Kaiser Aluminum (KALU) risk factors, FY2024 10-K

RISKS RELATED TO CHANGES IN DEMAND FOR OUR PRODUCTS

1. 01We operate in a highly competitive industry
2. 02Reductions in demand for our products may be more severe than, and may occur prior to, reductions in demand for our customers’ products
3. 03Our customers may reduce their demand for aluminum products in favor of alternative materials
4. 04Our 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
5. 05The commercial aerospace industry is cyclical and subject to disruption. Downturns in the commercial aerospace industry could adversely affect our business
6. 06Reductions in defense spending for aerospace and non-aerospace military applications could adversely affect demand for our products
7. 07Downturns in the automotive and ground transportation industries could adversely affect our business
8. 08Changes in consumer demand for particular motor vehicles could adversely affect our business
9. 09Aluminum beverage and food packaging products are subject to competition from substitute products and decreases in demand, which could result in lower profits and reduced cash flows

RISKS RELATED TO SALES

1. 10We depend on a core group of significant customers
2. 11We experience fluctuation in certain costs that we cannot pass through to our customers and face pressure from our customers on pricing

RISKS RELATED TO GEO-POLITICAL FACTORS

1. 12Our industry is very sensitive to foreign economic, regulatory and political factors that may adversely affect our business

RISKS RELATED TO PRODUCT AND MANUFACTURING

1. 13We may experience difficulties in the launch or production ramp-up of new products which could adversely affect our business
2. 14Unplanned events may interrupt our production operations, which may adversely affect our business
3. 15We may face challenges to our intellectual property rights which could adversely affect our reputation, business and competitive position

RISKS RELATED TO OUR STRATEGIC TRANSACTIONS AND INITIATIVES

1. 16We may not be able to successfully implement our productivity enhancement and cost reduction initiatives that are necessary to offset competitive price pressure
2. 17Our investment and other expansion projects may not be completed, start up as scheduled or deliver the expected capacity and other benefits
3. 18We are dependent upon Alcoa for certain resources essential to the day-to-day operation of our business at Warrick

RISKS RELATED TO COMMODITY-RELATED PRICE FLUCTUATIONS

1. 19Our business could be adversely affected by pricing and availability of primary aluminum
2. 20Our business could be adversely affected by the pricing and availability of recycled scrap aluminum
3. 21Our business could be adversely affected by the pricing and availability of alloying metals
4. 22Reduced pricing for aluminum can reduce our borrowing availability and cause our liquidity to decline
5. 23Our hedging programs have been and could continue to be adversely impacted by fluctuations as a result of the impacts of supply chain disruptions, geopolitical activity and general economic conditions
6. 24Our 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

RISKS RELATED TO OUR INDEBTEDNESS

1. 25Covenants and events of default in our debt instruments could limit our ability to undertake certain types of transactions and adversely affect our liquidity
2. 26In addition, restrictive covenants in our Revolving Credit Facility require us in certain circumstances to maintain specified financial ratios and satisfy other financial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control and we may be unable to meet them
3. 27In addition, our financial results, our level of indebtedness, and our credit ratings could adversely affect the availability and terms of any additional or replacement financing
4. 28Restrictive covenants in our debt instruments contain significant qualifications and exceptions
5. 29Servicing our debt requires a significant amount of cash and we may not have sufficient cash flow from our business to pay our debt
6. 30We are a holding company and depend on our subsidiaries for cash to meet our obligations and pay any dividends

RISKS RELATED TO OUR COLLECTIVE BARGAINING AGREEMENTS

1. 31Our failure to maintain satisfactory labor relations could adversely affect our business
2. 32Our participation in multiemployer union pension plans may have an adverse effect on our financial performance
3. 33An 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
4. 34The USW has director nomination rights through which it may influence us, and interests of the USW may not align with our interests or the interests of our stockholders, debt holders and other stakeholders

RISKS RELATED TO ENVIRONMENTAL LAWS AND REGULATIONS AND SUSTAINABILITY INITIATIVES

1. 35Environmental compliance, cleanup and damage claims may decrease our cash flow and adversely affect our business
2. 36Governmental 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
3. 37Expectations relating to sustainability considerations expose us to potential liabilities, increased costs and reporting requirements, reputational harm and other adverse effects on our business

RISKS RELATED TO CYBERSECURITY AND PRIVACY

1. 38We are subject to risks relating to our information technology systems and those of our third-party service providers

RISKS RELATED TO OUR COMMON STOCK

1. 39Payment of dividends may not continue in the future and our payment of dividends and stock repurchases are subject to restrictions
2. 40Delaware law and our governing documents may impede or discourage a takeover, which could adversely affect the value of our common stock