Thank you. Hello, everyone, and welcome to Kaiser Aluminum's Third Quarter 2026 Earnings Conference Call.

If you have not seen a copy of our earnings release, please visit the Investor Relations page on our website at kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call.

Joining me on the call today are Chairman, President, and Chief Executive Officer Keith Harvey; Executive Vice President and Chief Financial Officer Neal West; and incoming President and Chief Executive Officer Fred Stephan. Before we begin, I'd like to refer you to the first four slides of our presentation and remind you that the statements made by management and the information contained in this presentation that constitute forward-looking statements are based on management's current expectations.

For a summary of specific risk factors that could cause results to differ materially from the forward-looking statements, please refer to the company's earnings release and reports filed with the Securities and Exchange Commission, including the company's annual report on Form 10-K for the full year ended December 31st, 2025. The company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the company's expectations.

In addition, we have included non-GAAP financial information in our discussion. Reconciliations to the most comparable GAAP financial measures are included in the earnings release and in the appendix of the presentation.

Reconciliations of certain forward-looking non-GAAP financial measures to comparable GAAP financial 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. Any reference to EBITDA in our discussion today means adjusted EBITDA, which excludes non-run-rate items for which we have provided reconciliations in the appendix.

Further, slide 5 contains definitions of terms and measures that will be commonly used throughout today's presentation. At the conclusion of the company's presentation, we will open the call for questions.

I would now like to turn the call over to Keith Harvey. Keith?

Good morning, everyone, and thank you for joining us. I'll begin on slide 7.

Third quarter results were largely in line with our expectations and reflected continued strength across the majority of our portfolio. More importantly, customer activity remained robust throughout the quarter and in many cases strengthened further from the levels we discussed in July.

Demand across aerospace and high strength, packaging, and general engineering continues to exceed the expectations we established at the beginning of the year. Lead times remain extended, bookings continue to move further into 2027, and the investments we have made across the portfolio continue to position Kaiser as a preferred supplier across most of our end markets.

As we continue to work through our planning process for 2027 and beyond, we are more optimistic about the opportunities across our markets today than at any point in recent years. Over the last several quarters, we've spoken about the transition from recovery to growth.

As we look at the business today, we believe many of our markets have moved beyond that discussion. Demand remains robust, customer investment activity is high, and increasingly, our conversations with customers are centered on how we partner together to support their future growth plans, secure long-term supply, and meet expanding capacity requirements.

In many cases, the discussion is no longer whether demand will materialize, but rather how that demand will be supported in the years ahead. These conversations continue to strengthen our confidence in the long-term outlook for Kaiser.

As customers evaluate growth opportunities and look for partners capable of supporting them, Kaiser is uniquely positioned given the breadth and quality of our product offering, our technical capabilities, our commitment to customer service, and our reputation as a trusted supplier across the markets we serve. Neal will now provide additional details on our third quarter performance, after which I will return and provide a brief update on our markets and what we're seeing as we look ahead.

Neal?

Thank you, Keith. Good morning, everyone.

I'll now turn to slide 9 for an overview of our shipments and conversion revenue. Conversion revenue for the third quarter 2026 was $439 million, an increase of approximately $88 million or 25% compared to the prior year period.

On a per-pound basis, conversion revenue increased 12% year-over-year to $1.46 a pound, driven by broad-based demand strength across our end markets, improved pricing realization, and a continued mix shift towards higher value-added packaging and general engineering products. Now let's look at each of our end markets in detail.

Aerospace and high strength conversion revenue totaled $131 million, up approximately $31 million or 31%, primarily due to a 42% increase in shipments over last year. The year-over-year improvement in our third quarter performance was primarily driven by recovery in plate production following our planned third quarter 2025 outage at our Trentwood facility for the Phase 7 capacity expansion.

Based on conversations with our commercial aerospace customers, we now believe plate destocking is over as our commercial aerospace customers move towards their higher production targets. In addition, demand across business jet, defense, and space applications remains strong.

Packaging conversion revenue totaled $180 million, up approximately $42 million or 31% year-over-year, driven by the continued mix shift toward higher value coated products, which generate significantly higher conversion revenue per pound. Strong underlying demand across our customer base drove third quarter shipments up approximately 6% compared to the prior year, reflecting continued success in qualifying additional coatings and our focus on delivering the quality, consistency, and service that customers have long associated with Kaiser.

General engineering conversion revenue for the third quarter was $99 million, up approximately $17 million or 21% year-over-year on a 12% increase in shipments. The year-over-year increases primarily reflect the recovery of 6X plate production at our Trentwood facility following the third quarter 2025 Phase 7 planned outage to add additional capacity, in addition to strong demand for our purpose-built plate for the semiconductor industry, ongoing restocking of multiyear low inventory levels at our service center partners, and favorable market conditions supported by the Kaiser's longstanding reputation for quality, technical expertise, and reliable customer service, which continue to underpin our volume growth and improve pricing.

Finally, automotive conversion revenue of $29 million was down slightly year-over-year on a 15% decrease in shipments, reflecting a planned outage at our Bellwood facility as we invest to improve operational efficiencies and expand capacity support strong demand for aluminum driveshafts. Importantly, these investments are backed by contractual customer commitments and positions the business for continued growth.

While the broader automotive market conditions remain mixed with elevated consumer financing costs and ongoing tariff uncertainties, demand for light trucks and SUVs, which represents the core applications served by our products, continues to remain resilient. Additional details in conversion revenue and shipments by end market applications can be found in the appendix of this presentation.

Now moving to slide 10. Reported operating income for the third quarter was $55 million, an increase of approximately $6 million from $49 million in the prior year quarter.

After adjusting for operating non-run-rate charges of approximately $1 million, our third quarter 2026 adjusted operating income was $56 million, an increase of approximately $7 million from $49 million in the prior year quarter. Reported net income for the third quarter was approximately $31 million or $1.84 net income per diluted share, compared to net income of $40 million or $2.38 net income per diluted share in the prior year quarter.

As a reminder, our third quarter of 2025 reported net income included a non-run-rate gain of approximately $11 million related to legacy non-operating land sale and insurance settlements. After adjusting for net operating and non-operating non-run-rate pretax expense of approximately $1 million, adjusted net income for the third quarter 2026 was $32 million or $1.89 adjusted net income per diluted share.

This compares to adjusted net income of $31 million or $1.86 adjusted net income per diluted share in the prior year period. Adjusted net income increased modestly compared to the prior period as the approximately $2 million in additional interest expense associated with the refinancing of our senior notes completed in the fourth quarter of 2025 was largely offset by our improved operating performance.

Our effective tax rate for the third quarter was 23% compared to 17% in the third quarter of '25. For the full year 2026, we continue to expect our effective tax rate before discrete items to be in the mid-20% range.

Additionally, we now anticipate full year 2026 cash tax payments for the federal, state, and foreign taxes will be in the $14 million to $16 million range. Now turning to slide 11.

Adjusted EBITDA for the third quarter was $84 million, up $3 million from the prior year period. As we discussed on our second quarter 2026 earnings call, following several consecutive quarters of unprecedented metal price tailwinds and highly favorable scrap spreads, we expected the metal impact to be neutral to a slight headwind to our third quarter results.

More specifically, we recognized an unfavorable $1 million impact from metal price lag in the third quarter of 2026, compared to a favorable $28 million impact in the third quarter 2025. While adjusted EBITDA was up approximately $3 million year-over-year, that comparison includes approximately $29 million of an unfavorable swing in metal price lag.

Operationally, the business delivered approximately $32 million of year-over-year improvement, driven by higher conversion revenue from increased shipments and improved pricing and mix. Further offsetting the contributions from the year-over-year increase in the conversion revenues were higher metal consumption costs due to lower scrap utilization and lower operating efficiencies, predominantly driven by the planned partial outage at our Bellwood facility and continuing Roll Coat 4 startup-related costs.

These incremental costs, which we have anticipated when we provided our outlook for the remainder of the year, represented approximately 640 basis points of margin impact in the third quarter of 2026. On a sequential basis, as compared to the second quarter of 2026, our third quarter adjusted EBITDA was down $82 million or approximately 50%.

While conversion revenue was relatively flat as noted above, the significant metal tailwinds we benefited from in the prior quarter shifted to a slight headwind in the third quarter, as we had anticipated. As we indicated in our second quarter call, in the third quarter of 2026, metal consumption costs were approximately in line with the current month metal pass-through costs.

Breaking down the $82 million more granular, approximately $54 million was due to combination of tightening scrap spreads, lower scrap utilization, and the increase in the weighted average cost of purchased metal units, and $28 million was due to metal price lag. Consistent with our longstanding operating philosophy, Kaiser remains metal neutral.

We do not attempt to speculate on metal prices, and our objective is to create value through conversion, operational performance, and customer service rather than through movements in aluminum markets. It is also important to recognize that when we discuss metal, we're really talking about two different components.

The first is metal price lag, the change in market prices, and other accounting-related impacts, which are largely outside of our control and, as we discussed, represented a headwind during the quarter. The second is our ability to optimize metal procurement practices, improve scrap utilization, and drive operational performance across our facilities.

These areas, such as the Bellwood upgrade, Roll Coat trial, furnace rebuilds, etc., are largely within our control, and we believe our third quarter performance was not the same levels we experienced in prior periods this year. With that said, we do not expect the favorable metal-related dynamics experienced during the first half of the year to continue at the same level for the remainder of 2026, as the weighted average cost of our metal inventory has become more closely aligned with the current monthly metal pass-through costs.

We are also assuming a more normalized to tighter scrap spread environment and lower scrap utilization for the rest of the year. Finally, the fourth quarter 2026 results are expected to reflect costs associated with the Bellwood expansion project and seasonally higher major maintenance activity.

Even with these challenges, our focus remains on improving operational efficiencies across our portfolio and realizing the benefits of our recent strategic investments, while positioning the business for continued margin expansion over the long term. Now turning to slide 12 for discussion of our balance sheet and cash flow.

We continue to generate strong free cash flow, which we define as operating cash flow less capital expenditures, of $72 million during the third quarter, and already surpassed our prior outlook for the full year. With metal costs lower and more stable, we now expect full year 2026 free cash flow to exceed $200 million.

Our capital expenditures totaled $28 million for the third quarter of 2026, and for the full year, we now expect capital expenditures to be approximately $130 million. Our strong cash position resulted in total cash of approximately $117 million and approximately $570 million in borrowing availability on our revolving credit facility, strengthening our liquidity to $687 million as of September 30th, 2026.

As a reminder, our senior notes interest costs are fixed at $54 million annually, and we have no debt maturing until 2030. Given our strong last-12-month EBITDA performance and cash position at the end of the third quarter 2026, our net debt leverage ratio improved to 2.0 times from 3.4 times at year end, in line with our targeted range of 2 to 2.5 times.

In recognition of our improving operational performance and debt leverage, on October 2nd, 2026, Moody's upgraded our credit rating to Ba3 stable. On October 13th, we announced that our board of directors declared a quarterly dividend of 77 cents per common share, underscoring our commitment to returning capital to stockholders while continuing to invest in profitable growth opportunities.

Before I turn the call over to Keith to discuss our outlook, I would like to extend my sincere thank you to Keith and his wonderful wife and family for his 46 years of service to Kaiser Aluminum. Keith has been through the worst and best times at Kaiser Aluminum, and through it all, he's always kept his values and focus for the benefit of all the stakeholders of Kaiser.

This will be the last time that Keith and I host an earnings call together, and I will truly miss his leadership and mentorship. Congratulations and all the best as you and your family move into your next chapter of life.

Now, I'll turn the call back over to Keith. Keith?

Thank you, Neal. I very much appreciate the sentiment and the kind words.

Turning to the end market summary on slide 14. I'd like to share a few observations that have emerged as we've gotten deeper into our planning process.

I believe these observations provide a better perspective on what we see developing across our markets over the next several years, and why our confidence in Kaiser's long-term opportunities continues to grow. Let me start with aerospace and high strength.

Our outlook for 2026 remains largely unchanged. However, what has changed is our confidence in the opportunities developing beyond 2026.

We believe we have now come to an end of large commercial aerospace destocking, and conversations with customers have increasingly shifted toward rate readiness, future requirements, and long-term supply. Visibility into 2027 continues to improve, and demand signals remain strong, not only within aerospace and high strength, but across our broader flat rolled products portfolio.

As a leading supplier in this space, we are already engaged in discussions regarding how best to support future growth opportunities. While work remains in our planning process, these discussions continue to reinforce our confidence in the long-term outlook for the aerospace and high strength portfolio of businesses.

Now moving to packaging. The underlying packaging market remains robust, and longer-term customer demand continues to be strong.

As we enter the fourth quarter, we have received requests to manage shipments as customers modify their year-end inventory levels and metal prices move lower from recent historic highs. As a result, we are modestly revising our shipment outlook to growth of 5% to 10% from our prior expectation of 10% to 15%.

Despite this revision to shipments, we are maintaining the conversion revenue outlook with expectations to the higher end of the range. We continue making progress on our coated packaging strategy at our Warwick rolling mill by running more qualification trials, running at higher rates, and resetting long-term contracts.

We will be using the balance of 2026 to optimize our operational performance and improve our customer satisfaction metrics to position ourselves for long-term success. We believe these efforts will ensure we are well positioned for continued success entering into 2027.

Now to general engineering. General engineering market conditions remain very strong.

While our plate businesses continue to benefit from many of the same positive trends discussed in aerospace, our extrusion markets remain exceptionally tight with rising demand after several years of significant destocking at the service centers. As such, much of the material being produced is consumed almost immediately, and lead times continue to extend.

These conditions continue to support favorable pricing dynamics, as reflected by a record conversion revenue per pound of $1.47 during the quarter. We've also taken measured steps to free up additional production and better align our output with customer requirements as we move into 2027.

We expect demand to remain strong through year end and continue to see increasingly favorable developments as we move into 2027. Turning to automotive.

We are revising our shipment outlook to a decline of 5% to 10% compared with our prior expectation of a decline of 0% to 5%. There is no change to our conversion revenue outlook.

This revision is not driven by worsening customer demand, but rather it is the result of a major outage in this product line during the third quarter as we bring this equipment back online during the fourth quarter. While these investments have created short-term disruption, they position the business to better support customer growth and improve performance in 2027 and beyond.

Turning to slide 15 for an update on our full year 2026 outlook. While our confidence in the opportunities beyond 2026 continues to strengthen, our outlook for 2026 remains unchanged.

That said, we currently expect results to trend toward the lower end of our previously communicated EBITDA outlook of approximately 45% year-over-year growth. This outlook reflects the planned operational outages in the second half, execution performance, customer year-end inventory alignments, and metal-related headwinds.

Taken together, these factors impact our near-term outlook, but do not alter our longer-term view of the underlying opportunities developing across our markets. Before I wrap up, I'd like to take this opportunity to introduce Fred Stephan.

Following a thoughtful and very thorough succession planning process, and after 46 years of a rewarding career at Kaiser Aluminum, I have elected to enjoy the next chapter of my life and move one step closer to retirement. I will transition to Executive Chair of the company and act as an advisor to Fred as he assumes the role of CEO on November 1st.

With that, please welcome Fred Stephan. Fred, would you care to provide a few comments?

Thank you, Keith, and good morning, everyone. I will keep my comments brief.

Today is Keith's call, and he's provided a thorough review of the business. The themes Keith highlighted are among the reasons I am so energized to step into the CEO role next month.

Over the past several months, I've deepened my understanding of the business and gotten to know the leadership team. That experience has strengthened my conviction in the company's strategic vision and the opportunities ahead.

Keith has played a pivotal role in strengthening Kaiser's differentiated business model, sharpening its strategic focus, and building a world-class team to execute the strategy. I am grateful for his 46 years of service to Kaiser, including the past 6 years as Chief Executive Officer.

Under his leadership, Kaiser has continued to grow its reputation as an organization admired by the investment community and its peers, a great place to work, and a trusted strategic partner to its customers and suppliers. I also appreciate the time Keith has already invested in getting to know me and my family, and in helping me to fully understand the values on which Kaiser Aluminum is built.

I look forward to continuing to partner with him, the board, and the entire Kaiser Aluminum team as we take the company to the next level of performance. Between now and year end, I plan to visit all of our sites to first meet with employees and customers and key suppliers, to listen to their feedback, their ideas, and concerns, and to further deepen my understanding of the company and the industry.

I am confident that our strategy is sound, our markets are strong, and our execution plans are in place. We have a solid platform to build upon, and I am excited about the future.

I look forward to engaging with many of you in the investment community over the coming months and to speaking with you again on our fourth quarter earnings call. With that, I'll turn it back to Keith and Neal for Q&A.

Thank you.

Thank you, Fred. In closing, I'd like to take a moment to thank all the men and women in Kaiser Aluminum that I have had the honor to lead and work beside over the last 46 years.

I am so very proud of this organization. The future ahead of us is more exciting than at any time in my history with the company, and my confidence in its success never higher.

With Fred and the operating team at the helm, I'm absolutely certain our better days are ahead of us. I want to thank the board and the men and women of this great company for providing me so much support in my career, and my undying thanks to my wife and family for always providing the love and support, which has been the bedrock for any success I've had.

Thank you all. With that, I will now open the call to any questions you may have.

Operator?

Hi, good morning.

Morning, Sam.

Hey,

you maintained the '26 EBITDA guide, but noted you're shaded toward the lower end, and the release called out execution performance as a potential issue. That's not something we're used to hearing from Kaiser, and it'd be helpful if you could drill down more on what exactly that comment was intended to mean.

Certainly. Thanks.

Let's reflect back on the end of July. The comments we made is that we had foregone a number of investments and some outages that we had planned to take in the second half of the year.

That's actually what took place. Neal did a really good job of explaining those things we didn't control, which were the metal prices and subsequent scrap spread decreases and so forth.

The things that we could control, we tried to be a little more transparent about that, and those were things associated with the Bellwood expansion project that are underway. They're related to the Roll Coat 4 at Warwick.

We talked about continuing qualification periods, which are inefficient in themselves. These qualifications sometimes take months with our various customers.

We used some of the time in the third quarter to prepare and continue those. Those went very well.

The line is operating with quality and speeds that we had expected, and so we're very positive about that ongoing. Then we had some outages with furnaces.

When you have outages in furnaces and casting house investments, it means you have to forego utilization of some of that scrap, you have to use some more expensive other-type metal units. We anticipated those for the quarter.

We don't think that's an extenuation into ongoing quarterly results, but it's going to be part of taking care of your equipment and preparing for the growth that we're experiencing right now. As we move forward on that, I'm glad we're addressing this in the second half because the outlook beginning for 2027 is far stronger than we anticipated, and so finishing up the year with these things in front of us and still delivering record results, in my opinion, was a very successful year for the company.

Okay. Then on the headwind from the scrap utilization, just trying to better understand the 640 basis point year-over-year headwind.

With aero and high strength shipments increasing about 40% year-over-year and GE shipments up about 10%, was this increase also a function of stricter specs or melt requirements for those products, or was it really just the tighter scrap spreads and/or the more expensive inputs you talked about?

It's purely just the inputs that I just discussed. Nothing has changed other than the growth.

What I'd really like to accentuate here, Neal called out, we had in 2025, third quarter was a pretty significant raise for us, somewhere in the 80s from an EBITDA perspective, and with that was about a $20 to $30 million metal lag. We actually had a headwind this quarter, and we more than replicated those results.

What I would point to is the continued underlying strengthening of the business as we move forward. I've stated, Sam, all along that, look, we were recipients of these metal lags, this sharp increase of metal, but we've also called out all along that we felt these would end.

We believe they've ended. One can never predict the future from that regard.

What I'm confident about is we are replacing those short-term type metal accelerators that we've had with strong conversion numbers, and the businesses are performing very well, and we see demand strengthening in 2027. We're just figuring out how do we manage the growth over and above our expectations, and you'll be hearing about that in the very near future.

All right. Thanks, guys, and congrats on the retirement, Keith.

Thank you, Sam. Appreciate it much.

Hi. Good morning.

Thanks for taking the questions. Keith, it's been a pleasure working with you over the last four years or so, and, Fred, congrats on the appointment.

Like to first ask—

Thank you, Bill. Same here.

You're welcome. I guess on aerospace, it sounds like destocking is clearly in the rearview mirror.

Trying to get a sense for how we should think about the ramp from here, and maybe how that may vary between your large commercial aerospace customer versus business jet, defense, and space, anyway to delineate that sort of growth profile as you move ahead would be helpful.

Sure, Bill. Thanks.

Listen, destocking is over from Kaiser's perspective. You may note we were one of the first ones to call this out, the scenario over the last couple of years.

I'm glad we're up first declaring an end to it, at least on our side. All of our customers in this space, in this category, are coming to us with probably more growth than what was expected when we've had this discussions along the way over the last 24 months.

What we're busy doing right now is we're trying to understand how we service all these businesses. As you can expect, the large commercial jet is moving forward very strongly, 12-year backlog, and people are getting the supply chain issues in order, and we're seeing ramp rates, again, we get a year-plus outlook.

We're seeing those rates increase, and we're currently resetting those contracts in large commercial. As we look to the other areas of our portfolio, however, what we're seeing is continued growth here, and actually growth accelerating probably much faster than what we're seeing on the large commercial jet.

I think defense spending, we've talked about how some of our programs have quadrupled. We've extended the JSF F-35 program for multiyears out at better conditions.

We have ample opportunities there. Business jet continues to have a multiyear backlog.

We're a significant player there, not just with plate, but with our sheet and coil products and our hard alloy extruded products. Then finally, space has got an accelerator to it that is as hard for me to comprehend almost as how fast AI is moving.

We're working very closely with all the participants and how we supply their future needs, and those are ramping exponentially. As you might imagine, we're going back and looking at the total portfolio, and this even extends, Bill, over into the GE side of our business, because what we're seeing with the data center ramp rates and that forth, semiconductor is rising much quicker than expected or in previous past, and they're talking about 5- and 10-years of demand out there that, well, quite frankly, we're going to have to reset what our outlook is and how we service all these markets.

It reinforces my comment, I really have never seen it this strong. The biggest challenge for our company is how well we can ramp and continue to service these customers at the accelerator rates.

It's all moving north.

Thanks for that, and we'll address that sort of capital allocation decision with Fred here in the coming quarters and how to meet that demand. My second question is on packaging.

You're lowering the shipment growth to 5% 5% to 10%, also maintaining conversion revenue. I guess, how should we think about shipments in 2027 given this, I guess, sort of, I don't know, customers trying to manage their inventories?

I guess, why should investors not assume we're on the cusp of another cyclical downturn like we saw in 2023 and 2024? Then just, I guess, squaring the circle here, maintaining conversion revenue, is that a statement of better mix and better pricing even with shipments not coming in as high as expected?

I'll answer the last part of your question first. Yes.

We're very pleased with the contracts resetting. We're very pleased with the mix and our move to coated products.

We continue to be the market leader there, and we continue to invest to maintain that position. What you've also started to see and what you'll see at the first of the year, we're resetting contracts along the way.

We're continuing to see strong demand backed up by multiyear programs that we're putting in place with all of our customers. How I would look at the current quarter and the second half of the year about people resetting their inventories, if you take a look at it, and our extrusion customers are very similar, Bill, we have formulas out there that pass through metal cost.

With continued rising costs, people were buying, trying to get ahead of any increases. During the quarter, metal fell pretty rapidly, which led to the reason it was a million dollar headwind for us.

They're experiencing the same thing, and they would take every pound we could provide them. Let me make that very clear.

The reason to move out, there's two reasons: metal prices are falling, which gives them incentive to move out shipments unless they don't need them, and this is the slow time of the year. Remember, summertime is second quarter and third quarter generally the strongest for this market.

Then if we can't get the metal to them at this point for the qualifications and things, they're just moving those orders to the right. We're seeing no slowdown in long-term demand.

Matter of fact, in some of these meetings we've been having on business planning outlook for the next several years, we see continued growth. I'm sure that Fred will be talking to you about continued performance on Roll Coat 4 and perhaps some other investments that we're considering for this business.

Nothing has changed on the demand picture for any of our programs, quite frankly, including automotive, which has been our smallest portion.

Totally appreciate the comments, and again, pleasure working with you over the last couple of years, and congrats again.

Thank you, Bill. Appreciate it.

Good morning, everyone, and just want to say best wishes on the next chapter to Keith, look forward to working with Fred. I wanted to circle back, if I could, please, on the change in guidance to the lower end of the EBITDA range.

I completely understand the change in metal lag and that's out of your control, but in reference to the reason for the lower guidance, you also talk about outages and scrap. Those were already anticipated.

I'm just trying to understand, is it really the bulk of the change about the metal lag, or can you help put some more color to that, please?

Sure. Good morning, Timna.

Neal explained the items that we really didn't have control in, that was the metal lag, the change in metal, the impact on the scrap spreads. Then we talked about utilization there.

Utilization was impacted, that was under our control. We took some outages in our cast houses that we had foregone from the first half of the year because business was so strong, and we talked about that at the end of the last quarter that we anticipated.

We're also investing heavily in the Bellwood facility for automotive. We had a major outage there that had some impacts with it about coming back online that were a little outside of our control.

We didn't handle that extremely well. Then continued Roll Coat 4.

We did anticipate these kinds of costs as we gave the outlook at the end of the second quarter. We probably blew everyone's expectations away in the first half and nobody believed us for the second half, but from our perspective, we're coming in about what we thought we would be doing.

With respect to the balance of the year, so that outlook also reflects what's happened during the quarter and the outlook for the fourth quarter with some continued outages, some move out by some of the packaging customers into the first part of 2027. What we've tried to incorporate there with a lot more clarity after three months more of operating, that gives us to where we felt more confident and transparent about hitting to the lower end of the target.

The good news is we anticipate the targets, the min and the max, and we expect to come in closer to the min on the targets, but still a record-setting year for the company.

Okay. No, that's helpful.

Thank you for that additional color. Then a second question on the scrap side.

We're seeing more demand from Oswego restarting, Bay Minette, ADI ramping up. Are you seeing the impact either on the scrap procurement side or in selling into your markets from these new production facilities?

Not at all. We have our supply chain intact.

Again, the lesser use of scrap wasn't one due to availability. It was more due to the outages that we were taking, we had to use other forms of metal, higher cost forms of metal, to secure the shipments that we had in the quarter.

We anticipated those. I think we're pretty comfortable and healthy on where our scrap positions are, and we're going to continue to incur metal profits going forward, even though scrap spreads have tightened over the historic highs they had in the previous two or three quarters.

I feel pretty good about what our supply position is and our position on scrap.

In the markets? Because you have more specialty production, and as you ramp up, I can't imagine they're in the thick of the aerospace side, but are you seeing them in the markets, in some of your other markets?

One of the probably biggest concerns we had at this outset of the Iranian war, if you will, there is some high purity that comes from EGA over there. We actually got our shipments from that location, and we have multiple other sources around the world.

That was my biggest concern from a scrap perspective. Now we still use some specialized scrap, like in some of our can business for lids and tabs and things like that, but we've actually been able to secure what we need.

We had good, strong secondary positions in place, and those continued to perform very well. We're not seeing any of the competition in our markets.

SDI, Novelis, their startup, they're focused a lot on the automotive side of the business. Oswego, good for them.

I'm glad they were able to recover. They did a very good job from what I can tell, and they're back up online, and they have a strong position with OEMs that we supply other parts to.

We're happy to have them back up and running. Again, that had very little impact on our business to start with, and I don't expect it to be an issue going forward, and I don't have any concern about our ability to secure scrap in any of the markets that we're in, scrap or prime metal that we need to meet these growing sales and shipments to all of our constituents.

Okay. Thank you, and all the best again.

Thanks, Timna. Really appreciate it.

Good morning, guys. Congrats, Keith, and best of luck, Fred.

I guess just starting off, looking beyond 4Q, how much of the second half 2026 kind of headwinds you guys are experiencing from outages, scrap utilization, startup costs, inventory alignment, how much of that should really reverse out by the first quarter versus remain in the ongoing cost base?

I expect the majority of that will be secured in the second half. I don't see any of these really moving forward into 2027 whatsoever.

Now, I will clarify this. The Bellwood investment is going to continue in 2027, but the big part of the numbers that were impacted us in the second half were around the major outage that was incurred in third quarter.

We don't have any planned outages in 2027 there. It's just installing a duplicate line to take care of our driveshaft and customers mainly, and so there shouldn't be any disruption from that line.

We got a lot of the heavy lifting behind us in the second and third quarter of this year. From that perspective, and I think Roll Coat 4 is going to continue to elevate and operate well.

We're really pleased with what we've seen there. I think our big challenge going into 2027, and Fred and team are already addressing it, is how do we continue to supply the demand that we see coming at us?

We've got some really great ideas, some great plans in place. Fred will articulate that more in February, but that's really the focus.

How do we manage the growth that's coming at us? Just to capitalize on your comment, I don't consider any of these cost efficiencies to extend.

Now, we'll always have outages for furnaces, rebuilds in place. Hopefully, we typically distribute those more evenly throughout the year, and that's the plan going forward.

It's just that the growth that occurred in the first half was much quicker than what we anticipated. That's why we've moved everything to the second half.

That's good color. Appreciate that.

I guess then on the strong conversion revenue per pound, as Bellwood production normalizes, aero volumes recover, and coated packaging continues to ramp, I guess, can you guys maintain current conversion revenue per pound while adding that volume back, or should we expect some mix dilution there?

I think it's got a strong chance it'll be increasing above where it is in '27 and beyond. I will preface this, Alex, by saying I haven't seen demand this strong in any of my 46 years.

It's on us to how we manage this, and continued investments and make sure that our customers are taken care of. It's somewhat unprecedented to have all of these markets moving in this direction at the same time, and I don't think it's a one-year pony.

I think this is a multiyear going out driven by a number of factors that probably haven't existed before. We're looking at how we ramp that up.

That obviously creates a really good environment for managing price, managing mix, managing the volumes out of our facility, and we just have to make sure we remain efficient in doing so. That's a big focus of the company.

That sounds good. Appreciate the insights, and congrats again, Keith.

Thank you, Alex. Really appreciate it.

Thanks, everyone. Appreciate your time today and all your time over the years.

Fred and team will be back in February of 2027 to provide you an update on our continued progress and really the exciting outlook for Kaiser Aluminum in the upcoming year. Goodbye.