KAISER ALUMINUM CORP
For the period ended Dec 31, 2025. Filed Feb 19, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 19, 2026
KALU$106.84+3.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-20.
0000950170-25-024313
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-19.
0001193125-26-059575
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 94 current paragraphs.
48 unchanged; 32 reworded; 14 added; 11 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (14)
Current report
Basis of Presentation
Current report
Effective January 1, 2025, we changed our inventory valuation methodology from LIFO to WAC. The effects of this change in accounting principle have been retrospectively applied to all periods presented with a cumulative effect adjustment reflected in the January 1, 2023 beginning retained earnings. See Note 18 of our consolidated financial statements included in Item 8. “Financial Statements and Supplementary Data” of this Form 10-K for further information. Prior period information provided in this Management’s Discussion and Analysis has been updated to reflect the retrospective application of the change in accounting principle.
Current report
A fundamental part of our business model is to remain neutral to the impact from fluctuations in the market price for aluminum and certain alloys, thereby earning profit predominantly from the conversion of aluminum into semi-fabricated mill products. We refer to this as “metal price neutrality.” We purchase primary, rolling ingot and scrap, or recycled, aluminum, our main raw material, and alloys at prices that fluctuate on a monthly basis, and our pricing policies generally allow us to pass the current month underlying index cost of aluminum and certain alloys through to our customers so that we remain neutral to metal pricing. We may also enter into firm-price customer sales agreements that specify a firm underlying metal price plus a conversion price. Firm-price sales agreements create price exposure for us, which we mitigate through hedging and related programs with an objective to remain metal price neutral. Additionally, we have certain contracts that may adjust certain alloy prices for a forward period based on an average prior period cost for such alloys. As a result, until the selling price resets, we can experience an adverse impact when alloy prices increase and a favorable impact when alloy prices decrease.
Current report
Adjusted EBITDA of $310.2 million;
Current report
Issuance of a new $500.0 million aggregate principal amount of 5.875% unsecured Senior Notes, due 2034 replacing the $500.0 million aggregate principal amount of 4.625% unsecured Senior Notes due in 2028;
Current report
The increase in Net sales reflected an increase in the average realized sales price per pound of $0.46 (18%). This benefit was partially offset by a 64.1 million pound (5%) decrease in shipment volume. The decrease in shipment volume primarily reflects the impact of a planned partial outage at our Trentwood facility in conjunction with the Phase VII capacity expansion project, destocking of plate products in the commercial aerospace portion of Aero/HS Products, and the delayed ramp up of our fourth coating line at our Warrick facility.
Current report
Adjusted to reflect the retrospective change in inventory valuation methodology from LIFO to WAC. See Note 18 to the Consolidated Financial Statements included in this Form 10-K for further discussion.
Current report
Adjusted to reflect the retrospective change in inventory valuation methodology from LIFO to WAC. See Note 18 to the Consolidated Financial Statements included in this Form 10-K for further discussion.
Current report
Includes favorable Metal Price Lag of approximately $93.0 million and approximately $45.0 million for the years ended December 31, 2025 and 2024, respectively.
Current report
Adjusted to reflect the retrospective change in inventory valuation methodology from LIFO to WAC. See Note 18 to the Consolidated Financial Statements included in this Form 10-K for further discussion.
Current report
We are subject to environmental laws and regulations and may incur fines, penalties, or claims related to compliance. Based on our evaluation, we have recorded accruals primarily for solid waste disposal and soil and groundwater remediation. These accruals represent our best estimate of costs expected considering current laws, available information, and likely remediation actions.
Current report
Estimating environmental costs involves uncertainty, and actual results may differ. When a range of possible losses exists and no amount within the range is more likely, we record the minimum amount in accordance with ASC 450, Contingencies. Changes in facts, remediation plans, regulatory approvals, or technology could result in costs exceeding current accruals.
Current report
We believe our estimates are reasonable; however, actual costs could be materially higher or lower. It is reasonably possible that undiscounted costs may exceed current accruals by up to approximately $14.1 million over the remediation period. See Note 10 for additional details.
Current report
Changes in assumptions or plan provisions can materially affect obligations and expense. For example, a lower discount rate increases the present value of obligations, while a higher expected return reduces future expense. We also make variable annual contributions to the Salaried VEBA based on cash flow; the VEBA’s funding status does not affect our contribution amount. We have no control over any aspect of the Salaried VEBA plan and rely on information provided by the VEBA administrator for plan details.
Removed paragraphs (11)
Previous report
Adjusted EBITDA of $216.5 million; Adjusted EBITDA Margin 14.9%;
Previous report
Capital investment of $180.8 million, primarily driven by the fourth coating line investment at Warrick;
Previous report
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.
Previous report
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.
Previous report
The income tax provision for 2023 was $9.1 million, resulting in an effective tax rate of 16.2%. 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.
Previous report
We are subject to a number of environmental laws and regulations, to potential fines or penalties assessed for alleged breaches of such laws and regulations and to potential claims and litigation based upon such laws and regulations. Based on our evaluation of environmental matters, we have established environmental accruals, primarily related to solid waste disposal and soil and groundwater remediation matters. These environmental accruals represent our estimate of costs reasonably expected to be incurred in the ordinary course of business based on presently enacted laws and regulations, currently available facts, existing technology and our assessment of the likely remediation action to be taken.
Previous report
Making estimates of possible incremental environmental remediation costs is subject to inherent uncertainties. 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 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. As additional facts are developed and definitive remediation plans and necessary regulatory approvals for implementation of remediation are established or alternative technologies are developed, changes in these and other factors may result in actual costs exceeding the current environmental accruals.
Previous report
Although we believe that the judgments and estimates discussed herein are reasonable, actual results could differ and we may be exposed to losses or gains that could be materially different than those reflected in our accruals. 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. 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.
Previous report
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. Additionally, our obligation to the Salaried VEBA is to pay an annual variable contribution amount based on the level of our cash flow. The funding status of the Salaried VEBA has no impact on our annual variable contribution amount. We have no control over any aspect of the Salaried VEBA plan. We rely on information provided to us by the Salaried VEBA administrator with respect to specific plan provisions such as annual benefits expected to be paid. See Note 5 of Notes to Consolidated Financial Statements included in this Report for additional information on our benefit plans.
Previous report
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.
Previous report
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 and OPEB obligations to increase, yielding a reduced net expense of these obligations in future years. 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. An increase in annual benefits expected to be paid would increase the estimated present value of the obligations and conversely, a decrease in annual benefits expected to be paid would decrease the estimated present value of the obligations.
Reworded paragraphs (32)
Previous wording
This information contains certain non-GAAP financial measures. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with US GAAP in the statements of income (loss), balance sheets, or statements of cash flows of the company. We have provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying tables. We have also provided a discussion of the reasons we believe that presentation of the non-GAAP financial measures provides useful information to investors, as well as any additional ways in which we use the non-GAAP financial measures. The non-GAAP financial measures used in the following discussions are Conversion Revenue (defined as Net Sales less the Hedged Cost of Alloyed Metal, see below in “Metal Pricing Policies” discussion), Adjusted EBITDA and ratios related thereto. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors.
Current wording
This information contains certain non-GAAP financial measures. A non-GAAP financial measure is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with US GAAP in the statements of income, balance sheets, or statements of cash flows of the company. We have provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying tables. We have also provided a discussion of the reasons we believe that presentation of the non-GAAP financial measures provides useful information to investors, as well as any additional ways in which we use the non-GAAP financial measures. The non-GAAP financial measures used in the following discussions are Conversion Revenue (defined as Net Sales less the Hedged Cost of Alloyed Metal, see below in “Metal Pricing Policies” discussion), Adjusted EBITDA and ratios related thereto. These measures are presented because management uses this information to monitor and evaluate financial results and trends and believes this information to also be useful for investors.
Previous wording
In the discussion of operating results below, we refer to certain items as “non-run-rate items.” For purposes of such discussion, non-run-rate items are items that, while they may recur from period-to-period: (i) are particularly material to results; (ii) affect costs primarily as a result of external market factors; and (iii) may not recur in future periods if the same level of underlying performance were to occur. Non-run-rate items are part of our business and operating environment but are worthy of being highlighted for the benefit of readers of our financial statements. Our intent is to allow users of the financial statements to consider our results both in light of and separately from such items. 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.
Current wording
In the discussion of operating results below, we refer to certain items as “non-run-rate items.” For purposes of such discussion, non-run-rate items are items that, while they may recur from period-to-period: (i) are particularly material to results; (ii) affect costs primarily as a result of external market factors; and (iii) may not recur in future periods if the same level of underlying performance were to occur. Non-run-rate items are part of our business and operating environment but are worthy of being highlighted for the benefit of readers of our financial statements. Our intent is to allow users of the financial statements to consider our results both in light of and separately from such items. For a reconciliation of Conversion Revenue to Net sales and Adjusted EBITDA to Net income, see below in “Results of Operations - Selected Operational and Financial Information.”
Previous wording
Our pricing policies and hedging program are intended to significantly reduce or eliminate the impact on our profitability of fluctuations in the underlying price of primary and scrap, or recycled, aluminum, our main raw material, and certain alloys so that our earnings are predominantly associated with the conversion of aluminum to semi‑fabricated mill products. To allow users of our financial statements to consider the impact of aluminum and alloy cost on our Net sales, we disclose Net sales as well as Conversion Revenue, which is Net sales less the Hedged Cost of Alloyed Metal. As used in this discussion, “Hedged Cost of Alloyed Metal” is the cost of aluminum at the average MWTP plus the cost of alloying elements and any realized gains and/or losses on settled hedges related to the metal sold in the referenced period. The average MWTP of aluminum reflects the primary aluminum supply/demand dynamics in North America. For a reconciliation of Conversion Revenue to Net sales, see below in “Results of Operations - Selected Operational and Financial Information.”
Current wording
In order to allow users of our financial statements to consider the impact of aluminum and alloy cost on our Net sales, we disclose Net sales as well as Conversion Revenue, which is Net sales less the Hedged Cost of Alloyed Metal. As used in this discussion, “Hedged Cost of Alloyed Metal” is the cost of aluminum at the average MWTP plus the cost of alloying elements and any realized gains and/or losses on settled hedges related to the metal sold in the referenced period. The average MWTP of aluminum reflects the primary aluminum supply/demand dynamics in North America. For a reconciliation of Conversion Revenue to Net sales, see below in “Results of Operations - Selected Operational and Financial Information.”
Previous wording
Net income of $46.8 million and Net income per diluted share of $2.87;
Current wording
Net income of $112.5 million and Net income per diluted share of $6.77;
Previous wording
Net sales of $3.02 billion; Conversion Revenue of $1.46 billion;
Current wording
Net sales of $3.37 billion; Conversion Revenue of $1.45 billion;
Previous wording
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
Current wording
As of December 31, 2025, we had $547.2 million of combined cash and cash equivalents and net borrowing availability under our Revolving Credit Facility; and
Previous wording
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.
Current wording
We paid a total of approximately $51.3 million, or $3.08 per common share, in cash dividends during 2025.
Previous wording
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. The decrease reflected the following (in millions of dollars):
Current wording
COGS. COGS for 2025 totaled $2,930.6 million, or 87% of Net sales, compared to $2,666.6 million, or 88% of Net sales, in 2024. The increase reflected the following (in millions of dollars):
Previous wording
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. 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. 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.
Current wording
Of the $352.0 million increase in Hedged Cost of Alloyed Metal, $437.7 million was due to an increase in underlying metal prices, partially offset by an $85.7 million decrease attributed to lower shipment volume (see above in our “Net Sales” discussion for further details). The $89.7 million decrease in manufacturing costs was primarily due to favorable metal consumption cost and lower shipment volume, partially offset primarily by lower manufacturing efficiencies associated with a planned partial outage at Trentwood for the Phase VII capacity expansion project and the commissioning and start-up of the fourth coating line at Warrick. The $7.5 million decrease in freight costs was primarily due to lower shipment volume. The $6.2 million increase in other cost of products sold was primarily driven by an increase in major maintenance costs, partially offset by a decrease in legacy environmental costs and a gain on the disposition of operating assets. See “Selected Operational and Financial Information” below for a further discussion of the comparative results of operations for 2025 and 2024.
Previous wording
Depreciation and Amortization. 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.
Current wording
Depreciation and Amortization. Depreciation and amortization for 2025 was $122.5 million compared to $116.4 million for 2024. The increase of $6.1 million was primarily attributable to the fourth coating line and Phase VII capacity growth initiatives being placed in service at Warrick and Trentwood, respectively.
Previous wording
Selling, General, Administrative, Research and Development (“SG&A and R&D”). SG&A and R&D expense totaled $120.8 million in 2024 compared to $122.7 million in 2023. The decrease reflected the following (in millions of dollars):
Current wording
Selling, General, Administrative, Research and Development (“SG&A and R&D”). SG&A and R&D expense totaled $129.2 million in 2025 compared to $120.8 million in 2024. The increase reflected the following (in millions of dollars), with employee costs being driven primarily by higher incentive costs:
Previous wording
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.
Current wording
Restructuring Costs. Restructuring costs of $1.9 million and $7.6 million for the years ended December 31, 2025 and 2024, respectively, reflect the impacts of our restructuring plans. See Note 12 of Notes to Consolidated Financial Statements included in this Form 10-K for further information regarding the restructuring plans.
Previous wording
Income Tax (Provision) Benefit. The income tax provision for 2024 was $16.7 million, resulting in an effective tax rate of 26.3%. 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.
Current wording
Income Tax Provision. The income tax provision for 2025 was $37.5 million, resulting in an effective tax rate of 25.0%. The income tax provision for 2024 was $22.3 million, resulting in an effective tax rate of 25.4%. There was no material difference between the effective tax rate and the projected blended statutory tax rate for either 2025 or 2024.
Previous wording
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.
Current wording
Non-run-rate environmental expenses are related to legacy contingencies from activities at operating facilities prior to July 6, 2006. See Note 10 to the Consolidated Financial Statements included in this Form 10-K for additional information relating to environmental expenses.
Previous wording
Adjusted EBITDA for 2024 was $6.9 million higher than Adjusted EBITDA for 2023. 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. This was partially offset by: (i) higher personnel costs and (ii) an increase in energy costs. See above in “Consolidated Results of Operations” for further details.
Current wording
Adjusted EBITDA for 2025 was $69.2 million higher than Adjusted EBITDA for 2024. Adjusted EBITDA for the year ended December 31, 2025 was impacted by: (i) improved product pricing and mix and (ii) favorable metal consumption cost. This was partially offset by: (i) lower shipment volume; (ii) lower manufacturing efficiencies primarily due to costs associated with the Trentwood Phase VII outage and startup of the fourth coating line at Warrick; (iii) higher employee and employee-related costs, including higher incentive and benefits cost; and (iv) higher major maintenance costs. See above in “Consolidated Results of Operations” for further details.
Previous wording
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 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.
Current wording
Hedged Cost of Alloyed Metal for 2025 and 2024 included $1,946.8 million and $1,567.6 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 gains (losses) upon settlement of $27.0 million and ($0.2) million in 2025 and 2024, respectively, all of which were included within both Net sales and COGS in our Statements of Consolidated Income. See Note 8 of Notes to Consolidated Financial Statements included in this Form 10-K for the total realized gains and losses on aluminum hedges for which we hedged the metal price exposure externally.
Previous wording
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.
Current wording
We had $22.3 million of outstanding borrowings under our Revolving Credit Facility as of December 31, 2025, reflecting borrowings of $653.3 million and repayments of $631.0 million during the year ended December 31, 2025, and we had no outstanding borrowings under our Revolving Credit Facility during the year ended December 31, 2024. See “Sources of Liquidity” below for a further discussion of subsequent borrowing activity.
Previous wording
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.
Current wording
Cash provided by operating activities for the year ended December 31, 2025 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 $125.3 million primarily driven by higher metal costs, partially offset by a reduction in total inventory pounds; (ii) an increase in trade and other receivables of $81.9 million, primarily due to an increase in metal prices in addition to the timing of collections; (iii) an increase in accounts payable of $15.1 million due to an increase in metal costs in addition to the timing of payments; (iv) an increase in accrued liabilities of $13.4 million, primarily due to timing of uncleared cash disbursements; and (v) a decrease in contract assets of $10.0 million, primarily driven by timing of customer shipments.
Previous wording
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.
Current wording
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 $50.4 million, 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 $4.5 million, primarily due to an increase in metal costs in addition to the timing of collections.
Previous wording
Our Revolving Credit Facility and Senior Notes have covenants that, we believe, allow us to operate our business with limited restrictions and significant flexibility for the foreseeable future. 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.
Current wording
Our Revolving Credit Facility and outstanding Senior Notes have covenants that, we believe, allow us to operate our business with limited restrictions and significant flexibility for the foreseeable future. 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. During the fourth quarter of 2025, we entered into amendment No. 5 to our Revolving Credit Facility to, among other things, extend the maturity date to October 2030 and incorporate certain improved terms offering greater operational flexibility. See Note 9 of Notes to Consolidated Financial Statements included in this Report for further details.
Previous wording
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.
Current wording
At February 16, 2026, we had no outstanding borrowings under the Revolving Credit Facility after repaying borrowings of $62.4 million, including $40.1 million incurred subsequent to December 31, 2025. See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for a description of our Revolving Credit Facility.
Previous wording
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. 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. 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.
Current wording
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. 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, 2025 constituted approximately 32% 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.
Previous wording
Debt. As of December 31, 2024, we have outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $1.05 billion. 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”). At December 31, 2024, future interest payments associated with our outstanding notes total $241.8 million, with $47.9 million payable within 12 months. 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.
Current wording
Debt. As of December 31, 2025, we have outstanding fixed-rate notes with varying maturities for an aggregate principal amount of $1.05 billion. See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for further details with respect to the 5.875% Senior Notes maturing in 2034 (“5.875% Senior Notes”) and the 4.50% Senior Notes maturing in 2031 (“4.50% Senior Notes”). At December 31, 2025, future interest payments associated with our outstanding notes total $380.6 million, with $48.9 million payable within 12 months. We do not believe that covenants in the indentures governing the outstanding 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.
Previous wording
Revolving Credit Facility. 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. Additionally, under our Revolving Credit Facility, we issue standby letters of credit to provide financial assurance of our payment of obligations, primarily related to workers’ compensation claims. The specific timing of payments with respect to such matters is uncertain. The letters of credit generally automatically renew every 12 months and terminate when the underlying obligations no longer require assurance or upon the maturity of our Revolving Credit Facility in April 2027. See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for additional information.
Current wording
Revolving Credit Facility. We are required to pay a monthly commitment fee, calculated at a rate of either 0.20% or 0.25% per annum (depending on average revolver usage), on the unused commitments under the Revolving Credit Facility. Borrowings of $22.3 million were outstanding under our Revolving Credit Facility as of December 31, 2025. Additionally, under our Revolving Credit Facility, we issue standby letters of credit to provide financial assurance of our payment of obligations, primarily related to workers’ compensation claims. The specific timing of payments with respect to such matters is uncertain. The letters of credit generally automatically renew every 12 months and terminate when the underlying obligations no longer require assurance or upon the maturity of our Revolving Credit Facility in October 2030. See Note 9 of Notes to Consolidated Financial Statements included in this Form 10-K for additional information.
Previous wording
Multiemployer Pension Plans. 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. 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.
Current wording
Multiemployer Pension Plans. 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. 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 former covered employees.
Previous wording
We strive to strengthen our competitive position across our end markets through strategic capital investment. Significant investments over the past decade have positioned us well with increased capacity and expanded manufacturing capabilities while more recent capital projects have focused on further enhancing manufacturing cost efficiency, improving product quality, and promoting operational security, which we believe are critical to maintaining and strengthening our position in an increasingly competitive market environment. 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. 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. Total capital expenditures were $180.8 million in 2024 and $143.2 million in 2023.
Current wording
We strive to strengthen our competitive position across our end markets through strategic capital investment aimed at increasing our capacity and expanding our manufacturing capabilities. While some of our recent capital projects have focused on further enhancing manufacturing cost efficiency, improving product quality, and promoting operational security, a significant portion over the past several years related to our investment in a fourth coating line at Warrick to increase our capacity for higher margin coated aluminum material for packaging applications and the Trentwood modernization projects, 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. 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 allowed us to gain incremental manufacturing capacity to enable future sales growth. Total capital expenditures were $136.9 million in 2025 and $180.8 million in 2024.
Previous wording
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. We expect to continue to deploy capital thoughtfully so that investment decisions align with demand expectations in order to maximize the earnings potential of the business and maintain financial strength and flexibility.
Current wording
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 2026 of approximately $120.0 million to $130.0 million. We expect to continue to deploy capital thoughtfully so that investment decisions align with demand expectations in order to maximize the earnings potential of the business and maintain financial strength and flexibility.
Previous wording
We have consistently paid a quarterly cash dividend since the second quarter of 2007 to holders of our common stock, including holders of restricted stock. 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. We can give no assurance that dividends will be declared and paid in the future.
Current wording
We have consistently paid a quarterly cash dividend since the second quarter of 2007 to holders of our common stock, including holders of restricted stock. 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 outstanding Senior Notes or other indebtedness we may incur in the future. We can give no assurance that dividends will be declared and paid in the future.
Previous wording
We decide at the outset of entering into contracts with customers whether our performance obligations as specified in these contracts are satisfied over time or at a point in time. To recognize revenue over time means that we will need to synchronize revenue recognition with progress toward completion of the performance obligation. If we have determined that revenue will be recognized over time for a specific customer order, the earliest point in our production process that we will recognize revenue will be the point that the product cannot be directed to another customer. In most cases, this happens at the time we begin to mold the ingot or billet, either by flat rolling the ingot or by extruding the billet through a die. For custom alloys, we would begin recognizing revenue over time at the point the custom alloy billet is cast. Approximately 77% of our business is recognized at a point in time with the remaining 23% recognized over time.
Current wording
We decide at the outset of entering into contracts with customers whether our performance obligations as specified in these contracts are satisfied over time or at a point in time. To recognize revenue over time means that we will need to synchronize revenue recognition with progress toward completion of the performance obligation. If we have determined that revenue will be recognized over time for a specific customer order, the earliest point in our production process that we will recognize revenue will be the point that the product cannot be directed to another customer. In most cases, this happens at the time we begin to mold the ingot or billet, either by flat rolling the ingot or by extruding the billet through a die. For custom alloys, we would begin recognizing revenue over time at the point the custom alloy billet is cast. Approximately 78% of our business is recognized at a point in time with the remaining 22% recognized over time.
Previous wording
Although we believe that the judgments and estimates around recognizing revenue over time discussed herein are reasonable, actual results could differ and we may be exposed to losses or gains that could be material. 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.
Current wording
Although we believe that the judgments and estimates around recognizing revenue over time discussed herein are reasonable, actual results could differ and we may be exposed to losses or gains that could be material. For the portion of revenue recognized over time, a 5% change in our estimated average margins would have impacted Net income for the year ended December 31, 2025 by approximately $0.1 million.
Previous wording
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). The most significant assumptions used in determining the estimated year-end obligations include the assumed discount rate and the LTRR.
Current wording
Our liabilities and expenses for pension and other postretirement and postemployment benefits are determined using actuarial methods and significant assumptions, including the discount rate, expected long-term rate of return (“LTRR”) on plan assets, and workforce-related factors such as salary growth, health care cost trends, retirement age, and mortality. The discount rate and expected LTRR are the most significant assumptions.
Previous wording
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. 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.
Current wording
A 0.25% change in the weighted average discount rate would impact the combined pension and other postretirement obligations by approximately $3.4 million as of December 31, 2025 and impact pretax earnings in 2026 by approximately $0.3 million. A 0.25% change in the expected LTRR would impact pretax earnings by about $0.2 million in 2026. See Note 5 for additional information.