CENTURY ALUMINUM COMPANY
This Management's Discussion and Analysis ("MD&A") provides information that
management believes is relevant to an assessment and understanding of the
consolidated financial condition and results of operations of Century Aluminum
Company and should be read in conjunction with the accompanying consolidated
financial statements and related notes thereto. This MD&A contains
"forward-looking statements" - see "Forward-Looking Statements" above.
Overview
We are a global producer of primary aluminum with aluminum reduction facilities, or "smelters," inthe United States andIceland . The key determinants of our results of operations and cash flows from operations are as follows: •the price of primary aluminum, which is based on theLondon Metal Exchange ("LME") and other exchanges, plus any regional premiums and value-added product premiums;
•the cost of goods sold, the principal components of which are electrical power, alumina, carbon products and labor, which in aggregate represent more than 75% of our cost of goods sold; and
•our production volume and product mix.
Recent Developments
Hawesville temporary curtailment OnJune 22, 2022 , we announced that we would temporarily idle all of our production capacity at ourHawesville smelter, as a direct result of historically high energy costs and declining LME prices. As part of this action, we issued a notice to most of the employees at the facility pursuant to the Worker Adjustment and Retraining Notification ("WARN") Act regarding our intentions to temporarily curtailHawesville plant operations by no later thanAugust 20, 2022 . We have since fully curtailed all of our production at the facility and expect to continue to maintain the plant with the intention of restarting operations when market conditions permit, including energy prices returning to more normalized levels and aluminum prices maintaining levels that can support the on-going costs and capital expenditures necessary to restart and operate the plant. As the curtailment represents a significant adverse change in the extent and manner in which theHawesville smelter will be used, we accordingly evaluated theHawesville asset group for recoverability. As the carrying value of theHawesville asset group was determined to not be recoverable based on the estimated undiscounted cash flows expected to be generated over the life of the asset group, an impairment charge of$159.4 million was recognized to write down the asset group to its estimated fair value. We recognized$12.6 million of expense through the third quarter related to wages and severance triggered by our issuance of the WARN notice and excess capacity charges, partially offset by final plant idling activities. We also recognized a non-cash OPEB curtailment gain, net totaling$8.0 million for the three and nine months endedSeptember 30, 2022 . See Note 13. Components of net periodic benefit cost
to
the consolidated financial statements included herein for additional information.
Pricing of aluminum
The overall price of primary aluminum consists of three components: (i) the base commodity price, which is based on quoted prices on the LME and other exchanges; plus (ii) any regional premium (e.g., the Midwest premium for metal sold inthe United States ("MWP") and the European Duty Paid premium for metal sold intoEurope ("EDPP")); plus (iii) any value-added product premium. Each of these price components has its own drivers and variability. The aluminum price is influenced by a number of factors, including global supply-demand balance, inventory levels, speculative activities by market participants, production activities by competitors and political and economic conditions, as well as production costs in major production regions. These factors can be highly speculative and difficult to predict which can lead to significant volatility in the aluminum price. Increases or decreases in primary aluminum prices result in increases and decreases in our revenues (assuming all other factors are unchanged). From time to time, we may seek to manage our exposure to fluctuations in the LME price of primary aluminum and/or associated regional premiums through financial instruments designed to protect our downside price risk exposure. Information regarding financial contracts is included in Note 14. Derivatives and risks associated with such financial contracts are disclosed specifically in our Annual Report on Form 10-K for the fiscal year endedDecember 31, 2021 . We have seen declines in the pricing of aluminum through the third quarter of 2022, when compared to the aluminum prices that were generally increasing throughout 2021 and during the first quarter of 2022. The quarterly average LME price for primary aluminum was$3,267 per tonne in the first quarter of 2022, decreasing to$2,882 per tonne for the second quarter of 2022 and then to$2,354 in the third quarter of 2022 compared to annual average of$2,475 per tonne in 2021 and$1,702 per 33 -------------------------------------------------------------------------------- tonne in 2020. The quarterly average MWP price was$583 per tonne for the third quarter of 2022, compared to$805 per tonne for the second quarter of 2022,$794 per tonne for the first quarter of 2022, and to annual average of$581 per tonne in 2021 and$267 per tonne in 2020. The quarterly average EDPP price was$501 per tonne for the third quarter of 2022, compared to$604 per tonne for the second quarter of 2022,$489 per tonne for the first quarter of 2022 and to annual average of$272 per tonne in 2021 and$126 per tonne in 2020.
Results of Operations
The following discussion for the three and nine months endedSeptember 30, 2022 reflects no change in production capacities, other than the curtailment of theHawesville smelter, at our operating facilities. Our net sales are impacted primarily by the LME price for aluminum, regional and value-added premiums, and the volume and product mix of aluminum we ship during the period. In general, our results reflect the LME and regional premium pricing on an approximately one to three month lag basis reflecting contractual terms with our customers. Electrical power, alumina, carbon products and labor are the principal components of our cost of goods sold. Power costs can be volatile as a result of a number of factors beyond our control. See "Item 1A. Risk Factors - Increases in energy costs adversely affect our business, financial position, results of operations and liquidity" in our Annual Report on Form 10-K for the year endedDecember 31, 2021 . Power costs at ourKentucky plants are impacted by capacity demand charges, which are determined based on available power generating capacity in MISO, from which we purchase energy. The price of such capacity is set by auction in April. Our expected capacity demand costs for power are expected to be approximately$11.5 million per quarter afterJune 1, 2022 (notwithstanding the curtailment atHawesville ), in addition to the market price of power used. The recent increase in energy costs has adversely affected our business, and is expected to continue to adversely affect our business over the near term until power prices return to more normalized levels and/or LME prices improve. Increased domestic energy costs have resulted in the curtailment of ourHawesville facility as described above. InEurope , increased energy prices affect both our Grundartangi operations (a portion of our power is linked to theNord Pool power market) and our Vlissingen facility inthe Netherlands , which utilizes natural gas to produce anodes used in our Grundartangi operations. The energy market inEurope is materially dependent upon imported natural gas fromRussia , and the threat ofRussia further reducing or terminating natural gas supply toEurope creates uncertainty with respect to the price and availability of natural gas, which could adversely affect operations at Vlissingen, and in turn operations at Grundartangi, if we are not able to source an alternative supply of anodes. In general, our results reflect the market cost of alumina on an approximately three-month lag reflecting the terms of our alumina contracts and inventory levels. Quarter ended Nine months ended Sequential Year-to-date September 30, September 30, September 30, 2022 June 30, 2022 2022 2021 (in millions, except per share data)NET SALES : Related parties$ 404.9 $ 483.5 $ 1,321.5 925.3 Other customers 232.3 373.1 925.9 628.1 Total net sales 637.2 856.6 2,247.4 1,553.4 Gross profit (loss) (43.0) 15.9 66.1 54.8 Net income (loss) 44.3 37.4 99.4 (227.5) INCOME (LOSS) PER COMMON SHARE: Basic$ 0.46 $ 0.38$ 1.02 $ (2.52) Diluted$ 0.43 $ 0.36$ 0.97 $ (2.52) 34
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SHIPMENTS - PRIMARY ALUMINUM(1)
United States Iceland Total
Sales $ Sales $ Sales $
Tonnes (in millions) Tonnes (in millions) Tonnes (in millions)
2022
3rd Quarter 95,502 $ 320.3 78,223 $ 283.7 173,725 $ 604.0
2nd Quarter 139,630 $ 564.8 74,454 $ 273.2 214,084 $ 838.0
1st Quarter 134,953 $ 494.8 76,458 $ 247.5 211,411 $ 742.3
2021
3rd Quarter 117,951 $ 366.6 78,144 $ 207.6 196,095 $ 574.2
2nd Quarter 112,792 $ 314.0 78,102 $ 180.1 190,894 $ 494.1
1st Quarter 116,437 $ 275.6 79,260 $ 164.2 195,697 $ 439.8
(1) Excludes scrap aluminum, purchased aluminum and alumina sales.
Quarter ended Nine months ended
Sequential Year-to-date
September 30, June 30, 2022 September 30, September 30,
(in millions) 2022 2022 2021
Net sales $ 637.2 $ 856.6 $ 2,247.4 $ 1,553.4
Net sales (excluding scrap aluminum, purchased aluminum and alumina sales)
decreased by $234.0 million for the three months ended September 30, 2022 ,
compared to the three months ended June 30, 2022 , primarily driven by
unfavorable LME and premium price realizations of $81.6 million and unfavorable
volume of $152.2 million primarily attributable to the full curtailment of our
Hawesville smelter.
Net sales (excluding scrap aluminum, purchased aluminum and alumina sales)
increased by $676.2 million for the nine months ended September 30, 2022 ,
compared to the nine months ended September 30, 2021 , primarily driven by
favorable LME and premium price realizations of $569.3 million and favorable
volume and sales mix of $106.9 million driven by the restart at our Mt. Holly
facility and higher value-added product premiums, partially offset by full the
curtailment of our Hawesville smelter.
Quarter ended Nine months ended
Sequential Year-to-date
September 30, September 30,
(in millions) 2022 June 30, 2022 September 30, 2022 2021
Gross profit (loss) $ (43.0) $ 15.9 $ 66.1 $ 54.8
Gross profit decreased by $58.9 million for the three months ended September 30,
2022 , compared to the three months ended June 30, 2022 , primarily driven by
unfavorable metal price realization of $81.6 million , unfavorable volume mix of
$44.9 million primarily attributable to the full curtailment of our Hawesville
smelter, and unfavorable power price realization of $29.1 million , partially
offset by decreased operating costs of $57.6 million as a result of the full
curtailment of our Hawesville smelter and other cost savings from our remaining
operating smelters and favorable raw material price realization of $30.3
million .
Gross profit increased by $11.3 million for the nine months ended September 30,
2022 compared to the nine months ended September 30, 2021 , primarily driven by
favorable metal price realization of $569.3 million and favorable volume and
sales mix of $70.2 million driven by the restart at our Mt. Holly facility and
higher value-added product premiums, net of the $27.4 million impact of the full
curtailment of our Hawesville smelter. The change is partially offset by
unfavorable raw material price realization of $298.7 million , unfavorable power
price realization of $281.8 million and higher operating costs of $48.0 million .
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Quarter ended Nine months ended
Sequential Year-to-date
September 30, September 30,
(in millions) 2022 June 30, 2022 2022 September 30, 2021
Asset impairment charge $ - $ 159.4 $ 159.4 $ -
An asset impairment charge of $159.4 million was recognized in the period ended
September 30, 2022 as a result of the temporary curtailment of the Hawesville
facility, announced during June 2022 . As the curtailment represents a
significant adverse change in the extent and manner in which Hawesville will be
used, we accordingly evaluated the Hawesville asset group for recoverability
which resulted in the recognized impairment charge of $159.4 million .
Quarter ended Nine months ended
Sequential Year-to-date
September 30,
(in millions) September 30, 2022 June 30, 2022 September 30, 2022 2021
Selling, general and administrative
expenses $ 8.7 $ 5.8 $ 26.2 $ 39.0
Selling, general and administrative expenses increased by $2.9 million for the
three months ended September 30, 2022 , compared to the three months ended June
30, 2022 , primarily driven by share-based compensation costs as a result of
quarter over quarter changes in the Company's stock price.
Selling, general and administrative expenses decreased by $12.8 million for the
nine months ended September 30, 2022 , compared to the nine months ended
September 30, 2021 , primarily driven by a reduction in share-based compensation
costs during 2022 resulting from the reduction in the Company's stock price year
over year.
Quarter ended Nine months ended
Sequential Year-to-date
September 30, September 30,
(in millions) 2022 June 30, 2022 September 30, 2022 2021
Net gain (loss) on forward and
derivative contracts $ 112.6 $ 231.8 $ 287.7 $ (239.2)
For the three months ended September 30, 2022 , net gain (loss) on forward and
derivative contracts decreased by $119.2 million primarily driven by smaller
quarter over quarter decreases in LME, MWP, and Nord Pool forward prices as
compared to prior quarter over quarter changes in forward prices.
Net gain (loss) on forward and derivative contracts improved by $526.9 million
from a loss of $239.2 million for the nine months ended September 30, 2021 to a
gain of $287.7 million for the nine months ended September 30, 2022 , primarily
driven by decreases in LME and MWP forward prices, and increased gains on Nord
Pool derivative contracts due to Nord Pool power forward price increases.
Quarter ended Nine months ended
Sequential Year-to-date
September 30, September 30,
(in millions) 2022 June 30, 2022 September 30, 2022 2021
Income tax benefit (expense) $ (20.6) $ (42.3) $ (64.6) $ 43.8
For the three months ended September 30, 2022 , income tax expense decreased by
$21.7 million compared to the three months ended June 30, 2022 , primarily driven
by higher power prices at Grundartangi and unfavorable LME price realization.
For the nine months ended September 30, 2022 , income tax expense increased by
$108.4 million compared to the nine months ended September 30, 2021 , primarily
driven by favorable LME price realization. See Note 8. Income Taxes to the
consolidated financial statements included herein for additional information.
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--------------------------------------------------------------------------------Liquidity and Capital Resources
Liquidity
Our principal sources of liquidity are available cash and cash flows from operations. We also have access to our existingU.S. andIceland revolving credit facilities (collectively, the "revolving credit facilities") and have raised capital in the past through public equity and debt markets. We regularly explore various other financing alternatives. Our principal uses of cash include the funding of operating costs (including post-retirement benefits), debt service requirements, capital expenditures, investments in our growth activities and in related businesses, working capital and other general corporate requirements. We believe that cash provided from operations and financing activities will be adequate to cover our operations and business needs over the next twelve months. As ofSeptember 30, 2022 , we had cash and cash equivalents of approximately$64.8 million and unused availability under our revolving credit facilities of$136.9 million and Iceland Term Facility of €13.6 million, resulting in a total liquidity position of approximately$215.1 million .
Available Cash
Our available cash and cash equivalents balance at
Sources and Uses of Cash
Our statements of cash flows are summarized below:
Nine Months Ended September 30,
2022 2021
(in millions)
Net cash provided by (used in) operating activities $ 57.2 $ (12.1)
Net cash used in investing activities (70.1) (45.7)
Net cash provided by financing activities 38.2 42.4
Change in cash, cash equivalents and restricted
cash $ 25.3 $ (15.4)
The change from net cash used in operating activities during the nine months
ended September 30, 2021 to net cash provided by operating activities during the
nine months ended September 30, 2022 was primarily driven by net income during
the first three quarters, partially offset by changes in working capital. The
changes in working capital are primarily attributable to timing of receivable
collections, timing of raw material receipts, and pricing increases.
The increase in net cash used in investing activities was primarily due to
higher spending on capital projects during the nine months ended September 30,
2022 , driven by capital investments in the Mt. Holly restart project and the
Grundartangi casthouse project.
The change in net cash provided by financing activities was primarily due to
borrowings under the Grundartangi casthouse debt facility in 2022 as compared to
net borrowing on our revolving credit facilities in 2021.
Availability Under Our Credit Facilities
TheU.S. revolving credit facility, datedMay 2018 (as amended, the "U.S. revolving credit facility"), previously provided for borrowings of up to$220.0 million , including up to$110.0 million under a letter of credit sub-facility. InJune 2022 , we entered into a Fourth Amendment to our existing$220.0 million U.S. revolving credit facility, increasing the maximum capacity from$220.0 million to$250.0 million , including up to$150.0 million under a letter of credit sub-facility. TheU.S. revolving credit facility matures inJune 2027 . Any letters of credit issued and outstanding under theU.S. revolving credit facility reduce our borrowing availability on a dollar-for-dollar basis. We have also entered into, through our wholly-owned subsidiary Nordural Grundartangi ehf ("Grundartangi"), a$50.0 million revolving credit facility, datedNovember 2013 , as amended (the "Iceland revolving credit facility"). OnFebruary 4, 2022 , we amended theIceland revolving credit facility and increased the facility amount to$80.0 million in the aggregate. On 37 --------------------------------------------------------------------------------September 28, 2022 , we further amended theIceland revolving credit facility and increased the facility amount to$100.0 million in the aggregate. TheIceland revolving credit facility matures inNovember 2024 . The availability of funds under our credit facilities is limited by a specified borrowing base consisting of certain accounts receivable, inventory and qualified cash deposits which meet the lenders' eligibility criteria. Increases in the price of aluminum and/or restarts of previously curtailed operations, for example, increase our borrowing base by increasing our accounts receivable and inventory balances; decreases in the price of aluminum and/or curtailments of production capacity would decrease our borrowing base by reducing our accounts receivable and inventory balances. As ofSeptember 30, 2022 , ourU.S. revolving credit facility had a borrowing base of$190.3 million ,$63.5 million in borrowings and$39.9 million in letters of credit outstanding. Of the outstanding letters of credit,$26.6 million are related to our power commitments and$13.3 million are primarily for the purpose of securing certain debt and workers' compensation commitments. As ofSeptember 30, 2022 , ourIceland revolving credit facility had a borrowing base of$100.0 million and$50.0 million in outstanding borrowings. As ofSeptember 30, 2022 , our credit facilities had$136.9 million of net availability after consideration of our outstanding borrowings and letters of credit. We may borrow and make repayments under our credit facilities in the ordinary course based on a number of factors, including the timing of payments from our customers and payments to our suppliers. Our credit facilities contain customary covenants, including restrictions on mergers and acquisitions, indebtedness, affiliate transactions, liens, dividends and distributions, dispositions of collateral, investments and prepayments of indebtedness, including in theU.S. revolving credit facility, a springing financial covenant that requires us to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 as of any date of determination on which availability under theU.S. revolving credit facility is less than or equal to$25.0 million , or 10% of the borrowing base, but not less than$17.85 million . We intend to maintain availability to comply with these levels any time we would not meet the ratio, which could limit our ability to access the full amount of our availability under ourU.S revolving credit facility. OurIceland revolving credit facility contains a covenant that requires Grundartangi to maintain a minimum equity ratio. As ofSeptember 30, 2022 , we were in compliance with all such covenants or maintained availability above such covenant triggers.
Grundartangi Casthouse Facility
OnNovember 2, 2021 , Grundartangi entered into an eight-year Term Facility Agreement with Arion Bank hf, to provide for borrowings up to$130.0 million in connection with the casthouse project at Grundartangi (the "Casthouse Facility"). Under the Casthouse Facility, repayments of principal amounts will be made in equal quarterly installments equal to 1.739% of the principal amount, the first payment occurring inJuly 2024 , with the remaining 60% of the principal amount to be paid no later than the termination date. The Casthouse Facility will mature inDecember 2029 . The Casthouse Facility bears interest at a rate equal to USD LIBOR 3 month plus an applicable margin. As ofSeptember 30, 2022 there were$40.0 million in borrowings outstanding under the Casthouse Facility. The Casthouse Facility also contains customary covenants, including restrictions on mergers and acquisitions, indebtedness, preservation of assets, and dispositions of assets and contains a covenant that requires Grundartangi to maintain a minimum equity ratio. As ofSeptember 30, 2022 , we were in compliance with all such covenants.
Senior Notes and Convertible Senior Notes
InApril 2021 , we issued$250.0 million principal of senior secured notes that will mature onApril 1, 2028 (the "2028 Notes"), unless earlier refinanced in accordance with their terms. Interest on the 2028 Notes is payable semi-annually onApril 1 andOctober 1 of each year, at a rate of 7.5% per year. The indenture governing the 2028 Notes contains customary covenants which may limit our ability, and the ability of certain of our subsidiaries, to: (i) incur additional debt; (ii) incur additional liens; (iii) pay dividends or make distributions in respect of capital stock; (iv) purchase or redeem capital stock; (v) make investments or certain other restricted payments; (vi) sell assets; (vii) issue or sell stock of certain subsidiaries; (viii) enter into transactions with shareholders or affiliates; and (ix) effect a consolidation or merger. InApril 2021 , we issued$86.3 million in aggregate principal amount of Convertible Notes (the "Convertible Notes"), that will mature onMay 1, 2028 , unless earlier converted, repurchased or redeemed. The principal included the full exercise of the option by the initial purchasers of the Convertible Notes to purchase$11.3 million of additional principal amount. The Convertible Notes bear interest semi-annually in arrears onMay 1 andNovember 1 of each year, at a rate of 2.75% per annum in cash.
Iceland Term Facility
Our wholly-owned subsidiary, Grundartangi, has entered into a Term Facility
Agreement with Arion Bank hf, dated
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repayments of principal amounts will be made in equal monthly installments, the
first payment occurring in February 2023 , with the remainder of the principal
amount to be paid no later than the termination date in January 2024 . Borrowings
under the Iceland Term Facility will bear interest at a rate equal to 3.2% plus
EUR EURIBOR 1 month as published at any time by the European Money Markets
Institute . As of September 30, 2022 , there were no outstanding borrowings under
the Iceland Term Facility.
Supplemental Guarantor Financial Information
The Company has filed a Registration Statement on Form S-3 (the "Universal Shelf Registration Statement") with theSEC pursuant to which the Company may, from time to time, offer an indeterminate amount of securities, which may include securities that are guaranteed by certain of the Company's subsidiaries. As ofSeptember 30, 2022 , we have not issued any debt securities pursuant to the Universal Shelf Registration Statement. However, any securities that we may issue in the future may limit our ability, and the ability of certain of our subsidiaries, to pay dividends or make distributions in respect of capital stock. "Guarantor Subsidiaries" refers to all of our material domestic subsidiaries except forNordural US LLC ,Century Aluminum Development LLC andCentury Aluminum of West Virginia, Inc. The Guarantor Subsidiaries are 100% owned by Century. All guarantees will be full and unconditional; all guarantees will be joint and several. Our foreign subsidiaries, together withNordural US LLC ,Century Aluminum Development LLC andCentury Aluminum of West Virginia, Inc. , are collectively referred to as the "Non-Guarantor Subsidiaries". We allocate corporate expenses or income to our subsidiaries and charge interest on certain intercompany balances. The following summarized financial information of both the Company and the Guarantor Subsidiaries ("Guarantors") is presented on a combined basis. Intercompany balances and transactions between the Company and the Guarantors have been eliminated and the summarized financial information does not reflect investments of the Company or the Guarantors in the Non-Guarantor Subsidiaries ("Non-Guarantors"). The Company's or Guarantors' amounts due from, amounts due to, and transactions with the Non-Guarantors are disclosed below: September 30, 2022 December 31, 2021 Current assets $ 300.7 $ 395.3 Non-current assets 734.6 935.3 Current liabilities 293.2 375.1 Non-current liabilities 491.6 556.1 Nine Months Ended September 30, 2022 Net sales $ 1,443.0 Gross profit (loss)
(21.5)
Income (loss) before income taxes (144.5)
Net income (loss) 99.4
As of September 30, 2022 and December 31, 2021 , an intercompany receivable due
to the Company and Guarantors from the Non-Guarantors totaled $6.4 million and
$15.1 million , respectively, and an intercompany non-current loan due to the
Company from the Non-Guarantors totaled $498.6 million and $544.2 million ,
respectively.
Contingent Commitments
We have a contingent obligation in connection with the "unwind" of a contractual arrangement betweenCentury Aluminum of Kentucky ("CAKY"),Big Rivers Electric Corporation and a third party and the execution inJuly 2009 of a long-term cost-based power contract withKenergy , a member of a cooperative of Big Rivers. This contingent obligation consists of the aggregate payments made to Big Rivers by the third party on CAKY's behalf in excess of the agreed upon base amount under the long-term cost-based power contract withKenergy . As ofSeptember 30, 2022 , the principal and accrued interest for the contingent obligation was$29.1 million , which was fully offset by a derivative asset. We may be required to make installment payments for the contingent obligation in the future. These payments are contingent based on the LME price of primary aluminum and the level ofHawesville's operations. As ofSeptember 30, 2022 , based on the LME forward market prices and our expected level ofHawesville operations, we believe that we will not be required to make payments on the 39 -------------------------------------------------------------------------------- contingent obligation during the term of the agreement, which expires in 2028. There can be no assurance that circumstances will not change thus accelerating the timing of such payments.
Employee Benefit Plan Contributions
In 2013, we entered into a settlement agreement with thePension Benefit Guaranty Corporation (the "PBGC") regarding an alleged "cessation of operations" at ourRavenswood facility (the "PBGC Settlement Agreement"). Pursuant to the terms of the PBGC Settlement Agreement, we agreed to make additional contributions (above any minimum required contributions) to our defined benefit pension plans totaling approximately$17.4 million . Under certain circumstances, in periods of lower primary aluminum prices relative to our cost of operations, we were able to defer one or more of these payments, provided that we provide the PBGC with acceptable security for such deferred payments. We did not make any contributions for the three months endedSeptember 30, 2022 , and 2021. We historically elected to defer certain payments under the PBGC Settlement Agreement and provided the PBGC with the appropriate security. InOctober 2021 , we amended the PBGC Settlement Agreement such that we removed the deferral mechanism and agreed to contribute approximately$2.4 million per year to our defined benefit pension plans for a total of approximately$9.6 million , over the next four years beginning onNovember 30, 2022 and ending onNovember 30, 2025 , subject to acceleration if certain terms and conditions are met in such amendment.
Section 232 Aluminum Tariff
OnMarch 23, 2018 , theU.S. implemented a 10% tariff on imported primary aluminum products into theU.S. These tariffs are intended to protectU.S. national security and incentivize the restart of primary aluminum production in theU.S. , reducing reliance on imports and ensuring that domestic producers, like Century, can supply all the aluminum necessary for critical industries and national defense. In addition to primary aluminum products, the tariffs also cover certain other semi-finished products. All imports that directly compete with our products are covered by the tariff, with the exception of imports fromAustralia ,Canada andMexico . Additionally, primary aluminum imports fromArgentina are allowed up to an annual quota limit of 169,000 metric tonnes, the first 18,000 metric tonnes of imports from theEuropean Union and the first 900 metric tonnes of imports from theUnited Kingdom are also allowed duty free. Imports that receive a product exclusion from theDepartment of Commerce may also enter the US duty free. InJuly 2022 , theInternational Trade Commission (ITC) initiated a review of the Section 301 and 232 duties as required by law every four years. The process will conclude no later thanMarch 15, 2023 .
Other Items
During 2021, we initiated efforts to restart the curtailed capacity at our Mt. Holly facility. The project was completed during the second quarter of 2022, resulting in total production of 75% of Mt. Holly's full capacity. During 2021, we announced plans for construction of a new billet casthouse at Grundartangi. The Grundartangi casthouse project began in late 2021 and is expected to continue through the second half of 2023. The Grundartangi casthouse project will be fully funded through the Casthouse Facility. The project is progressing and is expected to be completed on-time, subject to market conditions. In 2011, our Board of Directors approved a$60.0 million common stock repurchase program and subsequently increased this program by$70.0 million in the first quarter of 2015. Under the program, Century is authorized to repurchase up to$130.0 million of our outstanding shares of common stock, from time to time, on the open market at prevailing market prices, in block trades or otherwise. The timing and amount of any shares repurchased will be determined by our management based on its evaluation of market conditions, the trading price of our common stock and other factors. We made no repurchases during the years ended 2019, 2020, and 2021. As ofSeptember 30, 2022 , we had$43.7 million remaining under the repurchase program authorization. The repurchase program may be expanded, suspended or discontinued by our Board, in its sole discretion, at any time. InNovember 2009 ,Century Aluminum of West Virginia, Inc. ("CAWV") filed a class action complaint for declaratory judgment against the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial andService Workers International Union ("USW"), the USW's local and certain CAWV retirees, individually and as class representatives ("CAWV Retirees"), seeking a declaration of CAWV's rights to modify/terminate retiree medical benefits. Later inNovember 2009 , the USW and representatives of a retiree class filed a separate suit against CAWV,Century Aluminum Company , Century Aluminum Master Welfare Benefit Plan, and various John Does with respect to the foregoing. OnAugust 18, 2017 , theDistrict Court for the Southern District of West Virginia approved a settlement agreement in respect of these actions, pursuant to which, CAWV agreed to make payments into a trust for the benefit of the CAWV Retirees in the aggregate amount of$23.0 million over the course of ten years. Upon approval of the settlement, we paid$5.0 million to the aforementioned trust inSeptember 2017 and agreed to pay the remaining amounts under the settlement agreement in annual increments of$2.0 million for nine years. AtSeptember 30, 2022 , we had$2.0 million in other current liabilities and$4.7 million in other liabilities related to this agreement. 40 -------------------------------------------------------------------------------- We are a defendant in several actions relating to various aspects of our business. While it is impossible to predict the ultimate disposition of any litigation, we do not believe that any of these lawsuits, either individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or liquidity. See Note 11. Commitments and Contingencies to the consolidated financial statements included herein for additional information. Capital Resources We intend to finance our future capital expenditures from available cash, cash flows from operations and if necessary, borrowing under our existing revolving credit facilities. For major investment projects we would likely seek financing from various capital and loan markets and may potentially pursue the formation of strategic alliances. We may be unable, however, to issue additional debt or equity securities, or enter into other financing arrangements on attractive terms, or at all, due to a number of factors including a lack of demand, unfavorable pricing, poor economic conditions, unfavorable interest rates, or our financial condition or credit rating at the time. Future uncertainty in theU.S. and international markets and economies may adversely affect our liquidity, our ability to access the debt or capital markets and our financial condition. Capital expenditures incurred for the nine months endedSeptember 30, 2022 were$14.6 million , excluding expenditures of$16.2 million associated with the restart project at Mt. Holly and$28.5 million associated with the Grundartangi casthouse project. We estimate our total capital spending in 2022, excluding the Mt. Holly restart project and the Grundartangi casthouse project, will be approximately$25.0 to$30.0 million related to our ongoing investment and sustainability projects at our plants. 41
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