In February 2025, Union Electric Steel UK Limited (“UES-UK”), an indirect subsidiary of the Corporation, entered into a formal consultation process with its unions and staff to evaluate various options to improve its profitability, which it completed during the second quarter of 2025. The U.K. operations have been impacted by unpredictable and high energy costs compared to its foreign competitors, lower demand for its products manufactured in the U.K., and increased imports of rolls and flat rolled steel into Europe from low-cost countries. In light of UES-UK's historical performance and management's outlook for the remainder of 2025 and subsequent years, UES-UK has decided to exit its operations. While UES-UK continues to review its restructuring alternatives, it is currently expected it will complete its orders in backlog and will cease foundry operations at the end of 2025 and finishing operations in the spring of 2026. As of the date of this filing, no decision has been made by the Board of Directors of UES-UK as to the method to liquidate and dissolve its operations.

For the three and six months ended June 30, 2025, the Corporation recognized costs and accelerated depreciation approximating $6,750. A summary of cash and non-cash charges included in the condensed consolidated statement of operations for the three and six months ended June 30, 2025 is as follows:


Type of Cost	Location of Cost in Statement of Operations	For the Three and Six Months Ended June 30, 2025
Employee-related costs	Severance charge	$	5,854
Accelerated depreciation	Depreciation and amortization		654
Professional fees	Selling and administrative		132
Other	Costs of products sold (excluding depreciation and amortization)		110
		$	6,750

The charge for employee-related costs represents primarily statutory severance and other benefits payable to the 168 employees of UES-UK under existing benefit plans. Additional benefits may be earned by the employees as additional services are rendered, which will be accrued as earned and could range between $500 - $600.

Accelerated depreciation represents higher depreciation expense resulting from reducing the estimated remaining useful lives and revising the estimated residual value of the property, plant and equipment of UES-UK (Note 5). UES-UK will continue to evaluate the future alternative uses of its property, plant and equipment, including estimated salvage value, highest and best use of the land and building, and costs to ready the site for disposal or sale. Accordingly, additional charges may occur in the future.

Professional fees and other non-cash charges approximated $132 and $110, respectively, for the three and six months ended June 30, 2025. Similar costs and charges may be incurred through the completion of its restructuring, which will be recognized when incurred.

Outstanding severance charges equaled $5,922 as of June 30, 2025, of which $5,074 is recorded as a current liability (accrued payrolls and employee benefits) and $848 is recorded as a noncurrent liability (other noncurrent liabilities) on the condensed consolidated balance sheet as of June 30, 2025. Activity during the three and six months ended June 30, 2025 consisted of the following:


	Three and Six Months Ended June 30, 2025
Balance at beginning of the period	$	—
Severance charge, depreciation and other exit costs		6,750
Deduct depreciation and other non-cash charges		(764	)
Estimated cash charges		5,986
Less paid by June 30, 2025		(132	)
Other, primarily changes in foreign currency exchange rates		68
Balance at end of the period	$	5,922