Century Aluminum(CENX) - 2024 Q4 - Annual Report

Market Risks - The company faces significant risks related to declines in the market price of primary aluminum, which can adversely affect its financial condition and results of operations[83]. - Excess capacity and overproduction in the aluminum market may disrupt pricing and negatively impact the company's sales, margins, and profitability[87]. - The company is exposed to market price volatility due to its reliance on market-based electricity contracts, which can lead to increased operational costs[89]. - The company is exposed to price risk for raw materials, with significant fluctuations affecting profitability and operational costs[106]. - Changes in trade laws or regulations could adversely affect sales margins and profitability, particularly regarding import tariffs on primary aluminum[161]. Operational Challenges - Increases in energy costs, particularly electricity, are critical to the company's profitability and can lead to operational disruptions[88]. - The company has experienced power supply disruptions that have previously impacted its operational results, highlighting the importance of stable energy supply[90]. - The company relies on a limited number of suppliers for key raw materials, and disruptions in supply could lead to production inefficiencies and increased costs[104]. - The company has curtailed operations at its Hawesville smelter and is exploring strategic alternatives, with no assurance of profitable restart[100]. - A new power agreement at the Mt. Holly smelter may allow for the potential restart of 25% of its curtailed production capacity, subject to market conditions[98]. - Future production curtailments may incur substantial ongoing expenses, impacting the company's financial position and liquidity[97]. - Unpredictable events, such as natural disasters and extreme weather, have previously disrupted operations and could lead to increased costs and operational challenges[118]. Financial Position - The company requires substantial resources to fund operating expenses and capital expenditures, which may necessitate access to financial markets[112]. - As of December 31, 2024, the company had approximately $528.2 million of outstanding debt, including$250.0 million of 7.5% senior secured notes due 2028 and $86.3 million of convertible senior notes due 2028[135]. - The company's ability to pay interest and repay or refinance its debt depends on access to liquidity and future operating performance, which are subject to various uncontrollable factors[135]. - The company is vulnerable to adverse economic conditions due to substantial indebtedness, which limits operational flexibility and reduces cash available for other purposes[137]. - The company is subject to interest rate risk, as its borrowings are at variable interest rates, which could increase debt service obligations and adversely affect cash flow[138]. - Existing debt instruments contain covenants that restrict business operations and limit the ability to incur additional debt or pay dividends, potentially impairing liquidity and growth[139]. - The company relies on intercompany transfers from subsidiaries to meet debt service obligations, making it dependent on their operating results[140]. Customer Concentration - Approximately 59.1$500 million in funding to build a new aluminum smelter in the United States[168]. - The Inflation Reduction Act provides a production tax credit equal to 10% of certain eligible production costs, which may benefit the company[166]. - The company may seek additional government grants and incentives to support the construction of the new aluminum smelter, which is subject to competitive application processes[169]. Cybersecurity - Cybersecurity incidents are increasing in frequency and sophistication, posing risks to the company's information technology systems and potentially impacting business operations[151]. Corporate Governance and Transparency - Century Aluminum provides access to periodic filings through the SEC's EDGAR system, including annual reports on Form 10-K and quarterly reports on Form 10-Q[74]. - The company offers free copies of its Forms 10-K, 10-Q, and 8-K upon request, highlighting transparency in financial reporting[74]. - Century Aluminum's Investor Relations Department can be contacted for document requests, indicating a commitment to shareholder communication[74].