KAISER ALUMINUM CORP

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1. “Financial Statements” of this Report and our consolidated financial statements and related notes included in Part II, Item 8. “Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with Part I, Item 1. “Financial Statements” of this Report and our consolidated financial statements and related notes included in Part II, Item 8. “Financial Statements and Supplementary Data” of our Annual Report on Form 10-K for the year ended December 31, 2025. Unless otherwise noted, dollars in tables are presented in millions.

Previous wording

Within the global market for flat-rolled aluminum mill products, our focus is on heat treat plate and sheet for applications that require higher strength and other desired product attributes that cannot be achieved by common alloy rolled products. The primary end market applications of flat-rolled heat treat plate and sheet, which are produced at Trentwood, are Aero/HS Products (which we sell globally) and GE Products (which we predominantly sell within North America). The primary end market application of bare and coated aluminum coil, which are produced at Warrick, is Packaging (which we sell in North America). Our Packaging products require demanding attributes and can be further processed to include coating and slitting depending on customer specifications.

Current wording

Within the global market for flat-rolled aluminum mill products, our focus is on two primary product categories: (i) heat treat plate, sheet and coil products and (ii) packaging coil products. Heat treat plate, sheet and coil products, which are produced at Trentwood, serve the global Aero/HS and primarily North America GE end markets and are designed for applications requiring higher strength and other specialized attributes that cannot be achieved by common alloy rolled products. Packaging coil products, which are produced at Warrick and sold primarily in North America are for demanding food and beverage can package applications. Our focus is primarily on coated packaging applications, which includes a range of colors and widths, depending on customer specifications, in addition to bare coil products.

Previous wording

We have long-standing relationships with our customers, which consist primarily of blue-chip companies, including leading aerospace and automotive manufacturers, tier one aerospace and automotive suppliers, beverage and food packaging manufacturers, and metal service centers. Approximately 70% of our shipments is sold direct to manufacturers or tier one suppliers and approximately 30% is sold to metal service centers. In our served markets, we seek to be the supplier of choice by pursuing “Best in Class” customer satisfaction driven by quality, availability, service and delivery performance. We believe we differentiate our product portfolio through our broad product offering and our Kaiser Select® products, which are engineered and manufactured to deliver enhanced product characteristics with improved consistency, so as to result in better performance, lower waste and, in many cases, lower production cost for our customers.

Current wording

We have long-standing relationships with our customers, which consist primarily of blue-chip companies, including leading aerospace and automotive manufacturers, tier one aerospace and automotive suppliers, leading beverage and food companies, beverage and food packaging manufacturers, and metal service centers. Approximately 70% of our shipments are sold direct to manufacturers or tier one suppliers and approximately 30% are sold to metal service centers. In our served markets, we seek to be the supplier of choice by pursuing “Best in Class” customer satisfaction driven by quality, availability, service and delivery performance. We believe we differentiate our product portfolio through our broad product offering and our Kaiser Select® products, which are engineered and manufactured to deliver enhanced product characteristics with improved consistency, so as to result in better performance, lower waste and, in many cases, lower production cost for our customers.

Previous wording

Net income $62.5 million; Net income per diluted share $3.71; and

Current wording

Net income $96.8 million; Net income per diluted share $5.72; and

Previous wording

Cash dividends and dividend equivalents of $0.77 per share, or $13.6 million, paid during the quarter ended March 31, 2026.

Current wording

Cash dividends and dividend equivalents of $0.77 per share, or $12.8 million, paid during the quarter ended June 30, 2026.

Previous wording

Net Sales. The following table sets forth, for the quarters ended March 31, 2026 and March 31, 2025, shipments (in millions of pounds) and Net sales (in millions of dollars) by end market applications and the respective fluctuations.

Current wording

Net Sales. The following table sets forth, for the quarters ended June 30, 2026 and June 30, 2025, shipments (in millions of pounds) and Net sales by end market applications and the respective fluctuations.

Previous wording

The increase in Net sales reflected a $0.94 per pound (33%) increase in the average realized sales price and an 18.8 million pound (7%) increase in shipment volume.

Current wording

The increase in Net sales primarily reflects $1.26 per pound (44%) increase in the average realized sales price and 17.3 million pound (6%) increase in shipment volume.

Previous wording

COGS. COGS for the quarter ended March 31, 2026 totaled $943.2 million, or 85% of Net sales, compared to $673.4 million, or 87% of Net sales, for the quarter ended March 31, 2025. The total increase reflected the following (in millions of dollars):

Current wording

COGS. COGS for the quarter ended June 30, 2026 totaled $1,057.6 million, or 84% of Net sales, compared to $722.8 million, or 88% of Net sales, for the quarter ended June 30, 2025. The total increase reflected the following:

Previous wording

Of the $288.2 million increase in Hedged Cost of Alloyed Metal, $259.9 million was due to an increase in hedged metal prices and $28.3 million was due to an increase in shipment volume (see above in our “Net Sales” discussion for further details). The $19.7 million decrease in manufacturing costs was primarily due to favorable metal consumption and valuation impacts, partially offset by higher operating costs. The $1.6 million increase in in freight costs was due to both higher shipping rates and shipment volume. The $1.5 million decrease in other cost of products sold was primarily driven by a decrease in major maintenance costs. For a further discussion of the comparative results of operations for the quarters ended March 31, 2026 and March 31, 2025, see below in “Selected Operational and Financial Information.”

Current wording

Of the $370.7 million increase in Hedged Cost of Alloyed Metal, $343.8 million was primarily due to an increase in hedged metal prices and $26.9 million was due to an increase in shipment volume (see above in our “Net Sales” discussion for further details). The $40.4 million decrease in manufacturing costs was primarily due to favorable metal consumption and valuation impacts, partially offset by higher operating costs. The $6.8 million increase in freight costs was primarily attributable to higher fuel costs, as well as higher shipment volumes. The $6.2 million decrease in other cost of products sold was primarily driven by a decrease in major maintenance costs. For a further discussion of the comparative results of operations for the quarters ended June 30, 2026 and June 30, 2025, see below in “Selected Operational and Financial Information.”

Previous wording

Selling, General, Administrative, Research and Development (“SG&A and R&D”). SG&A and R&D expense totaled $35.4 million and $30.8 million for the quarters ended March 31, 2026 and March 31, 2025, respectively. The increase in employee costs was primarily driven by higher incentive costs (in millions of dollars):

Current wording

Selling, General, Administrative, Research and Development (“SG&A and R&D”). SG&A and R&D expense totaled $35.7 million and $32.6 million for the quarters ended June 30, 2026 and June 30, 2025, respectively. The increase in employee costs was primarily driven by higher incentive costs. The total increase in SG&A and R&D reflected the following:

Previous wording

Restructuring Costs. During the quarter ended March 31, 2025, we initiated a plan to reduce certain operating costs (the “2025 Restructuring Plan”). Restructuring costs of $1.8 million for the quarter ended March 31, 2025 represented severance and related benefits under the plan. Substantially all costs associated with the 2025 Restructuring Plan were incurred and expensed as of December 31, 2025. No restructuring costs were incurred during the quarter ended March 31, 2026.

Current wording

Restructuring Costs. During the quarter ended March 31, 2025, we initiated a plan to reduce certain operating costs (the “2025 Restructuring Plan”). In the quarter and six months ended June 30, 2025, restructuring costs of $0.1 million and $6.8 million, respectively, represented severance and related benefits under the plan. Substantially all costs associated with the 2025 Restructuring Plan were incurred and expensed as of December 31, 2025, and norestructuring costs were incurred during the quarter or six months ended June 30, 2026.

Previous wording

Interest Expense. See Note 5 of Notes to Interim Consolidated Financial Statements included in this Report for a discussion of our debt and credit facilities that were in effect during the quarters ended March 31, 2026 and March 31, 2025 and interest expense capitalized as part of construction in progress.

Current wording

Interest Expense. See Note 5 of Notes to Interim Consolidated Financial Statements included in this Report for a discussion of our debt and credit facilities that were in effect during the quarters and six months ended June 30, 2026 and June 30, 2025 and interest expense capitalized as part of construction in progress.

Previous wording

Other Expense, Net. See Note 8 of Notes to Interim Consolidated Financial Statements included in this Report for details.

Current wording

Other Income, Net. See Note 8 of Notes to Interim Consolidated Financial Statements included in this Report for details.

Previous wording

The table below provides selected operational and financial information (in millions of dollars):

Current wording

The table below provides selected operational and financial information:

Previous wording

Adjusted EBITDA includes favorable Metal Price Lag of approximately $36.0 million and approximately $21.0 million for the quarters ended March 31, 2026 and March 31, 2025, respectively.

Current wording

Adjusted EBITDA includes favorable Metal Price Lag of approximately $27.0 million and approximately $14.0 million for the quarters ended June 30, 2026 and June 30, 2025, respectively, and favorable Metal Price Lag of approximately $64.0 million and approximately $36.0 million for the six months ended June 30, 2026 and June 30, 2025, respectively.

Previous wording

Adjusted EBITDA for the quarter ended March 31, 2026 was $55.1 million higher than Adjusted EBITDA for the quarter ended March 31, 2025. Adjusted EBITDA for the quarter ended March 31, 2026 was impacted by: (i) higher sales volume; (ii) improved product pricing; and (iii) favorable metal consumption and valuation impacts. This was partially offset by: (i) higher operating costs and (ii) higher employee and employee-related costs. See above in “Consolidated Results of Operations” for further details.

Current wording

Adjusted EBITDA for the quarter ended June 30, 2026 was $98.6 million higher than Adjusted EBITDA for the quarter ended June 30, 2025. Adjusted EBITDA for the quarter ended June 30, 2026 was favorably impacted by: (i) higher sales volume; (ii) improved product pricing and mix; (iii) favorable metal consumption and valuation impacts; and (iv) lower major maintenance costs. This was partially offset by: (i) higher operating costs and (ii) higher employee and employee-related costs. See above in “Consolidated Results of Operations” for further details.

Previous wording

Hedged Cost of Alloyed Metal for the quarters ended March 31, 2026 and March 31, 2025 included $709.9 million and $418.8 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 upon settlement of $7.5 million and $4.6 million in the quarters ended March 31, 2026 and March 31, 2025, respectively, all of which were included within both Net sales and COGS in our Statements of Consolidated Income. See Note 4 of Notes to Interim Consolidated Financial Statements included in this Report for the total realized gains and losses on aluminum hedges for which we hedged the metal price exposure externally.

Current wording

The total Hedged Cost of Alloyed Metal includes cost of aluminum at the MWTP and the cost of alloying elements used in the production process. This metric is net of metal price exposure on shipments that we hedged with realized gains upon settlement of $11.4 million and $0.6 million for the quarters ended June 30, 2026 and June 30, 2025, respectively, and $18.9 million and $5.2 million for the six months ended June 30, 2026 and June 30, 2025, respectively. See Note 4 of Notes to Interim Consolidated Financial Statements included in this Report for the total realized gains and losses on aluminum hedges for which we hedged the metal price exposure externally.

Previous wording

The following table summarizes our liquidity (in millions of dollars):

Current wording

The following table summarizes our liquidity:

Previous wording

We had no outstanding borrowings under the Revolving Credit Facility as of March 31, 2026. During the quarter, we repaid $93.8 million of borrowings, consisting of the full repayment of the $22.3 million outstanding balance as of December 31, 2025 and $71.5 million of borrowings incurred during the quarter ended March 31, 2026. See below in “Sources of Liquidity” for a further discussion of subsequent borrowing activity. See Note 5 of Notes to Interim Consolidated Financial Statements included in this Report.

Current wording

We had no outstanding borrowings under the Revolving Credit Facility as of June 30, 2026. During the six months ended June 30, 2026, we repaid $420.1 million of borrowings, consisting of the full repayment of the $22.3 million outstanding balance as of December 31, 2025 and $397.8 millionof borrowings incurred during the six months ended June 30, 2026. See below in “Sources of Liquidity” for a further discussion of subsequent borrowing activity. See Note 5 of Notes to Interim Consolidated Financial Statements included in this Report.

Previous wording

The following table summarizes our cash flows from operating, investing, and financing activities (in millions of dollars):

Current wording

The following table summarizes our cash flows from operating, investing, and financing activities:

Previous wording

Cash provided by operating activities for the quarter ended March 31, 2026 reflected results of business activity described above in our “Consolidated Results of Operations” discussion, as well as the following working capital changes: (i) an increase in accounts payable of $217.6 million, primarily due to timing of payments and higher metal costs; (ii) an increase in receivables of $105.3 million, primarily due to increased metal prices; (iii) an increase in inventory of $73.8 million, primarily due to increased metal costs; (iv) a decrease in accrued liabilities of $46.2 million, primarily due to timing; and (v) an increase in contract assets of $12.5 million, primarily due to the timing of customer shipments.

Current wording

Cash provided by operating activities for the six months ended June 30, 2026 reflected results of business activity described above in our “Consolidated Results of Operations” discussion, as well as the following working capital changes: (i) an increase in accounts payable of $229.0 million, primarily due to timing of payments and higher metal costs; (ii) an increase in receivables of $151.8 million, primarily due to increased metal prices and higher shipment volume; (iii) an increase in inventory of $123.6 million, due to higher metal costs; and (iv) a decrease in accrued liabilities of $48.8 million, primarily due to timing.

Previous wording

Cash provided by operating activities for the quarter ended March 31, 2025 reflected results of business activity described above in our “Consolidated Results of Operations” discussion, as well as the following working capital changes: (i) an increase in receivables of $48.0 million, primarily due to increased metal prices; (ii) a decrease in accrued liabilities of $14.3 million, primarily due to timing; (iii) an increase in accounts payable of $20.3 million, primarily due to the timing of payments and higher metal costs; (iv) a decrease in inventory of $29.5 million, primarily due to our continued focus on inventory management; and (v) a decrease in contract assets of $5.5 million, primarily due to the timing of customer shipments.

Current wording

Cash provided by operating activities for the six months ended June 30, 2025 reflected results of business activity described above in our “Consolidated Results of Operations” discussion, as well as the following working capital changes: (i) an increase in receivables of $75.9 million, primarily due to increased metal prices; (ii) a decrease in accrued liabilities of $26.0 million, primarily due to timing of uncleared cash disbursements; (iii) an increase in accounts payable of $45.7 million, primarily due to the timing of payments and higher metal cost; and (iv) a decrease in inventory of $6.3 million, primarily due to a reduction in total inventory pounds in connection with our continued focus on inventory management, offset by increased metal prices.

Previous wording

See Statements of Consolidated Cash Flows included in this Report for further details on our cash flows from operating, investing, and financing activities for the quarters ended March 31, 2026 and 2025.

Current wording

See Statements of Consolidated Cash Flows included in this Report for further details on our cash flows from operating, investing, and financing activities for the six months ended June 30, 2026 and 2025.

Previous 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 the 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 believe the covenants contained in the Revolving Credit Facility will not 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. We also do not 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.

Previous wording

At April 20, 2026, we had no outstanding borrowings under the Revolving Credit Facility. See Note 9 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for a description of our Revolving Credit Facility.

Current wording

At July 20, 2026, we had no outstanding borro wings under the Revolving Credit Facility. See Note 9 of Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for a description of our Revolving Credit Facility.

Previous 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 heat-treated 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.

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 process flow for heat-treated plate to achieve Kaiser Select® quality enhancements for Aero/HS Products and GE Products, and further improve our competitive cost position on all products produced at Trentwood. These improvements have allowed us to gain incremental manufacturing capacity and product performance to enable future sales growth.