of Warrick’s operations.
The early settlement, reclassification of cumulative losses and/or the periodic adjustment to fair value through Net income (loss) associated with ineffective hedging activities could have a material negative impact on our financial position, results of operations and cash flows. 20 Our hedging programs may limit the income and cash flows we would otherwise expect to receive if our hedging programs were not in place and may otherwise affect our business.
The early settlement, reclassification of cumulative losses and/or the periodic adjustment to fair value through Net income (loss) associated with ineffective hedging activities could have a material negative impact on our financial position, results of operations, and cash flows.
The USW also represents employees at six other facilities, one of which has a contract expiring in 2024. As part of any labor negotiation, the future wages, healthcare benefits, and excise taxes that may result therefrom, and other benefits that we agree to, could adversely affect our future financial position, results of operations and cash flows.
As part of any labor negotiation, the future wages, healthcare benefits, and excise taxes that may result therefrom, and other benefits that we agree to, could adversely affect our future financial position, results of operations, and cash flows.
These valuations reflect assumptions about financial markets and other economic conditions, which may change based on changes in key economic indicators. The most significant year-end assumptions we use to estimate pension or other postretirement benefit income or expense for the following year are the discount rate applied to plan liabilities and the expected long-term rate of return on plan assets.
The most significant year-end assumptions we use to estimate pension or other postretirement and postemployment benefit income or expense for the following year are the discount rate applied to plan liabilities and the expected long-term rate of return on plan assets.
Governmental regulation relating to greenhouse gas emissions may subject us to significant new costs and restrictions on our operations and could impact our supply chain and cost of material .
Governmental regulation relating to greenhouse gas emissions may subject us to significant new costs and restrictions on our operations and could impact our supply chain and cost of material . 23 Laws enacted by government agencies, or policies of regulators, including the U.S.
Payment of dividends may not continue in the future and our payment of dividends and stock repurchases are subject to restrictions. Our Board of Directors has declared a cash dividend for each quarter since the summer of 2007. In addition, our Board of Directors has authorized a stock repurchase program.
Our Board of Directors has declared a cash dividend for each quarter since the summer of 2007. In addition, our Board of Directors has authorized a stock repurchase program.
Furthermore, regulations or other targets for greenhouse gas emissions reductions could impact the availability and price of energy and raw materials, which could ultimately lead to supply demand imbalances, higher costs and supply chain disruptions. Prolonged shortages or slowdowns could negatively impact our cost of goods and result in delays or non-delivery of shipments of our products.
Furthermore, regulations or other targets for greenhouse gas emissions reductions in the United States as well as other jurisdictions could impact the availability and price of energy and raw materials, which could ultimately lead to supply demand imbalances, higher costs and supply chain disruptions.
If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures, dispose of material assets or operations, restructure or refinance our indebtedness or seek additional debt or equity capital.
We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the interest, principal, and premium, if any, on our indebtedness. 21 If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity challenges and could be forced to reduce or delay investments and capital expenditures, dispose of material assets or operations, restructure or refinance our indebtedness or seek additional debt or equity capital.
Macroeconomic factors include, but not limited to: (i) labor shortages; (ii) disruptions to supply chains; (iii) other interruptions of international and regional commerce; (iv) inflation; (v) higher interest rates; and (vi) recession risks.
We derive a significant portion of our revenue from products sold to the aerospace, packaging, automotive and ground transportation industries. Macroeconomic factors include, but not limited to: (i) labor shortages or disputes; (ii) disruptions to supply chains; (iii) other interruptions of international and regional commerce; (iv) inflation; (v) higher interest rates; and (vi) recession risks.
The future impact of these or other changes could be regulatory or voluntary and could impact our operations directly or indirectly through our customers or our supply chain.
Prolonged shortages or slowdowns could negatively impact our cost of goods and result in delays or non-delivery of shipments of our products. The future impact of these or other changes could be regulatory or voluntary and could impact our operations directly or indirectly through our customers or our supply chain.
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on sustainability considerations relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion. We make statements about our sustainability goals and initiatives through information provided on our website, press statements, and other communications, including through our Corporate Sustainability Report.
Many governments, regulators, investors, employees, customers, and other stakeholders are increasingly focused on sustainability considerations relating to businesses, including climate change and greenhouse gas emissions, data privacy, artificial intelligence, human capital and diversity, equity and inclusion.
In addition, Alcoa has agreed to pay for the development of infrastructure necessary for Warrick to obtain electricity from a third-party power supplier, subject to certain conditions no later than June 30, 2024.
In order to transition Warrick from dependence upon the support services to independence as a facility with its own self-sufficient infrastructure, Alcoa has agreed to pay for the development of infrastructure necessary for Warrick to obtain electricity from a third-party power supplier, subject to certain conditions.
Our inability to prevent information technology system disruptions or to mitigate the impact of such disruptions could have an adverse effect on us. RISKS RELATED TO TAX REGULATIONS. We may not be able to utilize all of our net operating loss carryforwards.
Our inability to prevent information technology system disruptions or to mitigate the impact of such disruptions could have an adverse effect on us. RISKS RELATED TO OUR COMMON STOCK. Payment of dividends may not continue in the future and our payment of dividends and stock repurchases are subject to restrictions.
Removed
Additionally, in periods of lower oil prices, the economic benefits of replacing older aircraft and automobiles with more fuel-efficient models are less compelling.
Added
Ongoing and heightened competitive price pressure makes it increasingly important for us to be a low-cost producer.
Removed
We are party to several supply chain financing arrangements, in which we may sell certain of our customers’ trade accounts receivable without recourse to such customers’ financial institutions.
Added
Our hedging programs may limit the income and cash flows we would otherwise expect to receive if our hedging programs were not in place and may otherwise affect our business.
Removed
To the extent that these arrangements are terminated, our financial condition, results of operations, cash flows and liquidity could be adversely affected by extended payment terms, delays, or failures in collecting trade accounts receivables.
Added
The collective bargaining agreements were renewed in February 2025 (see Note 18 of Notes to Consolidated Financial Statements included in this Form 10-K for additional information). The USW also represents employees at six other facilities.
Removed
The utility of certain supply chain financing arrangements also depends upon the Term SOFR rate, as it is a component of the discount rate applicable to certain arrangements.
Added
These valuations reflect assumptions about financial markets and other economic conditions, which may change based on changes in key economic indicators.
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If the Term SOFR rate increases significantly or remains at an elevated level for a prolonged period of time, we may be negatively impacted as we may not be able to pass these added costs on to our customers, which could have a material and adverse effect upon our financial condition, results of operations and cash flows.
Added
We make statements about our sustainability goals and initiatives through information provided on our website, press statements, and other communications, including through our Corporate Sustainability Report.
Removed
We may not realize the benefits of the Warrick rolling mill acquisition. Our acquisition of Warrick rolling mill in 2021 could disrupt our business and/or dilute or adversely affect the price of our common stock.
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We may also change our goals and initiatives due to a change in strategy, reduced relevance, or changing market conditions and we may take actions company parties view as contrary to such goals and initiatives.
Removed
Risks associated with the Warrick rolling mill acquisition may include difficulties integrating the financial, technological and management standards, processes, procedures, and controls of the acquired business with those of our existing operations. In addition, we may experience difficulties achieving anticipated operational improvements at Warrick.
Added
In addition, due to the industry we serve, there is an increased risk of cyberattacks, phishing attacks, and other forms of information technology threats.
Removed
If we fail to successfully integrate the Warrick rolling mill, we may not realize the benefits expected from the transaction and/or it may have adverse effects on our financial position, results of operations, and cash flows. We are dependent upon Alcoa for certain resources essential to the day-to-day operation of our business at Warrick.
Removed
In order to transition Warrick from dependence upon the support services to independence as a facility with its own self-sufficient infrastructure, Alcoa has agreed to provide “transition services,” including providing infrastructure and equipment for the production of steam, hot water and compressed air and conveying the filtration plant currently utilized for the supply of potable water.
Removed
We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the interest, principal, and premium, if any, on our indebtedness.
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An adverse decline in the liability discount rate, lower-than-expected investment return on pension assets and other factors could affect our business, financial condition, results of operations or amount of pension funding contributions in future periods.
Removed
Accordingly, preventing intrusions and detecting successful intrusions and defending against them continues to be more difficult and requires ever-increasing vigilance.
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Our ability to utilize our net operating loss carryforwards and other tax attributes could be limited to the extent they expire before we fully utilize them or if changes in federal or certain state tax laws reduce or eliminate our ability to use them to offset income taxes.
Removed
Additionally, a change in our ownership, specifically a change in ownership of more than 50% during any period of 36 consecutive months (“ownership change”), as determined under the Internal Revenue Code of 1986 (“Code”), could reduce our ability to fully use our net operating loss carryforwards and other significant tax attributes. 25 Furthermore, our tax returns for certain past years are still subject to examination by taxing authorities, and the use of net operating loss carryforwards in future periods could trigger a review of attributes and other tax matters in years that are not otherwise subject to examination.
Removed
After our net operating loss carryforwards and other significant tax attributes are fully utilized or if they become unavailable to us before we fully utilize them, our future income will not be shielded from federal and state income taxation and the funds otherwise available for general corporate purposes would be reduced.
Removed
We could engage in transactions involving our common shares that impair the use of our federal income tax attributes.
Removed
Section 382 of the Code affects our ability to use our federal income tax attributes, including our net operating loss carryforwards, following a more than 50% change in ownership during any period of 36 consecutive months, an ownership change, as determined under the Code.
Removed
Certain transactions may be included in the calculation of an ownership change, including transactions involving our repurchase or issuance of our common shares.
Removed
When we engage in any transaction involving our common shares that may be included in the calculation of an ownership change, our practice is to first perform the calculations necessary to confirm that our ability to use our federal income tax attributes will not be affected. These calculations are complex and reflect certain necessary assumptions.
Removed
Accordingly, it is possible that we could engage in a transaction involving our common shares that causes an ownership change and inadvertently impairs the use of our federal income tax attributes. Furthermore, we may intentionally pursue a transaction that impairs the use of our federal income tax attributes if our strategy changes. RISKS RELATED TO OUR COMMON STOCK.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe cybersecurity threat risk action plan is managed at the enterprise level by our Chief Information Officer (“CIO”). Management employs in-depth defense mechanisms throughout the enterprise. We regularly engage and consult with independent third-party consultants as part of our overall ERM, including penetration testing and periodic tabletop exercises to better prepare us for potential cyber threats.
Biggest changeWe regularly engage and consult with independent third-party consultants as part of our overall ERM, including penetration testing and periodic tabletop exercises to better prepare us for potential cyber threats. We also conduct annual information security training to educate employees and make them aware of information security risks and to enable them to take steps to mitigate those risks.
The CIO maintains over 25 years of information technology expertise with extensive experience in enterprise risk management, including analysis, development, evaluation, and testing of control objectives and procedures to mitigate risks.
The CIO has over 25 years of information technology expertise with extensive experience in enterprise risk management, including analysis, development, evaluation, and testing of control objectives and procedures to mitigate risks.
The Director of Cybersecurity oversees and helps to ensure appropriate capabilities and controls are implemented in the areas of network security, endpoint protection, data protection, incident response, identity, and access management. Additionally, in this role, the Director of Cybersecurity works closely with 3rd party security partners surrounding monitoring and incident response services. 28
The Director of Cybersecurity oversees and helps to ensure appropriate capabilities and controls are implemented in the areas of network security, endpoint protection, data protection, incident response, identity, and access management. Additionally, in this role, the Director of Cybersecurity works closely with third-party security partners surrounding monitoring and incident response services. 27
In addition, we employ multi-factor authentication and vulnerability management to mitigate and/or prevent cybersecurity incidents. 27 A cybersecurity incident may be detected in a number of ways, including, but not limited to, through automated reporting mechanisms, network and system indicators, intrusion detection systems, employee reports, law enforcement reports, or other third-party notification.
A cybersecurity incident may be detected in a number of ways, including, but not limited to, through automated reporting mechanisms, network and system indicators, intrusion detection systems, employee reports, law enforcement reports, or other third-party notification.
Management has not identified risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company, including its business, strategy, results of operations, or financial condition. See “Item 1A. Risk Factors - Risks Related to Cybersecurity and Privacy” for additional information.
Management has not identified risks from cybersecurity threats, including as a result of any previous cybersecurity incidents involving us or third-parties, that have materially affected or are reasonably likely to materially affect the Company in 2024, including its business, strategy, results of operations, or financial condition. See “Item 1A.
We also conduct annual information security training to educate employees and make them aware of information security risks and to enable them to take steps to mitigate those risks. As part of this program, we take reasonable steps to provide our executive management and employees who may come into possession of confidential financial information with appropriate information security awareness training.
As part of this program, we take reasonable steps to provide our executive management and employees who may come into possession of confidential financial information with appropriate information security awareness 26 training. In addition, we employ multi-factor authentication and vulnerability management to mitigate and/or prevent cybersecurity incidents.
Added
The cybersecurity threat risk action plan is managed at the enterprise level by our Chief Information Officer (“CIO”), who reports to our Executive Vice President and Chief Financial Officer. Management employs in-depth defense mechanisms throughout the enterprise.
Added
Risk Factors - Risks Related to Cybersecurity and Privacy” for additional information.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe Richland, Washington facility is subject to a lease with a 2025 expiration date, subject to certain extension rights held by us. 5. The Spokane Valley, Washington facility consists of 2,765,000 square feet, which is owned by us, and 121,000 square feet, which is subject to a lease with a 2025 expiration date.
Biggest changeSee Note 12 of Notes to Consolidated Financial Statements included in this Form 10-K for a description of our 2024 Restructuring Plan related to this facility. 6. The Spokane Valley, Washington facilities consist of 2,765,000 square feet, owned by us, and 121,000 square feet, which is subject to a lease with a 2025 expiration date.
Pr operties The following table provides information regarding the location, size, and ownership of our principal production facilities as of December 31, 2023: Location Square footage Owned or Leased Chandler, Arizona 98,000 Leased 1 Chandler, Arizona 103,000 Leased 2 Columbia, New Jersey 33,000 Owned Florence, Alabama 249,000 Owned Jackson, Tennessee 306,000 Owned Kalamazoo, Michigan 465,000 Leased 2 London, Ontario 306,000 Owned Los Angeles, California 174,000 Owned Heath, Ohio 1,284,000 Owned Newburgh, Indiana 3,922,000 Owned/Leased 3 Richland, Washington 63,000 Leased 4 Richmond, Virginia 474,000 Owned Sherman, Texas 311,000 Owned Spokane Valley, Washington 2,886,000 Owned/Leased 5 Total 10,674,000 1.
Pr operties The following table provides information regarding the location, size, and ownership of our principal production facilities as of December 31, 2024: Location Square footage Owned or Leased Chandler, Arizona 98,000 Leased 1 Chandler, Arizona 103,000 Leased 2 Columbia, New Jersey 33,000 Owned Florence, Alabama 249,000 Owned Jackson, Tennessee 306,000 Owned Kalamazoo, Michigan 465,000 Leased 2 London, Ontario 306,000 Owned Los Angeles, California 174,000 Owned Heath, Ohio 1,284,000 Owned Newburgh, Indiana 3,922,000 Owned/Leased 3 Richland, Washington 63,000 Leased 4 Richmond, Virginia 474,000 Owned Sherman, Texas 311,000 Owned 5 Spokane Valley, Washington 2,886,000 Owned/Leased 6 Total 10,674,000 1.
Production facilities and equipment are generally in good condition and suitable for their intended uses. For additional information regarding our production facilities, see the table under Item 1. Business “Resources - Manufacturing Processes” of this Form 10-K. Item 3. Legal Proceedings None. Item 4. Mine Saf ety Disclosures Not applicable. 29 PART II
Production facilities and equipment are generally in good condition and suitable for their intended uses. For additional information regarding our production facilities, see the table under Item 1. Business “Resources - Manufacturing Processes” of this Form 10-K. Item 3. Legal Proceedings None. Item 4. Mine Saf ety Disclosures Not applicable. 28 PART II
Added
The Richland, Washington facility is subject to a lease with a 2025 expiration date, subject to certain extension rights held by us. 5. During the quarter ended June 30, 2024, we initiated a plan to exit our soft alloy aluminum extrusion facility located in Sherman, Texas.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Kaiser Aluminum Corporation, the Russell 2000 Index and the S&P SmallCap 600 Materials Index 30 Issuer Repurchases of Equity Securities The following table provides information regarding our repurchases of our common shares during the quarter ended December 31, 2023: Equity Incentive Plans Stock Repurchase Plan Total Number of Shares Purchased 1 Average Price per Share Total Number of Shares Purchased 2 Average Price per Share Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (millions) 2 October 1, 2023 - October 31, 2023 344 $ 67.08 — $ — $ 93.1 November 1, 2023 - November 30, 2023 — — — — 93.1 December 1, 2023 - December 31, 2023 683 64.95 — — 93.1 Total 1,027 $ 65.67 — $ — n/a 1.
Biggest changeCOMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN Among Kaiser Aluminum Corporation, the Russell 2000 Index and the S&P SmallCap 600 Materials Index 29 Issuer Repurchases of Equity Securities The following table provides information regarding our repurchases of our common shares during the quarter ended December 31, 2024: Equity Incentive Plans Stock Repurchase Plan Total Number of Shares Purchased 1 Average Price per Share Total Number of Shares Purchased 2 Average Price per Share Maximum Dollar Value of Shares that May Yet Be Purchased Under the Program (millions) 2 October 1, 2024 - October 31, 2024 398 $ 68.93 — $ — $ 93.1 November 1, 2024 - November 30, 2024 475 82.05 — — 93.1 December 1, 2024 - December 31, 2024 2,442 71.30 — — 93.1 Total 3,315 $ 72.56 — $ — n/a 1.
Stock Performance Graph The following graph compares the cumulative total shareholder return on our common stock with: (i) the Russell 2000 Index and (ii) the S&P SmallCap 600 Materials Index. We are a component of each of these indices. The graph assumes: (i) an initial investment of $100 as of December 31, 2018 and (ii) reinvestment of all dividends.
Stock Performance Graph The following graph compares the cumulative total shareholder return on our common stock with: (i) the Russell 2000 Index and (ii) the S&P SmallCap 600 Materials Index. We are a component of each of these indices. The graph assumes: (i) an initial investment of $100 as of December 31, 2019 and (ii) reinvestment of all dividends.
In September 2018, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $100.0 million. At December 31, 2023, $93.1 million remained available to repurchase our common shares pursuant to the stock repurchase program. The September 2018 authorization does not have an expiration date.
In September 2018, our Board of Directors authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $100.0 million. At December 31, 2024, $93.1 million remained available to repurchase our common shares pursuant to the stock repurchase program. The September 2018 authorization does not have an expiration date.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information Our outstanding common stock is traded under the ticker symbol “KALU” on the Nasdaq Global Select Market. Holders As of February 19, 2024, there were approximately 495 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Sto ckholder Matters and Issuer Purchases of Equity Securities Market Information Our outstanding common stock is traded under the ticker symbol “KALU” on the Nasdaq Global Select Market. Holders As of February 17, 2025, there were approximately 484 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeCash used in operating activities for the year ended December 31, 2022 reflected results of business activity described within “Consolidated Selected Operational and Financial Information” above, as well as the following working capital changes: (i) an increase in inventory of $120.8 million, primarily driven by higher inventory pounds built at our Warrick facility to mitigate the impact of supply chain disruptions related to magnesium and hot metal supply and at our Trentwood facility to prepare for the planned outages associated with our large stretcher refurbishment, as well as higher per pound inventory cost due to higher metal prices in ending inventory; (ii) a decrease in accounts payable of $61.2 million, primarily due to timing of purchases and a decrease in period ending metal prices; and (iii) a decrease in accounts receivable of $15.0 million due to the timing and mix of sales, as well as a decrease in period ending metal prices.
Biggest changeCash Flows The following table summarizes our cash flows from operating, investing, and financing activities (in millions of dollars): Year Ended December 31, 2024 2023 Total cash provided by (used in): Operating activities $ 167.1 $ 211.9 Investing activities $ (174.6 ) $ (128.2 ) Financing activities $ (55.3 ) $ (54.3 ) Cash provided by operating activities for the year ended December 31, 2024 reflected results of business activity described within “Consolidated Selected Operational and Financial Information” above, as well as the following working capital changes: (i) an increase in inventory of $29.4 million, excluding LIFO impact, primarily driven by higher metal costs; (ii) an increase in contract assets of $14.9 million, primarily driven by timing of customer shipments; (iii) an increase in accounts payable of $14.1 million due to an increase in metal costs in addition to the timing of payments; and (iv) an increase in trade and other receivables of $4.4 million, primarily due to an increase in metal costs in addition to the timing of collections.
See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for further details with respect to the 4.50% Senior Notes maturing in 2031 (“4.50% Senior Notes”) and 4.625% Senior Notes maturing in 2028 (“4.625% Senior Notes”).
See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for further details with respect to the 4.625% Senior Notes maturing in 2028 (“4.625% Senior Notes”) and the 4.50% Senior Notes maturing in 2031 (“4.50% Senior Notes”).
We do not believe that covenants in the indenture governing the 4.50% Senior Notes and 4.625% Senior Notes are reasonably likely to limit our ability to obtain additional debt or equity financing should we choose to do so during the next 12 months. Purchase Obligations.
We do not believe that covenants in the indenture governing the 4.625% Senior Notes and 4.50% Senior Notes are reasonably likely to limit our ability to obtain additional debt or equity financing should we choose to do so during the next 12 months. Purchase Obligations.
In such an event, ASC 450, Contingencies ("ASC 450"), requires that a liability be established for at least the minimum end of the range assuming that there is no other amount which is more likely to occur.
In such an event, ASC 450, Contingencies requires that a liability be established for at least the minimum end of the range assuming that there is no other amount which is more likely to occur.
Nevertheless, as in the past, the future declaration and payment of dividends, if any, will be at the discretion of our Board of Directors and will depend on a number of factors, including our financial, including the availability of surplus and/or net profits, and operating results, financial position and anticipated cash requirements and contractual restrictions under our Revolving Credit Facility, the indentures for our Senior Notes or other indebtedness we may incur in the future.
Nevertheless, as in the past, the future declaration and payment of dividends, if any, will be at the discretion of our Board of Directors and will depend on a number of factors, including our financial and operating results, the availability of surplus and/or net profits, liquidity position, anticipated cash requirements, contractual restrictions under our Revolving Credit Facility, and the indentures for our Senior Notes or other indebtedness we may incur in the future.
Pension and Other Postretirement Benefits Liabilities and expenses for pension and other postretirement benefits 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 (“LTRR”) on plan assets and several assumptions relating to the employee workforce (salary increases, health care cost trend rates, retirement age and mortality).
Pension and Other Postretirement and Postemployment Benefits Liabilities and expenses for pension and other postretirement and postemployment benefits 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 (“LTRR”) on plan assets and several assumptions relating to the employee workforce (salary increases, health care cost trend rates, retirement age and mortality).
For a reconciliation of Adjusted EBITDA to Net income (loss), see below in “Results of Operations - Selected Operational and Financial Information.” 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.
For a reconciliation of Adjusted EBITDA to Net income, see below in “Results of Operations - Selected Operational and Financial Information.” 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.
Cash outlays for purchase obligations consist primarily of commitments to purchase primary aluminum, recycled scrap aluminum, other alloys, energy, and equipment. We have various contracts with suppliers of metals that require us to purchase minimum quantities of these metals in future years based primarily at the associated metal price at the time of payment.
Cash outlays for purchase obligations consist primarily of commitments to purchase primary aluminum, recycled scrap aluminum, alloys, energy, and equipment. We have various contracts with suppliers of metals that require us to purchase minimum quantities of these metals in future years based primarily at the associated metal price at the time of payment.
The most significant assumptions used in determining the estimated year-end obligations include the assumed discount rate and the LTRR. In addition to the above assumptions used in the actuarial valuations, changes in plan provisions could also have a material impact on the net funded status of our pensions and other postretirement benefits.
The most significant assumptions used in determining the estimated year-end obligations include the assumed discount rate and the LTRR. In addition to the above assumptions used in the actuarial valuations, changes in plan provisions could also have a material impact on the net funded status of our pensions and other postretirement and postemployment benefits.
See Note 5 of Notes to Consolidated Financial Statements included in this Form 10-K for additional information regarding the future net benefits we expect to pay with respect to our pension plans, OPEB, and our variable cash contributions to the Salaried VEBA.
See Note 5 of Notes to Consolidated Financial Statements included in this Form 10-K for information regarding the future net benefits we expect to pay with respect to our pension plans, OPEB, and our variable cash contributions to the Salaried VEBA.
A reduction in the LTRR would reduce the amount of projected net assets available to satisfy postretirement obligations and, thus, cause the net expense of these obligations to increase in future years. A change in plan provisions could cause the estimated obligations to change.
A reduction in the LTRR would reduce the amount of projected net assets available to satisfy postretirement and OPEB obligations and, thus, cause the net expense of these obligations to increase in future years. A change in plan provisions could cause the estimated obligations to change.
To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of our accruals, our future results from operations could 41 be materially affected.
To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of our accruals, our future results from operations could be materially affected.
As of December 31, 2023, we had deferred compensation plan liabilities for certain key employees, which were contingent upon investment performance, vesting and other eligibility requirements, including retirement dates. See Note 5 of Notes to Consolidated Financial Statements included in this Form 10-K for further information, including the total expense related to all benefit plans. Revolving Credit Facility.
As of December 31, 2024, we had deferred compensation plan liabilities for certain key employees, which were contingent upon investment performance, vesting and other eligibility requirements, including retirement dates. See Note 5 of Notes to Consolidated Financial Statements included in this Form 10-K for further information, including the total expense related to all benefit plans. Revolving Credit Facility.
At December 31, 2023, $93.1 million remained authorized and available for future repurchases of common stock under our stock repurchase program. See our Statements of Consolidated Stockholders’ Equity included in this Form 10-K for information regarding minimum statutory tax withholding obligations arising during 2023 and 2022 in connection with the vesting of non-vested shares, restricted stock units, and performance shares.
At December 31, 2024, $93.1 million remained authorized and available for future repurchases of common stock under our stock repurchase program. See our Statements of Consolidated Stockholders’ Equity included in this Form 10-K for information regarding minimum statutory tax withholding obligations arising during 2024 and 2023 in connection with the vesting of non-vested shares, restricted stock units, and performance shares.
In estimating the amount of any loss, in many instances a single estimation of the loss may not be possible. Rather, we may only be able to estimate a range for possible losses.
In estimating the amount of any loss, in many instances a single estimation of the loss may not be possible. Rather, we may only be able to estimate a 39 range for possible losses.
See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for further information regarding interest expense, capitalized interest expense and a discussion of our debt and credit facilities that were in effect during each of the years 2023 and 2022. Other Income (Expense), Net.
See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for further information regarding interest expense, capitalized interest expense, and a discussion of our debt and credit facilities that were in effect during each of the years 2024 and 2023. Other Income, Net.
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. 39 See our Statements of Consolidated Stockholders’ Equity and Note 18 of Notes to Consolidated Financial Statements included in this Form 10-K for information regarding dividends declared during 2023 and 2022 and subsequent to December 31, 2023.
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. 38 See our Statements of Consolidated Stockholders’ Equity and Note 18 of Notes to Consolidated Financial Statements included in this Form 10-K for information regarding dividends declared during 2024 and 2023 and subsequent to December 31, 2024.
For purposes of recognizing revenue over time on products that are in work‑in-process (“WIP”) as of the period end, we make the assumption that the average margins at the respective production facilities are reasonably close to the individual product margins that are in WIP.
For purposes of recognizing revenue over time on products that are in work‑in-process as of the period end, we make the assumption that the average margins at the respective production facilities are reasonably close to the individual product margins that are in work‑in-process.
We are required to pay a monthly commitment fee equal to 0.25% per annum of the unused commitments under the Revolving Credit Facility. No borrowings were outstanding under our Revolving Credit Facility as of December 31, 2023.
We are required to pay a monthly commitment fee equal to 0.25% per annum of the unused commitments under the Revolving Credit Facility. No borrowings were outstanding under our Revolving Credit Facility as of December 31, 2024.
For a detailed discussion of items impacting the year ended December 31, 2021, as well as a year‑to‑year comparison of our financial position and results of operations for the years ended December 31, 2022 and December 31, 2021, refer to Part II, Item 7.
For a detailed discussion of items impacting the year ended December 31, 2022, as well as a year‑to‑year comparison of our financial position and results of operations for the years ended December 31, 2023 and December 31, 2022, refer to Part II, Item 7.
Since the recorded obligation represents the present value of expected postretirement benefit payments over the life of the plans, decreases in the discount rate (used to compute the present value of the payments) would cause the estimated obligation to increase. Conversely, an increase in the discount rate would cause the estimated present value of the obligation to decline.
Since the recorded obligation represents the present value of expected postretirement and postemployment benefit payments over the life of the plans, decreases in the discount rate (used to compute the present value of the payments) would cause the estimated obligation to increase. Conversely, an increase in the discount rate would cause the estimated present value of the obligation to decline.
A change in the assumption for the weighted average expected long-term rate of return on plan assets of 0.25% would impact pretax earnings by approximately $0.2 million for 2024.
A change in the assumption for the weighted average expected long-term rate of return on plan assets of 0.25% would impact pretax earnings by approximately $0.2 million for 2025.
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. See Note 10 of Notes to Consolidated Financial Statements included in this Form 10-K for additional discussion of these matters.
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 $13.4 million over the remediation period. See Note 10 of Notes to Consolidated Financial Statements included in this Form 10-K for additional discussion of these matters.
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.
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 to satisfy our foreseeable liquidity needs during the next 12 months, should we choose to do so, 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.
Additionally, we are required to pay $0.3 million in annual administrative fees related to the hourly VEBA that provides benefits for eligible retirees represented by certain unions and their surviving spouses and eligible dependents through September 2025.
Additionally, we are required to pay $0.3 million in annual administrative fees related to the hourly VEBA that provides benefits for eligible retirees represented by certain unions and their surviving spouses and eligible dependents through September 2025. Multiemployer Pension Plans.
See Statements of Consolidated Cash Flows included in this Form 10-K for further details on our cash flows from operating, investing, and financing activities for the years ended December 31, 2023 and December 31, 2022. 37 Sources of Liquidity Our most significant sources of liquidity include available cash and cash equivalents, available credit under the Revolving Credit Facility, and funds generated from operations.
See Statements of Consolidated Cash Flows included in this Form 10-K for further details on our cash flows from operating, investing, and financing activities for the years ended December 31, 2024 and December 31, 2023. 36 Sources of Liquidity Our most significant sources of liquidity include available cash and cash equivalents, available credit under the Revolving Credit Facility, and funds generated from operations.
However, we believe the minimum required purchase quantities are lower than our current requirements for these metals. Physical delivery commitments with energy companies are in place to cover our exposure to fluctuations in electricity and natural gas prices and are based on fixed contractual rates and quantities. Equipment purchase obligations are based on scheduled payments to equipment manufacturers. Leases.
However, we believe the minimum required purchase quantities are lower than our current requirements for these metals. Physical delivery commitments with energy companies are in place to cover our exposure to fluctuations in utility prices and are based on fixed contractual rates and quantities. Equipment purchase obligations are based on scheduled payments to equipment manufacturers. Leases.
Hedged Cost of Alloyed Metal for 2023 and 2022 was comprised of $1,599.7 million and $2,028.2 million, respectively, reflecting the cost of aluminum at the average MWTP and the cost of certain alloys used in the production process, as well as metal price exposure on shipments that we hedged with realized losses upon settlement of $21.4 million and $17.0 million in 2023 and 2022, respectively, all of which were included within both Net sales and COGS in our Statements of Consolidated Income (Loss).
Hedged Cost of Alloyed Metal for 2024 and 2023 was comprised of $1,567.6 million and $1,599.7 million, respectively, reflecting the cost of aluminum at the average MWTP and the cost of certain alloys used in the production process, as well as metal price exposure on shipments that we hedged with realized losses upon settlement of $0.2 million and $21.4 million in 2024 and 2023, respectively, all of which were included within both Net sales and COGS in our Statements of Consolidated Income (Loss).
See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for further details. Borrowing availability under the Revolving Credit Facility was determined by a borrowing base calculated as of December 31, 2023 and December 31, 2022. We place our cash in bank deposits and money market funds with high credit quality financial institutions.
Borrowing availability under the Revolving Credit Facility was determined by a borrowing base calculated as of December 31, 2024 and December 31, 2023. See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for further details. We place our cash in bank deposits with high credit quality financial institutions.
At December 31, 2023, we had uncertain tax positions which ultimately could result in tax payments. See Note 14 of Notes to Consolidated Financial Statements included in this Form 10-K for further information. 38 Pension, OPEB, and Salaried VEBA.
At December 31, 2024, we had uncertain tax positions which ultimately could result in tax payments. See Note 14 of Notes to Consolidated Financial Statements included in this Form 10-K for further information. 37 Pension, OPEB, and Salaried VEBA.
Approximately 78% of our business is recognized at a point in time with the remaining 22% recognized over time. We follow the input method of recognizing revenue over time. Under this approach, revenue is recognized for products in production based on the cost incurred to date plus a reasonable margin.
Approximately 77% of our business is recognized at a point in time with the remaining 23% recognized over time. We follow the input method of recognizing revenue over time. Under this approach, revenue is recognized for products in production based on the cost incurred to date plus a reasonable margin.
See Note 4 of Notes to Consolidated Financial Statements included in this Form 10-K for further details. Restructuring Costs. Restructuring costs reflect the impacts of our restructuring plans initiated in 2022 and 2020. See Note 12 of Notes to Consolidated Financial Statements included in this Form 10-K for further information regarding the restructuring plans. Other Operating Charges, Net .
Restructuring Costs. Restructuring costs reflect the impacts of our restructuring plans initiated in 2024 and 2022. See Note 12 of Notes to Consolidated Financial Statements included in this Form 10-K for further information regarding the restructuring plans. Other Operating Charges, Net .
In addition, a significant portion of the investment also focused on modernizing legacy equipment and the process flow for thin gauge plate to achieve Kaiser Select ® quality enhancements for these Aero/HS Products and GE Products. These improvements have allowed us to gain incremental manufacturing capacity to enable future sales growth.
A significant portion of the Trentwood investment also focused on modernizing legacy equipment and the process flow for thin gauge plate to achieve Kaiser Select ® quality enhancements for these Aero/HS Products and GE Products. These improvements have and will allow us to gain incremental manufacturing capacity to enable future sales growth.
The impact on the combined pension and other postretirement liabilities of a change in the weighted average discount rate of 0.25% would be approximately $3.5 million as of December 31, 2023, and would impact pretax earnings in 2024 by approximately $0.3 million.
The impact on the combined pension and other postretirement and OPEB liabilities of a change in the weighted average discount rate of 0.25% would be approximately $3.3 million as of December 31, 2024 and would impact pretax earnings in 2025 by approximately $0.4 million.
See Note 8 of Notes to Consolidated Financial Statements included in this Form 10-K for the total realized loss (gain) on aluminum hedges for which we hedged the metal price exposure externally. 36 Liquidity and Capital Resources Summary The following table summarizes our liquidity (in millions of dollars): As of December 31, 2023 2022 Available cash and cash equivalents $ 82.4 $ 57.4 Borrowing availability under Revolving Credit Facility, net of letters of credit 1 516.7 557.8 Total liquidity $ 599.1 $ 615.2 1.
See Note 8 of Notes to Consolidated Financial Statements included in this Form 10-K for the total realized (gain) loss on aluminum hedges for which we hedged the metal price exposure externally. 35 Liquidity and Capital Resources Summary The following table summarizes our liquidity (in millions of dollars): As of December 31, 2024 2023 Available cash and cash equivalents $ 18.4 $ 82.4 Borrowing availability under Revolving Credit Facility, net of letters of credit 1 553.4 516.7 Total liquidity $ 571.8 $ 599.1 1.
The difference between the effective tax rate and the projected blended statutory tax rate for 2022 was primarily due to: (i) an increase of 3% due to various permanent items not deductible for tax purposes; (ii) an increase of 2% related to non-deductible compensation expense; and (iii) an increase of 1% related to state taxes, partially offset by a decrease of 6% related to a federal Research and Development credit. 34 Selected Operational and Financial Information The following data should be read in conjunction with our consolidated financial statements and the notes thereto included in Part II, Item 8.
The difference between the effective tax rate and the projected blended statutory tax rate for 2023 was primarily due to: (i) a decrease of 6% related to a Federal Research and Development credit and (ii) a decrease of 3% related to state taxes, partially offset by an increase of 3% related to non-deductible compensation expense. 33 Selected Operational and Financial Information The following data should be read in conjunction with our consolidated financial statements and the notes thereto included in Part II, Item 8.
See Note 13 of Notes to Consolidated Financial Statements included in this Form 10-K for details. Income Tax (Provision) Benefit. The income tax provision for 2023 was $9.1 million, resulting in an effective tax rate of 16.2%.
See Note 13 of Notes to Consolidated Financial Statements included in this Form 10-K for details. Income Tax (Provision) Benefit. The income tax provision for 2024 was $16.7 million, resulting in an effective tax rate of 26.3%.
Non-run-rate environmental expenses are related to legacy contingencies from activities at operating facilities prior to July 6, 2006. See Note 10 of Notes to Consolidated Financial Statements included in this Form 10-K for additional information relating to environmental expenses. 4.
Non-run-rate environmental expenses are related to legacy contingencies from activities at operating facilities prior to July 6, 2006. See Note 10 of Notes to Consolidated Financial Statements included in this Form 10-K for additional information relating to environmental expenses. Adjusted EBITDA for 2024 was $6.9 million higher than Adjusted EBITDA for 2023.
At December 31, 2023, future interest payments associated with our outstanding notes total $289.7 million, with $47.9 million payable within 12 months.
At December 31, 2024, future interest payments associated with our outstanding notes total $241.8 million, with $47.9 million payable within 12 months.
“Management’s Discussion and Analysis” of our Annual Report on Form 10-K for the years ended December 31, 2021 and 2022, respectively, filed with the SEC on March 1, 2022 and February 23, 2023, respectively. Non-GAAP Financial Measures This information contains certain non-GAAP financial measures.
“Management’s Discussion and Analysis” of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 22, 2024. Non-GAAP Financial Measures This information contains certain non-GAAP financial measures.
Cash Flows The following table summarizes our cash flows from operating, investing, and financing activities (in millions of dollars): Year Ended December 31, 2023 2022 Total cash provided by (used in): Operating activities $ 211.9 $ (63.1 ) Investing activities $ (128.2 ) $ (125.8 ) Financing activities $ (54.3 ) $ (56.8 ) Cash provided by operating activities for the year ended December 31, 2023 reflected results of business activity described within “Consolidated Selected Operational and Financial Information” above, as well as the following working capital changes: (i) a decrease in inventory of $48.2 million, primarily driven by improved inventory management and lower metal costs; (ii) a decrease in trade and other receivables of $33.1 million, primarily due to a decrease in metal costs in addition to the timing of collections; and (iii) a decrease in accounts payable of $43.0 million due to the timing of payments, in addition to a decrease in metal prices.
Cash provided by operating activities for the year ended December 31, 2023 reflected results of business activity described within “Consolidated Selected Operational and Financial Information” above, as well as the following working capital changes: (i) a decrease in inventory of $47.2 million, excluding LIFO impact, primarily driven by improved inventory management and lower metal costs; (ii) a decrease in trade and other receivables of $33.1 million, primarily due to a decrease in metal costs in addition to the timing of collections; and (iii) a decrease in accounts payable of $43.0 million due to the timing of payments, in addition to a decrease in metal prices.
A change in our effective tax rate by 1% would have had an impact of approximately $0.6 million to Net income for the year ended December 31, 2023.
A change in our estimated average margins by 5% would have had an impact of approximately $0.1 million to Net income for the year ended December 31, 2024.
We had no borrowings under our Revolving Credit Facility during the year ended December 31, 2022. See “Sources of Liquidity” below for a further discussion of subsequent borrowing activity.
We had no borrowings under our Revolving Credit Facility during the year ended December 31, 2024, and we had no outstanding borrowings under our Revolving Credit Facility as of December 31, 2023 after repaying borrowings of $215.1 million incurred during the year ended December 31, 2023. See “Sources of Liquidity” below for a further discussion of subsequent borrowing activity.
A significant portion of our capital spending over the past several years related to the modernization project at our Trentwood rolling mill, 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.
A significant portion of our capital spending over the past several years are related to: (i) our investment in a fourth coating line at Warrick to increase our capacity for higher margin coated aluminum material for packaging applications and (ii) modernization projects at our Trentwood rolling mill, 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 Trentwood.
The following table provides selected operational and financial information (in millions of dollars): Year Ended December 31, 2023 2022 Net income (loss) $ 47.2 $ (29.6 ) Interest expense 46.9 48.3 Other income, net (7.4 ) (6.4 ) Income tax provision (benefit) 9.1 (8.3 ) Depreciation and amortization 108.6 106.9 Non-run-rate items: Restructuring cost 5.0 2.2 Mark-to-market loss on derivative instruments 1 — 1.4 Goodwill impairment 2 — 20.5 Non-cash asset impairment charge — 3.2 Net periodic postretirement service cost relating to Salaried VEBA — 0.1 Environmental expenses 3 0.2 3.2 Acquisition costs 4 — 0.4 Total non-run-rate items 5.2 31.0 Adjusted EBITDA $ 209.6 $ 141.9 1.
The following table provides selected operational and financial information (in millions of dollars): Year Ended December 31, 2024 2023 Net income $ 46.8 $ 47.2 Interest expense 43.7 46.9 Other income, net (19.5 ) (7.4 ) Income tax provision 16.7 9.1 Depreciation and amortization 116.4 108.6 Non-run-rate items: Restructuring costs 7.6 5.0 Non-cash asset impairment charge 0.4 — Environmental expenses 1 4.4 0.2 Total non-run-rate items 12.4 5.2 Adjusted EBITDA $ 216.5 $ 209.6 1.
See above in “Consolidated Results of Operations” for further details. 35 The following table provides our shipment and Conversion Revenue information (in millions of dollars, except shipments and Conversion Revenue per pound) by end market applications: Year Ended December 31, 2023 2022 Aero/HS Products: Shipments (mmlbs) 254.3 186.5 $ $ / lb $ $ / lb Net sales $ 899.3 $ 3.54 $ 676.1 $ 3.63 Less: Hedged Cost of Alloyed Metal (366.4 ) (1.44 ) (319.8 ) (1.72 ) Conversion Revenue $ 532.9 $ 2.10 $ 356.3 $ 1.91 Packaging: Shipments (mmlbs) 612.4 655.3 $ $ / lb $ $ / lb Net sales $ 1,315.2 $ 2.15 $ 1,585.3 $ 2.42 Less: Hedged Cost of Alloyed Metal (812.0 ) (1.33 ) (1,030.6 ) (1.57 ) Conversion Revenue $ 503.2 $ 0.82 $ 554.7 $ 0.85 GE Products: Shipments (mmlbs) 215.6 303.9 $ $ / lb $ $ / lb Net sales $ 596.5 $ 2.77 $ 883.8 $ 2.91 Less: Hedged Cost of Alloyed Metal (291.4 ) (1.35 ) (517.2 ) (1.70 ) Conversion Revenue $ 305.1 $ 1.42 $ 366.6 $ 1.21 Automotive Extrusions: Shipments (mmlbs) 104.5 96.5 $ $ / lb $ $ / lb Net sales $ 254.9 $ 2.44 $ 254.8 $ 2.64 Less: Hedged Cost of Alloyed Metal (138.7 ) (1.33 ) (159.0 ) (1.65 ) Conversion Revenue $ 116.2 $ 1.11 $ 95.8 $ 0.99 Other Products: Shipments (mmlbs) 9.6 12.0 $ $ / lb $ $ / lb Net sales $ 21.1 $ 2.20 $ 27.9 $ 2.33 Less: Hedged Cost of Alloyed Metal (12.6 ) (1.31 ) (18.6 ) (1.55 ) Conversion Revenue $ 8.5 $ 0.89 $ 9.3 $ 0.78 Total: Shipments (mmlbs) 1,196.4 1,254.2 $ $ / lb $ $ / lb Net sales $ 3,087.0 $ 2.58 $ 3,427.9 $ 2.73 Less: Hedged Cost of Alloyed Metal 1 (1,621.1 ) (1.35 ) (2,045.2 ) (1.63 ) Conversion Revenue $ 1,465.9 $ 1.23 $ 1,382.7 $ 1.10 1.
See above in “Consolidated Results of Operations” for further details. 34 The following table provides our shipment and Conversion Revenue information (in millions of dollars, except shipments and Conversion Revenue per pound) by end market applications: Year Ended December 31, 2024 2023 Aero/HS Products: Shipments (mmlbs) 245.2 254.3 $ $ / lb $ $ / lb Net sales $ 883.0 $ 3.60 $ 899.3 $ 3.54 Less: Hedged Cost of Alloyed Metal (353.5 ) (1.44 ) (366.4 ) (1.44 ) Conversion Revenue $ 529.5 $ 2.16 $ 532.9 $ 2.10 Packaging: Shipments (mmlbs) 592.7 612.4 $ $ / lb $ $ / lb Net sales $ 1,260.9 $ 2.13 $ 1,315.2 $ 2.15 Less: Hedged Cost of Alloyed Metal (770.9 ) (1.30 ) (812.0 ) (1.33 ) Conversion Revenue $ 490.0 $ 0.83 $ 503.2 $ 0.82 GE Products: Shipments (mmlbs) 228.7 215.6 $ $ / lb $ $ / lb Net sales $ 618.1 $ 2.70 $ 596.5 $ 2.77 Less: Hedged Cost of Alloyed Metal (305.3 ) (1.33 ) (291.4 ) (1.35 ) Conversion Revenue $ 312.8 $ 1.37 $ 305.1 $ 1.42 Automotive Extrusions: Shipments (mmlbs) 101.4 104.5 $ $ / lb $ $ / lb Net sales $ 251.9 $ 2.48 $ 254.9 $ 2.44 Less: Hedged Cost of Alloyed Metal (132.2 ) (1.30 ) (138.7 ) (1.33 ) Conversion Revenue $ 119.7 $ 1.18 $ 116.2 $ 1.11 Other Products: Shipments (mmlbs) 4.3 9.6 $ $ / lb $ $ / lb Net sales $ 10.1 $ 2.35 $ 21.1 $ 2.20 Less: Hedged Cost of Alloyed Metal (5.9 ) (1.37 ) (12.6 ) (1.31 ) Conversion Revenue $ 4.2 $ 0.98 $ 8.5 $ 0.89 Total: Shipments (mmlbs) 1,172.3 1,196.4 $ $ / lb $ $ / lb Net sales $ 3,024.0 $ 2.58 $ 3,087.0 $ 2.58 Less: Hedged Cost of Alloyed Metal 1 (1,567.8 ) (1.34 ) (1,621.1 ) (1.35 ) Conversion Revenue $ 1,456.2 $ 1.24 $ 1,465.9 $ 1.23 1.
The 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 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 year ended December 31, 2024 constituted approximately 36% of our Net sales.
The LTRR on plan assets reflects an assumption regarding what the amount of earnings would be on existing plan assets (before considering any future contributions to the plan). Increases in the assumed LTRR would cause the projected value of plan assets available to satisfy postretirement obligations to increase, yielding a reduced net expense of these obligations in future years.
Increases in the assumed LTRR would cause the projected value of plan assets available to satisfy postretirement and OPEB obligations to increase, yielding a reduced net expense of these obligations in future years.
See Note 16 of Notes to Consolidated Financial Statements included in this Form 10-K for information regarding restricted cash at December 31, 2023. We had no outstanding borrowings as of December 31, 2023 under our Revolving Credit Facility, after repaying borrowings of $215.1 million incurred during the year ended December 31, 2023.
At February 17, 2025, we had no outstanding borrowings under the Revolving Credit Facility after repaying borrowings of $37.3 million incurred subsequent to December 31, 2024. See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for a description of our Revolving Credit Facility.
The difference between the effective tax rate and the projected blended statutory tax rate for 2023 was primarily due to: (i) a decrease of 6% related to a federal Research and Development credit and (ii) a decrease of 3% related to state taxes, partially offset by an increase of 3% related to non-deductible compensation expense.
The difference between the effective tax rate and the projected blended statutory tax rate for 2024 was primarily due to: (i) an increase of 5% related to an increase in the valuation allowance relating to certain state net operating losses and credits; and (ii) an increase of 4% related to non-deductible compensation expense, partially offset by (i) a decrease of 5% due to state net operating loss (“NOL”) carryforward expirations and tax rate true-ups in various states; and (ii) a decrease of 2% related to a Federal Research and Development credit.
The income tax benefit for 2022 was $8.3 million, resulting in an effective tax rate of 21.9%.
The income tax provision for 2023 was $9.1 million, resulting in an effective tax rate of 16.2%.
Our capital investment plans remain focused on supporting demand growth through capacity expansion, sustaining our operations, enhancing product quality and increasing operating efficiencies.
Total capital expenditures were $180.8 million in 2024 and $143.2 million in 2023. Our capital investment plans remain focused on supporting demand growth through capacity expansion, sustaining our operations, enhancing product quality, and increasing operating efficiencies. We anticipate total capital spending in 2025 of approximately $125.0 million.
Selling, General, Administrative, Research and Development (“SG&A and R&D”). SG&A and R&D expense totaled $122.7 million in 2023 compared to $110.9 million in 2022.
SG&A and R&D expense totaled $120.8 million in 2024 compared to $122.7 million in 2023.
See “Selected Operational and Financial Information” below for a further discussion of the comparative results of operations for 2023 and 2022. Depreciation and Amortization. Depreciation and amortization for 2023 was $108.6 million compared to $106.9 million for 2022. The increase of $1.7 million was primarily attributable to various construction-in-progress projects being placed in service related to manufacturing cost efficiency initiatives.
Depreciation and amortization for 2024 was $116.4 million compared to $108.6 million for 2023. The increase of $7.8 million was primarily attributable to various construction-in-progress projects related to manufacturing cost efficiency and capacity growth initiatives being placed in service. 32 Selling, General, Administrative, Research and Development (“SG&A and R&D”).
Results of Operations Fiscal 2023 Summary • Increasing demand for our Aero/HS Products within commercial aerospace and space applications, while defense and business jet applications demand remained strong; • Continued destocking in our Packaging and GE Products end markets; • Negotiated more efficient contained metal pass throughs and commodity price adjustments in our customer contracts to help mitigate the impact of higher material and other inflationary costs on our business; • Capital investment was $143.2 million for the year, driven by the fourth roll coat line investment at our Warrick facility; • As of December 31, 2023, we had $599.1 million of combined cash and cash equivalents and net borrowing availability under our Revolving Credit Facility; • We paid a total of approximately $50.4 million, or $3.08 per common share, in cash dividends to stockholders, including holders of restricted stock, and dividend equivalents to holders of certain restricted stock units during the year ended December 31, 2023. 33 Consolidated Selected Operational and Financial Information The following data should be read in conjunction with our consolidated financial statements and the notes thereto included in Item 8.
For a reconciliation of Conversion Revenue to Net sales, see below in “Results of Operations - Selected Operational and Financial Information.” Results of Operations Fiscal 2024 Summary • Net income of $46.8 million and Net income per diluted share of $2.87; • Net sales of $3.02 billion; Conversion Revenue of $1.46 billion; • Adjusted EBITDA of $216.5 million; Adjusted EBITDA Margin 14.9%; • Capital investment of $180.8 million, primarily driven by the fourth coating line investment at Warrick; • As of December 31, 2024, we had $571.8 million of combined cash and cash equivalents and net borrowing availability under our Revolving Credit Facility; and • We paid a total of approximately $50.7 million, or $3.08 per common share, in cash dividends to stockholders, including holders of restricted stock, and dividend equivalents to holders of certain restricted stock units during the year ended December 31, 2024. 31 Consolidated Selected Operational and Financial Information The following data should be read in conjunction with our consolidated financial statements and the notes thereto included in Item 8.
Receivables involved with these customer‑based supply chain finance programs for the year ended December 31, 2023 constituted approximately 41% of our Net sales. See Note 1 and Note 13 of Notes to Consolidated Financial Statements included in this Form 10-K for further details with respect to these supply chain financing programs.
See Note 1 and Note 13 of Notes to Consolidated Financial Statements included in this Form 10-K for further details with respect to these supply chain financing programs. Material Cash Requirements The discussion below summarizes our material cash requirements from significant contractual obligations, commercial commitments and off-balance sheet arrangements as of December 31, 2024. Debt.
Material Cash Requirements The discussion below summarizes our material cash requirements from significant contractual obligations, commercial commitments and off-balance sheet arrangements as of December 31, 2023. Debt. As of December 31, 2023, we have outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $1.05 billion.
As of December 31, 2024, we have outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $1.05 billion.
See the table in “Selected Operational and Financial Information” below for further details. COGS. COGS for 2023 totaled $2,754.9 million, or 89% of Net sales, compared to $3,180.2 million, or 93% of Net sales, in 2022.
COGS. COGS for 2024 totaled $2,691.1 million, or 89% of Net sales, compared to $2,754.9 million, or 89% of Net sales, in 2023.
For further details on goodwill and intangible assets, see Note 4 of Notes to Consolidated Financial Statements included in this Form 10-K.
See Note 16 of Notes to Consolidated Financial Statements included in this Form 10-K for information regarding restricted cash at December 31, 2024.
Adjusted EBITDA for the year ended December 31, 2023 was impacted by: (i) improved pricing and surcharges to offset higher inflationary and commodity related costs; (ii) a decrease in freight costs due to lower shipment volumes; and (iii) lower energy costs, partially offset by: (i) an increase in material and overhead costs; (ii) higher personnel costs; and (ii) an increase in major maintenance.
Adjusted EBITDA for the year ended December 31, 2024 was impacted by: (i) improved product mix, partially offset by lower shipment volume; (ii) a decrease in freight costs; (iii) favorable impact of metal sourcing strategies; and (iv) lower major maintenance costs driven by timing of annual planned maintenance programs.
Interest expense represents cash and non-cash interest expense incurred on our Senior Notes and our Revolving Credit Facility, net of capitalized interest.
Other operating charges, net, of $0.4 million for the year ended December 31, 2024 represented an impairment charge on land classified as held for sale. Interest Expense. Interest expense represents cash and non-cash interest expense incurred on our Senior Notes and our Revolving Credit Facility, net of capitalized interest.
At February 19, 2024, we had no outstanding borrowings under the Revolving Credit Facility. See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K 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.
We engage in certain customer-based supply chain financing programs to accelerate the receipt of payment for outstanding accounts receivable from certain customers. The costs of these programs are typically reimbursed to us by the customer.
Of the $424.1 million decrease in Hedged Cost of Alloyed Metal, $329.7 million was due to lower hedged metal cost and $94.4 million was due to lower shipment volume, as discussed above in “Net Sales.” The $1.2 million decrease in net manufacturing conversion and other costs was primarily due to: (i) a $19.8 million decrease related to lower shipments; (ii) a $10.9 million decrease in other costs, primarily due to lower freight costs; and (iii) a $3.2 million decrease in environmental costs, partially offset by: (i) a net $25.3 million increase in manufacturing costs primarily due to higher labor and material costs and (ii) a $7.4 million increase in major maintenance.
The decrease reflected the following (in millions of dollars): Year Ended December 31, 2024 2023 Change % Increase (Decrease) Hedged cost of alloyed metal $ 1,567.8 $ 1,621.1 $ (53.3 ) (3 %) Manufacturing costs 805.2 809.9 (4.7 ) (1 %) Plant overhead 170.5 164.6 5.9 4 % Freight costs 91.6 103.3 (11.7 ) (11 %) Other cost of products sold 56.0 56.0 — 0 % Total $ 2,691.1 $ 2,754.9 $ (63.8 ) (2 %) Of the $53.3 million decrease in Hedged Cost of Alloyed Metal, $20.6 million was due to lower hedged metal cost and $32.7 million was due to lower shipment volume, as discussed above in “Net Sales.” The $11.7 million decrease in freight costs was primarily due to favorable shipping rates.
Removed
For a reconciliation of Conversion Revenue to Net sales, see below in “Results of Operations - Selected Operational and Financial Information.” Molten Metal and Magnesium Supply Chain Issues In September 2021, Warrick faced specific challenges with the force majeure declaration of its primary magnesium supplier, US Magnesium, LLC (“US Mag”), which resulted in a significant reduction in deliveries while we were also being impacted by the operational challenges Alcoa was experiencing at its adjacent smelter, which supplies molten metal to Warrick.
Added
“Financial Statements and Supplementary Data” of this Form 10-K. Net Sales. The following table sets forth the 2024 and 2023 shipments (in millions of pounds) and Net sales (in millions of dollars) by end market applications and the respective fluctuations.
Removed
In June 2022, US Mag deliveries unexpectedly stopped while performance of the smelter also rapidly deteriorated, negatively impacting Warrick’s operating efficiency and financial performance.
Added
Year Ended December 31, 2024 2023 Shipments Net sales Shipments Net sales Shipment Change % Increase (Decrease) Net sales Change % Increase (Decrease) Aero/HS Products 245.2 $ 883.0 254.3 $ 899.3 (9.1 ) (4 %) $ (16.3 ) (2 %) Packaging 592.7 1,260.9 612.4 1,315.2 (19.7 ) (3 %) (54.3 ) (4 %) GE Products 228.7 618.1 215.6 596.5 13.1 6 % 21.6 4 % Automotive Extrusions 101.4 251.9 104.5 254.9 (3.1 ) (3 %) (3.0 ) (1 %) Other Products 4.3 10.1 9.6 21.1 (5.3 ) (55 %) (11.0 ) (52 %) Total 1,172.3 $ 3,024.0 1,196.4 $ 3,087.0 (24.1 ) (2 %) $ (63.0 ) (2 %) The decrease in Net sales reflected a 24.1 million pound (2%) decrease in shipment volume while the average realized sales price per pound remained flat at $2.58 for the years ended 2024 and 2023.
Removed
As a result of the abrupt and unexpected decline in magnesium supply, on July 7, 2022, we declared force majeure at Warrick due to the limited availability of magnesium utilized in the production of our beverage and food packaging products, reducing our ability to produce those products at the time.
Added
The $4.7 million decrease in manufacturing costs was primarily driven by lower shipment volume and favorable impact of metal sourcing strategies partially offset by higher energy costs and higher hourly personnel costs. The $5.9 million increase in plant overhead was due to higher employee and employee-related costs for salaried operational personnel.
Removed
After successfully securing and qualifying magnesium from additional sources, on September 6, 2022, we announced that we had lifted our force majeure declaration.
Added
Other cost of products sold remained flat as a result of increases in LIFO reserve expense and legacy environmental expenses offset by a decrease in major maintenance costs. See “Selected Operational and Financial Information” below for a further discussion of the comparative results of operations for 2024 and 2023. Depreciation and Amortization.
Removed
We believe our supply base is now well diversified, as it is not reliant on any one single supplier or geographical region, including with respect to the supply of molten metal to our Warrick operation. 32 Management Review of 2023 and Outlook for the Future Review Despite its challenges, 2023 was a foundational year for Kaiser as we laid the groundwork we believe to be necessary to capture the vast growth opportunities ahead.
Added
The decrease reflected the following (in millions of dollars): Year Ended December 31, 2024 2023 Change % Increase (Decrease) Research and development costs $ 2.2 $ 2.9 $ (0.7 ) (24 %) Employee costs 83.3 80.0 3.3 4 % Other selling, general and administrative costs 35.3 39.8 (4.5 ) (11 %) Total $ 120.8 $ 122.7 $ (1.9 ) (2 %) The $4.5 million decrease in other SG&A costs was due to: (i) a $2.9 million decrease in legal fees; (ii) a $1.2 million decrease in workers’ compensation expense; and (iii) a $0.7 million decrease in rent expense.
Removed
Our focused execution led us to end the year in a solid position with full year Net income of $47.2 million and adjusted EBITDA increasing 48% over 2022 to approximately $210 million.
Added
This was partially offset by: (i) higher personnel costs and (ii) an increase in energy costs.
Removed
Our marketing organization was successful working with our customers on pricing initiatives in response to higher inflationary costs impacting our performance as we exited 2022 and the first half of 2023. In addition, we led the industry in securing contain metal pass through to address the volatility of alloy costs.
Added
See Note 6 of Notes to Consolidated Financial Statements included in this Form 10-K for information regarding the future contributions we expect to make under the terms of collective bargaining agreements that cover our union-represented employees at certain facilities.
Removed
Aero/HS Products demand remained strong with Net sales and conversion revenue each setting a new record high. While reduced demand for general engineering plate products persisted, our unique ability to flex our capacity at our Trentwood facility to support strengthening aerospace demand further contributed to our performance.
Added
Additionally, in 2027 we expect to pay a partial withdrawal liability of approximately $4.6 million resulting from the exit of our soft alloy aluminum extrusion facility located in Sherman, Texas and the corresponding cessation of ongoing contributions to the multiemployer pension plan for those covered employees.
Removed
After five consecutive quarters, destocking activity for general engineering long products stabilized during the fourth quarter of 2023. In our Packaging operations, we continue to stabilize operations following the prior years impact of supply chain disruptions and the start of a beverage product destocking cycle that continued through the first half of 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+1 added−1 removed4 unchanged
Biggest changeAt December 31, 2023, we had derivative contracts with respect to approximately 56.4 million pounds and 7.1 million pounds to hedge sales to be made in 2024 and 2025, respectively, on pricing terms that create aluminum price risk for us. 42 Based on the aluminum derivative positions held by us to hedge firm-price customer sales agreements, we estimate that a $0.10/lb decrease in the LME market price of aluminum as of December 31, 2023 and December 31, 2022, with all other variables held constant, would have resulted in an unrealized mark-to-market loss of $6.3 million in both periods, with corresponding changes to the net fair value of our aluminum derivative positions.
Biggest changeBased on the aluminum derivative positions held by us to hedge firm-price customer sales agreements, we estimate that a $0.10/lb decrease in the LME market price of aluminum as of December 31, 2024 and December 31, 2023, with all other variables held constant, would have resulted in an unrealized mark-to-market loss of $4.7 million and $6.3 million, respectively, with corresponding changes to the net fair value of our aluminum derivative positions.
Our operating results are sensitive to changes in the prices of primary aluminum, certain alloying metals, natural gas, electricity and foreign currency, and also depend to a significant degree upon the volume and mix of products sold to customers.
Our operating results are sensitive to changes in the prices of primary aluminum, certain alloying metals, natural gas, electricity, foreign currency, and also depend to a significant degree upon the volume and mix of products sold to customers.
We estimate that a $5.00 per Mwh decrease in electricity prices would have resulted in an unrealized mark‑to‑market loss of $0.3 million as of December 31, 2023, with corresponding changes to the net fair value of our electricity derivative positions. As of December 31, 2022, we had no outstanding electricity derivative positions.
As of December 31, 2024, we had no outstanding electricity derivative positions. We estimate that a $5.00 per Mwh decrease in electricity prices would have resulted in an unrealized mark-to-market loss of $0.3 million as of December 31, 2023, with corresponding changes to the net fair value of our electricity derivative positions.
In addition, we estimate that a $0.05/lb decrease in the Midwest premium for aluminum as of December 31, 2023 and December 31, 2022, with all other variables held constant, would have resulted in an unrealized mark-to-market loss of $1.4 million and $3.2 million, respectively, with corresponding changes to the net fair value of our aluminum derivative positions.
In addition, we estimate that a $0.05/lb decrease in the Midwest premium for aluminum as of December 31, 2024 and December 31, 2023, with all other variables held constant, would have resulted in an unrealized mark-to-market loss of $2.0 million and $1.4 million, respectively, with corresponding changes to the net fair value of our aluminum derivative positions.
We estimate that a 10% decrease in the exchange rate of our hedged foreign currencies to U.S. dollars would have resulted in an unrealized mark-to-market loss of $1.9 million and $0.1 million as of December 31, 2023 and December 31, 2022, respectively, with corresponding changes to the net fair value of our foreign currency derivative positions.
We estimate that a 10% decrease in the exchange rate of our hedged foreign currencies to U.S. dollars would have resulted in an unrealized mark-to-market loss of $0.8 million and $1.9 million as of December 31, 2024 and December 31, 2023, respectively, with corresponding changes to the net fair value of our foreign currency derivative positions.
As of December 31, 2023, we had forward swap contracts with settlement dates designed to align with the timing of scheduled purchases of zinc and copper by our manufacturing facilities.
As of December 31, 2024, we had forward swap contracts with settlement dates designed to align with the timing of scheduled purchases of copper and zinc by our manufacturing facilities.
We estimate that a $0.10/lb decrease in the market price of zinc and copper as of December 31, 2023 and December 31, 2022, with all other variables held constant, would have resulted in an unrealized mark-to-market loss of $0.8 million and $0.1 million, respectively, with corresponding changes to the net fair value of our zinc and copper derivative positions.
We estimate that a $0.10/lb decrease in the market price of zinc and copper as of December 31, 2024 and December 31, 2023, with all other variables held constant, would have resulted in an unrealized mark-to-market loss of $0.9 million and $0.8 million, respectively, with corresponding changes to the net fair value of our zinc and copper derivative positions.
We estimate that a $1.00 per mmbtu decrease in natural gas prices would have resulted in an unrealized mark-to-market loss of $3.4 million and $3.5 million as of December 31, 2023 and December 31, 2022, respectively, with corresponding changes to the net fair value of our natural gas derivative positions.
We estimate that a $1.00 per mmbtu decrease in natural gas prices would have resulted in an unrealized mark-to-market loss of $2.8 million and $3.4 million as of December 31, 2024 and December 31, 2023, respectively, with corresponding changes to the net fair value of our natural gas derivative positions.
Our primary foreign exchange exposure is the operating costs of our London, Ontario facility. We estimate that a 10% change in the Canadian dollar exchange rate as of December 31, 2023 and December 31, 2022 would have resulted in an annual operating cost impact of $2.7 million and $2.6 million, respectively. 43 KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
Our primary foreign exchange exposure is the operating costs of our London, Ontario facility. We estimate that a 10% change in the Canadian dollar exchange rate as of December 31, 2024 and December 31, 2023 would have resulted in an annual operating cost impact of $2.8 million and $2.7 million, respectively. 41 KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIES
Foreign Currency As of December 31, 2023, we hedged certain lease transactions and equipment purchases denominated in Euros and British Pounds using forward swap contracts with settlement dates through January 2026.
Foreign Currency As of December 31, 2024, we hedged the foreign currency exchange rate risk related to certain lease transactions and equipment purchases denominated in Euros and British Pounds using forward swap contracts with settlement dates through July 2027.
We have historically utilized hedging transactions to lock in a specified price or range of prices for certain products which we sell or consume in our production process, and to mitigate our exposure to changes in energy prices.
We have historically utilized hedging transactions to lock in a specified price or range of prices for certain products which we sell or consume in our production process, and to mitigate our exposure to changes in energy prices. 40 Aluminum In 2024 and 2023, settlements of derivative contracts were for 154.9 million pounds and 207.5 million pounds, respectively, of hedged shipments sold on pricing terms that created aluminum price risk for us.
Removed
Aluminum In 2023 and 2022, settlements of derivative contracts were for 207.5 million pounds and 271.9 million pounds, respectively, of hedged shipments sold on pricing terms that created aluminum price risk for us.
Added
At December 31, 2024, we had derivative contracts with respect to approximately 46.8 million pounds and 0.5 million pounds to hedge sales to be made in 2025 and 2026, respectively, on pricing terms that create aluminum price risk for us.

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