Kaiser Aluminum
Annual Report 2015

Plain-text annual report

KAISER ALUMINUM CORP FORM 10-K (Annual Report) Filed 02/22/16 for the Period Ending 12/31/15 Address Telephone CIK Symbol SIC Code 27422 PORTOLA PARKWAY, SUITE 200 FOOTHILL RANCH, CA 92610-2831 949-614-1740 0000811596 KALU 3350 - Rolling, Drawing, And Extruding Of Nonferrous Industry Metal Mining Sector Fiscal Year Basic Materials 12/31 http://www.edgar-online.com © Copyright 2016, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.  UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2015 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________________________ to_________________________________________Commission File Number: 0-52105KAISER ALUMINUM CORPORATION(Exact name of registrant as specified in its charter)Delaware 94-3030279(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 27422 Portola Parkway, Suite 200 Foothill Ranch, California 92610-2831(Address of principal executive offices) (Zip Code) (949) 614-1740 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act:Title of each class Name of each exchange on which registeredCommon stock, par value $0.01 per share Nasdaq Stock Market LLC Securities registered pursuant to section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No oIndicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of Act. Yes o No þIndicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þNo oIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted andposted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submitand post such files). Yes þ No oIndicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, tothe best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment of this Form 10-K. þIndicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer, " " accelerated filer " and " smaller reporting company " in Rule 12b-2 of the Exchange ActLarge accelerated filer þAccelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company)Smaller reporting company oIndicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þThe aggregate market value of the registrant's common stock held by non-affiliates of the registrant as of the last business day of the registrant's most recently completed secondfiscal quarter ( June 30, 2015 ) was approximately $1.4 billion .As of February 12, 2016 , there were 17,995,363 shares of the Common Stock of the registrant outstanding.Documents Incorporated by Reference. Certain portions of the registrant’s definitive proxy statement related to the registrant’s 2016 annual meeting ofstockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.TABLE OF CONTENTSPART I Item 1.Business1Item 1A.Risk Factors8Item 1B.Unresolved Staff Comments18Item 2.Properties19Item 3.Legal Proceedings19Item 4.Mine Safety Disclosures19 PART II Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities20Item 6.Selected Financial Data22Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations23Item 7A.Quantitative and Qualitative Disclosures About Market Risk48Item 8.Financial Statements and Supplementary Data50Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure108Item 9A.Controls and Procedures108Item 9B.Other Information108 PART III Item 10.Directors, Executive Officers and Corporate Governance109Item 11.Executive Compensation109Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters109Item 13.Certain Relationships and Related Transactions and Director Independence109Item 14.Principal Accountant Fees and Services109 PART IV Item 15.Exhibits and Financial Statement Schedules110 SIGNATURES111 INDEX OF EXHIBITS112 PART IForward-Looking StatementsThis Annual Report on Form 10-K (this "Report") contains statements which constitute "forward-looking statements" within the meaning of the PrivateSecurities Litigation Reform Act of 1995. These statements appear throughout this Report, including Item 1. "Business – Business Operations," Item 1A. "RiskFactors," and Item 7. "Management’s Discussion and Analysis of Financial Condition and Results of Operations." These forward-looking statements can beidentified by the use of forward-looking terminology such as "believes," "expects," "may," "estimates," "will," "should," "plans," or "anticipates," or the negativeof the foregoing or other variations or comparable terminology, or by discussions of strategy.Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties andthat actual results may vary from those in the forward-looking statements as a result of various factors. These factors include: the effectiveness of management’sstrategies and decisions; general economic and business conditions, including cyclicality and other conditions in the aerospace, automotive and other end marketswe serve; developments in technology; new or modified statutory or regulatory requirements; changing prices and market conditions; and other factors discussed inItem 1A. "Risk Factors" and elsewhere in this Report. No assurance can be given that these are all of the factors that could cause actual results to vary materiallyfrom the forward-looking statements.Readers are urged to consider these factors carefully in evaluating any forward-looking statements and are cautioned not to place undue reliance on theseforward-looking statements. The forward-looking statements included herein are made only as of the date of this Report and we undertake no obligation to updateany information contained in this Report or to publicly release any revisions to any forward-looking statements that may be made to reflect events or circumstancesthat occur, or that we become aware of, after the date of this Report except as required by law.Item 1. BusinessAvailability of InformationWe file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and other information with theSecurities and Exchange Commission ("SEC"). You may inspect and, for a fee, copy any document that we file with the SEC at the SEC's Public Reference Roomat 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. You may alsoobtain the documents that we file electronically from the SEC's website at http://www.sec.gov . Our filings with the SEC, as well as news releases, announcementsof upcoming earnings calls and events in which our management participates or hosts with members of the investment community and an archive of webcasts ofsuch earnings calls and investor events and related investor presentations, are also available on our website at http://www.kaiseraluminum.com . Information onour website is not incorporated into this Report.Business OverviewKaiser Aluminum Corporation’s primary line of business is the production of semi-fabricated specialty aluminum mill products. Fabricated aluminum millproducts are broadly defined to include flat-rolled, extruded, drawn, forged and cast aluminum products used in a variety of end market applications. We focus ontechnically challenging applications for flat-rolled and extruded/drawn products that allow us to utilize our core metallurgical and process technology capabilitiesto produce highly engineered products with differentiated characteristics that present opportunities for us to receive premium pricing. The key end marketapplications we have strategically chosen to serve are aerospace/high strength ("Aero/HS products"), automotive ("Automotive Extrusions") and generalengineering ("GE products"). We additionally produce a small amount of products for other end market applications ("Other products"). In 2015 , we produced andshipped from our 12 North American facilities approximately 615.4 million pounds of semi-fabricated specialty aluminum mill products, which comprised all ofour consolidated net sales of approximately $1.4 billion .A fundamental part of our business model is to mitigate the impact of aluminum price volatility. We purchase primary and scrap aluminum, our main rawmaterial, at prices that fluctuate on a monthly basis, and we use pricing policies that generally allow us to pass metal cost fluctuations through to our customers.For some of our higher value added products sold on a spot basis, however, the pass through of metal price movements can sometimes lag by as much as severalmonths. Additionally, we often enter into firm-price customer sales agreements that specify the underlying metal price plus a conversion price. Spot sales withlagged metal price pass through and firm-price sales agreements create metal price exposure for us which we mitigate through a hedging program. Our pricingpolicies and hedging program are designed to largely mitigate the impact on our profitability of fluctuations in underlying metal price.1At December 31, 2015, we operated 12 focused production facilities, 11 in the United States and one in Canada, with approximately 2,790 employees.We have long-standing relationships with our customers, which consist primarily of blue-chip companies including leading aerospace companies, automotivesuppliers and 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 further seek to differentiate ourselves by offering a broad product portfolio including our KaiserSelect ®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.We have a culture of continuous improvement that is facilitated by the Kaiser Production System ("KPS"), an integrated application of tools such as LeanManufacturing, Six Sigma and Total Productive Manufacturing. We believe KPS enables us to continuously reduce our own manufacturing costs and eliminatewaste throughout the value chain. We strive to tightly integrate the management of the operations within our Fabricated Products segment across multipleproduction facilities, product lines and target markets in order to maximize the efficiency of product flow to our customers.In recent years, we have pursued significant capital spending initiatives to expand manufacturing capabilities, increase capacity, improve efficiency andenhance product quality. The most significant of these initiatives was a series of investments that more than doubled our capacity and expanded our manufacturingcapability to produce thick heat treat plate at our Spokane, Washington ("Trentwood") facility in order to capitalize on significant demand growth for aerospaceapplications. We recently commenced a multi-year, $150.0 million capital investment project at our Trentwood facility focused on equipment upgrades throughoutthe process flow to reduce conversion costs and increase efficiency, further improving our competitive cost position on all products produced at Trentwood. Asignificant portion of the investment will be focused on modernizing the legacy equipment and process flow for thin gauge plate to achieve KaiserSelect ® qualityenhancements for both aerospace and general engineering applications. The investments will also result in further expansion of Trentwood’s manufacturingcapacity. Additionally, we have invested to support sizable growth in demand for automotive applications by upgrading existing extrusion presses at each of ourautomotive focused extrusion facilities to enhance capabilities and by adding new extrusion press capacity within our automotive manufacturing platform.Kaiser Aluminum was founded by Henry J. Kaiser in 1946 with the lease and eventual purchase of three aluminum facilities from the United StatesGovernment. Over the ensuing decades, Kaiser Aluminum grew to become a fully-integrated aluminum company involved in virtually all aspects of the aluminumindustry, including the mining and refining of bauxite into alumina, the production of primary aluminum from alumina, and the manufacture of fabricated andsemi-fabricated aluminum products. From 2000 to 2010, as a result of a strategic reassessment of our competitive positions in the upstream and downstreamportions of the aluminum industry, we divested or closed our non-strategic bauxite mining, alumina refining, and primary aluminum operations and focused ondownstream operations where we had a competitive advantage. Following this restructuring of our business operations, we no longer participate in commoditysegments within the aluminum industry and focus solely on the production of semi-fabricated specialty aluminum products for major suppliers and manufacturersfor applications in our chosen Aero/HS, Automotive Extrusions, GE and other end-markets.Business OperationsConsistent with the manner in which our chief operating decision maker reviews and evaluates our business, our Fabricated Products business is treated as asingle operating segment. In addition to the Fabricated Products segment, we have one business unit, All Other, which provides general and administrative supportfor our operations. For purposes of segment reporting under United States generally accepted accounting principles ("GAAP"), we treat the Fabricated Productssegment as its own reportable segment. All Other is not considered a reportable segment.Fabricated Products SegmentOverviewOur Fabricated Products segment focuses on producing rolled, extruded and drawn aluminum products used principally for aerospace and defense, automotive,consumer durables, electronics, electrical and machinery and equipment applications. During 2015 , 2014 and 2013 , our North American manufacturing facilitiesproduced and shipped approximately 615.4 million , 588.8 million and 563.7 million pounds of fabricated aluminum products, respectively, which accounted forall of our total net sales.For information regarding net sales, operating (loss) income and total assets of the Fabricated Products segment, see Note 13 of Notes to ConsolidatedFinancial Statements included in this Report; such information is incorporated herein by reference.2The table below provides shipment and sales information (in millions of dollars except for shipment information and percentages) for our end marketapplications: Year EndedDecember 31, 2015 2014 2013Shipments (mm lbs): Aero/HS products 243.5 40% 236.9 40% 224.3 40%Automotive Extrusions 93.5 15% 78.5 13% 64.1 11%GE products 231.4 38% 223.4 38% 222.5 40%Other products 47.0 7% 50.0 9% 52.8 9% 615.4 100% 588.8 100% 563.7 100%Sales: Aero/HS products $695.5 50% $686.3 51% $677.0 52%Automotive Extrusions 199.2 14% 173.5 13% 129.5 10%GE products 426.1 31% 419.5 31% 411.0 32%Other products 71.1 5% 76.8 5% 80.0 6% $1,391.9 100% $1,356.1 100% $1,297.5 100%Aero/HS Products. Our Aero/HS products include high quality heat treat plate and sheet, as well as cold finish rod and bar, seamless drawn tube, hard alloyextrusions and billet that are manufactured to demanding specifications for the global aerospace and defense industries. These industries use our products inapplications that demand such properties as high tensile strength, superior fatigue resistance and exceptional durability even in harsh environments. For instance,aerospace manufacturers use high-strength 2000- and 7000-series alloys for a variety of structures that must perform consistently under extreme variations intemperature and altitude. Our Aero/HS products are used for a wide variety of end uses. We make aluminum plate, sheet, extruded shapes and tube for aerospaceapplications and we manufacture a variety of specialized rod and bar products that are incorporated in diverse applications. The aerospace and defense industries'consumption of fabricated aluminum products is driven by factors that include overall levels of airframe build rates, the mix of aircraft models being built anddefense spending, as well as the usage of competing materials such as titanium and composites. Demand has increased for thick plate with growth in monolithicconstruction of commercial and other aircraft. In monolithic construction, aluminum plate is heavily machined to form the desired part from a single piece of metal(as opposed to creating parts using aluminum sheet, extrusions or forgings that are affixed to one another using rivets, bolts or welds).Automotive Extrusions. Automotive Extrusions consist of extruded aluminum products for many North American automotive applications. Examples of thevariety of extruded products that we supply to the automotive industry include extruded products for the body-in-white structural components, bumper systems,anti-lock braking systems and drawn tube for drive shafts. For some Automotive Extrusions, we perform limited fabrication, including sawing and cutting tolength. Demand for Automotive Extrusions is determined based upon automotive build rates in North America and increasing aluminum content. As automotivemanufacturers continue to reduce the weight of vehicles to achieve greater fuel efficiency and comply with stringent federal regulations, applications historicallymade from steel are being converted to aluminum, which has the required mechanical properties but at a much lighter weight.GE Products. Our GE products consist primarily of 6000-series alloy plate, sheet, rod, bar, tube, wire and standard extrusions. The 6000-series alloy is anextrudable medium-strength alloy that is heat treatable and extremely versatile. Our GE products have a wide range of uses and applications, many of whichinvolve further fabrication for numerous transportation and other industrial end market applications where machining of plate, rod and bar is intensive. Forexample, our GE products are used in the enhancement and production of military vehicles, ordnances, semiconductor manufacturing cells, numerous electronicdevices, after-market motor sport parts and tooling plates. Our rod and bar products are manufactured into rivets, nails, screws, bolts and parts for machinery andequipment. Demand growth and cyclicality for GE products tend to mirror broad economic patterns and industrial activity in North America. Demand is alsoimpacted by the destocking and restocking of inventory throughout the supply chain.Other Products. Other products consist of extruded, drawn and cast billet aluminum products for a variety of North American industrial end uses. Demand forOther products tends to mirror broad economic patterns and industrial activity in North America.3Types of Manufacturing Processes EmployedWe utilize the following manufacturing processes to produce our fabricated products:Flat Rolling. The traditional manufacturing process for aluminum flat-rolled products uses ingot, a large rectangular slab of aluminum, as the starter material.The ingot is processed through a series of rolling operations, both hot and cold. Finishing steps may include heat treatment, annealing, stretching, leveling orslitting to achieve the desired metallurgical, dimensional and/or performance characteristics. Aluminum flat-rolled products are manufactured using a variety ofalloys, a range of tempers (hardness), gauges (thickness) and widths and various finishes. Flat-rolled aluminum semi-finished products are generally either sheet(under 0.25 inches in thickness) or plate (0.25 inches or greater in thickness). The vast majority of the North American market for aluminum flat-rolled productsuses "common alloy" plate and sheet for construction, beverage/food can and other applications. We have focused our efforts on "heat treat" products, which aredistinguished from common alloy products by higher strength and other desired product attributes. The primary end market applications of flat-rolled heat treatplate and sheet are for Aero/HS and GE products.Extrusion. The extrusion process typically starts with a cast billet, which is an aluminum cylinder of varying length and diameter. The first step in the process isto heat the billet to an elevated temperature whereby the metal is malleable. The billet is put into an extrusion press and pushed, or extruded, through a die thatgives the material the desired two-dimensional cross section. The material is either quenched as it leaves the press, or subjected to a post-extrusion heat treatmentcycle, to control the material’s physical properties. The extrusion is then straightened typically by stretching and cutting to length before being hardened in agingovens. The largest end market applications for extruded products are in the construction, general engineering and custom products. Building and constructionproducts represent the single largest end market application for extrusions by a significant amount. However, we have strategically chosen to focus on Aero/HSproducts, Automotive Extrusions, GE products and Other products, utilizing our well-developed technical expertise, strong production capability and high productquality to meet the requirements of these more demanding applications.Drawing. Drawing is a fabrication operation in which extruded tubes and rods are pulled through a die, or drawn. The primary purpose of drawing is to reducethe diameter and wall thickness while improving physical properties and dimensions. Material may go through multiple drawing steps to achieve the finaldimensional specifications. We use drawing in connection with certain of our Aero/HS and Automotive Extrusion products.A description of the manufacturing processes and category of products at each of our production facilities at December 31, 2015 is shown below:Location Types of Products Manufacturing ProcessChandler, Arizona (Extrusion) Aero/HS ExtrusionChandler, Arizona (Tube) Aero/HS Extrusion/DrawingFlorence, Alabama Aero/HS, GE, Other DrawingJackson, Tennessee Aero/HS, Auto, GE Extrusion/DrawingKalamazoo, Michigan Auto, GE ExtrusionLondon, Ontario (Canada) Auto ExtrusionLos Angeles, California GE, Other ExtrusionNewark, Ohio Aero/HS, GE Extrusion/Rod RollingRichland, Washington GE ExtrusionRichmond, Virginia (Bellwood) Auto, GE Extrusion/DrawingSherman, Texas Auto, GE, Other ExtrusionSpokane, Washington (Trentwood) Aero/HS, GE Flat RollingAs reflected by the table above, many of our facilities employ the same basic manufacturing process and produce the same types of products. We make asignificant effort to tightly integrate the management of our Fabricated Products segment across multiple manufacturing locations, product lines and end marketapplications to maximize the efficiency of product flow to customers. We centralize purchasing of our primary aluminum requirements in order to better manageprice, credit and other benefits. Our sales force and the management thereof are also significantly integrated as many customers purchase a number of differentproducts that are produced at different plant facilities. We believe that integration of our operations allows us to capture efficiencies while allowing our facilities toremain highly focused on their specific processes and end market applications.4Raw MaterialsTo make our fabricated products, we purchase primary aluminum and recycled and secondary scrap aluminum from third party suppliers in varyingpercentages depending on various market factors, including price and availability. The price for primary aluminum purchased for the Fabricated Products segmentis typically based on the Average Midwest Transaction Price ("Midwest Price"), which reflects the primary aluminum supply/demand dynamics in North America.Recycled and scrap aluminum is typically purchased at a discount to ingot prices but can require additional processing. The average Midwest Price, comprised ofthe average London Metal Exchange ("LME") plus average Midwest premium, per pound of primary aluminum for 2015 , 2014 and 2013 , were $0.75 + $0.13 ,$0.85 + $0.20 and $0.84 + $0.11 , respectively. At February 12, 2016 , the LME plus Midwest premium transaction price per pound was $0.68 + $0.09 .In addition to producing fabricated aluminum products for sale to third parties, certain of our production facilities provide one another with billet, log, or otherintermediate material for further production in lieu of purchasing such items from third-party suppliers. For example, our Newark, Ohio facility supplies billet andlog to the Jackson, Tennessee facility and redraw rod to the Florence, Alabama facility.Pricing, Metal Price Risk Management and HedgingAs noted above, we purchase primary and secondary aluminum, our principal raw material, on a floating price basis typically based on the Midwest Price. Ourpricing of fabricated aluminum products is generally intended to lock in a conversion margin (representing the value added from the fabrication process(es)) and topass metal price fluctuation through to our customers. We manage the risk of fluctuations in the price of aluminum through our pricing policies and use of financialderivatives. Our three principal pricing mechanisms are as follows:•Spot price. Some of our customers pay a product price that incorporates the spot price of primary aluminum (LME plus Midwest premium) in effect at thetime of shipment to a customer. Spot prices for these products change regularly based on competitive dynamics. Fluctuation in the underlying aluminumprice is a significant factor influencing changes in competitive spot prices. This pricing mechanism typically allows us to pass metal price risk through tothe customers. For some of our higher value added products sold on a spot basis, the pass through of metal price movements can sometimes lag by asmuch as several months, with a favorable impact to us when metal prices decline and an adverse impact to us when metal prices increase. We, from timeto time, enter into hedging transactions with third parties to minimize the impact to us of metal price swings for these higher value added products.•Index-based price. Some of our customers pay a product price that incorporates an index-based price for primary aluminum, such as Platt’s Midwest pricefor primary aluminum. This pricing mechanism also typically allows us to pass metal price risk through to the customer.•Firm price. Some of our customers who commit to volumes and timing of delivery pay a firm price, creating metal price risk that we must hedge. We areable to limit exposure to metal price risks created by firm-price customer sales contracts by using third-party hedging instruments. Total fabricatedproduct shipments for which we were subject to price risk were, in millions of pounds, 204.6 , 138.3 and 119.8 during 2015 , 2014 and 2013 ,respectively.All hedging activities are managed centrally to minimize transaction costs, monitor consolidated net exposures and allow for increased responsiveness tochanges in market factors. Hedging activities are conducted in compliance with a policy approved by our Board of Directors and administered by our hedgingcommittee (members of which include our principal executive officer, principal financial officer and principal accounting officer).Sales, Marketing and DistributionIndustry sales margins for fabricated products fluctuate in response to competitive and market dynamics. Sales are made directly to customers by our salespersonnel located in the United States, Canada, Europe and China and by independent sales agents in other regions of Asia, Latin America and the Middle East.Our sales and marketing efforts are focused on the markets for Aero/HS products, Automotive Extrusions, GE products and Other products.Aero/HS Products. Approximately 49% of our Aero/HS product shipments are sold to metal service centers with the remainder sold directly to end marketcustomers. Sales are made primarily under contracts (with terms spanning from one year to ten years) as well as on an order-by-order basis. We serve this marketwith a North American sales force focused on Aero/HS and GE products and direct sales representatives in Western Europe and China.Automotive Extrusions. Our Automotive Extrusions are sold primarily to first tier automotive suppliers under multi-year sales agreements. Almost all sales ofAutomotive Extrusions occur through direct channels using a North American direct sales force that works closely with our technical sales support organization.5GE Products. A majority of our GE products are sold to large metal service centers in North America on an order-by-order basis, with orders primarilyconsisting of standard catalog type items shipped with a relatively short lead-time. We service this market with a North American sales force focused on GE andAero/HS products.Other Products. Other products are primarily sold directly to industrial end users on an order-by-order basis using a North American direct sales force.CustomersIn 2015 , our Fabricated Products segment had approximately 800 customers. Our two largest customers, Reliance Steel & Aluminum Co. ("Reliance") andThe Boeing Company ("Boeing"), accounted for approximately 25% and 10% , respectively, of our net sales in 2015 . While the loss of Reliance or Boeing ascustomers could have a material adverse effect on us, we believe that our long-standing relationship with each is good and that the risk of losing either as acustomer is remote. See Note 13 of Notes to Consolidated Financial Statements included in this Report for information about our significant concentrations, whichinformation is incorporated herein by reference.Research and DevelopmentWe operate three research and development centers. Our Rolling and Heat Treat Center and our Metallurgical Analysis Center are both located at ourTrentwood facility. The Rolling and Heat Treat Center has complete hot rolling, cold rolling and heat treat capabilities to simulate, in small lots, processing of flat-rolled products for process and product development on an experimental scale. The Metallurgical Analysis Center consists of a full metallographic laboratory and ascanning electron microscope to support research development programs as well as respond to plant technical service requests. The third center, our Solidificationand Casting Center, is located in Newark, Ohio and has a developmental casting unit capable of casting billets and ingots for extrusion and rolling experiments.The casting unit is also capable of casting full size billets and ingots for processing on the production extrusion presses and rolling mills. See Note 1 of Notes toConsolidated Financial Statements included in this Report for information about our research and development costs, which information is incorporated herein byreference.A significant amount of our research and development is devoted to product and process development within our production operations, largely focused oncontrolling the manufacturing process to improve product quality, ensure consistency and enhance one or more specific product attributes. This has resulted in thecreation and delivery of our highly differentiated KaiserSelect ® products, which are engineered and manufactured to deliver enhanced product characteristics withimproved consistency, which results in such benefits as better performance, lower waste and, in many cases, lower production cost for our customers.All OtherAll Other provides general and administrative support to our operations. The expenses incurred in this business unit are not allocated to our other operations.All Other is not considered a reportable segment.Segment and Geographical Area Financial InformationThe information set forth in Note 13 of Notes to Consolidated Financial Statements included in this Report regarding our GAAP reporting segment and thegeographical areas in which we operate is incorporated herein by reference.CompetitionThe fabricated aluminum industry is highly competitive. We focus our fabricating operations on technically challenging applications for flat-rolled heat treatplate and sheet and extruded/drawn products that allow us to apply our core metallurgical and process technology capabilities to produce highly engineeredproducts with differentiated characteristics. We further differentiate ourselves from our competitors by pursuing "Best in Class" customer satisfaction, which isdriven by quality, availability, service and delivery performance and having a broad product offering.Our primary competitors in the global market for Aero/HS products are Alcoa Inc., Constellium N.V. and Aleris Corporation. Our primary competitors in themarket for GE products are Alcoa, Inc., Sapa AS, and in markets for certain GE products, we compete with imports and regional participants. We compete withAlcoa, Inc. and Sapa AS, along with other regional participants, in the market for Automotive Extrusions. Some of our competitors are substantially larger, havegreater financial resources and may have other strategic advantages.For heat treat plate and sheet products, particularly for aerospace applications, new competition is limited by technological expertise that only a few companieshave developed through significant investment in research and development and decades of6operating experience. Further, use of plate and sheet in safety critical applications makes quality and product consistency critical factors. Suppliers must pass arigorous qualification process to sell to airframe manufacturers. Additionally, significant investment in infrastructure and specialized equipment is required tosupply heat treat plate and sheet.EmployeesAt December 31, 2015 , we employed approximately 2,790 people, of which approximately 2,730 were employed in our Fabricated Products segment andapproximately 60 were employed in our corporate group, most of whom are located in our office in Foothill Ranch, California.The table below shows each manufacturing location, the primary union affiliation, if any, and the expiration date for the current union contracts as ofDecember 31, 2015 . As indicated below, union affiliations are with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial andService Workers International Union, AFL-CIO, CLC ("USW"), International Association of Machinists ("IAM") and International Brotherhood of Teamsters("Teamsters"). See Note 1 of Notes to Consolidated Financial Statements in this Report for additional information about concentration of labor subject to collectivebargaining agreements. ContractLocation Union Expiration DateChandler, Arizona (Extrusion) Non-union —Chandler, Arizona (Tube) USW Apr 2018Florence, Alabama USW Mar 2017Jackson, Tennessee Non-union —Kalamazoo, Michigan USW Feb 2016 1London, Ontario (Canada) USW Canada Feb 2018Los Angeles, California Teamsters Apr 2018Newark, Ohio USW Sep 2020Richland, Washington Non-union —Richmond, Virginia (Bellwood) USW/IAM Nov 2017/Nov 2017Sherman, Texas IAM Dec 2016Spokane, Washington (Trentwood) 2 USW Sep 2020_________________________1. We are currently in the process of negotiating the labor agreement covering employees at our Kalamazoo, Michigan facility. We consider our relationship withour employees to be good.2. There are two labor agreements with the USW covering employees at the Trentwood facility. One agreement covers the majority of the employees at thefacility as well as our Newark, Ohio facility. The other agreement covers employees working at a leased site near the Trentwood rolling mill complex. InJanuary 2015, both agreements were extended through September 30, 2020.Environmental MattersWe are subject to a number of environmental laws and regulations, to potential fines or penalties assessed for alleged breaches of the environmental laws andregulations and to potential claims and litigation based upon such laws and regulations.We have established procedures for regularly evaluating environmental loss contingencies. Our environmental accruals represent our undiscounted estimate ofcosts reasonably expected to be incurred based on presently enacted laws and regulations, existing requirements, currently available facts, existing technology andour assessment of the likely remediation actions to be taken. See Note 9 of Notes to Consolidated Financial Statements included in this Report.Legal StructureOur current corporate structure is summarized as follows:•We directly own 100% of the issued and outstanding shares of capital stock of Kaiser Aluminum Investments Company, a Delaware corporation("KAIC"), which functions as an intermediate holding company.7•We directly own 100% of the ownership interest in Kaiser Aluminum Beijing Trading Company, which was formed in China for the primary purpose ofengaging in market development and commercialization and distribution of our products in Asia.•KAIC owns 100% of the ownership interests of each of:•Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability company ("KAFP"), which directly holds the assets and liabilitiesassociated with our Fabricated Products segment (excluding those assets and liabilities associated with our London, Ontario and Chandler, Arizona(Extrusion) facilities and certain of the assets and liabilities associated with our Fabricated Products segment’s operations in the State ofWashington) and owns 100% of the ownership interest of each of:•Kaiser Aluminum Washington, LLC, a Delaware limited liability company, which holds certain of the assets and liabilities associated withour Fabricated Products segment’s operations in the State of Washington; and•Kaiser Aluminum Alexco, LLC, a Delaware limited liability company, which holds the assets and liabilities associated with our Chandler,Arizona (Extrusion) facility;•Kaiser Aluminum Canada Limited, an Ontario corporation, which holds the assets and liabilities associated with our London, Ontario facility;•Kaiser Aluminum Mill Products, Inc., a Delaware corporation, which engages in market development and commercialization and distribution ofour products in the United Kingdom.•Trochus Insurance Co., Ltd., a corporation formed in Bermuda, which has historically functioned as a captive insurance company;•Kaiser Aluminum France, SAS, a corporation formed in France for the primary purpose of engaging in market development and commercializationand distribution of our products in Europe; and•DCO Management, LLC, a Delaware limited liability company, which, as a successor by merger to Kaiser Aluminum & Chemical Corporation,holds our remaining non-operating assets and liabilities.Item 1A. Risk FactorsThis Item may contain statements which constitute " forward-looking statements " within the meaning of the Private Securities Litigation Reform Act of 1995.See Item 1. " Business – Forward-Looking Statements " for cautionary information with respect to such forward-looking statements. Such cautionary informationshould be read as applying to all forward-looking statements wherever they appear in this Report. Forward-looking statements are not guarantees of futureperformance and involve significant risks and uncertainties. Actual results may vary from those in forward-looking statements as a result of a number of factorsincluding those we discuss in this Item and elsewhere in this Report. In addition to the factors discussed elsewhere in this Report, the risks described below arethose that we believe are material to our company. The occurrence of any of the events discussed below could significantly and adversely affect our business,prospects, financial position, results of operations and cash flows as well as the trading price of our common stock.We have experienced and continue to experience the effects of global economic uncertainty.The global economy experiences periods of uncertainty that can have wide-ranging effects, including:•disruption in global financial markets that has at times reduced the liquidity available to us, our customers, our suppliers and the purchasers of productsthat materially affect demand for our products, including commercial airlines;•a weakened global banking and financial system that creates ongoing risk and exposure to the impact of non-performance by banks committed to providefinancing, hedging counterparties, insurers, customers and suppliers;•volatility in commodity prices that potentially could result in substantial non-cash charges as we adjust inventory values and mark our commodity hedgepositions to market and that potentially could also adversely affect our liquidity by creating cash margin requirements on our commodity hedge positionsand by reducing the value of our inventories and borrowing base under our revolving credit facility;•our inability to achieve the level of growth, integration or other benefits anticipated from our strategic investments;•fluctuations in our costs, including the cost of energy, raw materials and freight, which we may not be able to pass entirely through to our customers;8•substantial fluctuations in consumer spending that have at times reduced the demand for some applications that use our products;•destocking and restocking of inventory levels throughout the supply chain for certain of our products;•pressure to reduce defense spending, which reductions could affect demand for our products used in defense applications, as the U.S. and foreigngovernments are faced with competing national priorities;•the inability to predict with any certainty the success or failure of efforts to reduce government deficit spending or the scope, nature or effect of suchefforts; and•rapidly changing oil prices, which could impact the demand of our products, especially in aerospace/high strength and automotive applications.We are unable to predict the impact, severity and duration of these effects, any of which could have a material adverse impact on our financial position, resultsof operations and cash flows.We operate in a highly competitive industry.The fabricated products segment of the aluminum industry is highly competitive. Competition in the sale of fabricated aluminum products is based uponquality, availability, price, customer service and delivery performance. Many of our competitors are substantially larger than we are and have greater financialresources than we do and may have other strategic advantages, including more efficient technologies or lower or more stable raw material costs. Our facilities arelocated in North America. To the extent that our competitors have or develop production facilities located outside North America, they may be able to producesimilar products at a lower cost and sell those products at a lower price. Additionally, foreign price competition could increase during periods when currencyexchange rates favor foreign competition or as a result of dumping those products in North America in violation of existing trade laws. We may not be able toadequately reduce our costs or prices to compete with these products. Increased competition could cause a reduction in our shipment volumes and product pricingor increase our expenditures, any one of which could have a material adverse effect on our financial position, results of operations and cash flows.We depend on a core group of significant customers.In 2015 , our largest fabricated products customers, Reliance and Boeing, accounted for approximately 25% and 10% , respectively, of our net sales in 2015and our five largest customers in total accounted for approximately 49% of our fabricated products net sales. If our existing relationships with significantcustomers materially deteriorate or are terminated and we are not successful in replacing lost business, our financial position, results of operations and cash flowscould be materially and adversely affected. In addition, a prolonged or increasing downturn in the business or financial position of any of our significant customerscould cause any one or more of them to limit purchases to contractual minimum volumes, seek relief from contractual minimums or breach those obligations, all ofwhich could materially and adversely affect our financial position, results of operations and cash flows.Our industry is very sensitive to foreign economic, regulatory and political factors that may adversely affect our business.We import primary aluminum from, and manufacture fabricated products used in, foreign countries. Factors in the politically and economically diversecountries in which we operate or have customers or suppliers, including inflation, fluctuations in currency and interest rates, availability of financial capital,competitive factors, civil unrest and labor problems, could affect our financial position, results of operations and cash flows. Our financial position, results ofoperations and cash flows could also be adversely affected by:•acts of war or terrorism or the threat of war or terrorism;•government regulation in the countries in which we operate, service customers or purchase raw materials;•the implementation of controls on imports, exports or prices;•the adoption of new forms of taxation and duties;•new forms of emission controls and tax, commonly known as "cap and trade";•increasing medical benefit costs and the potential impact of the excise tax contemplated by the Affordable Care Act;•the imposition of currency restrictions;•the nationalization or appropriation of rights or other assets; and•trade disputes involving countries in which we operate, service customers or purchase raw materials.9The commercial aerospace industry is cyclical and downturns in the commercial aerospace industry could adversely affect our business.We derive a significant portion of our revenue from products sold to the aerospace industry, which can be highly cyclical. The aerospace industry is historicallydriven by the demand for new commercial aircraft. Demand for commercial aircraft is influenced by trends in airline passenger traffic and increasing global travel,normal replacement of older aircraft, replacement of fuel inefficient aircraft, airline industry profitability, the state of the U.S. and global economies, concernsregarding terrorism or the threat of terrorism, concerns regarding pandemics of infectious disease, safety concerns with newly introduced aircraft, and numerousother factors, any of which could result in a sharp decrease globally in new commercial aircraft deliveries and order cancellations or deferrals by the major airlines.Despite existing backlogs, any one or more of these influencing factors may lead to reduced demand for new aircraft that utilize our products, which couldadversely affect our financial position, results of operations and cash flows.Reductions in defense spending for aerospace and non-aerospace military applications could substantially reduce demand for our products.Our products are used in a wide variety of military applications, including military aircraft, armored vehicles and ordnance. The funding of U.S. governmentprograms is subject to congressional appropriations. Many of the programs in which we participate may extend several years; however, these programs arenormally funded annually. Changes in military strategy and priorities may affect current and future programs. With significant pressure to reduce defense spendingas the U.S. and foreign governments are faced with competing national priorities, reductions in defense spending could reduce the demand for our products andcould adversely affect our financial position, results of operations and cash flows.Our customers may reduce their demand for aluminum products in favor of alternative materials.Our fabricated aluminum products compete with products made from other materials, such as steel, titanium and composites, for various applications. Forinstance, the commercial aerospace industry has used and continues to evaluate the further use of alternative materials to aluminum, such as titanium andcomposites, in order to reduce the weight and increase the fuel efficiency of aircraft. Additionally, the automotive industry, while motivated to reduce vehicleweight with the use of aluminum, may revert to steel or other materials for certain applications. The willingness of customers to accept other materials in lieu ofaluminum could adversely affect the demand for our products, particularly our Aero/HS products and Automotive Extrusions, and thus adversely affect ourfinancial position, results of operations and cash flows.Downturns in the automotive and ground transportation industries could adversely affect our business.The demand for our Automotive Extrusions and many of our general engineering and other industrial products is dependent on the production of cars, lighttrucks, SUVs and heavy duty vehicles and trailers in North America. The automotive industry is highly cyclical, as new vehicle demand is dependent on consumerspending and is tied closely to the overall strength of the North American economy. Even with the automotive industry’s growing use of aluminum in light-weighting vehicles, weak demand for, or lower production of, new cars, light trucks, SUVs and heavy duty vehicles and trailers, particularly by U.S.manufacturers, could adversely affect the demand for our products and have a material adverse effect on our financial position, results of operations and cashflows.Changes in consumer demand for particular motor vehicles could adversely affect our business.Sensitivity to fuel prices and consumer preferences can influence consumer demand for motor vehicles that have a higher content of the aluminum AutomotiveExtrusions that we supply. The loss of business with respect to, or a lack of commercial success of, one or more particular vehicle models for which we are asignificant supplier could have an adverse impact on our financial position, results of operations and cash flows.We may experience difficulties in the launch or production ramp-up of new products which could adversely affect our business.To effectively compete in the aluminum supply industry, we must be able to launch new products to meet our customers' demand in a timely manner. We mayexperience difficulties, including manufacturing disruptions, delays or other complications, as we ramp up manufacturing processes for newly introduced products,which could adversely impact our ability to serve our customers, our reputation or our costs of production.10We face pressure from our customers on pricing.Cost cutting initiatives that many of our customers have adopted generally result in downward pressure on pricing. If we are unable to generate sufficientproduction cost savings in the future to offset price reductions, our financial position, results of operations and cash flows could be adversely impacted.Reductions in demand for our products may be more severe than, and may occur prior to, reductions in demand for our customers’ products.Customers purchasing our fabricated aluminum products, especially those in the cyclical aerospace industry, generally require significant lead time in theproduction of their own products. Therefore, demand for our products may increase prior to demand for our customers’ products. Conversely, demand for ourproducts may decrease as our customers anticipate a downturn in their respective businesses. As demand for our customers’ products begins to soften, ourcustomers typically meet the reduced demand for their products using their existing inventory without replenishing the inventory, which results in a reduction indemand for our products greater than the reduction in demand for their products. Further, the reduction in demand for our products can be exacerbated if inventorylevels held by our customers exceed normal levels, due to production delays of specific commercial airframe models, prior purchases by our customers of ourproducts under sales contracts at committed volumes that exceed the actual needs of our customers or for other reasons. This amplified reduction in demand for ourproducts while our customers consume their inventory to meet their business needs (destocking) may adversely affect our financial position, results of operationsand cash flows.Our business is subject to unplanned business interruptions which may adversely affect our business.The production of fabricated aluminum products and aluminum is subject to unplanned events such as explosions, fires, inclement weather, natural disasters,accidents, labor disruptions, transportation interruptions and supply interruptions. Operational interruptions at one or more of our production facilities, particularlyinterruptions at our Trentwood facility where our production of plate and sheet is concentrated, could cause substantial losses in our production capacity.Furthermore, because customers may be dependent on planned deliveries from us, customers that have to reschedule their own production due to our deliverydelays may be able to pursue financial claims against us and we may incur costs to correct such problems in addition to any liability resulting from such claims.Interruptions may also harm our reputation among actual and potential customers, potentially resulting in a loss of business. To the extent these losses are notcovered by insurance, our financial position, results of operations and cash flows may be adversely affected by such events.We may not be able to successfully implement our productivity enhancement and cost reduction initiatives.As the economy and markets for our products move through economic downturns or supply otherwise begins to exceed demand through increases in capacityor reduced demand, it is increasingly important for us to be a low cost producer. Although we have undertaken and expect to continue to undertake productivityenhancement and cost reduction initiatives to improve performance, including deployment of company-wide business improvement methodologies, such as ourKaiser Production System, which involves the integrated application of continuous improvement tools such as Lean Manufacturing, Six Sigma and TotalProductive Manufacturing, we cannot assure you that all of these initiatives will be completed or beneficial to us or that any estimated cost saving from suchactivities will be fully realized. Even when we are able to generate new efficiencies successfully in the short-to-medium term, we may not be able to continue toreduce cost and increase productivity over the long term.Our business could be adversely affected by increases in the cost of aluminum.The price of primary aluminum has historically been subject to significant cyclical price fluctuations and the timing of changes in the market price of aluminumis largely unpredictable. Although our pricing of fabricated aluminum products is generally intended to pass the risk of price fluctuations on to our customers, wemay not be able to pass on the entire cost of increases to our customers and there can be a potential time lag on certain high value added products betweenincreases in costs for aluminum and the point when we can implement a corresponding increase in price to our customers. As a result, we may be exposed tofluctuations in the costs for aluminum since, during the time lag, we may have to bear the additional cost increase. If these events were to occur, they could have amaterial adverse effect on our financial position, results of operations and cash flows. In addition, increases in aluminum costs may cause some of our customers tosubstitute other materials for our products over time, adversely affecting our financial position, results of operations and cash flows due to a decrease in the sales offabricated aluminum products.11Our investment and other expansion projects may not be completed or start up as scheduled.Our ability to complete our investment and expansion projects and the timing and costs of doing so are subject to various risks associated with all majorconstruction projects, many of which are beyond our control, including technical or mechanical problems and economic conditions. Additionally, the start-up ofoperations after such projects have been completed can be complicated and costly. If we are unable to fully complete these projects, if the actual costs for theseprojects exceed our expectations, or if the start-up phase after completion is more complicated than anticipated, our financial position, results of operations andcash flows could be adversely affected.Covenants and events of default in our debt instruments could limit our ability to undertake certain types of transactions and adversely affect our liquidity.Our revolving credit facility and the indenture governing our 8.25% Senior Notes due 2020 ("Senior Notes") contain a number of restrictive covenants thatimpose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interest, including restrictions on ourability to:• incur additional indebtedness and guarantee indebtedness;• pay dividends or make other distributions or repurchase or redeem capital stock;• prepay, redeem or repurchase certain debt;• issue certain preferred stock or similar equity securities;• make loans and investments;• sell assets;• incur liens;• enter into transactions with affiliates;• alter the businesses we conduct;• enter into agreements restricting our subsidiaries' ability to pay dividends; and• consolidate, merge or sell all or substantially all of our assets.In addition, restrictive covenants in our revolving credit facility require us in certain circumstances to maintain specified financial ratios and satisfy otherfinancial condition tests. Our ability to meet those financial ratios and tests can be affected by events beyond our control and we may be unable to meet them.A breach of the covenants or restrictions under our revolving credit facility or under the indenture governing the Senior Notes could result in an event of defaultunder the applicable indebtedness. Such a default may allow the creditors to accelerate the related debt. A payment default or an acceleration following an event ofdefault under our revolving credit facility or our indenture for our Senior Notes could trigger an event of default under the other indebtedness obligation as well asany other debt to which a cross-acceleration or cross-default provision applies, which could result in the principal of and the accrued and unpaid interest on all suchdebt becoming due and payable. In addition, an event of default under our revolving credit facility could permit the lenders under our revolving credit facility toterminate all commitments to extend further credit under that facility. Furthermore, if we were unable to repay any amounts due and payable under our revolvingcredit facility, those lenders could proceed against the collateral granted to them to secure that indebtedness. In the event our lenders or noteholders accelerate therepayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness. As a result of these restrictions, we may be:• limited in how we conduct our business and grow in accordance with our strategy;• unable to raise additional debt or equity financing to operate during general economic or business downturns; or• unable to compete effectively or to take advantage of new business opportunities.In addition, our financial results, our level of indebtedness and our credit ratings could adversely affect the availability and terms of any additional orreplacement financing.More detailed descriptions of our revolving credit facility and the indenture governing our Senior Notes are included in filings made by us with the Securitiesand Exchange Commission, along with the documents themselves, which provide the full text of these covenants.12Restrictive covenants in our debt instruments contain significant qualifications and exceptions.While our revolving credit facility and the indenture governing the Senior Notes place limitations on our ability to pay dividends or make other distributions,repurchase or redeem capital stock and make loans and investments, investors should be aware that these limitations are subject to significant qualifications andexceptions. The aggregate amount of payments made in compliance with these limitations could be substantial.As indicated above, more detailed descriptions of our revolving credit facility and the indenture governing our Senior Notes are included in filings made by uswith the Securities and Exchange Commission, along with the documents themselves, which provide the full text of these covenants.Servicing our debt requires a significant amount of cash and we may not have sufficient cash flow from our business to pay our debt.Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our debt obligations depends on our financial condition andoperating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business, legislative, regulatory and otherfactors beyond our control. We may be unable to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, ifany and interest on our indebtedness.If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced toreduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinanceour indebtedness. We may not be able to effect any such alternative measures, if necessary, on commercially reasonable terms or at all and, even if successful,those alternative actions may not allow us to meet our scheduled debt service obligations. Our revolving credit facility and the indenture governing the SeniorNotes restrict our ability to dispose of assets and use the proceeds from those dispositions and may also restrict our ability to raise debt or certain forms of equitycapital to be used to repay other indebtedness when it becomes due. We may not be able to consummate asset dispositions or to obtain proceeds in an amountsufficient to meet any debt service obligations then due.If we cannot make scheduled payments on our debt, we will be in default and holders of the Senior Notes could declare all outstanding principal and interest tobe due and payable, the lenders under our revolving credit facility could terminate their commitments to loan money, the lenders could foreclose against the assetssecuring their borrowings and we could be forced into bankruptcy or liquidation.We are a holding company and depend on our subsidiaries for cash to meet our obligations and pay any dividends.We are a holding company and conduct all of our operations through our subsidiaries, certain of which are not guarantors of our Senior Notes or our otherindebtedness. Accordingly, repayment of our indebtedness, including the Senior Notes, is dependent on the generation of cash flow by our subsidiaries and theirability to make such cash available to us, by dividend, debt repayment or otherwise. Unless they are guarantors of the Senior Notes or other indebtedness, oursubsidiaries do not have any obligation to pay amounts due on the Senior Notes or other indebtedness or to make funds available for that purpose. Our subsidiariesmay not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our indebtedness, including the Senior Notes. Eachof our subsidiaries is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from oursubsidiaries. While our revolving credit facility and the indenture governing the Senior Notes limit the ability of our subsidiaries to incur consensual restrictions ontheir ability to pay dividends or make other intercompany payments to us, these limitations are subject to qualifications and exceptions. In the event that we do notreceive distributions from our subsidiaries, we may be unable to make required principal and interest payments on our indebtedness, including the Senior Notes.Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, wouldmaterially and adversely affect our financial position and results of operations.13Our hedging programs may limit the income and cash flows we would otherwise expect to receive if our hedging program were not in place and may otherwiseaffect our business.In the ordinary course of business, we enter into hedging transactions to limit our exposure to price risks relating to primary aluminum prices, energy prices andforeign currency. To the extent that market prices or exchange rates at the expiration of these hedging transactions would have been more favorable to us than thefixed prices or rates established by these hedging transactions, our income and cash flows will be lower than they otherwise would have been. Additionally, to theextent that primary aluminum prices, energy prices or foreign currency exchange rates deviate materially and adversely from fixed, floor or ceiling prices or ratesestablished by outstanding hedging transactions, we fail to satisfy certain covenants or an event of default occurs under the terms of the underlying documents, wecould incur margin calls that could adversely impact our liquidity and result in a material adverse effect on our financial position, results of operations and cashflows. Conversely, we are exposed to risks associated with the credit worthiness of our hedging counterparties. The creditworthiness of hedging counterparties isinherently difficult to assess and can change quickly and dramatically. Non-performance by a counterparty could have a material adverse effect on our financialposition, results of operations and cash flows.Our failure to maintain satisfactory labor relations could adversely affect our business.At December 31, 2015 , approximately 63% of our employees were represented by labor unions under labor contracts with varying durations and expirationdates, including labor contracts with the USW, covering seven of our manufacturing locations. The labor contract with the USW covering employees at ourTrentwood and Newark, Ohio facilities extends through September 2020. Contracts at four other manufacturing locations expire in 2017 and the remainder of2016. We may not be able to renegotiate or negotiate our labor contracts on satisfactory terms. As part of any negotiation, we may reach agreements with respect tofuture wages and benefits, including healthcare benefits and any excise taxes that may result therefrom, that could materially and adversely affect our futurefinancial position, results of operations and cash flows. In addition, negotiations could divert management attention or result in union-initiated work actions,including strikes or work stoppages, that could have a material adverse effect on our financial position, results of operations and cash flows. Moreover, theexistence of labor agreements may not prevent such union-initiated work actions.Our participation in multi-employer union pension plans may have a material adverse effect on our financial performance.We are required to make contributions to multi-employer pension plans in amounts established under collective bargaining agreements. Pension expense forthese plans is recognized as contributions are funded. Benefits generally are based on a fixed amount for each year of service. Based on the most recent informationavailable to us, we believe a number of these multiemployer plans are underfunded. As a result, we expect that contributions to these plans may increase.Additionally, the benefit levels and related items will be issues in the negotiation of our collective bargaining agreements. Under current law, an employer thatwithdraws or partially withdraws from a multi-employer pension plan may incur withdrawal liability to the plan, which represents the portion of the plan’sunderfunding that is allocable to the withdrawing employer under very complex actuarial and allocation rules. The failure of a withdrawing employer to fund theseobligations can impact the remaining employers that participate in the plan. The amount of any increase or decrease in our required contributions to these multi-employer pension plans will depend upon the outcome of collective bargaining, actions taken by trustees who manage the plans and other employers thatparticipate in the plans, government regulations and the actual return on assets held in the plans, among other factors.Environmental compliance, clean up and damage claims may decrease our cash flow and adversely affect our business.We are subject to numerous environmental laws and regulations with respect to, among other things: air and water emissions and discharges; the generation,storage, treatment, transportation and disposal of solid and hazardous waste; and the release of hazardous or toxic substances, pollutants and contaminants into theenvironment. Compliance with these environmental laws is and will continue to be costly.Our continuing operations and certain of our former operations have subjected and may in the future subject us to fines, penalties and expenses for allegedbreaches of environmental laws and to obligations to perform investigations or clean up of the environment. We may also be subject to claims from governmentalauthorities or third parties related to alleged injuries to the environment, human health or natural resources, including claims with respect to waste disposal sites,the clean up of sites currently or formerly used by us or exposure of individuals to hazardous materials. Any investigation, clean-up or other remediation costs,fines or penalties, or costs to resolve third-party claims, may be significant and could have a material adverse effect on our financial position, results of operationsand cash flows.We have accrued and will accrue for costs relating to the above matters that are reasonably expected to be incurred based on available information. However, itis possible that actual costs may differ, perhaps significantly, from the amounts expected or accrued. Similarly, the timing of those expenditures may occur fasterthan anticipated. In addition, new laws or regulations or14changes to existing laws and regulations may be enacted, including government mandated green initiatives and limitations on carbon emissions, that increase thecost or complexity of compliance. Difference in actual costs, the timing of payments for previously accrued costs and the impact of new or amended laws andregulations may have a material adverse effect on our financial position, results of operations and cash flows.Governmental regulation relating to greenhouse gas emissions may subject us to significant new costs and restrictions on our operations .Laws enacted by Congress or policies of the Environmental Protection Agency could regulate greenhouse gas emissions through cap-and-trade systems, carbontaxes or other programs under which emitters would be required to buy allowances to offset emissions of greenhouse gas, pay carbon based taxes, make significantcapital investments, alter manufacturing practices or curtail production. In addition, several states, including the state of Washington, where we havemanufacturing plants, are considering various greenhouse gas registration and reduction programs through legislative proposals, executive order and ballotinitiatives. Certain of our manufacturing plants use significant amounts of energy, including electricity and natural gas and certain of our plants emit amounts ofgreenhouse gas above certain minimum thresholds that are likely to be imposed by existing proposals. Greenhouse gas regulation could increase the price of theelectricity we purchase, increase costs for our use of natural gas, potentially restrict access to or the use of natural gas, require us to purchase allowances to offsetour own emissions or result in an overall increase in our costs of raw materials, any one of which could significantly increase our costs, reduce our competitivenessin a global economy or otherwise negatively affect our business, operations or financial results. It is too early to predict how existing or future regulation will affectour business, operations or financial results.We may be subject to risks relating to our information technology systems.We rely on information technology systems to process, transmit and store electronic information and manage and operate our business. A breach in cybersecurity could expose us and our customers and suppliers to risks of misuse of confidential information, manipulation and destruction of data, productiondowntimes and operations disruptions, which in turn could adversely affect our reputation, competitive position, business or results of operations. The costs relatedto cyber or other security threats or disruptions may not be fully insured or indemnified by other means.In addition, from time to time we may replace and/or upgrade our current information technology systems. These activities subject us to inherent costs and risksassociated with replacing and updating these systems, including potential disruption of our internal control structure, substantial capital expenditures, demands onmanagement time and other risks of delays or difficulties in transitioning to new systems or of integrating new systems into our current systems. Our systemsimplementations and upgrades may not result in productivity improvements at the levels anticipated, or at all. In addition, the implementation of new technologysystems may cause disruptions in our business operations. Such disruption and any other information technology system disruptions and our ability to mitigatethose disruptions, if not anticipated and appropriately mitigated, could have a material adverse effect on us.We may not be able to utilize all of our net operating loss carryforwards.We have net operating loss carryforwards and other significant U.S. tax attributes that we believe could offset otherwise taxable income in the United States.The net operating loss carryforwards available in any year to offset our net taxable income will be reduced following a more than 50% change in ownership duringany period of 36 consecutive months (an "ownership change") as determined under the Internal Revenue Code of 1986 (the "Code"). Our certificate ofincorporation prohibits and voids certain transfers of our common stock in order to reduce the risk that an ownership change will jeopardize our net operating losscarryforwards; however, these transfer restrictions will expire in accordance with their terms on July 6, 2016. We are evaluating alternatives with respect to theprotection of our net operating loss carryforwards from and after July 6, 2016.Because U.S. tax law limits the time during which carryforwards may be applied against future taxes, we may not be able to take full advantage of thecarryforwards for federal income tax purposes. In addition, federal and state tax laws pertaining to net operating loss carryforwards may be changed from time totime such that the net operating loss carryforwards may be reduced or eliminated. If the net operating loss carryforwards become unavailable to us or are fullyutilized, our future income will not be shielded from federal and state income taxation and the funds otherwise available for general corporate purposes would bereduced.15We could engage in or approve transactions involving our common shares that inadvertently impair the use of our federal income tax attributes.Section 382 of the Code affects our ability to use our federal income tax attributes, including our net operating loss carryforwards, following a more than 50%change in ownership during any period of 36 consecutive months, an ownership change, as determined under the Code. Certain transactions may be included in thecalculation of an ownership change, including transactions involving our repurchase or issuance of our common shares. When we engage in or approve anytransaction involving our common shares that may be included in the calculation of an ownership change, our practice is to first perform the calculations necessaryto confirm that our ability to use our federal income tax attributes will not be affected. These calculations are complex and reflect certain necessary assumptions.Accordingly, it is possible that we could approve or engage in a transaction involving our common shares that causes an ownership change and inadvertentlyimpairs the use of our federal income tax attributes.Transfer restrictions and other factors could hinder the market for our common stock.In order to reduce the risk that an ownership change would jeopardize the preservation of our U.S. federal income tax attributes, including net operating losscarryforwards, for purposes of Sections 382 and 383 of the Code, our certificate of incorporation includes restrictions on transfers involving 5% ownership prior toJuly 6, 2016. These transfer restrictions may make our stock less attractive to large institutional holders, discourage potential acquirers from attempting to takeover our company, limit the price that investors might be willing to pay for shares of our common stock and otherwise hinder the market for our common stock.We are evaluating alternatives with respect to the protection of our net operating loss carry-forwards from and after July 6, 2016.Our certificate of incorporation includes transfer restrictions that may void transactions in our common stock effected by 5% stockholders.Our certificate of incorporation restricts the transfer of our equity securities if either (1) the transferor holds 5% or more of the fair market value of all of ourissued and outstanding equity securities or (2) as a result of the transfer, either any person would become such a 5% stockholder or the percentage stock ownershipof any such 5% stockholder would be increased. These restrictions are subject to exceptions set forth in our certificate of incorporation and will expire inaccordance with their terms on July 6, 2016. Any transfer that violates these restrictions is void and will be unwound as provided in our certificate of incorporation.We are evaluating alternatives with respect to the protection of our net operating loss carry-forwards from and after July 6, 2016.We could engage in or approve transactions involving our common shares that adversely affect significant stockholders.Under the transfer restrictions in our certificate of incorporation, prior to July 6, 2016, our 5% stockholders are, in effect, required to seek the approval of, or adetermination by, our Board of Directors before they engage in transactions involving our common stock. We could engage in or approve transactions involvingour common stock that limit our ability to approve future transactions involving our common stock by our 5% stockholders in accordance with the transferrestrictions in our certificate of incorporation without impairing the use of our federal income tax attributes. In addition, we could engage in or approvetransactions involving our common stock that cause stockholders owning less than 5% to become 5% stockholders, resulting in those stockholders’ having to seekthe approval of, or a determination by, our Board of Directors under our certificate of incorporation before they could engage in future transactions involving ourcommon stock. For example, share repurchases reduce the number of our common shares outstanding and could cause a stockholder holding less than 5% tobecome a 5% stockholder even though it has not acquired any additional shares. We are evaluating alternatives with respect to the protection of our net operatingloss carry-forwards from and after July 6, 2016.The ownership of our stock is concentrated, with a few owners who may, individually or collectively, exert significant influence over us.Certain investment funds, advisers and organizations own greater than 5% of our outstanding common stock as of December 31, 2015 . As a result, any of themcould have significant influence over matters requiring stockholder approval, including the composition of our Board of Directors. Further, to the extent that thesubstantial stockholders were to act in concert, they could potentially control any action taken by our stockholders. This concentration of ownership could alsofacilitate or hinder proxy contests, tender offers, open market purchase programs, mergers or other purchases of our common stock that might otherwise givestockholders the opportunity to realize a premium over the then prevailing market price of our common stock or cause the market price of our common stock todecline. We cannot assure you that the interests of our major stockholders will not conflict with our interests or the interests of our other investors.16Payment of dividends may not continue in the future and our payment of dividends and stock repurchases are subject to restriction.Our Board of Directors has declared a cash dividend for each quarter since the summer of 2007. In addition, our Board of Directors has authorized a stockrepurchase program. The future declaration and payment of dividends and the ongoing purchase of our shares, if any, will be at the discretion of the Board ofDirectors and will depend on a number of factors, including our financial and operating results, financial position and anticipated cash requirements. We can giveno assurance that dividends will be declared and paid or that dividends will not be reduced in the future. Additionally, our revolving credit facility and theindenture for our Senior Notes impose limitations on our ability to pay dividends and repurchase our common shares.Our annual variable payment obligations to two voluntary employees beneficiary associations ("VEBAs") are linked with our profitability, which means thatnot all of our earnings will be available to our stockholders.We are obligated to make annual payments to two VEBAs calculated in part on our profitability. Our obligation to the VEBA that provides benefits for eligibleretirees represented by certain unions and their surviving spouse and eligible dependents terminates on September 30, 2017 and is capped at $17.1 million per year.Our obligation to the VEBA that provides benefits for certain other eligible retirees, their surviving spouse and eligible dependents has no express termination dateand is capped at $2.9 million per year. As a result of these variable payment obligations, our cash flows may be reduced and not all of our earnings will beavailable to our stockholders.The USW has director nomination rights through which it may influence us, and USW interests may not align with our interests or the interests of ourstockholders, debt holders and other stakeholders.Pursuant to agreements between us and the USW, the USW has the right, subject to certain limitations, to nominate candidates which, if elected, wouldconstitute 40% of our Board of Directors through December 31, 2020, at which time the USW is required to cause any director nominated by the USW to submithis or her resignation to our Board of Directors, which submission our Board of Directors may accept or reject in its discretion. As a result, the directors nominatedby the USW have a significant voice in the decisions of our Board of Directors. It is possible that the USW may seek to extend the term of the agreement and itsright to nominate board members beyond 2020.Delaware law and our governing documents may impede or discourage a takeover, which could adversely affect the value of our common stock.Provisions of Delaware law and our certificate of incorporation and bylaws may discourage a change of control of our company or deter tender offers for ourcommon stock. We are currently subject to anti-takeover provisions under Delaware law. These anti-takeover provisions impose various impediments to the abilityof a third party to acquire control of us. Additionally, provisions of our certificate of incorporation and bylaws impose various procedural and other requirements,which could make it more difficult for stockholders to effect certain corporate actions. For example, our certificate of incorporation authorizes our Board ofDirectors to determine the rights, preferences and privileges and restrictions of unissued shares of preferred stock without any vote or action by our stockholders.As a result, our Board of Directors can authorize and issue shares of preferred stock with voting or conversion rights that could adversely affect the voting or otherrights of holders of common stock. Our certificate of incorporation also divides our Board of Directors into three classes of directors who serve for staggeredterms. A significant effect of a classified Board of Directors may be to deter hostile takeover attempts because an acquirer could experience delays in replacing amajority of directors. Moreover, stockholders are not permitted to call a special meeting. Prior to July 6, 2016, our certificate of incorporation will restrict certaintransactions in our common stock involving 5% stockholders or parties who would become 5% stockholders as a result of the transaction. The general effect ofthese transfer restrictions, which were put in place to reduce the risk that an ownership change would jeopardize the preservation of our U.S. federal income taxattributes, including net operating loss carryforwards, is to ensure that a change in ownership of more than 45% of our outstanding common stock cannot occur inany three-year period without the consent of our Board of Directors. These rights and provisions, and subsequent restrictions we may impose to replace theexpiring restrictions, may have the effect of delaying or deterring a change of control of our company and may limit the price that investors might be willing to payin the future for shares of our common stock.In addition to the risks discussed above, as a publicly traded U.S. manufacturing company with customers and suppliers outside the United States, we aresubject to a variety of other risks.In addition to the risks discussed above, as a publicly traded U.S. manufacturing company with customers and suppliers outside the United States, we aresubject to a variety of other risks, each of which could have a material adverse effect on our financial position, results of operations or cash flows, or the price ofour common stock. These risks include, among others, those associated with:17•the volatility of costs of fuel, principally natural gas and utility services, principally electricity, used by production facilities;•regulations that subject us to additional capital or margin requirements, or other restrictions on our trading and commodity positions, could have anadverse effect on our ability to hedge risks associated with our business or on the cost of our hedging activities;•changes in economic factors, including inflation and fluctuations in foreign currency exchange rates and interest rates, in the countries in which operationsexist, customers are serviced or raw materials are purchased;•the ability to attract and retain key management and other personnel and develop effective succession plans;•compliance with a wide variety of health and safety laws and regulations and changes to such laws and regulations;•disputes, legal proceedings, or investigations, whether meritorious or not, with respect to a variety of matters, including matters related to personal injury,employees, taxes, contracts and product liability;•pursuing growth through acquisitions, including the ability to identify acceptable acquisition candidates, finance and consummate acquisitions onfavorable terms and successfully integrate acquired assets or businesses;•protection of intellectual property, including patents, trademarks, trade secrets and copyrights, from infringement by others and the potential defense ofclaims, whether meritorious or not, alleging the unauthorized use of the intellectual property of others;•taxation by multiple jurisdictions and the impact of such taxation on effective tax rate and the amount of taxes paid;•compliance with Section 404 of the Sarbanes-Oxley Act of 2002, including the potential impact of compliance failures; and•the failure to meet the expectations of investors, including as a result of factors beyond the control of an individual company.Item 1B. Unresolved Staff CommentsNone.18Item 2. PropertiesInformation regarding the location, size and ownership of our principal production facilities as of December 31, 2015 is below:Location Square footage Owned or LeasedChandler, Arizona (Extrusion) 115,000 Owned/Leased 1Chandler, Arizona (Tube) 93,000 Owned/Leased 2Florence, Alabama 252,000 OwnedJackson, Tennessee 310,000 OwnedKalamazoo, Michigan 465,000 Leased 3London, Ontario (Canada) 276,000 OwnedLos Angeles, California 183,000 OwnedNewark, Ohio 1,293,000 OwnedRichland, Washington 45,000 Leased 4Richmond, Virginia (Bellwood) 443,000 OwnedSherman, Texas 313,000 OwnedSpokane, Washington (Trentwood) 2,872,000 Owned/Leased 5Total 6,660,000 ___________________________________1. The Chandler, Arizona (Extrusion) facility is subject to a land lease with a lease term that expires in 2023, subject to certain extension rights held by us. Thefacility is owned by us and is not subject to any leases.2. The Chandler, Arizona (Tube) facility is subject to a land lease with a lease term that expires in 2033, subject to certain extension rights held by us. Thefacility is owned by us and is not subject to any leases.3. The Kalamazoo, Michigan facility is subject to a lease with a 2033 expiration date.4. The Richland, Washington facility is subject to a lease that expires in December 2016, which we are currently in negotiations to extend.5. The Spokane, Washington facility consists of 2,751,000 square feet, which is owned by us, and 121,000 square feet, which is subject to a lease with a 2020expiration date and a renewal option subject to certain terms and conditions.Plants and equipment and other facilities are generally in good condition and suitable for their intended uses. For additional information regarding ourproduction facilities, see the table under Item 1. Business "Business Operations - Fabricated Products Segment - Types of Manufacturing Processes Employed" ofthis Report.Our corporate headquarters, located in Foothill Ranch, California, consists of 36,000 square feet at December 31, 2015 and is subject to a lease that expiresin 2019.Item 3. Legal ProceedingsNone.Item 4. Mine Safety DisclosuresNot applicable.19PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity SecuritiesMarket InformationOur outstanding common stock is traded on the Nasdaq Global Select Market under the ticker symbol "KALU."The following table sets forth the high and low transaction prices of our common stock for each quarterly period for fiscal years 2015 and 2014 : High LowFiscal 2015 First quarter $78.39 $68.42Second quarter $86.16 $75.60Third quarter $88.92 $77.92Fourth quarter $88.70 $75.61Fiscal 2014 First quarter $73.33 $66.78Second quarter $74.27 $66.43Third quarter $81.62 $71.44Fourth quarter $76.53 $68.26HoldersAs of February 12, 2016 , there were approximately 667 holders of record of our common stock.DividendsWe declare and pay regular quarterly cash dividends to holders of our common stock, including holders of restricted stock. We also pay quarterly dividendequivalents to the holders of certain restricted stock units and to the holders of performance shares granted prior to 2014 with respect to the target number ofunderlying shares of common stock (constituting approximately one-half of the maximum payout). Holders of performance shares granted beginning in 2014 arenot paid a quarterly dividend equivalent, but instead are entitled to receive, in connection with the issuance of underlying shares of common stock in respect ofperformance shares that ultimately vest, a one-time payment equal to the dividends such holder would have received if the number of such shares of common stockso issued had been held of record by such holder from the date of grant of such performance shares through the date of such issuance. Total cash dividends (anddividend equivalents) paid in 2015 , 2014 and 2013 were $1.60 per share (or $28.1 million ), $1.40 per share (or $25.4 million ) and $1.20 per share (or $23.0million ), respectively.On January 15, 2016 , we announced that our Board of Directors approved the declaration of a quarterly cash dividend of $ 0.45 per common share, or $8.2million (including dividend equivalents), which was paid on February 12, 2016 to stockholders of record at the close of business on January 25, 2016 .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, includingour financial and operating results, financial position and anticipated cash requirements and contractual restrictions under our revolving credit facility, theindenture for our 8.25% Senior Notes due 2020, or other indebtedness we may incur in the future. We can give no assurance that dividends will be declared andpaid in the future. See Note 3 of Notes to Consolidated Financial Statements in this Report for additional information about restrictions on dividend payments.Stock Performance GraphThe following graph compares the cumulative total shareholder return on our common stock with: (i) the Russell 2000 ® index, (ii) the S&P SmallCap 600 ®index and (iii) the S&P SmallCap 600 ® Materials index. We are a component of each of these indices. The graph assumes: (i) an initial investment of $100 as ofDecember 31, 2010 and (ii) reinvestment of all dividends. The performance graph is not necessarily indicative of the future performance of our stock price.20Issuer Repurchases of Equity SecuritiesThe following table provides information regarding our repurchases of our common shares during the quarter ended December 31, 2015 : Amended and Restated 2006 Equity andPerformance Incentive Plan Stock Repurchase Plan Total Number ofShares Purchased 1 Average Price perShare Total Number ofShares Purchased 2 Average Price perShare Maximum DollarValue of Shares thatMay Yet BePurchased Under theProgram (millions) 2October 1, 2015 - October 31, 2015 703 $83.34 18,324 $82.27 $125.8November 1, 2015 - November 30, 2015 1,225 81.62 14,561 82.73 $124.6December 1, 2015 - December 31, 2015 — — 15,238 84.43 $123.3Total 1,928 $82.25 48,123 $83.09 N/A21_________________________________________ 1. Under our equity and performance incentive plan, participants may elect to have us withhold common shares to satisfy minimum statutory tax withholdingobligations arising from the recognition of income and the vesting of restricted stock, restricted stock units and performance shares. When we withhold theseshares, we are required to remit to the appropriate taxing authorities the market price of the shares withheld by us on the date of withholding. The withholding ofcommon shares by us could be deemed a purchase of such common shares. During the quarter ended December 31, 2015 , we withheld 1,928 shares of commonstock to satisfy employee tax withholding obligations. All such were withheld and canceled by us on the applicable vesting dates or dates on which income to theemployees was recognized and the number of shares withheld was determined based on the closing price per common share as reported on the Nasdaq GlobalSelect Market on such dates.2. Of the $123.3 million that as of December 31, 2015 may yet be used to purchase our shares pursuant to the stock repurchase plan, $23.3 million is part of the$75.0 million that was authorized in December 2013 and $100.0 million was authorized in April 2015. Repurchase transactions will occur at such times andprices as management deems appropriate and will be funded with our excess liquidity after giving consideration to internal and external growth opportunities andfuture cash flows. Repurchases may be in open-market transactions or in privately negotiated transactions and the program may be modified or terminated by ourBoard of Directors at any time.During the year ended December 31, 2015 , 1,015,185 shares of our common stock were issued in connection with exercises of warrants. The warrants werenet-share-settled and accordingly we did not receive any proceeds from their exercise. The shares of common stock issued upon exercises of the warrants wereissued in reliance on the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended, and no underwriters were used inconnection with the warrant exercises. For additional information related to the warrants, see Note 3 , Note 10 and Note 12 of Notes to Consolidated FinancialStatements included in this Report.Item 6. Selected Financial DataThe following table represents our selected financial data. The table should be read in conjunction with Item 7. "Management’s Discussion and Analysis ofFinancial Condition and Results of Operations" and Item 8. "Financial Statements and Supplementary Data" of this Report (in millions of dollars, exceptshipments, average realized sales price and per share amounts): Year Ended December 31, 2015 2014 2013 2012 2011Net sales $1,391.9 $1,356.1 $1,297.5 $1,360.1 $1,301.3Net (loss) income 1 $(236.6) $71.8 $104.8 $85.8 $25.1Net (loss) income per share - Basic $(13.76) $4.02 $5.56 $4.49 $1.32Net (loss) income per share - Diluted $(13.76) $3.86 $5.44 $4.45 $1.32Shipments (mm lbs) 615.4 588.8 563.7 585.9 560.9Average realized sales price (per lb) $2.26 $2.30 $2.30 $2.32 $2.32Cash dividends declared per common share $1.60 $1.40 $1.20 $1.00 $0.96Capital expenditures $63.1 $59.4 $70.4 $44.1 $32.5Depreciation and amortization expense $32.4 $31.1 $28.1 $26.5 $25.2_____________________1. Net (loss) income includes the impact of removing the net assets of the voluntary employees beneficiary association that provides benefits for eligible retireesrepresented by certain unions and their surviving spouses and eligible dependents and related deferred tax liabilities from our Consolidated Balance Sheetsduring the first quarter of 2015. See Note 6 of Notes to Consolidated Financial Statements included in this Report for further details.22 December 31, 2015 2014 2013 2012 2011Assets: Fabricated Products $904.8 $878.9 $852.5 $771.2 $637.0 All Other 345.3 864.8 918.4 981.3 683.6Total assets 1 $1,250.1 $1,743.7 $1,770.9 $1,752.5 $1,320.6Cash and short-term investments $102.5 $291.7 $299.0 $358.4 $49.8Long-term borrowings (at face value), includingamounts due within one year $197.8 $400.0 $400.0 $400.0 $179.7_____________________1. The 2015 Total assets reflect the removal of the Union VEBA net assets from our Consolidated Balance Sheets during the first quarter of 2015. See Note 6 ofNotes to Consolidated Financial Statements included in this Report for further details.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThis Report contains statements which constitute " forward-looking statements " within the meaning of the Private Securities Litigation Reform Act of 1995.These statements appear throughout this Report and can be identified by the use of forward-looking terminology such as " believes, " " expects, " " may, " "estimates, " " will, " " should, " " plans " or " anticipates " or the negative of the foregoing or other variations of comparable terminology, or by discussions ofstrategy. Readers are cautioned that any such forward-looking statements are not guarantees of future performance and involve significant risks and uncertaintiesand that actual results may vary from those in the forward-looking statements as a result of various factors. These factors include: the effectiveness ofmanagement’s strategies and decisions; general economic and business conditions, including cyclicality and other conditions in the aerospace, automotive andother end market applications we serve; developments in technology; new or modified statutory or regulatory requirements; and changing prices and marketconditions. This Item and Item 1A. " Risk Factors " each identify other factors that could cause actual results to vary. No assurance can be given that these are allof the factors that could cause actual results to vary materially from the forward-looking statements.Management’s discussion and analysis of financial condition and results of operations ("MD&A") is designed to provide a reader of our financial statementswith a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect ourfuture results. Our MD&A is presented in the following sections:•Overview;•Management Review of 2015 and Outlook for the Future;•Results of Operations;•Certain Information Related to Our Significant Tax Attributes;•Liquidity and Capital Resources;•Contractual Obligations, Commercial Commitments and Off-Balance Sheet and Other Arrangements;•Critical Accounting Estimates and Policies; and•New Accounting Pronouncements.Our MD&A should be read in conjunction with the consolidated financial statements and related notes included in Item 8. "Financial Statements andSupplementary Data" of this Report.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 notrecur 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 areworthy 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 bothin light of and separately from items such as unrealized mark-to-market gains or losses on derivatives related to fluctuations in underlying metal and energy pricesand currency exchange rates, lower of cost or market inventory write-downs and gains or losses related to our voluntary employee beneficiary associations("VEBAs"). For a reconciliation of23operating (loss) income excluding non-run-rate items to operating (loss) income, see "Results of Operations - Segment and Business Unit Information " below.We also provide information regarding value added revenue, which represents net sales less the hedged cost of alloyed metal. A fundamental part of ourbusiness model is to mitigate the impact of aluminum price volatility. We purchase primary and scrap aluminum, our main raw material, at prices that fluctuate ona monthly basis, and we use pricing policies that generally allow us to pass metal cost fluctuations through to our customers. For some of our higher value addedproducts sold on a spot basis, however, the pass through of metal price movements can sometimes lag by as much as several months, with a favorable impact to uswhen metal prices decline and an adverse impact to us when metal prices increase. Additionally, we often enter into firm-price customer sales agreements thatspecify the underlying metal price plus a conversion price. Spot sales with lagged metal price pass through and firm-price sales agreements create metal priceexposure for us which we mitigate through a hedging program. Our pricing policies and hedging program are designed to largely mitigate the impact on ourprofitability as a result of fluctuations in underlying metal price. Value added revenue (including average realized value added revenue and value added revenue ofthe product categories of our Fabricated Products segment) is worthy of being highlighted for the benefit of readers of our financial statements. Our intent is toallow users of the financial statements to consider our net sales information both with and without the metal cost component thereof. For a reconciliation of valueadded revenue to net sales, see "Results of Operations - Segment and Business Unit Information " below.OverviewWe are a leading North American manufacturer of semi-fabricated specialty aluminum products for the following end market applications: aerospace and highstrength products ("Aero/HS products"); extrusions for automotive applications ("Automotive Extrusions"); general engineering products ("GE products"); andother industrial products ("Other products"). We operate 12 focused production facilities in North America to serve a global customer base. We have one operatingsegment, Fabricated Products. See "Results of Operations - Segment and Business Unit Information " below.Our highly engineered products are manufactured to meet demanding requirements of aerospace/high strength, automotive, general engineering and otherindustrial end market applications. We have focused our business on select end market applications where we believe we have sustainable competitive advantagesand opportunities for long-term profitable growth. We believe that we differentiate ourselves with "Best in Class" customer satisfaction driven by quality,availability, service and delivery performance. We believe that we further differentiate ourselves by offering a broad product portfolio, including our KaiserSelect® products, which are engineered and manufactured to deliver enhanced product characteristics with improved consistency, which results in such benefits as betterperformance, lower waste and, in many cases, lower production cost for our customers.In the commercial aerospace sector, we believe that global economic growth and development will continue to drive growth in airline passenger miles. Inaddition, trends such as longer routes, larger payloads and focus on fuel efficiency have increased the demand for new and larger aircraft. We believe the strengthof commercial aerospace demand is demonstrated by the existing nine-year backlog for the two primary manufacturers of commercial aircraft. Further, we believethat the long-term demand drivers, including growing build rates, larger airframes and continued conversion of parts to monolithic design (where aluminum plate isheavily machined to form the desired part from a single piece of metal as opposed to using aluminum sheet, extrusions or forgings that are affixed to one anotherusing rivets, bolts or welds) throughout the industry will continue to increase demand for our high strength aerospace plate. We expect aerospace plate demand togrow at a pace higher than our other Aero/HS products (including sheet, extruded shapes, cold finish rod and bar and tube) as some of the applications using theseother Aero/HS products continue to be converted to monolithic design (using plate in lieu of these other products). Additionally, our Aero/HS products other thanplate tend to be used to a greater degree in applications that have a lower growth rate than commercial aerospace.Our Aero/HS and GE products are also sold for use in defense end market applications. Requirements of military engagements and sequestration of spendingby the United States government will determine near-term demand for our Aero/HS and GE products for use in such applications. We expect the production of theF-35 , or Joint Strike Fighter, to continue to be a demand driver for our Aero/HS products.Commercial aerospace and defense end market applications have demanding customer requirements for quality and consistency. As a result, there are a limitednumber of suppliers worldwide who are qualified to serve these market segments. We believe barriers to entry include significant capital requirements,technological expertise and a rigorous qualification process for safety-critical applications.In recent years, automotive original equipment manufacturers ("OEMs") and their suppliers have at an increasing pace been converting many automotivecomponents that historically were made of steel to aluminum to decrease weight without sacrificing structural integrity and safety performance and thereby achievegreater fuel efficiency standards mandated by24stringent United States' Corporate Average Fuel Economy ("CAFE") regulations. We believe fuel efficiency standards along with consumer preference for largervehicles will continue to drive growth in demand for aluminum extruded components in passenger vehicles as a replacement for the heavier weight of steelcomponents. Our Automotive Extrusions are designed and produced to provide specific mechanical properties and performance attributes required in automotiveapplications across a broad mix of North American OEMs and automotive platforms. We believe that these attributes are not easily replicated by our competitorsand are important to our customers, who are typically first tier automotive suppliers.Our GE products serve the North American industrial market segments and demand for these products generally tracks the broader manufacturing economicenvironment.Management Review of 2015 and Outlook for the FutureOur 2015 full year results reflected record shipments driven by higher volume of heat treat plate and automotive extrusions. The previous investments made atour Spokane, Washington ("Trentwood") facility and across our automotive platform were key factors in enabling the growth in shipments and overall results. Theyear-over-year increase in operating income reflected operating leverage from strong volume, improved pricing for heat treat plate and certain general engineeringproducts, as well as some benefit from lower contained metal costs on some of our higher value added products. Although we continued to derive benefit fromprevious investments improving manufacturing efficiencies, these benefits were more than offset by growth related costs and inefficiencies associated with thesignificant increase in our automotive extrusions as we continued to launch and ramp-up numerous new automotive programs during the year, including newprograms for the redesigned Ford F-150 truck.Based on new programs booked and to support further demand growth for our automotive extrusions, we continued to make investments to expand ourcapacity, including upgrades to existing extrusion presses at our London, Ontario, Sherman, Texas and Richmond, Virginia facilities, the addition of a newextrusion press at our London, Ontario facility that was in start-up at year-end 2015, and significant spending on a new extrusion press at our Sherman, Texasfacility that will be in production later in 2016. We also commenced a multi-year, $150.0 million capital investment project at our Trentwood facility focused onequipment upgrades throughout the process flow to reduce conversion costs and increase efficiency, further improving our competitive cost position on all productsproduced at the Trentwood facility. A significant portion of the investment will focus on modernizing the legacy equipment and process flow for thin gauge plateto achieve KaiserSelect ® quality enhancements for these aerospace and general engineering products. In addition to cost and quality benefits, the investments willresult in a 5%-10% increase in manufacturing capacity at our Trentwood facility by early 2018. The project is scheduled to be completed over the next five years tominimize plant disruption and facilitate execution.Consistent with our priorities for capital deployment, in addition to significant investments in our operations, we retired $175.0 million of convertible debt andreturned $77.3 million of cash to shareholders through share repurchases and dividends, increasing our quarterly dividend 14% in early 2015 to $0.40 per share andan additional 12.5% in early 2016 to $0.45 per share.OutlookWe anticipate continued growth in total value added revenue with improvement in operating income driven by sales growth and continued improvement inmanufacturing efficiencies. Overall for 2016, we anticipate a 3%-5% year-over-year increase in our total value added revenue driven by approximately 5% growthin value added revenue for our Aero/HS applications and approximately 10% growth in value added revenue for Automotive Extrusions. Demand for our GE andindustrial applications is expected to be relatively flat with no indication of any positive shift in 2016 demand. We continue to anticipate increased import activityand price competition for GE plate in 2016.As we look at demand drivers over the next three years and related growth opportunities for each of our served markets, we continue to envision growth incommercial aerospace demand driven by increasing build rates, larger airframes and continued conversion to monolithic design. Airframe builds in 2015 were arecord, and for the sixth consecutive year orders exceeded builds, maintaining the very strong nine-year backlog. For other aerospace applications, such asregional, business and military aircraft, we expect slow overall growth, and for high strength products used in other industrial applications we anticipate little to nogrowth given the weakness in U.S. manufacturing economy. Overall, we anticipate compound annual demand growth in our Aero/HS served markets ofapproximately 5% over the next three years.Demand for our Automotive Extrusions is driven by mature applications including anti-lock braking systems and drive train components and growingapplications that include chassis, structural components and crash management systems where aluminum is being utilized to light-weight vehicles. While weremain optimistic about the prospects for growing aluminum extrusion content in vehicles, we are increasingly cautious regarding the outlook for North Americanbuild rates. As such, we anticipate approximately 6% compound annual demand growth for our served automotive markets over the next three years driven byapproximately 1% growth in North American build rates and approximately 5% content growth.25In addition to capitalizing on the secular growth opportunities in our served markets, we continue to benefit from investments we have made over the years toimprove efficiency and overall throughput. We anticipate that the modernization project at our Trentwood facility along with other planned investments willprovide the next step in advancing our overall manufacturing efficiencies and product quality while creating additional capacity for heat treat plate and automotiveextrusions. Based on these growth related investments in addition to our sustaining capital investments, we anticipate capital spending of approximately $60.0million to $80.0 million per year over the next three years with spending in 2016 at the upper end of the range.Results of OperationsFiscal 2015 Summary•We reached agreement on a definitive expiration date of our obligation to make variable cash contributions to the Union VEBA which caused us toterminate defined benefit accounting with respect to the Union VEBA in the first quarter 2015. Removing the net assets and the deferred tax liabilitiesrelated to the Union VEBA from our balance sheet and establishing liabilities for expected remaining payments resulted in a predominantly non-cashpretax loss of $492.2 million in the first quarter, which we considered to be non-run-rate.•Our reported operating loss for 2015 was $345.9 million reflecting predominantly non-cash, non-run-rate charges totaling $496.4 million , primarilyrelated to settlement accounting for the Union VEBA. Adjusted for non-run-rate items, operating income was $150.5 million for the full year 2015. See "Segment and Business Unit Information " below for further discussion of our operating loss before non-run-rate items.•Net loss for 2015 was $236.6 million , as reported. Adjusting for the non-run-rate items as discussed above, adjusted net income was $71.6 million . See "Segment and Business Unit Information " below for discussion of additional non-run-rate items.•We recorded a $2.6 million lower of cost or market inventory adjustment in the fourth quarter primarily due to the decline in metal prices. We consideredthis inventory adjustment to be a non-run-rate item.•We had combined cash balances, short-term investments and net borrowing availability under our revolving credit facility (with no borrowings thereunderoutstanding) of approximately $383.3 million as of December 31, 2015 .•We invested $63.1 million in capital spending. See " Liquidity and Capital Resources – Capital Expenditures and Investments " below.•We paid a variable cash contribution to the VEBAs with respect to 2014 of $13.7 million and recorded a $19.6 million payable to the VEBAs for thevariable contribution with respect to 2015.•We settled our 4.5% Cash Convertible Senior Notes ("Convertible Notes") and the related Option Asset and Bifurcated Conversion Feature on April 1,2015 with a net cash outflow of $175.0 million ; we issued 1,015,185 shares of our common stock in connection with exercised warrants also related tothe Convertible Notes. See Note 3 for additional information.•We repurchased $27.2 million aggregate principal amount of our 8.25% Senior Notes due 2020 ("Senior Notes") for 107.5% of the face value.•In December 2015, we amended our revolving credit facility to extend the maturity to December 2020, improve pricing and provide more financialflexibility. The commitment under the facility remained unchanged at $300.0 million.•We paid a total of approximately $28.1 million , or $1.60 per common share, in cash dividends to stockholders, including holders of restricted stock, anddividend equivalents to holders of certain restricted stock units and to the holders of performance shares granted prior to 2014 with respect to the targetnumber of underlying common shares (constituting approximately one-half of the maximum payout).•We repurchased 647,520 shares of common stock in 2015 for a total cost of $49.4 million . Share repurchases were pursuant to a stock repurchaseprogram authorized by our Board of Directors. As of December 31, 2015 , $123.3 million was available under the program to purchase additional sharesof our common stock.26Consolidated Selected Operational and Financial InformationThe following data should be read in conjunction with our consolidated financial statements and the notes thereto included in Item 8. "Financial Statements andSupplementary Data" of this Report. See Note 13 of Notes to Consolidated Financial Statements included in this Report for further information regardingsegments.Net Sales. We reported Net sales for 2015 of $1,391.9 million , compared to $1,356.1 million for 2014 and $1,297.5 million for 2013 . The increase in Net salesduring 2015 compared to 2014 reflected a 5% increase in Fabricated Products segment shipment volume, partially offset by a 2% decrease in average realized salesprice per pound. The increase in Fabricated Products segment shipment volume was primarily due to a 15.0 million pound, or 19%, increase in AutomotiveExtrusions shipment volume, an 8.0 million pound, or 4% increase in GE products shipment volume and a 7.0 million pound, or 3%, increase in Aero/HS productsshipment volume. The increase in Automotive Extrusions shipments reflected launches of new programs at each of our automotive facilities, including a significantramp up of programs on the new aluminum-intensive Ford F-150 platform, as well as strong demand for certain other large vehicle models that we supply. Thedecrease in average realized sales price per pound reflected an 8% decrease in average hedged cost of alloyed metal prices per pound, partially offset by a 3%increase in average value added revenue per pound. The increase in average value added revenue per pound reflected spot pricing improvements on some Aero/HSand GE products, the benefit from lower contained metal prices on some high value added products and a more favorable shipment mix of Aero/HS and GEproducts sold. See the table in " Segment and Business Unit Information " below for further details.The increase in Net sales during 2014 compared to 2013 reflected a 4% increase in Fabricated Products segment shipment volume. The increase in FabricatedProducts segment shipment volume was primarily due to a 14.4 million pound, or 22%, increase in Automotive Extrusions shipment volume and a 12.6 millionpound, or 6%, increase in Aero/HS products shipment volume. Total average realized sales price per pound for 2014 was consistent with that of 2013. However,the average realized value added revenue per pound declined $0.06 per pound, or 5%, which was offset by a $0.06 per pound, or 6%, increase in average hedgedcost of alloyed metal prices per pound. The decline in average value added revenue per pound reflected: (i) a 9% decrease in value added revenue per pound forAero/HS products, primarily due to lower pricing for heat treat plate products; (ii) a 4% decrease in value added revenue per pound for GE products due to lowerheat treat plate pricing, partially offset by (iii) a 13% increase in value added revenue per pound for Automotive Extrusions driven by a richer mix of higher valuedproducts and the launch of several new automotive programs in 2014. See the table in " Segment and Business Unit Information " below for further details.Fluctuation in the Midwest Transaction Price for primary aluminum does not necessarily directly impact profitability because: (i) a substantial portion of thebusiness conducted by the Fabricated Products segment passes aluminum price changes directly onto customers and (ii) our hedging activities in support of theFabricated Products segment’s firm-price sales agreements limit our losses, as well as gains, from primary metal price changes.Cost of Products Sold, Excluding Depreciation and Amortization and Other Items. Cost of products sold, excluding depreciation and amortization and otheritems for 2015 totaled $1,115.4 million , or 80% of Net sales, compared to $1,117.5 million , or 82% of Net sales, in 2014 and $1,038.9 million , or 80% of Netsales, in 2013 . The $2.1 million decrease from 2014 to 2015 was comprised of a $21.6 million decrease in hedged cost of alloyed metal, partially offset by $19.5million of higher net manufacturing conversion and other costs. Of the $21.6 million decrease in hedged cost of alloyed metal, $49.9 million was due to lowerhedged metal prices, partially offset by $28.3 million due to higher shipment volume, as discussed in " Net Sales " above. The $19.5 million increase in netmanufacturing conversion and other costs reflected $11.5 million of higher conversion costs due to the impact of higher shipment volume, $7.1 million due tohigher manufacturing costs largely related to start-ups of automotive programs and higher overhead costs to support automotive growth, and approximately $0.9million of other costs. See " Segment and Business Unit Information " below for a further discussion of the comparative results of operations for 2015 and 2014.The increase in Cost of products sold, excluding depreciation and amortization and other items during 2014 compared to 2013 was primarily due to: (i) a $59.8million increase related to the higher hedged cost of alloyed metal prices discussed in " Net Sales " above; (ii) a $26.3 million increase due to sales impact; (iii)$2.2 million of higher major maintenance expense related to the ramp up of major 2013 capital improvement projects; and (iv) $3.2 million of higher energy costrelated primarily to the severe 2014 winter season. These increases were partially offset by a reduction in: (i) environmental costs of $2.7 million and (ii) netmanufacturing conversion and other costs of approximately $10.2 million.See "Segment and Business Unit Information" below for further discussion of the comparative results of operations for 2015 , 2014 and 2013 .Lower of Cost or Market Inventory Write-Down . We recorded a lower of cost or market inventory write-down of $2.6 million in 2015, predominantly as aresult of declining metal prices.27Unrealized Loss (Gain) on Derivative Instruments. Unrealized loss (gain) on derivative instruments is primarily due to changes in underlying commodity pricesas well as derivative settlements and are related to our operational hedges. These hedges are intended to mitigate our exposure to changes in prices for certainproducts sold and consumed by us and, to a lesser extent, to mitigate our exposure to changes in foreign currency exchange rates. Unrealized loss (gain) onderivative instruments was $3.4 million , $10.4 million and $(0.7) million for 2015 , 2014 and 2013 , respectively. Unrealized loss in 2015 was comprised of a $0.5million loss on natural gas hedge positions and $4.6 million loss on aluminum hedge positions, partially offset by a $1.7 million gain on electricity hedge positions.See Note 10 of Notes to Consolidated Financial Statements included in this Report for details on the unrealized loss (gain) on derivative instruments for 2014 and2013.Depreciation and Amortization. Depreciation and amortization for 2015 was $32.4 million compared to $31.1 million for 2014 and $28.1 million for 2013 .Approximately $1.3 million of the increase in Depreciation and amortization in 2015 compared to 2014 was due to various construction-in-progress projects beingplaced in service during 2015 such as the capital upgrades at several of our extrusion facilities to support new automotive programs that will launch over the nextfew years. Approximately $2.2 million of the increase in Depreciation and amortization expense in 2014 compared to 2013 was due to additional construction inprogress being placed in service during 2014 in connection with our casting complex and Phase 5 expansion at our Trentwood facility.Selling, General, Administrative, Research and Development ("SG&A and R&D"). SG&A and R&D expense totaled $88.1 million in 2015 compared to $81.4million in 2014 . The increase in 2015 was due primarily to an increase of $3.7 million in employee incentive compensation and $2.5 million in salaries andbenefits.SG&A and R&D expense totaled $81.4 million in 2014 compared to $80.4 million in 2013 . The increase in 2014 was primarily due to increased investment inresearch and development initiatives.Net Periodic Postretirement Benefit Cost (Income) Relating to VEBAs. Net periodic postretirement benefit cost (income) relating to the VEBAs totaled $2.4million , $(23.7) million and $(22.5) million in 2015 , 2014 and 2013 , respectively. The increase in cost in 2015 was due primarily to the removal of the net assetsof the VEBA that provides benefits for eligible retirees represented by certain unions and their surviving spouses and eligible dependents (the "Union VEBA") andrelated deferred tax liabilities from our consolidated financial statements during the quarter ended March 31, 2015. The 2015 cost reflected only the cost associatedwith the VEBA that provides healthcare related benefits for certain other retirees and their spouse and eligible dependents (the "Salaried VEBA"), which wasnetted against the net periodic postretirement benefit income of the Union VEBA in prior years. The net periodic postretirement benefit cost relating to the SalariedVEBA was $0.6 million and $1.2 million for 2014 and 2013 , respectively. The increase in cost in 2015 was due primarily to the increase in the annual healthcarereimbursement benefit starting in 2015 for plan participants in the Salaried VEBA. The increase in income in 2014 was due primarily to increases in expectedreturn on plan assets for both VEBAs. See Note 6 of Notes to Consolidated Financial Statements included in this Report for disclosure regarding the VEBAs.Loss on Removal of Union VEBA Net Assets . Loss on removal of Union VEBA net assets totaled $493.4 million in 2015 due to the removal of the UnionVEBA’s plan assets, related deferred tax liabilities and accumulated other comprehensive loss from our consolidated financial statements during the quarter endedMarch 31, 2015 as a result of the definitive expiration of our obligation to make annual variable contributions to the Union VEBA for any period after September2017. The loss on removal of Union VEBA net assets included a $16.8 million accrual for the 2015 variable contribution to be paid in the first quarter of 2016 anda $29.9 million accrual for the estimated variable contributions for 2016 (to be paid in 2017) and 2017 (to be paid in 2018). The final amount is subject to changeuntil the close of each respective calendar year. See Note 6 of Notes to Consolidated Financial Statements included in this Report for further details. The estimatedliability for the remaining variable cash contributions will be adjusted quarterly based on our most current projections of cash flow (as defined) with the changesreflected in our Operating (loss) income.Other Operating Charges, Net. Other operating charges in 2015 and 2014 consisted primarily of $0.1 million and $1.5 million , respectively, of impairmentcharges related to property, plant and equipment. There were no Other operating charges, net in 2013.Interest Expense. Interest expense represents cash and non-cash interest expense incurred on our Convertible Notes, which were settled on April 1, 2015, ourSenior Notes and our revolving credit facility, net of capitalized interest. Interest expense was $24.1 million , $37.5 million and $35.7 million for 2015 , 2014 and2013 , respectively, net of $1.8 million , $2.5 million and $3.4 million of interest expense capitalized as part of construction-in-progress, respectively, for the threeperiods. Non-cash amortization of the discount on our Convertible Notes accounted for $2.4 million , $9.1 million and $8.2 million of the total interest expense in2015 , 2014 and 2013 , respectively. Interest expense in 2015 , 2014 and 2013 was primarily related to interest expense incurred on our Convertible Notes and ourSenior Notes.28Other (Expense) Income, Net. Other (expense) income, net was $(1.8) million for 2015 , compared to $6.7 million for 2014 and $5.6 million for 2013 . Other(expense) income, net for 2015 was due primarily to a $2.5 million loss related to the repurchase of Senior Notes. Other (expense) income, net for 2014 and 2013primarily consisted of unrealized gains associated with our hedges relating to the Convertible Notes. See Note 3 and Note 15 of Notes to Consolidated FinancialStatements included in this Report for further information.Income Tax Benefit (Provision). The income tax benefit for 2015 was $135.2 million , resulting in an effective tax rate of 36.4% . The difference between theeffective tax rate and the projected blended statutory tax rate for 2015 was primarily due to: (i) a decrease in unrecognized tax benefits, including interest andpenalties, of $1.8 million, resulting in a 0.5% increase in the effective tax rate; (ii) state tax rate and apportionment changes in various states resulting in anincrease of $4.7 million, which resulted in a 1.3% decrease in the effective tax rate; and (iii) an increase in the valuation allowance for Federal and certain state netoperating losses of $2.0 million, which resulted in a 0.5% decrease to the effective tax rate.The income tax provision for 2014 was $35.3 million, resulting in an effective tax rate of 33.0%. The difference between the effective tax rate and the projectedblended statutory tax rate for 2014 was primarily due to: (i) a decrease in unrecognized tax benefits, including interest and penalties, of $2.3 million, resulting in a2.1% decrease in the effective tax rate; (ii) a lower state tax rate in various states resulting in a decrease of $1.6 million, which resulted in a 1.5% decrease in theeffective tax rate; and (iii) a decrease in the valuation allowance for certain state net operating losses of $0.7 million, which resulted in a 0.6% decrease to theeffective tax rate.The income tax provision for 2013 was $38.4 million, resulting in an effective tax rate of 26.8%. The difference between the effective tax rate and the projectedblended statutory tax rate for 2013 was primarily due to: (i) a decrease in unrecognized tax benefits, including interest and penalties, of $4.4 million, resulting in a3.1% decrease in the effective tax rate due to an audit settlement with the Canada Revenue Agency Competent Authority on February 28, 2013 for the 1998-2004tax years; (ii) a decrease in unrecognized tax benefits, including interest and penalties, of $4.6 million, resulting in a 3.2% decrease in the effective rate; (iii) adecrease from a bilateral advance pricing agreement between Canada and the U.S. for $2.9 million, resulting in a 2.0% decrease in the effective tax rate; and (iv) adecrease from an audit settlement with the Canada Revenue Agency for $5.3 million, resulting in a 3.7% decrease in the effective tax rate.Segment and Business Unit InformationConsistent with the manner in which our chief operating decision maker reviews and evaluates our business, we have one operating segment, which we refer toas Fabricated Products, that produces semi-fabricated specialty aluminum products, such as aluminum plate and sheet and extruded and drawn products, primarilyused in aerospace/high strength, automotive, general engineering and other industrial end market applications. We categorize our products by the following endmarket applications: Aero/HS products, Automotive Extrusions, GE products and Other products.We also have a business unit, All Other, which provides general and administrative support for our operations. For purposes of segment reporting under UnitedStates generally accepted accounting principles ("GAAP"), we treat the Fabricated Products segment as a reportable segment. All Other is not considered areportable segment.The following data should be read in conjunction with our consolidated financial statements and the notes thereto included in this Report. See Note 13 of Notesto Consolidated Financial Statements included in this Report for further information regarding segments.29Fabricated ProductsThe table below provides selected operational and financial information for our Fabricated Products segment for each period presented (in millions of dollars): Year EndedDecember 31, 2015 2014 2013Segment operating income $190.8 $151.4 $188.6Impact to segment operating income of non-run-rate items: Adjustments to plant-level LIFO 1 7.0 (4.0) 7.4Mark-to-market (loss) gain on derivative instruments (3.4) (10.4) 0.7Non-cash lower of cost or market inventory write-down 2 (2.6) — —Workers’ compensation (cost) benefit due to discounting (0.2) — 1.1Asset impairment charges (0.1) (1.5) —Environmental expenses 3 (1.7) (1.2) (4.0)Total non-run-rate items (1.0) (17.1) 5.2Segment operating income excluding non-run-rate items $191.8 $168.5 $183.4_____________________1. We manage our Fabricated Products segment business on a monthly last-in, first-out ("LIFO") basis at each plant, but report inventory externally on an annualLIFO basis in accordance with GAAP on a consolidated basis. This amount represents the conversion from GAAP LIFO applied on a consolidated basis forthe Fabricated Products segment to monthly LIFO applied on a plant-by-plant basis.2. The $2.6 million lower of cost or market inventory write-down in 2015 was due primarily to declining metal prices.3. See Note 9 of Notes to Consolidated Financial Statements included in this Report for additional information relating to the environmental expenses.As noted above, operating income excluding non-run-rate items for 2015 was $23.3 million higher than operating income excluding such items for 2014.Higher operating income excluding non-run-rate items primarily reflected a positive sales impact, partially offset by higher: (i) manufacturing conversion and othercosts; (ii) overhead cost; (iii) other costs and (iv) depreciation expense. The positive sales impact of $33.7 million was due primarily to increased shipments ofAutomotive Extrusions, GE products and Aero/HS products and improved sales margins on certain Aero/HS and GE products reflecting improved spot pricing andlower contained metal costs. The $1.2 million increase in manufacturing conversion and other costs was due to approximately $5.2 million of inefficiencies in ourautomotive operations as we ramped up on several new automotive programs and responded to unexpectedly strong and volatile demand, as discussed in furtherdetail in " Consolidated Results of Operations " above, largely offset by the improved manufacturing cost efficiencies in our operations other than automotive,including benefits derived from recent investments at our Trentwood facility. Overhead cost increased $5.4 million due to additional resources to support sizablegrowth in strategic served markets and increased wages. Other costs increased $3.0 million due primarily to higher employee incentive compensation. Depreciationexpense increased $1.3 million.Operating income excluding non-run-rate items for 2014 was $14.9 million lower than for 2013. Lower operating income excluding non-run-rate items in 2014reflected: (i) a $32.6 million negative price impact due primarily to lower pricing for heat treat plate products; (ii) a positive volume impact of $16.6 million dueprimarily to increased shipments of Automotive Extrusions and Aero/HS products; (iii) $3.2 million of higher energy costs; (iv) $2.2 million of higher plannedmajor maintenance expense; (v) $3.0 million of higher depreciation expense; and (vi) a net $9.5 million improvement in manufacturing conversion and other costs.The table below provides shipment and value added revenue information (in millions of dollars except shipments and value added revenue per pound) for eachof the product categories (which are based on end market applications) of our Fabricated Products segment for each period presented:30 Year Ended December 31, 2015 2014 2013Aero/HS Products: Shipments (mmlbs) 243.5 236.9 224.3 $ $ / lb $ $ / lb $ $ / lbNet sales $695.5 $2.86 $686.3 $2.90 $677.0 $3.02Less: hedged cost of alloyed metal (246.4) (1.02) (256.1) (1.08) (227.8) (1.02)Value added revenue $449.1 $1.84 $430.2 $1.82 $449.2 $2.00 Automotive Extrusions: Shipments (mmlbs) 93.5 78.5 64.1 $ $ / lb $ $ / lb $ $ / lbNet sales $199.2 $2.13 $173.5 $2.21 $129.5 $2.02Less: hedged cost of alloyed metal (88.7) (0.95) (82.6) (1.05) (63.2) (0.99)Value added revenue $110.5 $1.18 $90.9 $1.16 $66.3 $1.03 GE Products: Shipments (mmlbs) 231.4 223.4 222.5 $ $ / lb $ $ / lb $ $ / lbNet sales $426.1 $1.84 $419.5 $1.88 $411.0 $1.85Less: hedged cost of alloyed metal (226.1) (0.98) (237.6) (1.07) (224.9) (1.01)Value added revenue $200.0 $0.86 $181.9 $0.81 $186.1 $0.84 Other Products: Shipments (mmlbs) 47.0 50.0 52.8 $ $ / lb $ $ / lb $ $ / lbNet sales $71.1 $1.51 $76.8 $1.54 $80.0 $1.52Less: hedged cost of alloyed metal (40.8) (0.87) (47.3) (0.95) (48.0) (0.91)Value added revenue $30.3 $0.64 $29.5 $0.59 $32.0 $0.61 Total: Shipments (mmlbs) 615.4 588.8 563.7 $ $ / lb $ $ / lb $ $ / lbNet sales $1,391.9 $2.26 $1,356.1 $2.30 $1,297.5 $2.30Less: hedged cost of alloyed metal (602.0) (0.98) (623.6) (1.06) (563.9) (1.00)Value added revenue $789.9 $1.28 $732.5 $1.24 $733.6 $1.30For 2015 , Net sales of Fabricated Products increased by $35.8 million to $1,391.9 million , as compared to 2014 , primarily reflecting a 5% increase inFabricated Products segment shipment volume, partially offset by a 2% decrease in average realized sales price per pound. See " Consolidated SelectedOperational and Financial Information " above for further discussion.The increase in Net sales of Fabricated Products during 2014 compared to 2013 was due primarily to an increase in shipment volume and an increase in thehedged cost of alloyed metal prices, partially offset by a decrease in average value added revenue per pound. See " Consolidated Selected Operational andFinancial Information " above for further discussion.31All OtherAll Other provides support for our operations and incurs general and administrative expenses that are not allocated to the Fabricated Products segment. AllOther is not considered a reportable segment. The table below presents the impact of non-run-rate items to operating loss within the All Other business unit foreach period presented (in millions of dollars): Year EndedDecember 31, 2015 2014 2013Operating loss $(536.7) $(13.5) $(15.3)Impact to operating loss of non-run-rate items: Net periodic postretirement benefit (cost) income relating to the VEBAs 1 (2.4) 23.7 22.5Loss on removal of Union VEBA net assets 1,2 (493.4) — —Environmental income (expense) 0.4 0.4 (0.5)Workers' compensation benefit due to a change in discount rate 3 — — 0.2Total non-run-rate items (495.4) 24.1 22.2Operating loss excluding non-run-rate items $(41.3) $(37.6) $(37.5)_______________________1. See Note 6 of Notes to Consolidated Financial Statements included in this Report for additional information relating to the VEBAs.2. Our obligation to make variable contributions to the Union VEBA continues until September 30, 2017. This loss includes a liability of $46.7 million for theestimated remaining variable cash contributions to be made with respect to 2015, 2016 and the first nine months of 2017 (in each case paid in the followingcalendar year). See Note 6 for additional information regarding our estimated future variable cash contributions.3. Amount represents a portion of the workers' compensation benefit (expense) resulting from the change in the discount rates applied in estimating workers'compensation liabilities. We consider such expense to be non-run-rate because such amounts are not related to the incurrence and resolution of workers'compensation claims. Non-run-rate workers' compensation benefit (expense) for years presented was not material because discount rates did not fluctuatesignificantly.All Other operating loss excluding non-run-rate items for 2015 was $3.7 million higher than in 2014 . The increase was due primarily to an increase of $1.5million in employee long-term incentive compensation expense and $1.9 million in salaries and benefits.All Other operating loss excluding non-run-rate items for 2014 was $0.1 million higher than in 2013. The increase was primarily due to an increase in corporateoverhead, partially offset by a decrease in short-term employee incentive compensation expense.Certain Information Related to Our Significant Tax AttributesWe have significant federal income tax attributes, including sizable net operating loss carryforwards. Under Section 382(l)(5) ("Section 382") of the InternalRevenue Code of 1986 ("Code"), our ability to use our federal income tax attributes following a more than 50% change in ownership during any period of 36consecutive months, all as determined under the Code (an "ownership change"), would be limited annually to an amount equal to the product of: (i) the aggregatevalue of our outstanding common shares immediately prior to the ownership change and (ii) the applicable federal long-term tax exempt rate in effect on the dateof the ownership change.To reduce the risk that an ownership change under Section 382 would jeopardize our ability to fully use our federal income tax attributes, our certificate ofincorporation prohibits certain transfers of our equity securities without the prior approval of our Board of Directors if either (a) the transferor holds 5% or more ofthe total fair market value of all of our issued and outstanding equity securities (such person, a "5% shareholder") or (b) as a result of such transfer, either: (i) anyperson or group of persons would become a 5% shareholder or (ii) the percentage stock ownership of any 5% shareholder would be increased (any such transfer, a"5% transaction"). These transfer restrictions, however, are scheduled to expire on July 6, 2016. We are evaluating alternatives with respect to the protection of ournet operating loss carry-forwards from and after July 6, 2016.32Liquidity and Capital ResourcesSummaryThe following table summarizes our liquidity at the dates presented (in millions of dollars): December 31, 2015 December 31, 2014Available cash and cash equivalents$72.5 $177.7Short-term investments30.0 114.0Net borrowing availability under Revolving Credit Facility after borrowings and letters of credit280.8 269.1Total liquidity$383.3 $560.8Cash equivalents consist primarily of money market accounts and investments with an original maturity of 90 days or less when purchased. We place our cashin bank deposits and money market funds with high credit quality financial institutions, which invest primarily in commercial paper and time deposits of primequality, short-term repurchase agreements and U.S. government agency notes. Short-term investments represent holdings in investment-grade commercial paperand corporate bonds with a maturity of greater than 90 days.In addition to our unrestricted cash and cash equivalents described above, we have restricted cash that is pledged or held as collateral in connection withworkers’ compensation requirements and certain other agreements. From time to time, such restricted funds could be returned to us or we could be required topledge additional cash (see Note 2 of Notes to Consolidated Financial Statements included in this Report).On December 1, 2015, we and certain of our subsidiaries amended and extended our credit agreement with JPMorgan Chase Bank, N.A., as administrativeagent, and the other financial institutions party thereto ("Revolving Credit Facility") (see Note 3 of Notes to Consolidated Financial Statements included in thisReport). There were no borrowings under our Revolving Credit Facility as of December 31, 2015 or December 31, 2014 .33Cash FlowsThe following table summarizes our cash flows from operating, investing and financing activities for each period presented (in millions of dollars): Year EndedDecember 31, 2015 2014 2013Total cash provided by (used in): Operating activities: Fabricated Products $226.4 $199.5 $187.5All Other (67.6) (75.4) (75.8)Total cash provided by operating activities $158.8 $124.1 $111.7 Investing activities: Fabricated Products $(62.4) $(58.5) $(69.8)All Other 82.8 13.8 (43.6)Total cash provided by (used in) investing activities $20.4 $(44.7) $(113.4) Financing activities: Fabricated Products $— $— $(0.1)All Other (284.4) (71.2) (102.1)Total cash used in financing activities $(284.4) $(71.2) $(102.2)Operating ActivitiesFabricated Products – In 2015 , Fabricated Products segment operating activities provided $226.4 million of cash. Cash provided in 2015 was primarily relatedto: (i) $190.8 million of operating income; (ii) adjustments for non-cash items and depreciation and amortization of $37.5 million and (iii) a decrease in accountsreceivable of $17.0 million, partially offset by (iv) an increase in inventory of $4.9 million (net of a $2.6 million lower of cost or market charge) due primarily toincreased shipment volume and (v) a decrease in accounts payable of $12.4 million due to the timing of payments and decreasing price of aluminum.In 2014, Fabricated Products segment operating activities provided $199.5 million of cash. Cash provided in 2014 was primarily related to: (i) $151.4 million ofoperating income; (ii) adjustments for non-cash items and depreciation and amortization of $46.4 million; and (iii) an increase in accounts payable of $20.7 milliondue to an increase in general business activities and the timing of payments. Cash provided in 2014 was partially offset by: (i) an increase in accounts receivable of$7.7 million; (ii) a $5.0 million decrease in other accrued liabilities due primarily to a decrease in accrued salaries and wages; and (iii) a $6.1 million decrease inlong-term liabilities due primarily to a decrease in workers' compensation and environmental accruals.In 2013, Fabricated Products segment operating activities provided $187.5 million of cash. Cash provided in 2013 was primarily related to $188.6 million ofoperating income and $15.7 million of Canadian tax benefits, partially offset by $3.3 million of non-cash adjustments. Cash provided in 2013 also included anincrease in accounts payable and other accrued liabilities of $2.1 million due to general business activities and the timing of payments, partially offset by anincrease in accounts receivable of $7.9 million due partially to the recognition of a $4.4 million receivable relating to tax refunds from the Canada RevenueAgency, as well as increases in product shipments near year end and an increase in inventory of $4.4 million in anticipation of higher sales.For additional information regarding Fabricated Products operating income excluding non-run-rate items, see "Results of Operations - Segment and BusinessUnit Information " above.All Other – Cash used in operating activities was $67.6 million , $75.4 million and $75.8 million during 2015 , 2014 and 2013 , respectively. Cash outflow fromAll Other operating activities in 2015 consisted primarily of payments relating to: (i) general and administrative costs of $25.9 million; (ii) an annual variable cashcontribution to the VEBAs of $13.7 million with respect to the 2014 year; (iii) our short-term incentive program in the amount of $3.4 million; (iv) interest on theConvertible34Notes, Senior Notes and Revolving Credit Facility of $22.1 million; and (v) a loss of $2.5 million on the repurchase of our Senior Notes.Cash outflow from All Other operating activities in 2014 consisted primarily of payments relating to: (i) general and administrative costs of $29.9 million; (ii)an annual variable cash contribution to the VEBAs of $16.0 million with respect to 2013; (iii) our short-term incentive program in the amount of $4.3 million; and(iv) interest on the Convertible Notes Senior Notes and Revolving Credit Facility of $25.6 million in the aggregate. Cash outflow from All Other operatingactivities in 2013 consisted primarily of payments relating to: (i) general and administrative costs of $26.9 million; (ii) an annual variable cash contribution to theVEBAs of $20.0 million with respect to 2012; and (iii) interest on the Convertible Notes, Senior Notes and Revolving Credit Facility of $28.1 million in theaggregate.Investing ActivitiesFabricated Products – Cash used in investing activities for Fabricated Products was $62.4 million in 2015 , compared to $58.5 million of cash used in 2014 and$69.8 million of cash used in 2013. Cash used in 2015 , 2014 and 2013 was substantially related to capital expenditures. See " Capital Expenditures andInvestments " below for additional information.All Other – Cash provided by investing activities during 2015 of $82.8 million primarily consisted of proceeds from the disposition of available for salesecurities. A portion of the proceeds was used to settle the Convertible Notes on April 1, 2015. Cash provided by investing activities during 2014 of $13.8 millionconsisted primarily of $14.7 million net cash inflow in conducting investment activities with respect to our available for sale securities, partially offset by $0.9million of capital expenditures. Cash used in investing activities for All Other during 2013 of $43.6 million consisted primarily of $44.7 million net cash outflowrelating to purchases and settlements of short-term investments and $0.6 million relating to capital expenditures, partially offset by cash deposit returns of $1.7million related to workers' compensation insurance.Financing ActivitiesFabricated Products – No cash was used in financing activities for Fabricated Products in 2015 or 2014 . Cash used in financing activities for FabricatedProducts in 2013 was $0.1 million , relating to the repayment of a capital lease liability.All Other – Cash used in financing activities in 2015 was $284.4 million , representing: (i) net cash outlay of $175.0 million to settle the Convertible Notes; (ii)$49.2 million of cash used to repurchase our common stock under our stock repurchase program; (iii) $28.1 million of cash dividends paid to our stockholders,including holders of restricted stock, and dividend equivalents paid to holders of certain restricted stock units and to holders of performance shares granted prior to2014, with respect to the target number of underlying shares of common stock (constituting approximately one-half of the maximum payout); (iv) a $30.0 millionpayment related to the repurchase of $27.2 million aggregate principal amount of our Senior Notes; (v) $2.8 million of cash used to repurchase our common stockto satisfy withholding taxes resulting from the vesting of employee restricted stock, restricted stock units and performance shares; and (vi) $0.6 million of cashpaid for financing costs related to the renewal of our Revolving Credit Facility. Cash used in financing activities in 2015 was partially offset by $1.3 million ofadditional tax benefit in connection with the vesting of employee non-vested shares, restricted stock units and performance shares.Cash used in financing activities in 2014 was $71.2 million, representing: (i) $44.1 million of cash used to repurchase our common stock under our stockrepurchase program; (ii) $25.4 million of cash dividends paid to our stockholders, including holders of restricted stock, and dividend equivalents paid to holders ofcertain restricted stock units and to holders of performance shares granted prior to 2014, with respect to the target number of underlying shares of common stock(constituting approximately one-half of the maximum payout); and (iii) $2.4 million of cash used to repurchase our common stock to satisfy withholding taxesresulting from the vesting of employee restricted stock, restricted stock units and performance shares. Cash used in financing activities in 2014 was partially offsetby $0.8 million of additional tax benefit in connection with the vesting of employee non-vested shares, restricted stock units and performance shares.Cash used in financing activities in 2013 was $102.1 million, representing primarily: (i) $78.3 million of cash used to repurchase our common stock under ourstock repurchase program; (ii) $22.4 million of cash dividends paid to our stockholders (net of dividends returned), including holders of restricted stock, anddividend equivalents paid to holders of certain restricted stock units and to holders of performance shares with respect to the target number of underlying shares ofcommon stock (constituting approximately one-half of the maximum payout); (iii) $2.5 million of cash used to repurchase our common stock to satisfywithholding taxes resulting from the vesting of employee restricted stock, restricted stock units and performance shares. Cash used in financing activities in 2013was partially offset by $1.1 million of additional tax benefit in connection with the vesting of employee non-vested shares, restricted stock units and performanceshares.35Sources of LiquidityWe believe our available cash and cash equivalents, short-term investments, borrowing availability under the Revolving Credit Facility and funds generatedfrom operations are our most significant sources of liquidity. We believe these sources will be sufficient to finance our cash requirements and our planned capitalexpenditures and investments for at least the next 12 months. Nevertheless, our ability to fund our working capital requirements, debt service obligations, the fullamount of any variable cash contribution to the VEBAs and planned capital expenditures and investments will depend upon our future operating performance(which will be affected by prevailing economic conditions) and financial, business and other factors, some of which are beyond our control.The Revolving Credit Facility matures in December 2020 and provides for borrowings up to $300.0 million (subject to borrowing base limitations), of which upto a maximum of $20.0 million may be utilized for letters of credit. The Revolving Credit Facility may, subject to certain conditions and the agreement of lendersthereunder, be increased up to $400.0 million .The table below summarizes recent availability and usage of our Revolving Credit Facility (in millions of dollars except for borrowing rate): February 12, 2016 December 31, 2015Revolving Credit Facility borrowing commitment$300.0 $300.0 Borrowing base availability$293.2 $288.1Less: Outstanding borrowings under Revolving Credit Facility— —Less: Outstanding letters of credit under Revolving Credit Facility(7.3) (7.3)Net remaining borrowing availability$285.9 $280.8Borrowing rate (if applicable) 13.75% 3.75%_______________________1. Such borrowing rate, if applicable, represents the interest rate for any overnight borrowings under the Revolving Credit Facility.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 should wechoose to do so during the next 12 months, nor do we believe it is likely that during the next 12 months we will trigger the availability threshold that would requiremeasuring and maintaining a fixed charge coverage ratio.See Note 3 of Notes to Consolidated Financial Statements included in this Report for a description of our Revolving Credit Facility.DebtSee "Contractual Obligations, Commercial Commitments and Off-Balance Sheet and Other Arrangements - Contractual Obligations and CommercialCommitments " below for mandatory principal and cash interest payments on the outstanding borrowings under the Senior Notes. See Note 3 of Notes toConsolidated Financial Statements included in this Report for further details with respect to the Senior Notes.We do not believe that covenants in the indenture governing the Senior Notes are reasonably likely to limit our ability to obtain additional debt or equityfinancing should we choose to do so during the next 12 months.36Capital Expenditures and InvestmentsA component of our long-term strategy is our capital expenditure program. We recently commenced a multi-year, $150.0 million capital investment project atour Trentwood facility focused on: (i) equipment upgrades throughout the process flow to reduce conversion costs and increase efficiency; (ii) modernizing ourlegacy equipment and process flow for thin gauge plate to achieve KaiserSelect® quality enhancements for these aerospace and general engineering products; and(iii) the further expansion of Trentwood’s manufacturing capacity.Total capital expenditures were $63.1 million , $59.4 million and $70.4 million for 2015 , 2014 and 2013 , respectively. The majority of our capital spendingduring 2015 was to support new automotive programs that will launch over the next few years, with upgrades to existing extrusion presses at our London, Ontario,Sherman, Texas and Richmond, Virginia facilities, the addition of a new extrusion press at our London, Ontario facility that was in start-up at year-end 2015, andsignificant spending on a new extrusion press at our Sherman, Texas facility that will be in production later in 2016. Initial capital spending on the $150.0 millionmodernization project at our Trentwood facility also commenced in 2015. Capital spending during 2014 and 2013 was due primarily to spending on major projectsat our Trentwood facility, including a new casting complex to expand our rolling ingot capacity and reduce costs and a project to further expand heat treat platecapacity. The remainder of our capital spending in 2015 , 2014 and 2013 was spread among our manufacturing locations on projects expected to reduce operatingcosts, improve quality, increase capacity or enhance operational security.In 2016, we anticipate capital spending will be in the $60.0 million to $80.0 million range for purposes of: (i) continuing our capacity expansions forAutomotive Extrusions; (ii) continued spending on the $150.0 million modernization project at our Trentwood facility; (iii) other manufacturing cost efficiency andquality initiatives; and (iv) sustaining capital spending. Capital investment will be funded using cash generated from operations, available cash and cashequivalents, short-term investments, borrowings under the Revolving Credit Facility and/or other third-party financing arrangements. The level of anticipatedcapital expenditures may be adjusted from time to time depending on our business plans, our price outlook for fabricated aluminum products, our ability tomaintain adequate liquidity and other factors. No assurance can be provided as to the timing of any such expenditures or the operational benefits expectedtherefrom.DividendsSee Note 12 of Notes to Consolidated Financial Statements included in this Report for information regarding dividends paid during 2015 , 2014 and 2013 . SeeItem 5 of this Report for disclosure regarding the future declaration and payment of dividends.Repurchases of Common StockSee Note 12 of Notes to Consolidated Financial Statements included in this Report and Item 5 of this Report for information regarding repurchases of commonstock in 2015 and 2014 and the amounts authorized and available for future repurchases of common stock under our stock repurchase program.See Note 8 of Notes to Consolidated Financial Statements included in this Report for information regarding minimum statutory tax withholding obligationsarising during 2015 , 2014 and 2013 in connection with the vesting of non-vested shares, restricted stock units and performance shares.Restrictions Related to Equity CapitalAs discussed in "Certain Information Related to Our Significant Tax Attributes" above and elsewhere in this Report, our certificate of incorporation placesrestrictions on the transfer of our common shares. These restrictions are intended to reduce the risk that an ownership change within the criteria under Section 382would jeopardize our ability to fully use our federal income tax attributes. These transfer restrictions will expire in accordance with their terms on July 6, 2016. Weare evaluating alternatives with respect to the protection of our federal income tax attributes from and after July 6, 2016.Environmental Commitments and ContingenciesSee Note 9 of Notes to Consolidated Financial Statements included in this Report for information regarding our environmental commitments and contingencies.Repurchase of Senior NotesSee Note 3 of Notes to Consolidated Financial Statements included in this Report for information regarding the repurchase of Senior Notes in 2015.37Contractual Obligations, Commercial Commitments and Off-Balance Sheet and Other ArrangementsContractual Obligations and Commercial CommitmentsWe are obligated to make future payments under various contracts such as long-term purchase obligations and lease agreements. We have grouped thesecontractual obligations into operating activities, investing activities and financing activities in the same manner as they are classified in our Statements ofConsolidated Cash Flows included in Item 8. "Financial Statements and Supplemental Data" in order to provide a better understanding of the nature of theobligations and to provide a basis for comparison to historical information.The following table provides a summary of our significant contractual obligations at December 31, 2015 (in millions of dollars): Payments Due by Period Total 2016 2017 2018 2019 2020 2021 andThereafterOperating activities: 1 Purchase obligations $207.4 $189.6 $9.5 $5.6 $0.6 $0.6 $1.5Operating leases 47.3 6.2 5.1 4.1 3.9 2.2 25.8VEBA payments 2 51.0 19.9 17.4 13.1 0.3 0.3 —Standby letters of credit 3 7.7 6.1 1.6 — — — —Uncertain tax liabilities 4 0.7 — — — — — —Deferred compensation plan liability 5 7.7 — — — — — —Investing activities: 6 Capital equipment 5.3 5.2 0.1 — — — —Financing activities: 7 Principal on the Senior Notes 197.8 — — — — 197.8 —Interest on the Senior Notes 8 73.4 16.3 16.3 16.3 16.3 8.2 —Commitment fees on the Revolving CreditFacility 9 5.5 1.1 1.1 1.1 1.1 1.1 —Total contractual obligations 6 $603.8 $244.4 $51.1 $40.2 $22.2 $210.2 $27.3__________________________1. See " Obligations for Operating Activities " below.2. Total contractual obligations include: (i) the annual administration fees to the VEBAs; (ii) variable cash contribution to the VEBAs to be made in the firstquarter of 2016 with respect to the 2015 calendar year; and (iii) estimated future annual variable cash contributions to the Union VEBA that we recorded as aresult of settlement accounting, which are subject to change until the close of each respective calendar year. See Note 6 of Notes to Consolidated FinancialStatements included in this Report for a description of our annual variable cash obligations to the VEBAs.3. Of the $7.7 million of standby letters of credit, $0.4 million represents cash collateralized and $7.3 million represents letters of credit issued under ourRevolving Credit Facility. The letters of credit provide financial assurance of our payment of obligations, primarily related to workers' compensation andenvironmental compliance. The specific timing of payments with respect to such matters is uncertain. The letters of credit generally automatically renew every12 months and terminate when the underlying obligations no longer require assurance or upon the maturity of our Revolving Credit Facility in September2020 (for those letters of credit issued under that facility).4. At December 31, 2015 , we had uncertain tax positions which ultimately could result in tax payments. As the amount of ultimate tax payments beyond 2016 iscontingent on the tax authorities’ assessment, it is not practical to present annual payment information.5. The amount represents liability relating to our deferred compensation plan for certain key employees. As the distribution amount is contingent upon vestingand other eligibility requirements, it is not practical to present annual payment information.6. See " Obligations for Investing Activities " below.387. See " Obligations for Financing Activities " below.8. Interest obligations on the Senior Notes are based on scheduled interest payments.9. Future commitment fees are estimated based on the amount of unused credit under our Revolving Credit Facility at December 31, 2015 and assuming noextension of terms beyond the current maturity date of our Revolving Credit Facility, which is in December 2020.Obligations for Operating ActivitiesCash outlays for operating activities primarily consist of purchase obligations with respect to primary aluminum, other raw materials and electricity andpayment obligations under operating leases.We have various contracts with suppliers of aluminum that require us to purchase minimum quantities of aluminum in future years at a price to be determinedat the time of purchase based primarily on the underlying metal price at that time. Amounts included in the table are based on minimum quantities at the metalprice at December 31, 2015 . We believe the minimum quantities are lower than our current requirements for aluminum. Actual quantities and actual metal pricesat the time of purchase could be different.Operating leases represent multi-year obligations for certain manufacturing facilities, warehouses, office space and equipment.Our primary financial obligation to the VEBAs is to make an annual variable cash contribution. The amount to be contributed to the two VEBAs pursuant toour obligation is 10% of the first $20.0 million of annual cash flow (as defined; in general terms, the principal elements of cash flow are earnings before interestexpense, provision for income taxes and depreciation and amortization less cash payments for, among other things, interest, income taxes and capitalexpenditures), plus 20% of annual cash flow, as defined, in excess of $20.0 million . Annual contribution payments are allocated 85% to the Union VEBA and15% to the other VEBA ("Salaried VEBA"). Such annual payments to the two VEBAs are limited (with no carryover to future years) to the extent that thepayments would cause our liquidity to be less than $50.0 million and may not exceed $20.0 million ($17.1 million annually for the Union VEBA and $2.9 millionannually for the Salaried VEBA). Our obligation to make annual contributions to the Union VEBA terminates on September 30, 2017 and our obligation to theSalaried VEBA has no express termination date. As of December 31, 2015 , we determined that the variable cash contribution to the two VEBAs for 2015 was$19.6 million . See Note 6 of Notes to Consolidated Financial Statements included in this Report for information regarding the VEBAs and the effect they had onour consolidated financial statements.See Note 6 of Notes to Consolidated Financial Statements included in this Report for information regarding our employee benefit plans, including definedcontribution plans and defined benefit plans.Obligations for Investing ActivitiesCapital project spending included in the preceding table represents non-cancelable capital commitments as of December 31, 2015 . We expect capital projectsto be funded through available cash generated from our operations, cash and cash equivalents, short-term investments, borrowings under our Revolving CreditFacility and/or other third-party financing arrangements.Obligations for Financing ActivitiesCash outlays for financing activities consist of our principal obligations under long-term debt, scheduled interest payments on the Senior Notes andcommitment fees under our Revolving Credit Facility. No borrowings were outstanding under our Revolving Credit Facility either throughout the year or as ofDecember 31, 2015 .Off-Balance Sheet and Other Arrangements•See Note 7 of Notes to Consolidated Financial Statements included in this Report for information regarding our participation in multi-employer pensionplans.•See Note 8 of Notes to Consolidated Financial Statements included in this Report for information regarding our employee incentive plans. Additionalequity awards are expected to be made to employees and non-employee directors in 2016 and future years.39Critical Accounting Estimates and PoliciesOur consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our financial statements, we are required tomake assumptions and estimates about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses and therelated disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to berelevant at the time our consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, assumptions, estimatesand judgments to ensure that our financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannotbe determined with certainty, actual results could differ from our assumptions and estimates and such differences could be material.Our significant accounting policies are discussed in Note 1 of Notes to Consolidated Financial Statements included in this Report. Management believes thatthe following accounting estimates are the most critical to aid in fully understanding and evaluating our reported financial results and require management’s mostdifficult, subjective or complex judgments, resulting from the need to make estimates about the effects of matters that are inherently uncertain. Management hasreviewed these critical accounting estimates and related disclosures with the Audit Committee of our Board of Directors.40Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsOur judgments and estimates with respect to environmentalcommitments and contingencies . We are subject to a number of environmental laws and regulations, topotential fines or penalties assessed for alleged breaches of such lawsand regulations and to potential claims and litigation based upon suchlaws and regulations. Based on our evaluation of environmentalmatters, we have established environmental accruals, primarilyrelated to potential solid waste disposal and soil and groundwaterremediation matters. These environmental accruals represent ourestimate of costs reasonably expected to be incurred on a goingconcern basis in the ordinary course of business based on presentlyenacted laws and regulations, currently available facts, existingtechnology and our assessment of the likely remediation action to betaken.See Note 9 of Notes to Consolidated Financial Statements includedin this Report for additional information on our environmentalcontingencies. Making estimates of possible incrementalenvironmental remediation costs issubject to inherent uncertainties. Inestimating the amount of any loss, inmany instances a single estimation of theloss may not be possible. Rather, we mayonly be able to estimate a range forpossible losses. In such an event, GAAPrequires that a liability be established forat least the minimum end of the rangeassuming that there is no other amountwhich is more likely to occur. Asadditional facts are developed anddefinitive remediation plans andnecessary regulatory approvals forimplementation of remediation areestablished or alternative technologiesare developed, changes in these and otherfactors may result in actual costsexceeding the current environmentalaccruals. Although we believe that thejudgments and estimates discussedherein are reasonable, actual resultscould differ and we may be exposedto losses or gains that could bematerially different than thosereflected in our accruals. To theextent we prevail in matters forwhich accruals have beenestablished or are required to payamounts in excess of our accruals,our future results from operationscould be materially affected. Our judgments and estimates with respect to legal and othercommitments and contingencies. Valuation of legal and other contingent claims is subject to a greatdeal of judgment and substantial uncertainty. Under GAAP,companies are required to accrue for loss contingencies in theirfinancial statements only if both: (i) the potential loss is "probable"and (ii) the amount (or a range) of probable loss is "estimable." Inreaching a determination of the probability of an adverse ruling in amatter, we typically consult outside experts. However, any suchjudgments reached regarding probability are subject to significantuncertainty. We may, in fact, obtain an adverse ruling in a matter thatwe did not consider a "probable" loss or "estimable" and which,therefore, was not accrued for in our financial statements.Additionally, facts and circumstances can change causing keyassumptions that were used in previous assessments of a matter tochange. In estimating the amount of any loss, inmany instances a single estimation of theloss may not be possible. Rather, we mayonly be able to estimate a range forpossible losses. In such an event, GAAPrequires that a liability be established forat least the minimum end of the rangeassuming that there is no other amountwhich is more likely to occur. Although we believe that thejudgments and estimates discussedherein are reasonable, actual resultscould differ and we may be exposedto losses or gains that could bematerially different than thosereflected in our accruals. To theextent we prevail in matters forwhich accruals have beenestablished or are required to payamounts in excess of our accruals,our future results from operationscould be materially affected. 41Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsOur judgments and estimates with respect to conditional assetretirement obligations. We recognize conditional asset retirement obligations ("CAROs")related to legal obligations associated with the normal operations ofcertain of our facilities. These CAROs consist primarily ofincremental costs that would be associated with the removal anddisposal of asbestos (all of which is believed to be fully containedand encapsulated within walls, floors, ceilings or piping) of certain ofour older facilities if such facilities were to undergo major renovationor be demolished. There are currently plans for such renovation ordemolition at certain facilities and management’s current assessmentis that certain immaterial CAROs may be triggered during the nextthree years. For locations where there are no current plans forrenovations or demolitions, the most probable scenario is suchCAROs would not be triggered for 15 to 20 or more years, if at all.Under current accounting guidelines, liabilities and costs for CAROsmust be recognized in a company’s financial statements even if it isunclear when or if the CARO will be triggered. If it is unclear whenor if a CARO will be triggered, companies are required to useprobability weighting for possible timing scenarios to determine theprobability-weighted amounts that should be recognized in thecompany’s financial statements. The estimation of CAROs is subject to anumber of inherent uncertaintiesincluding: (i) the timing of when anysuch CARO may be incurred; (ii) theability to accurately identify all materialsthat may require special handling ortreatment; (iii) the ability to reasonablyestimate the total incremental specialhandling and other costs; (iv) the abilityto assess the relative probability ofdifferent scenarios which could give riseto a CARO; and (v) other factors outsidea company’s control including changesin regulations, costs and interest rates. Assuch, actual costs and the timing of suchcosts may vary significantly from theestimates, judgments and probablescenarios we considered, which could, inturn, have a material impact on our futurefinancial statements. Although we believe that thejudgments and estimates discussedherein are reasonable, actual resultscould differ and we may be exposedto losses or gains that could bematerially different than thosereflected in our accruals. 42Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsOur judgments and estimates with respect to self-insured workers'compensation liabilities. We are primarily self-insured for workers' compensation benefitsprovided to employees. Workers' compensation liabilities areestimated for incurred-but-not-reported claims based on judgment,using our historical claims data and information and analysisprovided by actuarial and claim advisors, our insurance carriers andother professionals. We account for accrued liability relating toworkers' compensation claims on a discounted basis. The accounting for our self-insuredworkers' compensation plan involvesestimates and judgments to determineour ultimate liability related to reportedclaims and incurred-but-not-reportedclaims. We consider our historicalexperience, severity factors, actuarialanalysis and existing stop loss insurancein estimating our ultimate insuranceliability. In addition, since recordedobligations represent the present value ofexpected payments over the life of theclaims, decreases in the discount rate(used to compute the present value of thepayments) would cause the estimatedobligations to increase. Conversely, anincrease in the discount rate would causethe estimated present value of expectedpayments to decrease. If our workers'compensation claim trends were to differsignificantly from our historic claimsexperience and as the discount ratechanges, we would make acorresponding adjustment to our workers'compensation accruals. The rate used to discount futureestimated workers' compensationliabilities is determined based on theU.S. Treasury bond rate with a five-year maturity date which resemblesthe remaining estimated life of theworkers' compensation claims. Achange in the discount rate of 1/4 of1% would impact the workers'compensation liability and operatingincome by approximately $0.2million.43Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsLong-Lived Assets. Long-lived assets other than goodwill and indefinite-lived intangibleassets, which are separately tested for impairment, are evaluated forimpairment whenever events or changes in circumstances indicatethat the carrying value may not be recoverable. When evaluatinglong-lived assets for potential impairment, we first compare thecarrying value of the asset to the asset’s estimated future cash flows(undiscounted and without interest charges). If the estimated futurecash flows are less than the carrying value of the asset, we calculatean impairment loss. The impairment loss calculation compares thefair value, which may be based on estimated future cash flows(discounted and with interest charges) to the asset’s carrying value.We recognize an impairment loss if the amount of the asset’scarrying value exceeds the asset's estimated fair value. If werecognize an impairment loss, the adjusted carrying amount of theasset becomes its new cost basis. For a depreciable long-lived asset,the new cost basis will be depreciated (amortized) over the remaininguseful life of that asset. Our impairment loss calculations containuncertainties because they requiremanagement to make assumptions andapply judgment to estimate future cashflows and asset fair values, includingforecasting useful lives of the assets andselecting the discount rate that reflectsthe risk inherent in future cash flows. We have not made any materialchanges in our impairment lossassessment methodology.We do not believe there is areasonable likelihood that there willbe a material change in the estimatesor assumptions we use to calculatelong-lived asset impairment losses.However, if actual results are notconsistent with our estimates andassumptions used in estimatingfuture cash flows and asset fairvalues, we may be exposed tofurther losses from impairmentcharges that could be material.See Note 1 of Notes to ConsolidatedFinancial Statements included inthis Report for informationregarding impairment charges takenon property, plant and equipment.44Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsIncome Tax. We have substantial tax attributes available to offset the impact offuture income taxes. We have a process for determining the need fora valuation allowance with respect to these attributes. The processincludes an extensive review of both positive and negative evidenceincluding our earnings history, future earnings, adverse recentoccurrences, carryforward periods, an assessment of the industry andthe impact of the timing differences.We expect to record a full statutory tax provision in future periodsand, therefore, the benefit of any tax attributes realized will onlyaffect future balance sheets and statements of cash flows.In accordance with GAAP, financial statements for interim periodsinclude an income tax provision based on the effective tax rateexpected to be incurred in the current year. Inherent within the completion of ourassessment of the need for a valuationallowance, we make significantjudgments and estimates with respect tofuture operating results, timing of thereversal of deferred tax assets and currentmarket and industry factors. In order todetermine the effective tax rate to applyto interim periods, estimates andjudgments are made (by taxablejurisdiction) as to the amount of taxableincome that may be generated, theavailability of deductions and creditsexpected and the availability of netoperating loss carryforwards or other taxattributes to offset taxable income.Making such estimates and judgments issubject to inherent uncertainties giventhe difficulty of predicting future marketconditions, customer requirements, thecost for key inputs such as energy andprimary aluminum, overall operatingefficiency and other factors. However, if,among other things: (i) actual resultsvary from our forecasts due to one ormore of the factors cited above orelsewhere in this Report; (ii) income isdistributed differently than expectedamong tax jurisdictions; (iii) one or morematerial events or transactions occurwhich were not contemplated; or(iv) certain expected deductions, creditsor carryforwards are not available, it ispossible that the effective tax rate for ayear could vary materially from theassessments used to prepare the interimconsolidated financial statements. SeeNote 5 of Notes to ConsolidatedFinancial Statements included in thisReport for additional discussion of thesematters. Although we believe that thejudgments and estimates discussedherein are reasonable, actual resultscould differ and we may be exposedto losses or gains that could bematerial. A change in our effectivetax rate by 1% would have had animpact of approximately$3.7 million to Net loss for the yearended December 31, 2015. 45Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsTax Contingencies. We use a "more likely than not" threshold for recognition of taxattributes that are subject to uncertainties and measure reserves inrespect of such expected benefits based on their probability. Anumber of years may elapse before a particular matter for which wehave established a reserve is audited and fully resolved or clarified.We adjust our tax reserve and income tax provision in the period inwhich actual results of a settlement with tax authorities differs fromour established reserve, the statute of limitations expires for therelevant tax authority to examine the tax position or when moreinformation becomes available. See Note 5 of Notes to ConsolidatedFinancial Statements included in this Report for additionalinformation on the recognition of tax attributes. Our reserve for contingent tax liabilitiesreflects uncertainties becausemanagement is required to makeassumptions and to apply judgment toestimate the exposures associated withour various filing positions.Our effective income tax rate is alsoaffected by changes in tax law, the taxjurisdiction of new plants or businessventures, the level of earnings and theresults of tax audits. Although we believe that thejudgments and estimates discussedherein are reasonable, actual resultscould differ and we may be exposedto losses or gains that could bematerial.To the extent we prevail in mattersfor which reserves have beenestablished or are required to payamounts in excess of our reserves,our effective income tax rate in agiven financial statement periodcould be materially affected. Anunfavorable tax settlement couldrequire use of our cash and wouldresult in an increase in our effectiveincome tax rate in the period ofresolution. A favorable taxsettlement would be recognized as areduction in our effective incometax rate in the period of resolution.Our liability related to uncertain taxpositions at December 31, 2015 was$0.7 million. Inventory Valuation. We value our inventories at the lower of cost or market value. For theFabricated Products segment, finished products, work-in-process andraw material inventories are stated on a LIFO basis and otherinventories, principally operating supplies and repair andmaintenance parts, are stated at average cost.Inventory costs consist of material, labor and manufacturingoverhead, including depreciation. Abnormal costs, such as idlefacility expenses, freight, handling costs and spoilage, are accountedfor as current period charges. We determine the market value of ourinventories based on the current replacement cost, by purchase or byreproduction, except that it does not exceed the net realizable valueand it is not less than net realizable value reduced by an approximatenormal profit margin. Our estimate of the market value of ourinventories contains uncertaintiesbecause management is required to makeassumptions and to apply judgment toestimate the selling price of ourinventories, costs to complete ourinventories and normal profit margin.Making such estimates and judgments issubject to inherent uncertainties giventhe difficulty predicting such factors asfuture commodity prices and marketconditions. Although we believe that thejudgments and estimates discussedherein are reasonable, actual resultscould differ and we may be exposedto losses or gains that could bematerial.46Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsAcquisitions, Goodwill and Intangible Assets. We accounted for acquisitions using the acquisition method ofaccounting, which requires the assets acquired and liabilitiesassumed to be recorded at the date of acquisition at their respectiveestimated fair values.We recognize goodwill as of the acquisition date, as a residual overthe fair values of the identifiable net assets acquired. Goodwill istested for impairment on an annual basis as well as on an interimbasis as events and changes in circumstances occur.Definite-lived intangible assets acquired are amortized over theestimated useful lives of the respective assets, to reflect the pattern inwhich the economic benefits of the intangible assets are consumed.In the event the pattern cannot be reliably determined, we use astraight-line amortization method. Whenever events or changes incircumstances indicate that the carrying amount of the intangibleassets may not be recoverable, the intangible assets will be reviewedfor impairment. The judgments made in determining theestimated fair value assigned to eachclass of assets acquired and liabilitiesassumed, as well as asset lives, cansignificantly impact our results ofoperations. Fair values and useful livesare determined based on, among otherfactors, the expected future period ofbenefit of the asset, the variouscharacteristics of the asset and projectedcash flows. As the determination of anasset’s fair value and useful life involvesmanagement making certain estimatesand because these estimates form thebasis for the determination of whether ornot an impairment charge should berecorded, these estimates are consideredto be critical accounting estimates. We do not believe there is areasonable likelihood that there willbe a material change in the estimatesor assumptions we use to calculategoodwill and intangible assets.Additionally, as of December 31,2015, we do not believe any of ourreporting units are at risk of failingstep one of the two-step goodwillimpairment test. However, if actualresults are not consistent with ourestimates and assumptions used inestimating future cash flows and fairvalues assigned to each class ofassets acquired and liabilitiesassumed, we may be exposed tolosses from impairment charges thatcould be material. 47Description Judgments and Uncertainties Potential Effect if Actual ResultsDiffer From AssumptionsOur judgments and estimates with respect to the Salaried VEBAand the Canadian defined benefit plan. At December 31, 2015, our financial statements include: (i) theSalaried VEBA, which we are required to reflect on our financialstatements as a defined benefit postretirement plan, despite ourlimited legal obligations to the Salaried VEBA in regards to that planand (ii) a pension plan for our Canadian salaried employees.Liabilities and expenses for pension and other postretirement benefitsare determined using actuarial methodologies and incorporatesignificant assumptions, including the rate used to discount the futureestimated liability, the long-term rate of return ("LTRR") on planassets and several assumptions relating to the employee workforce(i.e., salary increases, retirement age and mortality). The mostsignificant assumptions used in determining the estimated year-endobligations include the assumed discount rate and the LTRR.In addition to the above assumptions used in the actuarial valuation,changes in plan provisions could also have a material impact on thenet funded status of the Salaried VEBA. Our obligation to theSalaried VEBA is to pay an annual variable contribution amountbased on the level of our cash flow. The funding status of theSalaried VEBA has no impact on our annual variable contributionamount. We have no control over any aspect of the plan. We rely oninformation provided to us by the Salaried VEBA administrator withrespect to specific plan provisions such as annual benefits expectedto be paid. See Note 6 of Notes to Consolidated Financial Statementsincluded in this Report for additional information on our benefitplans. Since recorded obligations represent thepresent value of expected pension andpostretirement benefit payments over thelife of the plans, decreases in thediscount rate (used to compute thepresent value of the payments) wouldcause the estimated obligations toincrease. Conversely, an increase in thediscount rate would cause the estimatedpresent value of the obligations todecline. The LTRR on plan assets reflects anassumption regarding what the amount ofearnings would be on existing plan assets(before considering any futurecontributions to the plans). Increases inthe assumed LTRR would cause theprojected value of plan assets available tosatisfy pension and postretirementobligations to increase, yielding areduced net expense of these obligations.A reduction in the LTRR would reducethe amount of projected net assetsavailable to satisfy pension andpostretirement obligations and, thus,cause the net expense of theseobligations to increase. A change in plan provisions could causethe estimated obligations to change. Anincrease in annual benefits expected to bepaid would increase the estimatedpresent value of the obligations andconversely, a decrease in annual benefitsexpected to be paid would decrease theestimated present value of theobligations. The rate used to discount futureestimated liabilities is determinedtaking into consideration the ratesavailable at year end on debtinstruments that could be used tosettle the obligations of the plan. Inrelation to the Salaried VEBA, achange in the discount rate of 1/4 of1% would impact the accumulatedpostretirement benefit obligation byapproximately $1.6 million, impactservice and interest costs by $0.1million and have an immaterialimpact on 2016 expense. The LTRRon plan assets is estimated byconsidering historical returns andexpected returns on current andprojected asset allocations. Achange in the assumption for LTRRon plan assets of 1/4 of 1% wouldimpact expense by approximately$0.1 million in 2016 in relation tothe Salaried VEBA.A change in the discount rate of 1/4of 1% would have an immaterialimpact on the Canadian pensionplan. New Accounting PronouncementsFor a discussion of all recently adopted and recently issued but not yet adopted accounting pronouncements, see Note 1 of Notes to Consolidated FinancialStatements included in this Report.Item 7A. Quantitative and Qualitative Disclosures About Market RiskOur operating results are sensitive to changes in the prices of primary aluminum and fabricated aluminum products and also depend to a significant degreeupon the volume and mix of all products sold. As discussed more fully in Note 10 of Notes to Consolidated Financial Statements included in this Report, we havehistorically utilized hedging transactions to lock in a48specified price or range of prices for certain products which we sell or consume in our production process and to mitigate our exposure to changes in energy pricesand foreign currency exchange rates.AluminumSee Note 10 of Notes to Consolidated Financial Statements included in this Report, under "Hedges of Operational Risk" for a discussion of our pricing offabricated aluminum, firm-price arrangements and third-party hedging instruments.In 2015 , 2014 and 2013 , settlements of derivative contracts covering, in millions of pounds, 204.6 , 138.3 and 119.8 , respectively, hedged Fabricated Productsshipments sold on pricing terms that created metal price risk for us. At December 31, 2015 , we had derivative contracts with respect to approximately, in millionsof pounds, 129.9 and 4.8 to hedge sales to be made in 2016 and 2017, respectively, on pricing terms that create metal price risk for us.Based on the aluminum derivative positions held by us to hedge firm-price customer sales agreements, we estimate that a $0.10 per pound decrease in theLondon Metal Exchange market price of aluminum as of December 31, 2015 and December 31, 2014 , with all other variables held constant, would have resultedin an unrealized mark-to-market loss of $12.9 million and $6.7 million , respectively, with corresponding changes to the net fair value of our aluminum derivativepositions. Additionally, we estimate that a $0.01 per pound decrease in the Midwest premium for aluminum as of December 31, 2015 and December 31, 2014 ,with all other variables held constant, would have resulted in an unrealized mark-to-market loss of $0.8 million and $0.7 million , respectively. The balances ofsuch financial instruments may change in future periods and therefore the amounts discussed above may not be indicative of future results.If we continue to encounter reductions in the price of aluminum and/or if we experience a decrease in our net realizablevalue of inventory, we may be subject to additional inventory lower of cost or market value adjustments.EnergyWe are exposed to energy price risk from fluctuating prices for natural gas and electricity. We estimate that, before consideration of any hedging activities andthe potential to pass through higher natural gas and electricity prices to customers, each $1.00 change in natural gas prices (per mmBtu) and electricity prices (permwh) would impact our 2016 annual operating costs by approximately $4.3 million and $0.5 million , respectively. We, from time to time, in the ordinary courseof business, enter into hedging transactions and/or physical delivery commitments with third parties to mitigate our risk from fluctuations in natural gas andelectricity prices.As of December 31, 2015 , we had derivative and/or physical delivery commitments with energy companies in place to cover our exposure to fluctuations innatural gas prices for approximately 73% , 72% and 59% of the expected natural gas purchases for 2016 , 2017 and 2018 , respectively. We estimate that a $1.00per mmbtu decrease in natural gas prices as of December 31, 2015 and December 31, 2014 would have resulted in an unrealized mark-to-market loss of $7.0million and $6.7 million , respectively, with corresponding changes to the net fair value of our natural gas derivative positions.Additionally, as of December 31, 2015 , we had physical delivery commitments with energy companies, in place to cover our exposure to fluctuations inelectricity prices for approximately 55% of the expected electricity purchases for both 2016 and 2017 .The balances of such financial instruments for hedging of natural gas and electricity may change in future periods however, and therefore the amountsdiscussed above may not be indicative of future results.Foreign CurrencyOur primary foreign exchange exposure is the operating costs of our London, Ontario facility. A 10% change in the Canadian dollar exchange rate is estimatedto have an annual operating cost impact of $1.5 million . Additionally, during the year ended December 31, 2015 , we entered into cash commitments for anequipment purchase denominated in euros and hedged our exposure to currency exchange rate fluctuations by entering into foreign currency forward contracts withsettlement dates designed to line up with the timing of scheduled payments to the foreign equipment manufacturer. These derivative instruments are designated andqualify as cash flow hedges; therefore, periodic gains and losses related to market value adjustments are deferred in Accumulated other comprehensive loss untildepreciation on the underlying equipment commences. See Note 10 of Notes to Consolidated Financial Statements included in this Report for additionalinformation relating to these foreign currency forward contracts. As of December 31, 2015 , we hedged our equipment purchase transactions denominated in eurosusing forward contracts with settlement dates through December 2016. We estimate that a 10% decrease in the December 31, 2015 exchange rate of euros to USdollars would have resulted in an unrealized mark-to-market loss of $0.5 million .49KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESItem 8. Financial Statements and Supplementary DataReport of Independent Registered Public Accounting Firm51 Consolidated Balance Sheets52 Statements of Consolidated (Loss) Income53 Statements of Consolidated Comprehensive (Loss) Income54 Statements of Consolidated Stockholders’ Equity55 Statements of Consolidated Cash Flows56 Notes to Consolidated Financial Statements5750KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Board of Directors and Stockholders ofKaiser Aluminum CorporationFoothill Ranch, CaliforniaWe have audited the accompanying consolidated balance sheets of Kaiser Aluminum Corporation and Subsidiary Companies (the " Company " ) as ofDecember 31, 2015 and 2014, and the related consolidated statements of (loss) income, comprehensive (loss) income, stockholders' equity, and cash flows for eachof the three years in the period ended December 31, 2015. We also have audited the Company's internal control over financial reporting as of December 31, 2015,based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and forits assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on internal control overfinancial reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company's internal control overfinancial reporting based on our audits.We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement and whethereffective internal control over financial reporting was maintained, in all material respects. Our audits of the consolidated financial statements included examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimatesmade by management, and evaluating the overall consolidated financial statement presentation. Our audit of internal control over financial reporting includedobtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures, as we considered necessary in thecircumstances. We believe that our audits provide a reasonable basis for our opinions.A company's internal control over financial reporting is a process designed by, or under the supervision of, the Company's principal executive and principalfinancial officers, or persons performing similar functions, and effected by the Company's board of directors, management, and other personnel to providereasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordancewith accounting principles generally accepted in the United States of America ("generally accepted accounting principles"). A company’s internal control overfinancial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect thetransactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation ofconsolidated financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the consolidated financial statements.Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls,material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of theinternal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or thatthe degree of compliance with the policies or procedures may deteriorate.In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as ofDecember 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2015, in conformitywith generally accepted accounting principles. Also, in our opinion, the Company maintained, in all material respects, effective internal control over financialreporting as of December 31, 2015, based on the criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission./s/ DELOITTE & TOUCHE LLPCosta Mesa, CaliforniaFebruary 22, 201651KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESCONSOLIDATED BALANCE SHEETS December 31, 2015 December 31, 2014 (In millions of dollars, except share and pershare amounts)ASSETS Current assets: Cash and cash equivalents $72.5 $177.7Short-term investments 30.0 114.0Receivables: Trade receivables – net 116.7 129.3Other 6.1 10.9Inventories 219.6 214.7Prepaid expenses and other current assets 56.7 178.6Total current assets 501.6 825.2Property, plant and equipment – net 495.4 454.9Net assets of Union VEBA — 340.1Deferred tax assets – net (including deferred tax liability relating to the Union VEBA of $0.0 at December 31, 2015 and$127.0 at December 31, 2014, respectively – see Note 5) 162.6 30.9Intangible assets – net 30.5 32.1Goodwill 37.2 37.2Other assets 22.8 23.3Total $1,250.1 $1,743.7LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $76.7 $81.4Accrued salaries, wages and related expenses 39.8 39.6Other accrued liabilities 52.7 132.8Current portion of long-term debt — 172.5Short-term capital leases 0.1 0.1Total current liabilities 169.3 426.4Net liabilities of Salaried VEBA 19.0 17.2Deferred tax liabilities 2.1 0.9Long-term liabilities 87.5 58.3Long-term debt 197.8 225.0Total liabilities 475.7 727.8Commitments and contingencies – Note 9 Stockholders’ equity: Preferred stock, 5,000,000 shares authorized at both December 31, 2015 and December 31, 2014; no shares were issued andoutstanding at December 31, 2015 and December 31, 2014 — —Common stock, par value $0.01, 90,000,000 shares authorized at both December 31, 2015 and December 31, 2014;22,291,180 shares issued and 18,053,747 shares outstanding at December 31, 2015; 21,197,164 shares issued and17,607,251 shares outstanding at December 31, 2014 0.2 0.2Additional paid in capital 1,036.5 1,028.5Retained earnings 15.9 280.4Treasury stock, at cost, 4,237,433 shares at December 31, 2015 and 3,589,913 shares at December 31, 2014 (246.5) (197.1)Accumulated other comprehensive loss (31.7) (96.1)Total stockholders’ equity 774.4 1,015.9Total $1,250.1 $1,743.7The accompanying notes to consolidated financial statements are an integral part of these statements.52KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESSTATEMENTS OF CONSOLIDATED (LOSS) INCOME Year Ended December 31, 2015 2014 2013 (In millions of dollars, except share and per share amounts)Net sales $1,391.9 $1,356.1 $1,297.5Costs and expenses: Cost of products sold: Cost of products sold, excluding depreciation and amortization and other items 1,115.4 1,117.5 1,038.9Lower of cost or market inventory write-down 2.6 — —Unrealized loss (gain) on derivative instruments 3.4 10.4 (0.7)Depreciation and amortization 32.4 31.1 28.1Selling, general, administrative, research and development: Selling, general, administrative, research and development 88.1 81.4 80.4Net periodic postretirement benefit cost (income) relating to VEBAs – Note 6 2.4 (23.7) (22.5)Loss on removal of Union VEBA net assets – Note 6 493.4 — —Total selling, general, administrative, research and development 583.9 57.7 57.9Other operating charges, net 0.1 1.5 —Total costs and expenses 1,737.8 1,218.2 1,124.2Operating (loss) income (345.9) 137.9 173.3Other (expense) income: Interest expense (24.1) (37.5) (35.7)Other (expense) income, net – Note 15 (1.8) 6.7 5.6(Loss) income before income taxes (371.8) 107.1 143.2Income tax benefit (provision) 135.2 (35.3) (38.4)Net (loss) income $(236.6) $71.8 $104.8 Net (loss) income per common share: Basic $(13.76) $4.02 $5.56Diluted $(13.76) $3.86 $5.44Weighted-average number of common shares outstanding (in thousands): Basic 17,201 17,818 18,827Diluted 17,201 18,593 19,246 Dividends declared per common share $1.60 $1.40 $1.20The accompanying notes to consolidated financial statements are an integral part of these statements.53KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESSTATEMENTS OF CONSOLIDATED COMPREHENSIVE (LOSS) INCOME Year Ended December 31, 2015 2014 2013 (In millions of dollars) Net (loss) income (236.6) 71.8 104.8Other comprehensive income (loss): Defined benefit pension plan and VEBAs: Total actuarial (loss) gain and prior service costs (6.1) (129.5) 2.2Reclassification adjustments: Amortization of net actuarial loss (gain) 1.1 (1.8) 1.5Amortization of prior service cost 3.0 10.6 4.2Removal of obligation relating to Union VEBA 106.6 — —Other comprehensive income (loss) relating to defined benefit pension plan and VEBAs 104.6 (120.7) 7.9Available for sale securities: Unrealized (loss) gain on available for sale securities (0.1) (0.2) 1.0Reclassification adjustments: Reclassification of unrealized gain upon sale of available for sale securities (0.4) (0.1) (1.0)Other comprehensive loss relating to available for sale securities (0.5) (0.3) —Unrealized loss on foreign currency cash flow hedges (0.3) — —Foreign currency translation (loss) gain (0.2) 0.4 0.2Other comprehensive income (loss), before tax 103.6 (120.6) 8.1Income tax (expense) benefit related to items of other comprehensive income (loss) (39.2) 45.2 (2.8)Other comprehensive income (loss), net of tax 64.4 (75.4) 5.3Comprehensive (loss) income $(172.2) $(3.6) $110.1The accompanying notes to consolidated financial statements are an integral part of these statements.54KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESSTATEMENTS OF CONSOLIDATED STOCKHOLDERS’ EQUITY CommonSharesOutstanding CommonStock Additional PaidInCapital RetainedEarnings TreasuryStock AccumulatedOtherComprehensiveIncome (Loss) Total (In millions of dollars, except share and per share amounts)BALANCE, December 31, 2012 19,313,235 $0.2 $1,017.7 $151.2 $(72.3) $(26.0) $1,070.8Net income — — — 104.8 — — 104.8Other comprehensive income, net of tax — — — — — 5.3 5.3Issuance of non-vested shares to employees and non-employee directors 76,336 — — — — — —Issuance of common shares to non-employeedirectors 2,916 — 0.2 — — — 0.2Issuance of common shares to employees uponvesting of restricted stock units and performanceshares 36,503 — — — — — —Cancellation of employee non-vested shares (820) — — — — — —Cancellation of shares to cover employees’ taxwithholdings upon vesting of non-vested shares (40,075) — (2.5) — — — (2.5)Repurchase of common stock (1,232,077) — — — (79.3) — (79.3)Distribution from third-party trust (9,001) — — 0.6 (0.6) — —Cash dividends on common stock ($1.20 per share) — — — (23.0) — — (23.0)Excess tax benefit upon vesting of non-vested sharesand dividend payment on unvested shares expectedto vest — — 1.1 — — — 1.1Amortization of unearned equity compensation — — 6.6 — — — 6.6Dividends on unvested equity awards that werecanceled — — — 0.2 — — 0.2BALANCE, December 31, 2013 18,147,017 $0.2 $1,023.1 $233.8 $(152.2) $(20.7) $1,084.2Net income — $— $— $71.8 $— $— $71.8Other comprehensive loss, net of tax — — — — — (75.4) (75.4)Issuance of non-vested shares to employees and non-employee directors 119,799 — — — — — —Issuance of common shares to non-employeedirectors 2,969 — 0.2 — — — 0.2Issuance of common shares to employees uponvesting of restricted stock units and performanceshares 44,895 — — — — — —Cancellation of employee non-vested shares (40,503) — — — — — —Cancellation of shares to cover employees’ taxwithholdings upon vesting of non-vested shares (33,696) — (2.4) — — — (2.4)Repurchase of common stock (633,230) — — — (44.9) — (44.9)Cash dividends on common stock ($1.40 per share) — — — (25.4) — — (25.4)Excess tax benefit upon vesting of non-vested sharesand dividend payment on unvested shares expectedto vest — — 0.8 — — — 0.8Amortization of unearned equity compensation — — 6.8 — — — 6.8Dividends on unvested equity awards that werecanceled — — — 0.2 — — 0.2BALANCE, December 31, 2014 17,607,251 $0.2 $1,028.5 $280.4 $(197.1) $(96.1) $1,015.9Net loss — $— $— $(236.6) $— $— $(236.6)Other comprehensive income, net of tax — — — — — 64.4 64.4Issuance of non-vested shares to employees and non-employee directors 62,285 — — — — — —Issuance of common shares to non-employeedirectors 2,436 — 0.2 — — — 0.2Issuance of common shares to employees uponvesting of restricted stock units and performanceshares 52,106 — — — — — —Cancellation of employee non-vested shares (987) — — — — — —Cancellation of shares to cover employees’ taxwithholdings upon vesting of non-vested shares (37,009) — (2.8) — — — (2.8)Repurchase of common stock (647,520) — — — (49.4) — (49.4)Issuance of stock related to warrants 1,015,185 Cash dividends on common stock ($1.60 per share) — — — (28.1) — — (28.1)Excess tax benefit upon vesting of non-vested sharesand dividend payment on unvested shares expectedto vest — — 1.3 — — — 1.3Amortization of unearned equity compensation — — 9.3 — — — 9.3Dividends on unvested equity awards that werecanceled — — — 0.2 — — 0.2BALANCE, December 31, 2015 18,053,747 $0.2 $1,036.5 $15.9 $(246.5) $(31.7) $774.4The accompanying notes to consolidated financial statements are an integral part of these statements.55KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESSTATEMENTS OF CONSOLIDATED CASH FLOWS Year Ended December 31, 2015 2014 2013 (In millions of dollars)Cash flows from operating activities: Net (loss) income $(236.6) $71.8 $104.8Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation of property, plant and equipment 30.8 29.5 26.4Amortization of definite-lived intangible assets 1.6 1.6 1.7Amortization of debt discount and debt issuance costs 4.3 11.8 11.0Deferred income taxes – Note 5 (131.7) 34.3 55.4Excess tax benefit upon vesting of non-vested shares and dividend payment on unvested sharesexpected to vest (1.3) (0.8) (1.1)Non-cash equity compensation 9.5 7.0 6.8Lower of cost or market inventory write-down 2.6 — —Non-cash unrealized loss (gain) on derivative instruments 3.4 6.8 (3.9)Amortization of option premiums (received) paid, net — — (0.1)Non-cash impairment charges 0.1 1.5 —Loss on repurchase of Senior Notes 1 2.5 — —Loss on disposition of property, plant and equipment 0.3 0.2 0.1Loss (gain) on disposition of available for sale securities — 0.1 (0.4)Non-cash defined benefit net periodic benefit cost (income) 2 2.8 (23.5) (22.0)Non-cash loss on removal of Union VEBA, net 2 446.7 — —Other non-cash changes in assets and liabilities 0.6 0.6 (9.3)Changes in operating assets and liabilities: Trade and other receivables 17.4 (7.0) (3.3)Inventories, excluding lower of cost or market write-down (7.5) (0.3) (28.4)Prepaid expenses and other current assets 3 0.5 (0.6) 1.1Accounts payable (13.6) 20.3 (1.6)Accrued liabilities 2,3 12.8 (6.0) 1.8Annual variable cash contributions to VEBAs 2 (13.7) (16.0) (20.0)Payable to affiliate — — (7.9)Long-term assets and liabilities, net 2,3 27.3 (7.2) 0.6Net cash provided by operating activities 158.8 124.1 111.7Cash flows from investing activities 4 : Capital expenditures (63.1) (59.4) (70.4)Purchase of available for sale securities (0.5) (93.5) (227.8)Proceeds from disposition of available for sale securities 84.0 108.2 183.1Change in restricted cash — — 1.7Net cash provided by (used in) investing activities 20.4 (44.7) (113.4)Cash flows from financing activities 4 : Repurchase of Senior Notes 1 (30.0) — —Settlement of Convertible Notes 1 (175.0) — —Proceeds from cash-settled call options related to settlement of Convertible Notes 1 94.9 — —Payment for conversion premium related to settlement of Convertible Notes 1 (94.9) — —Cash paid for financing costs (0.6) — —Payment of capital lease liability — (0.1) (0.1)Excess tax benefit upon vesting of non-vested shares and dividend payment on unvested sharesexpected to vest 1.3 0.8 1.1Cancellation of shares to cover employees' tax withholdings upon vesting of non-vested shares (2.8) (2.4) (2.5)Repurchase of common stock (49.2) (44.1) (78.3)Cash dividends paid to stockholders (28.1) (25.4) (23.0)Cash dividend returned to the Company — — 0.6Net cash used in financing activities (284.4) (71.2) (102.2)Net (decrease) increase in cash and cash equivalents during the period (105.2) 8.2 (103.9)Cash and cash equivalents at beginning of period 177.7 169.5 273.4Cash and cash equivalents at end of period $72.5 $177.7 $169.5_____________1. See Note 3 for more information relating to the Senior Notes (defined in Note 3 ) and the Convertible Notes.2. See Note 6 for the impact of removing the Union VEBA (defined in Note 6 ) net assets.3. Excludes the reclassification of derivatives relating to the Convertible Notes (defined in Note 3 ) from long-term to current at December 31, 2014 as theamounts had no impact on cash flow - see Note 3 and Note 11 .4. See Note 14 for the supplemental disclosure on non-cash transactions.The accompanying notes to consolidated financial statements are an integral part of these statements.56KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS1. Summary of Significant Accounting PoliciesIn this Annual Report on Form 10-K (this "Report"), unless the context otherwise requires, references in these notes to consolidated financial statements to"Kaiser Aluminum Corporation," "we," "us," "our," "the Company" and "our Company" refer collectively to Kaiser Aluminum Corporation and its subsidiaries.Organization and Nature of Operations. Kaiser Aluminum Corporation specializes in the production of semi-fabricated specialty aluminum products, such asaluminum plate and sheet and extruded and drawn products, primarily used in aerospace/high strength, automotive, general engineering and other industrial endmarket applications. Our business is organized into one operating segment, Fabricated Products. See Note 13 for additional information regarding our reportablesegment and business unit.Principles of Consolidation and Basis of Presentation. The consolidated financial statements include the accounts of our wholly owned subsidiaries and areprepared in accordance with United States generally accepted accounting principles ("GAAP") and the rules and regulations of the Securities and ExchangeCommission (the "SEC"). Intercompany balances and transactions are eliminated.Use of Estimates in the Preparation of Financial Statements. The preparation of financial statements in accordance with GAAP requires the use of estimatesand assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities known to exist as of the date the financialstatements are published and the reported amounts of revenues and expenses during the reporting period. Uncertainties with respect to such estimates andassumptions are inherent in the preparation of our consolidated financial statements; accordingly, it is possible that the actual results could differ from theseestimates and assumptions, which could have a material effect on the reported amounts of our consolidated financial position and results of operations.Recognition of Sales. Sales are generally recognized on a gross basis when all of the following criteria are met: (i) persuasive evidence of an arrangementexists; (ii) title, ownership and risk of loss has passed to the customer; (iii) the price to the customer is fixed or determinable; and (iv) collection of the resultingreceivable is reasonably assured. A provision for estimated sales returns from and allowances to customers is made in the same period as the related revenues arerecognized, based on historical experience or the specific identification of an event necessitating a reserve.Stock-Based Compensation. Stock-based compensation in the form of service-based awards is provided to executive officers, certain employees and non-employee directors and is accounted for at fair value. We measure the cost of services received in exchange for an award of equity instruments based on the grant-date fair value of the award and the number of awards expected to ultimately vest. The grant-date fair value is determined based on the stock price on the date ofgrant, adjusted for expected dividends to be paid during the vesting period.We also grant performance-based awards to executive officers and other key employees. Performance awards granted prior to 2014 are subject to performanceconditions pertaining to specified financial metrics and are valued based on the stock price at the date of grant, adjusted for expected dividend equivalents to bepaid during the vesting period. Performance awards granted after 2014 are subject to performance conditions pertaining to total shareholder return and are valuedon the date of grant using a Monte Carlo valuation model. The key assumptions in applying this model are an expected volatility and a risk-free interest rate. Formore information on our stock-based compensation, see Note 8 .The cost of service-based awards, including time-vested restricted stock and performance shares, is recognized as an expense over the requisite service periodof the award on a straight-line basis. For performance shares granted prior to 2014, the related expense is updated quarterly by adjusting the estimated number ofshares expected to vest based on the most probable outcome of the performance condition (see Note 8 ).Shipping and Handling Costs. Shipping and handling costs are recorded as a component of Cost of products sold, excluding depreciation, amortization andother items.Advertising Costs. Advertising costs, which are included in Selling, general, administrative, research and development ("SG&A and R&D"), are expensed asincurred. Advertising costs for 2015 , 2014 and 2013 were $1.2 million , $0.6 million and $1.3 million , respectively.57Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSResearch and Development Costs. Research and development costs, which are included in SG&A and R&D, are expensed as incurred. Research anddevelopment costs for 2015 , 2014 and 2013 were $9.5 million , $8.9 million and $7.8 million , respectively.Major Maintenance Activities. All major maintenance costs are accounted for using the direct expensing method.Cash and Cash Equivalents. We consider only those short-term, highly liquid investments with original maturities of 90 days or less when purchased to be cashequivalents. Our cash equivalents consist primarily of funds in commercial paper, money market funds and other highly liquid investments, which are classifiedwithin Level 1 of the fair value hierarchy with the exception of commercial paper, which is classified within Level 2 of the fair value hierarchy.Restricted Cash. We are required to keep on deposit certain amounts that are pledged or held as collateral relating to workers’ compensation and otheragreements. We account for such deposits as restricted cash (see Note 2 ). From time to time, such restricted funds could be returned to us or we could be requiredto pledge additional cash.Trade Receivables and Allowance for Doubtful Accounts. Trade receivables primarily consist of amounts billed to customers for products sold. Accountsreceivable are generally due within 30 to 60 days . For the majority of our receivables, we establish an allowance for doubtful accounts based upon collectionexperience and other factors. On certain other receivables where we are aware of a specific customer’s inability or reluctance to pay, an allowance for doubtfulaccounts is established against amounts due, to reduce the net receivable balance to the amount we reasonably expect to collect. However, if circumstances change,our estimate of the recoverability of accounts receivable could be different. Circumstances that could affect our estimates include, but are not limited to, customercredit issues and general economic conditions. Accounts are written off once deemed to be uncollectible. Any subsequent cash collections relating to accounts thathave been previously written off are typically recorded as a reduction to total bad debt expense in the period of payment. Write-offs for 2015 , 2014 and 2013 wereimmaterial to the consolidated financial statements.Inventories. Inventories are stated at the lower of cost or market value. On December 31, 2015 , we recorded an inventory write-down of $2.6 million to reflectthe net realizable value as of that date. The net realizable value reflected: (i) a reduction in the Midwest Transaction Price and (ii) commitments as of that date fromcustomers to purchase our inventory at prices that exceeded the Midwest Transaction Price reduced by an approximate normal profit margin. If we continue toencounter reductions in the price of aluminum and/or if we experience a decrease in our net realizable value of inventory, we may be subject to additionalinventory lower of cost or market value adjustments.Finished products, work-in-process and raw material inventories are stated on the last-in, first-out ("LIFO") basis. At December 31, 2015, after adjusting for theinventory write down discussed above, the stated LIFO value of inventory represented its net realizable value (less a normal profit margin) and exceeded thecurrent cost of our inventory by $24.1 million . At December 31, 2014, the current cost of our inventory exceeded its stated LIFO value by $37.6 million . Otherinventories, principally operating supplies and repair and maintenance parts, are stated at average cost. Inventory costs consist of material, labor and manufacturingoverhead, including depreciation. Abnormal costs, such as idle facility expenses, freight, handling costs and spoilage, are accounted for as current period charges.All of our inventories at December 31, 2015 and December 31, 2014 were included in the Fabricated Products segment (see Note 2 for the components ofinventories).Property, Plant and Equipment – Net. Property, plant and equipment is recorded at cost (see Note 2 ). Construction in progress is included within Property,plant and equipment – net on the Consolidated Balance Sheets. Interest related to the construction of qualifying assets is capitalized as part of the constructioncosts. The aggregate amount of interest capitalized is limited to the interest expense incurred in the period. The amount of interest expense capitalized asconstruction in progress was $1.8 million , $2.5 million and $3.4 million during 2015 , 2014 and 2013 , respectively.Depreciation is computed using the straight-line method at rates based on the estimated useful lives of the various classes of assets. Capital lease assets andleasehold improvements are depreciated on a straight-line basis over the shorter of the estimated useful lives of the assets or the lease term. The principal estimateduseful lives are as follows: Range (in years)Land improvements3-25Buildings and leasehold improvements15-45Machinery and equipment1-24Capital lease assets3-558Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDepreciation expense is not included in Cost of products sold, excluding depreciation and amortization and other items , but is included in Depreciation andamortization on the Statements of Consolidated (Loss) Income. For 2015 , 2014 and 2013 , we recorded depreciation expense of $30.3 million , $29.0 million and$25.8 million , respectively, relating to our operating facilities in our Fabricated Products segment. An immaterial amount of depreciation expense was alsorecorded within All Other for all periods presented in this Report.Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset orgroup of assets may not be recoverable. We regularly assess whether events and circumstances with the potential to trigger impairment have occurred and rely on anumber of factors, including operating results, business plans, economic projections and anticipated future cash flow, to make such assessments. We use anestimate of the future undiscounted cash flows of the related asset or asset group over the estimated remaining life of such asset(s) in measuring whether theasset(s) are recoverable. Measurement of the amount of impairment, if any, is based on the difference between the carrying value of the asset(s) and the estimatedfair value of such asset(s). Fair value is determined through a series of standard valuation techniques.We recorded impairment charges of $0.1 million and $1.5 million in 2015 and 2014, respectively, to reflect the scrap value of idled assets we determined not todeploy for future use. There were no impairment charges in 2013 . Asset impairment charges are included in Other operating charges, net in the Statements ofConsolidated (Loss) Income and are included in the Fabricated Products segment.We classify assets as held for sale only when an asset is being actively marketed and expected to sell within 12 months. Assets held for sale are initiallymeasured at the lesser of the assets' carrying amount and the fair value less costs to sell.Available for Sale Securities. We account for investments in certain marketable debt securities as available for sale securities. Such securities are recorded atfair value (see Note 11 ), with net unrealized gains and losses, net of income taxes, reflected in Accumulated other comprehensive income (loss) as a component ofStockholders' equity. Realized gains and losses from the sale of marketable debt securities, if any, are determined on a specific identification basis. Debtinvestment securities with an original maturity of 90 days or less are classified as Cash and cash equivalents (see Note 2 ). Debt investment securities with anoriginal maturity of greater than 90 days are presented as Short-term investments on the Consolidated Balance Sheets. In addition to debt investment securities, wealso hold assets in various investment funds managed by a third-party trust in connection with our deferred compensation program (see Note 6 ).Deferred Financing Costs. Costs incurred in connection with debt financing are deferred and amortized over the estimated term of the related borrowing. Suchamortization is included in Interest expense and may be capitalized as part of construction in progress (see Note 2 and Note 3 ).Goodwill and Intangible Assets. Goodwill is tested for impairment during the fourth quarter on an annual basis, as well as on an interim basis, as warranted, atthe time of relevant events and changes in circumstances. Intangible assets with definite lives are initially recognized at fair value and subsequently amortized overthe estimated useful lives to reflect the pattern in which the economic benefits of the intangible assets are consumed. In the event the pattern cannot be reliablydetermined, we use a straight-line amortization method. Whenever events or changes in circumstances indicate that the carrying amount of the intangible assetsmay not be recoverable, the intangible assets are reviewed for impairment. We concluded there was no impairment of the carrying value of goodwill atDecember 31, 2015 or December 31, 2014 (see Note 4 ).Conditional Asset Retirement Obligations ( " CAROs " ). We have CAROs at several of our Fabricated Products facilities. The vast majority of such CAROsconsist primarily of incremental costs that would be associated with the removal and disposal of asbestos (all of which is believed to be fully contained andencapsulated within walls, floors, roofs, ceilings or piping) at certain of our older facilities if such facilities were to undergo major renovation or be demolished.We estimate incremental costs for special handling, removal and disposal costs of materials that may or will give rise to CAROs and then discount the expectedcosts back to the current year using a credit-adjusted, risk-free rate. When it is unclear when or if CAROs will be triggered, we use probability weighting forpossible timing scenarios to determine the probability-weighted liability amounts that should be recognized in our consolidated financial statements (see Note 11 ).Self Insurance of Employee Health and Workers' Compensation Liabilities . We self-insure the majority of the costs of employee health care benefits andworkers' compensation benefits and rely on insurance coverage to protect us from large losses on individual claims. Workers' compensation liabilities are based ona combination of estimates for: (i) incurred-but-not-reported claims and (ii) the ultimate expense of incurred claims. Such estimates are based on judgment, usingour historical claims data and information and analysis provided by actuarial and claims advisors, our insurance carriers and other59Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSprofessionals. Our undiscounted workers' compensation liabilities were estimated at $23.5 million and $25.9 million at December 31, 2015 and December 31, 2014, respectively. However, we account for our workers' compensation accrued liability on a discounted basis, using a discount rate of 1.75% at both December 31,2015 and December 31, 2014 . Accrued liabilities for employee healthcare benefits, which are estimates of unpaid incurred medical and prescription drug costs asprovided by our healthcare administrators, were $3.2 million and $2.9 million at December 31, 2015 and December 31, 2014 , respectively.Environmental Contingencies. With respect to environmental loss contingencies, we record a loss contingency whenever a contingency is probable andreasonably estimable (see Note 9 ). Accruals for estimated losses from environmental remediation obligations are generally recognized no later than the completionof the remedial feasibility study. Such accruals are adjusted as information develops or circumstances change. Costs of future expenditures for environmentalremediation obligations are not discounted to their present value. Accruals for expected environmental costs are included in Other accrued liabilities or Long-termliabilities, as appropriate (see Note 2 ). Environmental expense relating to continuing operations is included in Cost of products sold, excluding depreciation andamortization and other items in the Statements of Consolidated (Loss) Income. Environmental expense relating to non-operating locations is included in SG&Aand R&D in the Statements of Consolidated (Loss) Income.Derivative Financial Instruments. Hedging transactions using derivative financial instruments are primarily designed to mitigate our exposure to changes in themarket price of aluminum and energy and, to a lesser extent, to mitigate our exposure to changes in foreign currency exchange rates. From time to time, we alsoenter into hedging arrangements in connection with financing transactions to mitigate financial risks.We do not utilize derivative financial instruments for trading or other speculative purposes. Our derivative activities are initiated within guidelines establishedby management and approved by our Board of Directors. Hedging transactions are executed centrally on behalf of all of our operations to minimize transactioncosts, monitor consolidated net exposures and allow for increased responsiveness to changes in market factors.We recognize derivative instruments as assets or liabilities in our Consolidated Balance Sheets and measure these instruments at fair value by "marking-to-market" all of our hedging positions at each period's end (see Note 11 ). Because we do not meet the documentation requirements for hedge (deferral) accountingrelated to aluminum and energy derivatives, unrealized and realized gains and losses associated with these hedges are reflected as a reduction or increase,respectively, in Cost of products sold - Unrealized loss (gain) on derivative instruments and unrealized and realized gains and losses relating to hedges of financingtransactions are reflected as a component of Other income (expense) (see Note 15 ). Our accounting policy for foreign currency related derivatives is discussed in "Foreign Currency Risk Management" below. See Note 10 for additional information about realized and unrealized gains and losses relating to our derivativefinancial instruments.Our derivative contacts for metal, natural gas, electricity and foreign currency potentially subject us to concentrations of credit risk if a counterparty fails toperform its obligations on derivative contracts with us or fails to return cash collateral that we previously posted with the counterparty. To mitigate this risk, weonly enter into hedges with major financial institutions and/or trading firms that are investment grade or better, and we diversify our hedging positions amongmultiple counterparties to minimize exposure to any single counterparty. Additionally, we enter into reciprocal margin arrangements whereby: (i) we depositmargin collateral with a counterparty to the extent that the net market value of our derivative positions with such counterparty is a liability to us and exceeds aspecified dollar threshold or (ii) the counterparty deposits margin collateral with us to the extent that the net market value of our derivative positions with suchcounterparty is an asset to us and exceeds a specified dollar threshold. At both December 31, 2015 and December 31, 2014 , we had no margin deposits with orfrom our counterparties. As a result of our efforts to manage our counterparty exposures, we believe the risk of loss is remote and, in any event, would not bematerial.Additionally, our firm price customer sales commitments create incremental customer credit risk related to metal price movements. Under certaincircumstances, we mitigate this risk by periodically requiring cash collateral from them, which we classify as deferred revenue and include as a component ofOther accrued liabilities on our Consolidated Balance Sheets. At December 31, 2015 , cash collateral totaled $0.9 million . For more information aboutconcentration risks concerning customers and suppliers, see Note 13 .Fair Value Measurements. We apply the provisions of Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures , inmeasuring the fair value of our derivative contracts and plan assets invested by certain of our employee benefit plans (see Note 11 ).60Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSFair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at themeasurement date. The fair value hierarchy consists of three broad levels and is described below:•Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.•Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly, including:quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active;inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates); and inputs that are derived principally from orcorroborated by observable market data by correlation or other means.•Level 3 – Inputs that are both significant to the fair value measurement and unobservable.Income Taxes. Deferred income taxes reflect the future tax effect of temporary differences between the carrying amount of assets and liabilities for financialand income tax reporting and are measured by applying statutory tax rates in effect for the year during which the differences are expected to reverse. In accordancewith ASC Topic 740, Income Taxes , we use a "more likely than not" threshold for recognition of tax attributes that are subject to uncertainties and measure anyreserves in respect of such expected benefits based on their probability. Deferred tax assets are reduced by a valuation allowance to the extent it is more likely thannot that the deferred tax assets will not be realized (see Note 5 ).Net (Loss) Income per Share. Basic net (loss) income per share is computed by dividing distributed and undistributed net (loss) income allocable to commonshares by the weighted-average number of common shares outstanding during the applicable period. The basic weighted-average number of common sharesoutstanding during the period excludes unvested share-based payment awards. Diluted net (loss) income per share was calculated under the treasury stock methodfor 2015 , 2014 and 2013 , which in all years was more dilutive than the two-class method (see Note 12 ).Leases. For leases that contain predetermined fixed escalations of the minimum rent, we recognize the related rent expense on a straight-line basis from the datewe take possession of the property to the end of the initial lease term. We record any difference between the straight-line rent amounts and the amount payableunder the lease as part of deferred rent in Other accrued liabilities or Long-term liabilities, as appropriate. Deferred rent for all periods presented was not material.Foreign Currency. Certain of our foreign subsidiaries use the local currency as their functional currency; our assets and liabilities are translated at exchangerates in effect at the balance sheet date; and our statement of (loss) income is translated at weighted-average monthly rates of exchange prevailing during the year.Resulting translation adjustments are recorded directly to a separate component of stockholders’ equity in accordance with ASC Topic 830, Foreign CurrencyMatters . At both December 31, 2015 and December 31, 2014 , the amount of translation adjustment relating to foreign subsidiaries using local currency as theirfunctional currency was immaterial. Where the U.S. dollar is the functional currency of a foreign facility or subsidiary, re-measurement adjustments are recordedin Other income (expense).Foreign Currency Risk Management. From time to time, we enter into foreign currency forward contracts to protect the value of anticipated foreign currencyexpenses associated with cash commitments for equipment purchases. These derivative instruments are designated and qualify for cash flow hedge accounting andare adjusted to current market values each reporting period. Both realized and unrealized periodic gains and losses of derivative instruments designated as cashflow hedges are deferred in Accumulated other comprehensive loss until depreciation on the underlying equipment commences. Upon commencement, realizedgains and losses are recorded in Net income (loss) as an adjustment to depreciation expense in the period in which depreciation is recognized on the underlyingequipment. Depending on the time to maturity and asset or liability position, the carrying values of cash flow hedges are included in Prepaid expenses and othercurrent assets, Other assets, Other accrued liabilities or Long-term liabilities. We report the effective portion of our cash flow hedges in the same financialstatement line item as changes in the fair value of the hedged item.In order to qualify for hedge accounting treatment, derivative instruments must be effective at reducing the risk associated with the exposure being hedged andmust be designated as a hedge at the inception of the instrument contract. Hedge effectiveness is assessed periodically. Any derivative instrument not designated asa hedge, or so designated but ineffective, is adjusted to market value and recognized in net income immediately. If a cash flow hedge ceases to qualify for hedgeaccounting treatment, the derivative instrument would continue to be carried on the balance sheet at fair value until settled and future adjustments to the derivativeinstrument’s fair value would be recognized in Net (loss) income immediately. If a forecasted61Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSequipment purchase was no longer probable to occur, amounts previously deferred in Accumulated other comprehensive income would be recognized immediatelyin Net (loss) income. See Note 10 for additional information.New Accounting Pronouncements. Accounting Standards Update ("ASU") No. 2014-12, Compensation - Stock Compensation (Topic 718): Accounting forShare-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period - Consensus of theFASB Emerging Issues Task Force ("ASU 2014-12"), was issued in June 2014. ASU 2014-12 requires an entity to treat a performance target that affects vestingand that could be achieved after the requisite service period as a performance condition. Our adoption of this ASU in the first quarter of 2015 did not have amaterial impact on our consolidated financial statements.ASU No. 2015-03, Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"), was issued inApril 2015. ASU 2015-03 requires debt issuance costs related to a recognized debt liability to be presented in an entity’s balance sheet as a direct deduction fromthe carrying amount of that debt liability, consistent with debt discounts, instead of being presented as a deferred charge in the balance sheet. In August 2015, ASUNo. 2015-15, Interest - Imputation of Interest (Subtopic 835-30) - Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements ("ASU 2015-15") was issued to address the presentation and subsequent measurement of debt issuance costs related to line-of-creditarrangements. The recognition and measurement guidance for debt issuance costs is not affected by ASU 2015-03 and ASU 2015-15. An entity is required to adoptASU 2015-03 and ASU 2015-15 for reporting periods beginning on or after December 15, 2015. We do not expect the adoption of these ASUs to have a materialimpact on our consolidated financial statements.ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or ItsEquivalent) ("ASU 2015-07"), was issued in May 2015. This ASU removes the requirement to categorize within the fair value hierarchy table investments withoutreadily determinable fair values in entities that elect to measure fair value using net asset value per share ("NAV") or its equivalent. ASU 2015-07 requires thatthese investments continue to be shown in the fair value disclosure in order to allow the disclosure to reconcile to the investment amount presented in the balancesheet. An entity is required to adopt ASU 2015-07 for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. We do notexpect the adoption of this ASU to have a material impact on our consolidated financial statements.ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date ("ASU 2015-14"), was issued in August 2015. ASU2015-14 defers the effective date of ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was issued in May 2014 and requires an entityto recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to beentitled in exchange for those goods or services, by one year for all entities and permits early adoption on a limited basis. We expect to adopt ASU 2014-09 for thefiscal year ending December 31, 2018 and will continue to assess the impact of the adoption on our consolidated financial statements; however, based on ourassessments to date, we do not expect the adoption of this ASU to have a material impact on our consolidated financial statements.ASU No. 2015-17, Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes ("ASU 2015-17"), was issued in November 2015. ASU 2015-17requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. This ASU does not,however, change the existing requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount.We do not expect the adoption of ASU 2015-17 in the first quarter of 2016 to have a material impact on our consolidated financial statements.2. Supplemental Balance Sheet Information December 31, 2015 December 31, 2014 (In millions of dollars)Cash and Cash Equivalents Cash and money market funds $40.3 $29.5Commercial paper 32.2 148.2Total $72.5 $177.7 62Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2015 December 31, 2014 (In millions of dollars)Trade Receivables – Net Billed trade receivables $116.8 $128.7Unbilled trade receivables 0.7 1.4Trade receivables, gross 117.5 130.1Allowance for doubtful receivables (0.8) (0.8)Trade receivables – net $116.7 $129.3 Inventories Finished products $79.5 $73.6Work-in-process 63.6 66.7Raw materials 53.4 54.2Operating supplies and repair and maintenance parts 23.1 20.2Total $219.6 $214.7 Prepaid Expenses and Other Current Assets Current derivative assets – Notes 10 and 11 $1.5 $85.7Current deferred tax assets 49.6 86.4Prepaid insurance 1.9 2.0Short-term restricted cash 0.3 0.3Other 3.4 4.2Total $56.7 $178.6 Property, Plant and Equipment – Net Land and improvements $22.7 $22.9Buildings and leasehold improvements 71.8 63.8Machinery and equipment 549.0 509.8Construction in progress 48.5 25.2Property, plant and equipment – gross 692.0 621.7Accumulated depreciation (196.9) (166.8)Assets held for sale 0.3 —Property, plant and equipment – net $495.4 $454.9 Other Assets Restricted cash $10.9 $10.0Deferred financing costs 4.5 5.9Deferred compensation plan assets 7.3 7.3Derivative assets – Notes 10 and 11 0.1 —Other — 0.1Total $22.8 $23.3 63Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2015 December 31, 2014 (In millions of dollars)Other Accrued Liabilities Current derivative liabilities – Notes 10 and 11 $14.1 $94.9Uncleared cash disbursements 8.0 9.1Accrued income taxes and taxes payable 3.1 5.2Accrued annual contribution to VEBAs 19.6 13.7Short-term environmental accrual – Note 9 1.6 2.3Accrued interest 1.5 3.7Short-term deferred revenue – Note 1 1.2 0.2Other 3.6 3.7Total $52.7 $132.8 Long-Term Liabilities Derivative liabilities – Notes 10 and 11 $2.1 $1.9Income tax liabilities 0.7 2.4Workers’ compensation accruals 21.7 21.5Long-term environmental accrual – Note 9 17.0 17.0Long-term asset retirement obligations 4.8 4.4Long-term deferred revenue – Note 1 0.3 0.5Deferred compensation liability 7.7 7.2Long-term capital leases 0.1 0.1Long-term portion of contingent contribution to Union VEBA – Note 6 29.9 —Other long-term liabilities 3.2 3.3Total $87.5 $58.33. Debt and Credit FacilitySenior NotesIn May 2012, we issued $225.0 million principal amount of 8.25% unsecured senior notes due June 1, 2020 ("Senior Notes") at 100% of the principal amount.Interest expense, including amortization of deferred financing costs, relating to the Senior Notes was $18.8 million for 2015 , and $19.4 million each for 2014 and2013. A portion of the interest relating to the Senior Notes was capitalized as construction in progress. The effective interest rate of the Senior Notes isapproximately 8.6% per annum, taking into account the amortization of deferred financing costs.The Senior Notes are unsecured obligations and are guaranteed by certain of our domestic subsidiaries that own virtually all of our operating assets and throughwhich we conduct the vast majority of our business. See Note 17 for condensed guarantor and non-guarantor financial information.The indenture governing the Senior Notes places limitations on our and certain of our subsidiaries' ability to, among other things, incur liens, consolidate,merge or sell all or substantially all of our and certain of our subsidiaries' assets, incur or guarantee additional indebtedness, enter into transactions with affiliatesand to make "restricted payments" (which are defined in the indenture to include certain loans, investments, dividend payments, share repurchases andprepayments, redemptions or repurchases of certain indebtedness). Certain types and amounts of restricted payments are allowed by various provisions of theindenture. In particular, the indenture provisions permit us to make restricted payments in any amount if, after giving effect to such restricted payments, our"consolidated total indebtedness" as a ratio of "EBITDA" (each term as defined in the indenture) is less than 2.00:1.00 .We may redeem the Senior Notes at our option in whole or part at any time on or after June 1, 2016 at a redemption price of 104.125% of the principal amount,declining to 102.0625% of the principal amount on or after June 1, 2017 and declining64Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSfurther to 100% of the principal amount on or after June 1, 2018, in each case plus any accrued and unpaid interest. At any time prior to June 1, 2016, we may alsoredeem some or all of the Senior Notes at a redemption price equal to 100% of the principal amount, together with any accrued and unpaid interest, plus a "make-whole premium."Holders of the Senior Notes have the right to require us to repurchase the Senior Notes at a price equal to 101% of the principal amount plus any accrued andunpaid interest following a change of control. A change of control includes: (i) certain ownership changes; (ii) certain recapitalizations, mergers and dispositions;(iii) certain changes in the composition of our Board of Directors; and (iv) shareholders' approval of any plan or proposal for the liquidation or dissolution of us.We may also be required to offer to repurchase the Senior Notes at 100% of the principal amount, plus any accrued and unpaid interest, with the proceeds ofcertain asset sales.During 2015 , we repurchased $27.2 million aggregate principal amount of our Senior Notes for 107.5% of the face value plus $0.8 million of accrued interestfor a total net cash outflow of $30.0 million and a loss of $2.5 million recognized within Other (expense) income, net on our Statements of Consolidated (Loss)Income. As of December 31, 2015 and December 31, 2014 , the aggregate principal amount of our Senior Notes outstanding was $197.8 million and $225.0million , respectively. The fair value of the outstanding Senior Notes at December 31, 2015 and December 31, 2014 was approximately $207.3 million and $244.5million , respectively. See Note 11 for information relating to the estimated fair value of the Senior Notes.Cash Convertible Senior NotesConvertible Notes . In March 2010, we issued $175.0 million principal amount of 4.5% unsecured cash convertible senior notes due April 1, 2015 ("ConvertibleNotes"). We accounted for the cash conversion feature of the Convertible Notes as a separate derivative instrument ("Bifurcated Conversion Feature") with the fairvalue on the issuance date equaling the original issuance discount for purposes of accounting for the debt component of the Convertible Notes. The effectiveinterest rate for the term of the Convertible Notes was approximately 11% , taking into account the amortization of the original issuance discount and deferredfinancing costs. At December 31, 2014 , the carrying amount of the Convertible Notes, net of $2.5 million of unamortized issuance discount, was $172.5 million .The following table provides additional information regarding the Convertible Notes (in millions of dollars): Year Ended December 31, 2015 2014 2013Contractual coupon interest$2.0 $7.9 $7.9Amortization of discount2.4 9.1 8.2Amortization of deferred financing costs0.3 1.1 1.2Total interest expense 1$4.7 $18.1 $17.3_______________1. A portion of the interest relating to the Convertible Notes was capitalized as construction in progress.We settled the Convertible Notes in cash on April 1, 2015. The conversion value of 154.261% of par was determined over a period of 50 consecutive tradingdays that ended on March 27, 2015, resulting in a total settlement amount of $273.8 million , comprised of a final coupon payment of $3.9 million , principal of$175.0 million and conversion premium of $94.9 million .Hedge Transactions . In connection with the issuance of our Convertible Notes, we purchased cash-settled call options ("Option Assets") relating to shares ofour common stock that settled contemporaneously with the Convertible Notes. The Option Assets' settlement proceeds of $94.9 million equaled the ConvertibleNotes' conversion premium. Accordingly, the net cash outflow to settle our Convertible Notes and Option Assets on April 1, 2015 was $178.9 million .Contemporaneous with the issuance of the Convertible Notes and our purchase of the Option Assets, we sold net-share-settled warrants ("Warrants") relating toapproximately 3.7 million notional shares of our common stock. During the Warrant settlement period from July 1, 2015 through December 18, 2015, we issued1,015,185 shares of our common stock in connection with the Warrants according to the formula discussed in Note 12 . In addition, we paid a de minimis amountin cash to the holders for fractional shares at the end of the settlement period. See Note 12 for additional information relating to the settlement of our Warrants.65Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSRevolving Credit FacilityOur credit agreement with JPMorgan Chase Bank, N.A., as administrative agent, and the other financial institutions party thereto ("Revolving Credit Facility")was amended and extended on December 1, 2015, with the term being extended from September 2016 to December 2020 and the commitment under the facilityremaining unchanged at $300.0 million . Co-borrowers under the facility are the Company and four of our wholly-owned domestic operating subsidiaries: KaiserAluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC, Kaiser Aluminum Washington, LLC and Kaiser Aluminum Alexco, LLC.The Revolving Credit Facility is secured by a first priority lien on substantially all of our accounts receivable, inventory and certain other of our related assetsand proceeds and our domestic operating subsidiaries as well as certain machinery and equipment. Under the Revolving Credit Facility, we are able to borrow fromtime to time an aggregate commitment amount equal to the lesser of $300.0 million and a borrowing base comprised of: (i) 85% of eligible accounts receivable; (ii)the lesser of (a) 75% of eligible inventory and (b) 85% of the net orderly liquidation value of eligible inventory as determined in the most recent inventoryappraisal ordered by the administrative agent; and (iii) certain eligible machinery and equipment supporting up to $60.0 million of borrowing availability, reducedby certain reserves, all as specified in the Revolving Credit Facility. Up to a maximum of $20.0 million of availability under the Revolving Credit Facility may beutilized for letters of credit.Borrowings under the Revolving Credit Facility bear interest at a rate equal to either a base prime rate or LIBOR, at our option, plus, in each case, a specifiedvariable percentage determined by reference to the then-remaining borrowing availability under the Revolving Credit Facility. The Revolving Credit Facility may,subject to certain conditions and the agreement of lenders thereunder, be increased up to $400.0 million .We had $288.1 million of borrowing availability under the Revolving Credit Facility at December 31, 2015 , based on the borrowing base determination then ineffect. At December 31, 2015 , there were no borrowings under the Revolving Credit Facility and $7.3 million was used to support outstanding letters of credit,leaving $280.8 million of net borrowing availability. The interest rate applicable to any overnight borrowings under the Revolving Credit Facility would have been3.75% at December 31, 2015 .Amounts owed under the Revolving Credit Facility may be accelerated upon the occurrence of various events of default including, without limitation, thefailure to make principal or interest payments when due and breaches of covenants, representations and warranties set forth therein. The Revolving Credit Facilityplaces limitations on our ability and certain of our subsidiaries to, among other things, grant liens, engage in mergers, sell assets, incur debt, enter into sale andleaseback transactions, make investments, undertake transactions with affiliates, prepay certain debt, pay dividends and repurchase shares. We are allowed toprepay debt, pay dividends and repurchase shares in any amount if, after giving effect to such payment, $52.5 million or more would be available for us to borrowunder the Revolving Credit Facility, or if after giving effect to such payment, $45.0 million or more would be available to us to borrow under the Revolving CreditFacility and we maintain a fixed charge coverage ratio at or above 1.15:1.0 . In addition, we are required to maintain a fixed charge coverage ratio on aconsolidated basis at or above 1.0:1.0 if borrowing availability under the Revolving Credit Facility is less than $30.0 million .4. Goodwill and Intangible AssetsOur accounting policy is to perform an annual goodwill impairment test during the fourth quarter of each year or whenever events or changes in circumstancesindicate that goodwill or the carrying value of intangible assets may not be recoverable. As of December 31, 2015 , we performed a quantitative impairment testand determined that no impairment of our goodwill and intangible assets was required.Goodwill. We had goodwill of $37.2 million at both December 31, 2015 and December 31, 2014 . Such goodwill is related to our acquisitions of the Chandler,Arizona (Extrusion) facility and the Florence, Alabama facility and is included in the Fabricated Products segment.Intangible Assets. In 2015 and 2014 , our identifiable intangible assets were related to customer relationships. The original cost of these customer relationshipswas $38.5 million and accumulated amortization and net book value were $8.0 million and $30.5 million , respectively, at December 31, 2015 , and $6.4 millionand $32.1 million , respectively, at December 31, 2014 .Amortization expense relating to definite-lived intangible assets is recorded in the Fabricated Products segment. Such expense was $1.6 million for both 2015and 2014 and $1.7 million for 2013 . The expected amortization of intangible assets for each of the next five calendar years is $1.6 million and $22.5 million foryears thereafter.66Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS5. Income Tax MattersTax Benefit (Provision) . (Loss) income before income taxes by geographic area was as follows (in millions of dollars): Year Ended December 31, 2015 2014 2013Domestic$(373.6) $102.1 $138.9Foreign1.8 5.0 4.3(Loss) income before income taxes$(371.8) $107.1 $143.2Income taxes are classified as either domestic or foreign, based on whether payment is made or due to the United States or a foreign country. Certain incomeclassified as foreign is also subject to domestic income taxes.Income tax benefit (provision) consisted of (in millions of dollars): Federal Foreign State Total2015 Current$0.7 $2.1 $0.4 $3.2Deferred93.2 (1.2) 1.8 $93.8Benefit applied to increase Additional paid in capital/ Othercomprehensive income33.5 0.4 4.3 $38.2Income tax benefit$127.4 $1.3 $6.5 $135.22014 Current$(1.0) $1.0 $(0.6) $(0.6)Deferred6.4 0.3 5.1 $11.8Expense applied to decrease Additional paid in capital/Othercomprehensive income(41.6) (0.5) (4.4) $(46.5)Income tax (provision) benefit$(36.2) $0.8 $0.1 $(35.3)2013 Current$1.1 $16.2 $(0.2) $17.1Deferred(49.7) (0.5) (6.7) $(56.9)Benefit (expense) applied to increase (decrease) Additional paid incapital/ Other comprehensive income1.3 (0.1) 0.2 $1.4Income tax (provision) benefit$(47.3) $15.6 $(6.7) $(38.4)67Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSA reconciliation between the benefit from (provision for) income taxes and the amount computed by applying the federal statutory income tax rate to (loss)income before income taxes is as follows (in millions of dollars): Year Ended December 31, 2015 2014 2013Amount of federal income tax benefit (provision) based on the statutory rate$130.1 $(37.5) $(50.1)(Increase) decrease in federal valuation allowances(0.6) — 0.1Non-deductible compensation expense(0.2) (0.1) (0.3)Non-deductible expense(0.3) (0.3) (0.9)State income tax benefit (provision), net of federal benefit 14.2 — (4.4)Foreign income tax benefit0.1 0.3 —Expiration of statute of limitations1.7 2.3 4.6Settlement with taxing authorities— — 4.4Advance pricing agreement(0.2) — 2.9Competent Authority settlement0.4 — 5.3Income tax benefit (provision)$135.2 $(35.3) $(38.4)___________________________1. The State income tax benefit was $10.3 million in 2015, but was offset by a $3.1 million increase due to state tax rate and state law changes enacted during thecurrent year and a $3.0 million increase relating to the expiration of certain current and future state net operating losses. State income taxes were $2.3 millionin 2014, but were offset by a $1.6 million decrease due to lower tax rates in various states and a $0.7 million in the valuation allowance relating to certain statenet operating losses. State income taxes of $4.4 million in 2013 included a $1.2 million increase in the valuation allowance relating to certain unused state netoperating losses expected to expire.Deferred Income Taxes. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and amounts used for income tax purposes. The components of our net deferred income tax assets were as follows (in millions ofdollars): Year Ended December 31, 2015 2014Deferred income tax assets: Loss and credit carryforwards$255.7 $275.4VEBAs (see Note 6)25.9 5.1Other assets38.7 37.8Inventories— 18.7Valuation allowances(21.2) (19.2)Total deferred income tax assets299.1 317.8Deferred income tax liabilities: Property, plant and equipment(79.6) (74.1)VEBAs (see Note 6)— (120.6)Inventories(9.4) (6.7)Total deferred income tax liabilities(89.0) (201.4)Net deferred income tax assets 1$210.1 $116.468Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS__________________________1. Of the total net deferred income tax assets of $210.1 million , $49.6 million was included in Prepaid expenses and other current assets, $162.6 million waspresented as Deferred tax assets, net and $2.1 million was presented as Deferred tax liabilities on the Consolidated Balance Sheet as of December 31, 2015 .Of the total net deferred income tax assets of $116.4 million , $86.4 million was included in Prepaid expenses and other current assets and $30.9 million waspresented as Deferred tax assets, net and $0.9 million was presented as Deferred tax liabilities on the Consolidated Balance Sheet as of December 31, 2014 .Tax Attributes. At December 31, 2015 , we had $564.4 million of net operating loss ("NOL") carryforwards available to reduce future cash payments forincome taxes in the United States. Of the $564.4 million of NOL carryforwards at December 31, 2015 , $1.7 million represents excess tax benefits related to thevesting of employee restricted stock, which will result in an increase in equity if and when such excess tax benefits are ultimately realized. The NOL carryforwardsexpire periodically through 2030. We also had $29.5 million of AMT credit carryforwards with an indefinite life, available to offset regular federal income taxrequirements.To preserve the NOL carryforwards available to us, our certificate of incorporation includes certain restrictions on the transfer of our common stock. Thesetransfer restrictions will expire in accordance with their terms on July 6, 2016.In assessing the realizability of deferred tax assets, management considers whether it is "more likely than not" that some portion or all of the deferred tax assetswill not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which thosetemporary differences become deductible. Management considers taxable income in carryback years, the scheduled reversal of deferred tax liabilities, tax planningstrategies and projected future taxable income in making this assessment. Due to uncertainties surrounding the realization of some of our deferred tax assets,primarily including state NOL carryforwards sustained during the prior years and expiring tax benefits, we have a valuation allowance against our deferred taxassets. When recognized, the tax benefits relating to any reversal of this valuation allowance will be recorded as a reduction of income tax expense. The increase(decrease) in the valuation allowance was $2.0 million , $(0.7) million and $1.2 million in 2015 , 2014 and 2013, respectively.The increase in the valuation allowance in 2015 was primarily due to unutilized state NOL carryforwards and Federal Separate Return Limitation Year (SRLY)losses that were expected to expire. The decrease in the valuation allowance for 2014 was primarily due to the projected utilization of state NOL carryforwards.The increase in the valuation allowance in 2013 was primarily due to unutilized state NOL carryforwards that were expected to expire.Other . We and our subsidiaries file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions.Our tax returns for certain past years are still subject to examination by taxing authorities and the use of NOL carryforwards in future periods could trigger areview of attributes and other tax matters in years that are not otherwise subject to examination.We have gross unrecognized benefits relating to uncertain tax positions. A reconciliation of changes in the gross unrecognized tax benefits is as follows (inmillions of dollars): Year Ended December 31, 2015 2014 2013Gross unrecognized tax benefits at beginning of period $2.2 $3.8 $15.7Gross increases for tax positions of prior years 0.1 — —Gross decreases for tax positions of prior years — — (7.6)Gross decrease for tax positions relating to lapse of a statute of limitation (0.6) (1.4) (3.3)Foreign currency translation — (0.2) (1.0)Gross unrecognized tax benefits at end of period $1.7 $2.2 $3.8If and when the $1.7 million , $2.2 million and $3.8 million of gross unrecognized tax benefits at December 31, 2015 , December 31, 2014 and December 31,2013 , respectively, are recognized, $0.6 million , $1.1 million and $2.7 million will be reflected, respectively, in our income tax provision and thus affect theeffective tax rate in future periods.69Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe change in gross unrecognized tax benefits during 2015 was due to the expiration of statutes. The change during 2014 was due to the expiration of statutesand foreign currency fluctuations. The change during 2013 was primarily due to the expiration of statutes, settlements with taxing authorities, foreign currencyfluctuations and change in tax positions.In addition, we recognize interest and penalties related to unrecognized tax benefits in the income tax provision. We had $0.2 million and $1.4 million accruedfor interest and penalties at December 31, 2015 and December 31, 2014 , respectively. Of these amounts, none were recorded as current liabilities and included inOther accrued liabilities on the Consolidated Balance Sheets at December 31, 2015 and December 31, 2014 . We recognized a decrease in interest and penalty of$1.2 million , $0.9 million and $5.2 million in our tax provision in 2015 , 2014 and 2013 , respectively.In connection with the gross unrecognized tax benefits (including interest and penalties) denominated in foreign currency, we incurred a foreign currencytranslation adjustment. During 2015 , 2014 and 2013 , the foreign currency impact on such liabilities resulted in $0.1 million , $0.3 million and $0.7 millioncurrency translation adjustments, respectively, which increased Other comprehensive income.We do not expect our gross unrecognized tax benefits to significantly change within the next 12 months .6. Employee BenefitsEmployee Plans. Employee benefit plans include:•A defined contribution 401(k) savings plan for hourly bargaining unit employees at nine of our production facilities based on the specific collectivebargaining agreement at each facility. For active bargaining unit employees at three of these production facilities, we are required to make fixed ratecontributions. For active bargaining unit employees at one of these production facilities, we are required to match certain employee contributions. Foractive bargaining unit employees at three of these production facilities, we are required to make both fixed rate contributions and concurrent matches. Foractive bargaining unit employees at two remaining production facilities, we are not required to make any contributions. Fixed rate contributions either:(i) range from (in whole dollars) $800 to $2,400 per employee per year, depending on the employee’s age, or (ii) vary between 2% to 10% of theemployees’ compensation depending on their age and years of service for employees hired prior to January 1, 2004 or is a fixed 2% annual contributionfor employees hired on or after January 1, 2004. We contributed $1.9 million to such plans during 2015 .•A defined contribution 401(k) savings plan for salaried and certain hourly employees providing for a concurrent match of up to 4% of certaincontributions made by employees plus an annual contribution of between 2% and 10% of their compensation depending on their age and years of serviceto employees hired prior to January 1, 2004. All new hires on or after January 1, 2004 receive a fixed 2% contribution annually. We contributed $6.7million to such plans during 2015 .•A defined benefit plan for salaried employees at our London, Ontario facility, with annual contributions based on each salaried employee’s age and yearsof service. At December 31, 2015 , approximately 59% of the plan assets were invested in equity securities and 37% of plan assets were invested in fixedincome securities. The remaining plan assets were invested in short-term securities. Our investment committee reviews and evaluates the investmentportfolio. The asset mix target allocation on the long-term investments is approximately 66% in equity securities, 30% in fixed income securities and theremaining assets in short-term securities. See Note 11 for additional information regarding the fair values of the Canadian pension plan assets.•A non-qualified, unfunded, unsecured plan of deferred compensation for key employees who would otherwise suffer a loss of benefits under our definedcontribution plan as a result of the limitations imposed by the Internal Revenue Code of 1986 (the "Code"). Despite the plan being an unfunded plan, wemake an annual contribution to a rabbi trust to fulfill future funding obligations, as contemplated by the terms of the plan. The assets in the trust are at alltimes subject to the claims of our general creditors and no participant has a claim to any assets of the trust. Plan participants are eligible to receivedistributions from the trust subject to vesting and other eligibility requirements. Assets in the rabbi trust relating to the deferred compensation plan areaccounted for as available for sale securities and are included in Other assets on the Consolidated Balance Sheets (see Note 2 ). Liabilities relating to thedeferred compensation plan are included in Long-term liabilities on the Consolidated Balance Sheets (see Note 2 ).•An employment agreement with our chief executive officer extending through December 31, 2018. We also provide certain members of seniormanagement, including each of our named executive officers, with benefits related to70Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSterminations of employment in specified circumstances, including in connection with a change in control, by us without cause and by the executive officerwith good reason.VEBA Postretirement Obligations. Certain eligible retirees receive certain healthcare related benefits through participation in a voluntary employees'beneficiary association ("VEBA") that provides healthcare and medical cost reimbursement benefits for eligible retirees represented by certain unions and theirsurviving spouse and eligible dependents (the "Union VEBA") or a VEBA that provides healthcare related benefits for certain other retirees and their spouse andeligible dependents (the "Salaried VEBA" and, together with the Union VEBA, the "VEBAs"). The Union VEBA covers certain qualifying bargaining unit retireesand future retirees. The Salaried VEBA covers certain retirees who retired prior to the 2004 termination of the prior plan and employees who were hired prior toFebruary 2002 and have subsequently retired or will retire with the requisite age and service. The Union VEBA is managed by four trustees, two of which areappointed by us and two of which are appointed by the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service WorkersInternational Union, AFL-CIO, CLC ("USW"). The Salaried VEBA is managed by trustees who are independent of us. The VEBAs' assets are managed byindependent fiduciaries appointed by the VEBAs' trustees.Our primary financial obligation to the VEBAs is to make an annual variable cash contribution. The formula determining the annual variable contributionamount is 10% of the first $20.0 million of annual cash flow (as defined; in general terms, the principal elements of cash flow are earnings before interest expense,provision for income taxes and depreciation and amortization less cash payments for, among other things, interest, income taxes and capital expenditures), plus20% of annual cash flow (as defined) in excess of $20.0 million . Such payments may not exceed $20.0 million annually and payments are allocated between theUnion VEBA and the Salaried VEBA at 85.5% and 14.5% , respectively. The variable cash contribution obligation to the Union VEBA will terminate inSeptember 2017, while the obligation to the Salaried VEBA has no express termination date. As of December 31, 2015 , we determined that the variablecontribution for 2015 was $19.6 million (comprised of $16.8 million to the Union VEBA and $2.8 million to the Salaried VEBA). These amounts will be paidduring the first quarter of 2016 . The variable contribution relating to 2014 in the amount of $13.7 million was paid in 2015 .We have no claim to the assets of the VEBAs nor do we have any obligation to fund their liabilities. The VEBA plan designs and benefits paid by the VEBAsare at the sole discretion of the respective VEBA trustees and are outside our control. Nevertheless, we have historically accounted for the VEBAs as definedbenefit postretirement plans with the current VEBA assets and future variable contributions from us and earnings thereon, operating as a cap on the benefits to bepaid. Accordingly, we have historically accounted for net periodic postretirement benefit costs (income) in accordance with ASC Topic 715, Compensation –Retirement Benefits, and recorded any difference between the assets of each VEBA and our accumulated postretirement benefit obligation in our consolidatedfinancial statements. Information necessary for the valuation of the net funded status of the plans must be obtained from the VEBAs on an annual basis.Under this accounting treatment, the funding status of each of the VEBAs could result in a liability or asset position on our Consolidated Balance Sheets. Suchliability or asset has no impact on our cash flow or liquidity. Only our obligation to make an annual variable cash contribution can have a material impact to ourcash flow or liquidity.In January 2015, members of the USW at our Newark, Ohio ("Newark") and Spokane, Washington ("Trentwood") facilities ratified a new five-year collectivebargaining agreement. The collective bargaining agreement did not extend our obligation to make annual variable contributions to the Union VEBA. As a result ofour obligation to make annual variable contributions to the Union VEBA expiring for any period after September 2017, we no longer account for the Union VEBAas a defined benefit plan and have removed the Union VEBA net assets and related deferred tax liabilities from our Consolidated Balance Sheets as of January 1,2015. As of December 31, 2015 , the estimated liability for the remaining variable cash contributions through September 2017 of $46.7 million in the aggregatewas recorded in Other accrued liabilities and Long-term liabilities (see Note 2 ) of which $16.8 million was related to 2015 and will be paid in the first quarter of2016, as noted above. The remaining $29.9 million is an estimate of the amounts due for 2016 (to be paid in 2017) and 2017 (to be paid in 2018). The final amountis subject to change until the close of each respective calendar year. The estimated liability for the remaining variable cash contributions will be adjusted quarterlybased on our most current projections of cash flow (as defined) with the changes reflected in our Operating (loss) income.The projected benefit obligation and fair value of the plan assets of the Union VEBA as of December 31, 2014 were $391.5 million and $731.6 million ,respectively. As a result of the termination of defined benefit plan accounting for the Union VEBA, the projected benefit obligation and fair value of the plan assetswere removed from our consolidated financial statements, resulting in a predominantly non-cash loss of $306.9 million , net of a $186.5 million tax benefit, during2015.71Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSKey Assumptions. The following data presents the key assumptions used and the amounts reflected in our consolidated financial statements with respect to ourCanadian pension plan and the VEBAs. We use a December 31 measurement date for all of the plans.Assumptions used to determine benefit obligations as of the periods presented were as follows: Canadian Pension Plan VEBAs December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014 Salaried VEBA Union VEBA Salaried VEBADiscount rate 4.10% 4.00% 3.90% 3.80% 3.60%Rate of compensation increase 3.00% 3.00% — — —Initial medical trend rate 1 — — — 7.00% —Ultimate medical trend rate 1 — — — 5.00% —_____________________1. The medical trend rate assumptions used for the Union VEBA at December 31, 2014 were provided by the Union VEBA and certain industry data wereprovided by our actuaries. The trend rate was assumed to decline to 5% by 2019 .Key assumptions made in computing the net asset/obligation of each VEBA and in total include:With respect to VEBA assets:•Based on the information received from the Salaried VEBA at December 31, 2015 and the VEBAs at December 31, 2014 , both the Salaried VEBA andUnion VEBA assets were invested in various managed proprietary funds. VEBA plan assets are managed by an independent fiduciary selected by theapplicable VEBA's trustees and are not under our control.•Our variable payment, if any, is treated as a funding/contribution policy and not counted as a VEBA asset at December 31 for actuarial purposes.With respect to VEBA obligations:•The accumulated postretirement benefit obligation ("APBO") for each VEBA was computed based on the level of benefits being provided by it atDecember 31, 2015 for the Salaried VEBA and December 31, 2014 for the VEBAs.•Since the Salaried VEBA was paying a fixed annual amount to its constituents at both December 31, 2015 and December 31, 2014 , no future cost trendrate increase has been assumed in computing the APBO for the Salaried VEBA.Assumptions used to determine net periodic benefit cost (income) for the years ended December 31 were: Canadian Pension Plan VEBAs 2015 2014 2013 2015 2014 2013 SalariedVEBA UnionVEBA SalariedVEBA UnionVEBA SalariedVEBADiscount rate 4.00% 4.90% 4.40% 3.60% 4.70% 4.20% 4.00% 3.40%Expected long-term return on plan assets1 5.10% 4.75% 4.50% 7.75% 6.75% 7.75% 6.25% 7.25%Rate of compensation increase 3.00% 3.00% 3.00% — — — — —Initial medical trend rate 2 — — — — 7.50% — 8.00% —Ultimate medical trend rate 2 — — — — 5.00% — 5.00% —72Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS_____________________1. The expected long-term rate of return assumption is based on the targeted investment portfolios provided to us by the VEBAs’ trustees.2. The medical trend rate was assumed to decline to 5% by 2019 for each of 2014 and 2013 .Benefit Obligations and Funded Status. The following table presents the benefit obligations and funded status of our Canadian pension and the VEBAs as ofDecember 31, 2015 and December 31, 2014 and the corresponding amounts that are included in our Consolidated Balance Sheets (in millions of dollars): Canadian Pension Plan VEBAs 2015 2014 2015 2014Change in benefit obligation: Obligation at beginning of year $7.0 $6.6 $470.9 $374.7Removal of Union VEBA — — (391.5) —Foreign currency translation adjustment (1.0) (0.5) — —Service cost 0.2 0.2 — 2.2Interest cost 0.2 0.3 2.7 16.7Prior service cost 1 — — 13.2 90.4Actuarial loss (gain) 2 (0.1) 0.7 (11.2) 10.2Benefits paid by Company (0.2) (0.3) — —Benefits paid by VEBAs — — (6.2) (24.7)Reimbursement from retiree drug subsidy 3 — — — 1.4Obligation at end of year 6.1 7.0 77.9 470.9 Change in plan assets: Fair market value of plan assets at beginning of year 6.3 6.2 793.8 780.7Removal of Union VEBA 4 — — (778.3) —Foreign currency translation adjustment (1.0) (0.5) — —Actual return on assets 0.3 0.6 0.1 22.7Employer/Company contributions 4,5 0.3 0.3 49.5 13.7Benefits paid by Company (0.2) (0.3) — —Benefits paid by VEBAs — — (6.2) (24.7)Reimbursement from retiree drug subsidy 3 — — — 1.4Fair market value of plan assets at end of year 5.7 6.3 58.9 793.8Net funded status 6 $(0.4) $(0.7) $(19.0) $322.9_____________________________1. The prior service cost relating to the Salaried VEBA in 2015 was primarily comprised of a $13.2 million loss due to an increase in the annual healthcarereimbursement benefit starting in 2016 for plan participants.The prior service cost relating to the VEBAs in 2014 was primarily comprised of: (i) a $60.5 million loss due to an increase in the healthcare premiumreimbursement benefit in the Union VEBA; (ii) a $15.9 million loss resulting from the addition of a new death benefit starting in 2015 for plan participants inthe Union VEBA; and (iii) a $14.0 million loss due to an increase in the annual healthcare reimbursement benefit starting in 2015 for plan participants in theSalaried VEBA.73Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS2. The actuarial gain relating to the Salaried VEBA in 2015 was primarily comprised of: (i) a $5.5 million gain due to projected lower benefit utilization; (ii) a$2.0 million gain due primarily to reductions in the discount rates; and (iii) a $3.7 million gain due primarily to updated actuarial mortality rates.The actuarial gain relating to the VEBAs in 2014 was primarily comprised of: (i) a gain of $53.6 million due to projected lower benefit utilization; (ii) again of $18.0 million due to projected lower drug claim cost in the future because of lower than expected drug claim costs in 2014 in the Union VEBA; (iii) again of $0.4 million due primarily to a reduction in administrative cost in the Union VEBA. The actuarial gain relating to the VEBAs in 2014 was partiallyoffset by: (i) a loss of $45.0 million due primarily to reductions in the discount rates; and (ii) a loss of $37.2 million due primarily to updated actuarialmortality rates in both VEBAs.3. The Union VEBA was eligible for the retiree drug subsidy of the Medicare Modernization Act that went into effect January 1, 2006. As a result, we measuredthe Union VEBA’s obligations and costs for the year ended December 31, 2014 to take into account this subsidy.4. Removal of Union VEBA and Employer/Company contributions each include $46.7 million of accrued variable cash contribution, of which: (i) $16.8 millionrelates to the Union VEBA for the 2015 year, which will be paid during the first quarter of 2016 and (ii) $29.9 million relates to the estimated accrual for theUnion VEBA with respect to the variable contributions for 2016 and 2017.5. In addition to the $46.7 million discussed above, Employer/Company contributions included $2.8 million of accrued variable cash contribution related to theSalaried VEBA for the 2015 year, which will be paid during the first quarter of 2016. For the calendar year 2014 , we accrued a total (Union and Salaried)liability for a variable cash contribution of $13.7 million , which was paid in the first quarter of 2015 .6. Net funded status of $19.0 million relating to the Salaried VEBA at December 31, 2015 was presented as Net liabilities of Salaried VEBA on the ConsolidatedBalance Sheet. Net funded status of $322.9 million at December 31, 2014 was comprised of $340.1 million presented as Net assets of Union VEBA on theConsolidated Balance Sheet, offset by $17.2 million presented as Net liabilities of Salaried VEBA.The following table presents the net assets (liabilities) of each VEBA as of the periods presented. Such information is also included in the tables required underGAAP above which roll forward the assets and obligations (in millions of dollars): Salaried VEBA Union VEBA December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014Accumulated plan benefit obligation $(77.9) $(79.4) $— $(391.5)Plan assets 58.9 62.2 — 731.6Net funded status $(19.0) $(17.2) $— $340.1The accumulated benefit obligation for the Canadian defined benefit pension plan was $5.4 million and $6.2 million at December 31, 2015 and December 31,2014 , respectively. We expect to contribute $0.3 million to the Canadian pension plan in 2016 .As of December 31, 2015 , the net benefits expected to be paid in each of the next five fiscal years and in aggregate for the five fiscal years thereafter are asfollows (in millions of dollars): Benefit Payments Due by Period 2016 2017 2018 2019 2020 2020-2023Canadian pension plan benefit payments$0.2 $0.2 $0.2 $0.3 $0.3 $1.6Salaried VEBA benefit payments 17.6 7.3 7.0 6.7 6.4 27.2Total net benefits$7.8 $7.5 $7.2 $7.0 $6.7 $28.8__________________________________1. Such amounts are based on benefit amounts and certain key assumptions obtained from the Salaried VEBA.74Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe amount of loss which is recognized in the Consolidated Balance Sheets (in Accumulated other comprehensive loss) associated with our Canadian definedbenefit pension plan and the VEBAs (before tax) that have not yet been reflected in net periodic benefit cost (income) were as follows for the years endedDecember 31 (in millions of dollars): Canadian Pension Plan Salaried VEBA Union VEBA 2015 2014 2015 2014 2015 2014Accumulated net actuarial (loss) gain $(1.0) $(1.9) $(13.6) $(21.5) $— $65.1Transition assets 0.1 0.2 — — — —Prior service cost — — (35.9) (25.7) — (171.7)Loss recognized in Accumulated other comprehensive loss $(0.9) $(1.7) $(49.5) $(47.2) $— $(106.6)The amount in Accumulated other comprehensive loss that has not yet been recognized as a component of net periodic postretirement benefit cost (income) atDecember 31, 2015 that is expected to be recognized in 2016 is $4.5 million for the Salaried VEBA. For the Canadian pension plan, such amounts were nominal atDecember 31, 2015 . Of the $4.5 million relating to the Salaried VEBA, $4.0 million is related to amortization of prior service cost and $0.5 million is related toamortization of net actuarial gain (loss). See the Statement of Comprehensive (Loss) Income for reclassification adjustments of other comprehensive income (loss)that were recognized as components of net periodic benefit cost (income) for 2015 , 2014 and 2013 .Fair Value of Plan Assets. See Note 11 for the fair values of the assets of the Canadian pension plan and the VEBAs.Components of Net Periodic Benefit Cost (Income). Our results of operations included the following impacts associated with the Canadian defined benefit planand the VEBAs: (a) charges for service rendered by employees; (b) a charge for accretion of interest; (c) a benefit for the return on plan assets; and (d) amortizationof net gains or losses on assets, prior service costs associated with plan amendments and actuarial differences. The following table presents the components of netperiodic benefit cost (income) for the years ended December 31 (in millions of dollars): Canadian Pension Plan VEBAs 2015 2014 2013 2015 2014 2013Service cost 1 $0.3 $0.2 $0.3 $— $2.2 $2.5Interest cost 0.3 0.3 0.3 2.7 16.7 14.6Expected return on plan assets (0.3) (0.3) (0.3) (4.3) (51.4) (45.1)Amortization of prior service cost 2 — — — 3.0 10.6 4.2Amortization of net actuarial loss (gain) 0.1 0.1 0.2 1.0 (1.8) 1.3Net periodic benefit cost (income) 0.4 0.3 0.5 2.4 (23.7) (22.5)__________________________1. The service cost related to the Salaried VEBA was insignificant for all periods presented.2. We amortize prior service cost on a straight-line basis over the average remaining years of service to full eligibility for benefits of the active plan participants.75Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe following tables present the total charges (income) related to all benefit plans for the periods presented (in millions of dollars): Year Ended December 31, 2015 2014 2013Included within Fabricated Products: Canadian pension plan $0.4 $0.3 $0.5Deferred compensation plan 0.1 0.2 0.3Defined contribution plans 7.8 7.3 7.2Total Fabricated Products 1 $8.3 $7.8 $8.0 Included within All Other: Net periodic postretirement benefit cost (income) relating to VEBAs 2.4 (23.7) (22.5)Loss on removal of Union VEBA net assets 493.4 — —Deferred compensation plan 0.3 0.7 0.9Defined contribution plans 0.8 0.8 0.7Total All Other 2 $496.9 $(22.2) $(20.9) Total $505.2 $(14.4) $(12.9)___________________________1. Substantially all of the Fabricated Products segment’s charges related to employee benefits were in Cost of products sold, excluding depreciation andamortization and other items with the remaining balance in SG&A and R&D.2. Charges (income) related to VEBAs is included within the Statements of Consolidated (Loss) Income as Net periodic postretirement benefit cost (income)relating to VEBAs with the remaining balance in SG&A and R&D.7. Multiemployer Pension PlansOverview. We contribute to multiemployer defined benefit pension plans under the terms of collective bargaining agreements that cover our union-representedemployees at certain facilities. At December 31, 2015 , approximately 53% of our total employees were union-represented employees at facilities participating inthese multiemployer pension plans. We currently estimate that contributions will range from $3.0 million to $5.0 million per year through 2016.The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects:•Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers.•If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.•If we choose to stop participating in some of our multiemployer plans, we may be required to pay those plans an amount based on the underfunded statusof the plan, referred to as a withdrawal liability.76Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSOur participation in multiemployer pension plans for the year ended December 31, 2015 is outlined in the table below:Pension Fund EmployerIdentificationNumber Pension Protection ActZone Status 1 FIP/RP StatusPending/Implementedin 2015 2 Contributions of the Company SurchargeImposed in2015 Expiration Date ofCollective-BargainingAgreement 2015 2014 2013 2015 2014 (in millions of dollars) Steelworkers PensionTrust (USW) 3 236648508 Green Green No $3.5 $3.1 $2.9 No Mar2017-Sep2020Other Funds 4 0.9 0.9 0.9 $4.4 $4.0 $3.8 ________________ 1. The most recent Pension Protection Act zone status available in 2015 and 2014 for the Steelworkers Pension Trust is for the plan's year-end at December 31,2014 and December 31, 2013 , respectively. The zone status is based on information that we received from the plan and is certified by the plan's actuary.Among other factors, plans in the green zone are at least 80 percent funded.2. The "FIP/RP Status Pending/Implemented" column indicates if a Financial Improvement Plan (FIP) or a Rehabilitation Plan (RP) is either pending or has beenimplemented for the plan under the Pension Protection Act.3. We are party to three USW collective bargaining agreements that require contributions to the Steelworkers Pension Trust. As of December 31, 2015 , USWcollective bargaining agreements covering employees at the Newark and Trentwood facilities covered 85% of our USW-represented employees and expires inSeptember 2020. Our monthly contributions per hour worked by each bargaining unit employee at the Newark and Trentwood facilities are (in whole dollars)$1.50 and will increase to $1.75 in 2019. The union contracts covering employees at the Richmond, Virginia facility and Florence, Alabama facility cover10% and 5% of our USW-represented employees, respectively, and expire in November 2017 and March 2017, respectively.4. Other Funds consists of plans that are not individually significant.We were not listed in any of the plans' Forms 5500 or the Canada-Wide Industrial Pension Plan financial statements as providing more than 5% of the totalcontributions for any of the plan years disclosed. At December 31, 2015 , Forms 5500 were not available for the plan years ending in 2015 . Further, there were nosignificant changes to the number of employees covered by our multiemployer plans that would affect the period-to-period comparability of the contributions forthe years presented.8. Employee Incentive PlansShort-Term Incentive Plans ("STI Plans")We have annual short-term incentive compensation plans for senior management and certain other employees payable at our election in cash, shares ofcommon stock, or a combination of cash and shares of common stock. Amounts earned under STI Plans are based on our adjusted earnings before interest, taxes,depreciation and amortization ("Adjusted EBITDA"), modified for certain safety, quality, delivery, cost and individual performance factors. The AdjustedEBITDA targets are determined based on the economic value added ("EVA") of our Fabricated Products business. Most of our production facilities have similarprograms for both hourly and salaried employees.77Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSTotal costs relating to STI Plans were recorded as follows for each period presented (in millions of dollars): Year Ended December 31, 2015 2014 2013Cost of products sold, excluding depreciation and amortization and other items $4.7 $4.7 $4.6SG&A and R&D 9.3 8.0 11.1Total costs recorded in connection with STI Plans $14.0 $12.7 $15.7The following table presents the allocation of the charges detailed above, by segment (in millions of dollars): Year Ended December 31, 2015 2014 2013Fabricated Products $10.2 $9.6 $11.2All Other 3.8 3.1 4.5Total costs recorded in connection with STI Plans $14.0 $12.7 $15.7Long-Term Incentive Programs ("LTI Programs")General . Executive officers and other key employees of the Company, as well as non-employee directors of the Company, are eligible to participate in theKaiser Aluminum Corporation Amended and Restated 2006 Equity and Performance Incentive Plan (as amended, "Equity Incentive Plan"). The Equity IncentivePlan permits the granting of awards in the form of options to purchase common shares, stock appreciation rights, shares of non-vested and vested stock, restrictedstock units, performance shares, performance units and other awards. The Equity Incentive Plan will expire on July 6, 2016 and no grants will be made thereunderafter that date. Our Board of Directors may, in its discretion, terminate the Equity Incentive Plan at any time. The termination of the Equity Incentive Plan will notaffect the rights of participants or their successors under any awards outstanding and not exercised in full on the date of termination and all grants made on or priorto the date of termination will remain in effect thereafter subject to the terms of the applicable grant agreement and the Equity Incentive Plan. Subject to certainadjustments that may be required from time to time to prevent dilution or enlargement of the rights of participants under the Equity Incentive Plan, a total of2,722,222 common shares have been authorized for issuance under the Equity Incentive Plan. At December 31, 2015 , 709,362 common shares were available foradditional awards under the Equity Incentive Plan.Non-vested Common Shares and Restricted Stock Units. We grant non-vested common shares to our non-employee directors, executive officers and other keyemployees. We also grant restricted stock units to certain employees. The restricted stock units have rights similar to the rights of non-vested common shares andeach restricted stock unit that becomes vested entitles the recipient to receive one common share. For both non-vested common shares and restricted stock units,the service period is generally one year for non-employee directors and three years for executive officers and other key employees.In addition to non-vested common shares and restricted stock units, we grant performance shares to executive officers and other key employees. Eachperformance share that becomes vested entitles the recipient to receive one common share. Performance shares granted prior to 2014 ("EVA-Based PerformanceShares") are subject to performance conditions pertaining to our EVA performance, measured over specified three-year performance periods. The number of EVA-Based Performance Shares that will ultimately vest and result in the issuance of common shares ranges between 0% to 200% of the target number of underlyingcommon shares (constituting approximately one-half of the maximum payout) and depends on the average annual EVA achieved for the specified three -yearperformance period. Performance shares granted beginning in 2014 ("TSR-Based Performance Shares") are subject to performance conditions pertaining to ourtotal shareholder return ("TSR") over a three-year performance period compared to the TSR of a specified group of peer companies. The number of TSR-BasedPerformance Shares that will ultimately vest under both the 2014-2016 and 2015-2017 LTI Programs and result in the issuance of common shares ranges between0% to 200% of the target number of underlying common shares (constituting approximately one-half of the maximum payout) and depends on the percentileranking of our TSR compared to the group of peer companies.During the first quarter of 2015, a portion of the EVA-Based Performance Shares granted under the 2012-2014 LTI Program vested (see "Summary of Activity"below). The vesting of performance shares resulting in the issuance and delivery of common shares, if any, under the 2013-2015, 2014-2016 and 2015-2017 LTIPrograms will occur in 2016, 2017 and 2018, respectively.78Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSNon-Cash Compensation Expense. Compensation expense relating to all awards under the Equity Incentive Plan is included in SG&A and R&D. Non-cashcompensation expense by type of award under LTI Programs was as follows for each period presented (in millions of dollars): Year Ended December 31, 2015 2014 2013Non-vested common shares and restricted stock units$4.4 $3.9 $4.3EVA-Based Performance Shares0.9 1.0 2.3TSR-Based Performance Shares4.0 1.9 —Total non-cash compensation expense$9.3 $6.8 $6.6The following table presents the allocation of the charges detailed above, by segment (in millions of dollars): Year Ended December 31, 2015 2014 2013Fabricated Products$3.5 $3.2 $2.2All Other5.8 3.6 4.4Total non-cash compensation expense$9.3 $6.8 $6.6Recognized tax benefits relating to non-cash compensation expense were $3.5 million , $2.5 million and $2.4 million for 2015 , 2014 and 2013 , respectively.Unrecognized Gross Compensation Cost Data. The following table presents unrecognized gross compensation cost data by type of award as of December 31,2015 : Unrecognized gross compensation costs (inmillions of dollars) Expected period (in years) over which theremaining gross compensation costs will berecognizedNon-vested common shares and restricted stock units$5.8 1.9EVA-Based Performance Shares$0.3 0.2TSR-Based Performance Shares$7.5 1.9Summary of Activity. A summary of the activity with respect to non-vested common shares, restricted stock units, EVA-Based Performance Shares and TSR-Based Performance Shares for the year ended December 31, 2015 is as follows: Non-VestedCommon Shares RestrictedStock Units EVA-Based PerformanceShares TSR-Based PerformanceShares Shares Weighted-AverageGrant-DateFairValue perShare Units Weighted-AverageGrant-DateFairValue per Unit Shares Weighted-Average Grant-DateFair Value perShare Shares Weighted-Average Grant-DateFair Value perShareOutstanding at December 31,2014158,770 $59.88 5,357 $59.71 353,576 $50.35 150,223 $83.18Granted 162,285 72.09 2,325 69.83 — — 150,424 95.68Vested(63,515) 53.68 (2,161) 52.91 (49,945) 44.81 — —Forfeited 1(987) 66.93 — — (1,212) 57.54 (770) 89.12Canceled 1— — — — (147,314) 44.59 — —Outstanding at December 31,2015156,553 $67.20 5,521 $66.64 155,105 $57.76 299,877 $89.4379Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS_____________________1. For EVA-Based Performance Shares and TSR-Based Performance Shares, the number of shares granted and forfeited are presented at their maximum payout;and the number of shares canceled includes the number of shares that did not vest due to EVA performance results falling below those required formaximum payout.The total grant-date fair value for shares granted was $11.8 million in 2015 and $14.8 million in both 2014 and 2013 . The total grant-date fair value for sharesthat vested during 2015 , 2014 and 2013 was $5.8 million , $5.5 million and $5.1 million , respectively. The weighted-average grant-date fair value per share forshares granted by type of award was as follows for each period presented: Year Ended December 31, 2015 2014 2013Non-vested common shares$72.09 $66.42 $58.65Restricted stock units$69.83 $67.42 $57.70EVA-Based Performance Shares$— $— $57.75TSR-Based Performance Shares$95.68 $83.18 $—Stock Options. We have fully-vested stock options that were granted in 2007. There were 16,645 fully-vested options outstanding as of both December 31, 2015and December 31, 2014 , in each case exercisable to purchase common shares at $80.01 per share and having a remaining contractual life of 1.25 and 2.25 years,respectively. The average fair value of the options granted was $39.90 . During 2015 , no options were granted, exercised or forfeited and no options had expired.Vested Stock. From time to time, we issue common shares to non-employee directors electing to receive common shares in lieu of all or a portion of theirannual retainer fees. The fair value of these common shares is based on the fair value of the shares at the date of issuance and is immediately recognized in Net(loss) income as a period expense. During each of the periods ending December 31, 2015 , 2014 and 2013 , we recorded $0.2 million relating to common sharesgranted to non-employee directors in lieu of all or a portion of their annual retainer fees.Under the Equity Incentive Plan, participants may elect to have us withhold common shares to satisfy minimum statutory tax withholding obligations arising inconnection with the exercise of stock options and vesting of non-vested shares, restricted stock units and performance shares. We cancel any such shares withheldon the applicable vesting dates or earlier dates when service requirements are satisfied, which correspond to the times at which income to the employee isrecognized. When we withhold these common shares, we are required to remit to the appropriate taxing authorities the fair value of the shares withheld as of thevesting date. During 2015 , 2014 and 2013 , 37,009 , 33,696 and 40,075 commons shares, respectively, were withheld and canceled for this purpose. Thewithholding of common shares by us could be deemed a purchase of the common shares.9. Commitments and ContingenciesCommitments. We have a variety of financial commitments, including purchase agreements, forward foreign exchange and forward sales contracts,indebtedness and letters of credit (see Note 3 and Note 10 ).Rental expenses were $8.2 million , $7.4 million and $7.5 million for 2015 , 2014 and 2013 , respectively. There are renewal options in various operating leasessubject to certain terms and conditions. Minimum rental commitments under operating leases at December 31, 2015 were as follows (in millions of dollars): Year Ended December 31, 2016 2017 2018 2019 2020 2021 andThereafterMinimum rental commitments $6.2 $5.1 $4.1 $3.9 $2.2 $25.8Our purchase obligations at December 31, 2015 consisted of: (i) various contracts with suppliers of aluminum that require us to purchase minimum quantitiesof aluminum in 2016 at a price to be determined at the time of purchase based primarily on the underlying metal price at that time; (ii) energy contracts requiringus to purchase minimum quantities of energy in future years at a fixed price; and (iii) cash commitments for future equipment purchases. Amounts to be purchasedin 2016 under the80Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSvariable priced metal contracts totaled $140.6 million and are included in the table below based on minimum quantities at the metal price as of December 31, 2015. We believe the minimum quantities are lower than our current requirements for aluminum. Actual quantities and actual metal prices at the time of purchase couldbe different. All remaining amounts in the table below relate to the fixed price electricity contracts discussed above. The total amounts due under purchaseobligations as of December 31, 2015 were as follows (in millions of dollars): Year Ended December 31, 2016 2017 2018 2019 2020 2021 andThereafterRaw materials $179.3 $— $— $— $— $—Energy 10.3 9.5 5.6 0.6 0.6 1.5Capital equipment 5.2 0.1 — — — —Total purchase obligations $194.8 $9.6 $5.6 $0.6 $0.6 $1.5Environmental Contingencies. We are subject to a number of environmental laws and regulations, to potential fines or penalties assessed for alleged breaches ofsuch laws and regulations and to potential claims based upon such laws and regulations.We have established procedures for regularly evaluating environmental loss contingencies. Our environmental accruals represent our undiscounted estimate ofcosts reasonably expected to be incurred based on presently enacted laws and regulations, existing requirements, currently available facts, existing technology andour assessment of the likely remediation actions to be taken.The following table presents the changes in such accruals, which are primarily included in Long-term liabilities (in millions of dollars): Year Ended December 31, 2015 2014 2013Beginning balance $19.3 $22.8 $21.7Additional accruals 1.3 0.8 4.5Less expenditures (2.0) (4.3) (3.4)Ending balance $18.6 $19.3 $22.8In 2012, we submitted a final feasibility study to the Washington State Department of Ecology ("Washington State Ecology") that included recommendationsfor remediation alternatives primarily to address the historical use of oils containing polychlorinated biphenyls ("PCBs") at our Trentwood facility. We also signedan amended work order in 2012 with Washington State Ecology allowing certain remediation activities to begin the initiation of a treatability study in regards toproposed PCB remediation methods. We began implementation of certain approved sections of the work plan in 2013 and throughout 2014, completing a numberof these sections in 2014 and receiving approval from Washington State Ecology. Also in cooperation with Washington State Ecology, we began construction of apilot test facility to implement the treatability study and evaluate the feasibility of removing PCBs from ground water under the Trentwood facility. As pilot testinghas only begun and the success of the new methodology cannot be reasonably determined at this time, it is possible we may need to make upward adjustments toour related accruals as facts and cost estimates regarding the groundwater treatment method become available.During 2013, at the request of the Ohio Environmental Protection Agency ("OEPA"), we initiated an investigational study of the Newark facility related tohistorical on-site waste disposal. During 2014 and 2015, we completed a number of preliminary steps in the preparation of completing the final risk assessment andfeasibility study, both of which are subject to review and approval by the OEPA. As work continues and progresses to a final risk assessment and feasibility study,we will establish and update estimates for probable and estimable remediation, if any. The actual and final cost for remediation will not be fully determinable untila final feasibility study is submitted and accepted by the OEPA and work plans are prepared, which is expected to occur in the next 12 to 18 months .At December 31, 2015 , our environmental accrual of $18.6 million represented our estimate of the incremental remediation cost based on: (i) proposedalternatives in the final feasibility study related to the Trentwood facility; (ii) currently available facts with respect to our Newark facility; and (iii) facts related tocertain other locations owned or formally owned by us. In81Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSaccordance with approved and proposed remediation action plans, we expect that the implementation and ongoing monitoring could occur over a period of 30 ormore years.As additional facts are developed, feasibility studies are completed, draft remediation plans are modified, necessary regulatory approvals for theimplementation of remediation are obtained, alternative technologies are developed and/or other factors change, there may be revisions to management’s estimatesand actual costs may exceed the current environmental accruals. We believe at this time that it is reasonably possible that undiscounted costs associated with theseenvironmental matters may exceed current accruals by amounts that could be, in the aggregate, up to an estimated $24.7 million over the remediation period. It isreasonably possible that our recorded estimate will change in the next 12 months .Other Contingencies. We are party to various lawsuits, claims, investigations and administrative proceedings that arise in connection with past and currentoperations. We evaluate such matters on a case-by-case basis and our policy is to vigorously contest any such claims we believe are without merit. We accrue for alegal liability when it is both probable that a liability has been incurred and the amount of the loss is reasonably estimable. Quarterly, in addition to when changesin facts and circumstances require it, we review and adjust these accruals to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel andother information and events pertaining to a particular case. While uncertainties are inherent in the final outcome of such matters and it is presently impossible todetermine the actual cost that may ultimately be incurred, we believe that we have sufficiently accrued for such matters and that the ultimate resolution of pendingmatters will not have a material impact on our consolidated financial position, operating results, or liquidity.10. Derivative Financial Instruments and Related Hedging ProgramsOverview . In conducting our business, we enter into derivative transactions, including forward contracts and options, to limit our economic (i.e. cash) exposureresulting from: (i) metal price risk related to our sale of fabricated aluminum products and the purchase of metal used as raw material for our fabricationoperations; (ii) energy price risk relating to fluctuating prices of natural gas and electricity used in our production processes; and (iii) foreign currency requirementswith respect to our foreign subsidiaries and cash commitments for equipment purchases denominated in foreign currency.Our derivative activities are overseen by a hedging committee ("Hedging Committee"), which is composed of our chief executive officer, chief operatingofficer, chief financial officer, chief accounting officer, treasurer and vice president of commodity risk management and other officers and employees selected bythe chief executive officer. The Hedging Committee meets regularly to review derivative positions and strategy and reports to our Board of Directors on the scopeof its activities.Hedges of Operational RisksDesignated Foreign Currency Cash Flow Hedges . We are exposed to foreign currency exchange risk related to firm-price agreements for equipment purchasesfrom foreign manufacturers. Such agreements require that we make payments in foreign currency to the vendor over time based on milestone achievements. Weuse foreign currency forward contracts in order to mitigate the exposure to currency exchange rate fluctuations related to these purchases. The timing and amountsof the forward contract settlements are designed to line up with the timing and amounts of scheduled payments to the foreign equipment manufacturers and aretherefore expected to be highly effective hedges. During 2015 , we entered into forward contracts designated as cash flow hedges to purchase euros. As ofDecember 31, 2015 , we had open contracts with maturity dates between one month and 12 months related to these foreign currency forward contracts. Thenotional amounts of these foreign currency forward contracts totaled 4.7 million euros at December 31, 2015 with an average contract exchange rate of 1.15 euro toUS dollar. The effective portion of the fair value on these instruments is recorded within Other comprehensive (loss) income and is reclassified into the Statementsof Consolidated (Loss) Income on the same line item and the same period in which the underlying equipment is depreciated. We had no such reclassifications intoNet (loss) income during 2015 and anticipate no such reclassifications for the next 12 months. For 2015 , we recorded an unrealized loss of $0.3 million on theeffective portions of our designated foreign currency cash flow hedges, resulting in an ending balance in Accumulated other comprehensive loss related to the cashflow hedges of $0.3 million at December 31, 2015 . We incurred no ineffectiveness on these hedges during 2015 . There were no forward contracts designated ascash flow hedges as of December 31, 2014.Non-Designated Hedges of Operational Risks . Our pricing of fabricated aluminum products is generally intended to lock in a conversion margin (representingthe value added from the fabrication process(es)) and to pass through metal price fluctuations to our customers. For some of our higher value added products soldon a spot basis, the pass through of metal price movements can sometimes lag by as much as several months, with a favorable impact to us when metal pricesdecline and an adverse impact to us when metal prices increase. Additionally, in certain instances, we enter into firm-price arrangements with our customers forstipulated volumes to be delivered in the future. Because we generally purchase primary and secondary82Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSaluminum on a floating price basis, the lag in passing through metal price movements to customers on some of our higher value added products sold on a spot basisand the volume that we have committed to sell to our customers under a firm-price arrangement create metal price risk for us. We use third-party hedginginstruments to limit exposure to metal price risk related to the metal pass through lag on some of our products and firm-price customer sales contracts. See Note 11for additional information regarding our material derivative positions relating to hedges of operational risk and their respective fair values.A majority of our derivative contracts relating to hedges of operational risks contain liquidity based thresholds that could require us to provide additionalcollateral in the event our liquidity were to fall below specified levels. To minimize the exposure to additional collateral requirements related to our liability hedgepositions, we allocate hedging transactions among our counterparties, use options as part of our hedging activities, or both. The aggregate fair value of ourderivative instruments that were in a net liability position at December 31, 2015 was $14.6 million , and we had no collateral posted as of that date.We regularly review the creditworthiness of our derivative counterparties and do not expect to incur significant loss from the failure of any counterparties toperform under any agreements.Hedges Relating to the Convertible NotesAs described in Note 3 , in 2010 we issued $175.0 million principal amount of Convertible Notes due on April 1, 2015, which could only be settled in cash, andwe purchased Option Assets that settled at the same time as the Convertible Notes to hedge their cash conversion feature. We accounted for the Option Assets asderivative instruments (assets) and the Bifurcated Conversion Feature of the Convertible Notes as a derivative liability, separate from the Convertible Notes. Uponsettlement, the Option Assets' proceeds of $94.9 million equaled and offset the cash conversion premium, represented by the Bifurcated Conversion Feature, thatwe paid on the Convertible Notes. See Note 11 for additional information regarding the fair values of the Bifurcated Conversion Feature and the Option Assets.Realized and Unrealized Gains and Losses. Realized and unrealized (losses) gains associated with all derivative contracts consisted of the following for eachperiod presented (in millions of dollars): Year Ended December 31, 2015 2014 2013Included in Other Comprehensive (Loss) Income: Unrealized (loss): Foreign Currency $(0.3) $— $—Included in Statement of Consolidated (Loss) Income: Realized (loss) gain 1 : Aluminum (27.3) 6.9 (5.5)Natural Gas (5.4) 1.0 (1.8)Electricity (1.9) (0.1) 0.8Total realized (loss) gain: $(34.6) $7.8 $(6.5)Unrealized (loss) gain 2 : Non-designated hedges of operational risk: Aluminum $(4.6) $(2.6) $(3.1)Natural Gas (0.5) (6.0) 2.6Electricity 1.7 (1.8) 1.1Foreign Currency — — 0.1Total non-designated hedges of operational risk (3.4) (10.4) 0.7Option Assets relating to the Convertible Notes 3 — 5.2 24.2Bifurcated Conversion Feature of the Convertible Notes — (1.6) (21.0)Total unrealized (loss) gain $(3.4) $(6.8) $3.983Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS______________________1. Realized (loss) gain on hedges of operational risk are recorded within Cost of products sold, excluding depreciation, amortization and other items.2. Unrealized (loss) gain on hedges of operational risk are recorded within Unrealized loss (gain) on derivative instruments.3. Unrealized (loss) gain on financial derivatives are recorded within Other (expense) income, net.The following table summarizes our material derivative positions at December 31, 2015 :Aluminum Maturity Period(month/year) Notional Amount ofContracts (mmlbs)Call option purchase contracts 1/16 through 6/16 4.7Fixed price purchase contracts 1/16 through 12/17 132.9Fixed price sales contracts 1/16 through 10/16 3.0Midwest premium swap contracts 1 1/16 through 12/17 84.9Natural Gas 2 Maturity Period(month/year) Notional Amount ofContracts (mmbtu)Fixed price purchase contracts 1/16 through 12/18 7,000,000Euro Maturity Period(month/year) Notional Amount of contracts(euro)Fixed price purchase contracts 3/16 through 12/16 4,699,750_________________________1. Regional premiums represent the premium over the London Metal Exchange price for primary aluminum which is incurred on our purchases of primaryaluminum.2. As of December 31, 2015 , we had derivative and/or physical delivery commitments with energy companies in place to cover exposure to fluctuations in pricesfor approximately 73% , 72% and 59% of the expected natural gas purchases for 2016 , 2017 and 2018 , respectively.As of December 31, 2015 , our Mid-C International Commodity Exchange-based electricity hedge positions had all settled. Physical delivery commitmentswith energy companies are in place to cover exposure to fluctuations in prices for approximately 55% of the expected electricity purchases for both 2016 and 2017.We enter into derivative contracts with counterparties, some of which are subject to enforceable master netting arrangements and some of which are not. Wereflect the fair value of our derivative contracts on a gross basis on the Consolidated Balance Sheets (see Note 2 ).84Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe following tables present offsetting information regarding our derivatives by type of counterparty as of December 31, 2015 (in millions of dollars):Derivative Assets and Collateral Held by Counterparty Gross Amounts ofRecognized Assets Gross AmountsOffset in theConsolidatedBalance Sheets Net Amounts ofAssets Presented inthe ConsolidatedBalance Sheets Gross Amounts Not Offset in theConsolidated Balance Sheets FinancialInstruments Cash CollateralReceived Net AmountCounterparty(with netting agreements)$1.3 $— $1.3 $1.3 $— $—Counterparty(with partial netting agreements)0.3 — 0.3 0.3 — —Total$1.6 $— $1.6 $1.6 $— $—Derivative Liabilities and Collateral Held by Counterparty Gross Amounts ofRecognizedLiabilities Gross AmountsOffset in theConsolidated BalanceSheets Net Amounts ofLiabilitiesPresented in theConsolidatedBalance Sheets Gross Amounts Not Offset in theConsolidated Balance Sheets FinancialInstruments Cash CollateralPledged Net AmountCounterparty(with netting agreements)$(8.5) $— $(8.5) $(1.3) $— $(7.2)Counterparty(with partial netting agreements)(7.7) — (7.7) (0.3) — (7.4)Total$(16.2) $— $(16.2) $(1.6) $— $(14.6)The following tables present offsetting information regarding our derivatives by type of counterparty as of December 31, 2014 (in millions of dollars):Derivative Assets and Collateral Held by Counterparty Gross Amounts ofRecognized Assets Gross AmountsOffset in theConsolidatedBalance Sheets Net Amounts ofAssets Presented inthe ConsolidatedBalance Sheets Gross Amounts Not Offset in theConsolidated Balance Sheets FinancialInstruments Cash CollateralReceived Net AmountCounterparty(with netting agreements)$0.9 $— $0.9 $0.8 $— $0.1Counterparty(without netting agreements) 184.8 — 84.8 — — 84.8Total$85.7 $— $85.7 $0.8 $— $84.985Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSDerivative Liabilities and Collateral Held by Counterparty Gross Amounts ofRecognizedLiabilities Gross AmountsOffset in theConsolidated BalanceSheets Net Amounts ofLiabilitiesPresented in theConsolidatedBalance Sheets Gross Amounts Not Offset in theConsolidated Balance Sheets FinancialInstruments Cash CollateralPledged Net AmountCounterparty(with netting agreements)$(8.0) $— $(8.0) $(0.8) $— $(7.2)Counterparty(without netting agreements) 1(85.0) — (85.0) — — (85.0)Counterparty(with partial netting agreements)(3.8) — (3.8) — — (3.8)Total$(96.8) $— $(96.8) $(0.8) $— $(96.0)_________________1. Such amounts consist primarily of the fair value of the Bifurcated Conversion Feature and Option Assets at December 31, 2014 (see Note 11 ).11. Fair Value MeasurementsOverviewWe apply the fair value hierarchy established by GAAP for the recognition and measurement of certain financial assets and liabilities. An asset or liability's fairvalue classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. In determining fair value,we utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and considercounterparty risk in our assessment of fair value.The fair values of financial assets and liabilities are evaluated and measured on a recurring basis. As part of that evaluation process, we review the underlyinginputs that are significant to the fair value measurement of financial instruments to determine if a transfer among hierarchy levels is appropriate. We historicallyhave not had significant transfers into or out of each hierarchy level.Financial assets and liabilities that we measure at fair value as required by GAAP include: (i) our derivative instruments; (ii) the plan assets of the SalariedVEBA at December 31, 2015 , both VEBAs at December 31, 2014 and our Canadian defined benefit pension plan measured annually at December 31; and (iii)available for sale securities, consisting of debt investment securities and investments related to our deferred compensation plan (see Note 6 ). We record certainother financial assets and liabilities at carrying value (see the tables below for the fair value disclosure of those assets and liabilities).The majority of our non-financial assets and liabilities, which include goodwill, intangible assets, inventories and property, plant and equipment, are notrequired to be measured at fair value on a recurring basis. However, if certain triggering events occur (or at least annually for goodwill), an evaluation of theaffected non-financial asset or liability is required, potentially resulting in an adjustment to the carrying amount of such asset or liability.Fair Values of Financial Assets and LiabilitiesDerivative Assets and Liabilities. Our derivative contracts are valued at fair value using significant observable and unobservable inputs.Commodity, Energy and Foreign Currency Derivatives - The fair values of a majority of these derivative contracts are based upon trades in liquid markets.Valuation model inputs can generally be verified, and valuation techniques do not involve significant judgment. The fair values of such financial instruments aregenerally classified within Level 2 of the fair value hierarchy. We, however, have some derivative contracts that do not have observable market quotes. For thesefinancial instruments, management uses significant unobservable inputs (e.g., information concerning regional premiums for swaps). Where appropriate, valuationsare adjusted for various factors, such as bid/offer spreads. The fair values of these financial instruments are classified as Level 3 in the fair value hierarchy.86Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSBifurcated Conversion Feature and Option Assets - At December 31, 2014 , the fair value of the Bifurcated Conversion Feature was classified as Level 2 in thefair value hierarchy and measured as the difference in the estimated fair value of the Convertible Notes (based on the trading price of the Convertible Notes) andthe estimated fair value of the Convertible Notes without the cash conversion feature (present value of the series of the remaining fixed income cash flows underthe Convertible Notes, with a maturity of April 1, 2015). Due to the short duration before maturity, management concluded that the fair value of the Option Assetsshould equal the fair value of the Bifurcated Conversion Feature as of December 31, 2014 . As of December 31, 2014 , the Bifurcated Conversion Feature andOption Assets were included in the Consolidated Balance Sheet as a portion of Other accrued liabilities and Prepaid expenses and other current assets, respectively.As of December 31, 2015 , all balances related to the Convertible Notes, Bifurcated Conversion Feature and Option Assets had been settled.The aggregate fair value of our derivatives recorded on the Consolidated Balance Sheets at December 31, 2015 and December 31, 2014 was a net liability of$14.6 million and $11.1 million , respectively. The increase in the net liability position during 2015 was primarily due to changes in the underlying commodity andenergy prices, as well as settlement of asset positions during such period. Changes in the fair value of our derivative contracts relating to non-designated hedges ofoperational activities are reflected in Operating (loss) income (see Note 10 ).VEBA and Canadian Pension Plan Assets. The plan assets of the Salaried VEBA and our Canadian pension plan are measured annually on December 31 andreflected in our Consolidated Balance Sheets at fair value. As discussed further below, the plan assets of the Union VEBA were treated in this manner at December31, 2014, but not December 31, 2015. In determining the fair value of the plan assets at an annual period end, we utilize primarily the results of valuations suppliedby the investment advisors responsible for managing the assets of each plan, which we independently review for reasonableness. With respect to the VEBAs, theinvestment advisors providing the valuations are engaged by the VEBA trustees.As previously discussed, in January 2015, members of the USW at our Newark and Trentwood facilities ratified a new five-year collective bargainingagreement, which did not extend our obligation to make annual variable contributions to the Union VEBA for any period after September 2017. As a result of theexpiration of our obligation to make annual variable contributions to the Union VEBA, we removed the assets of the Union VEBA from our Consolidated BalanceSheets during the year ended December 31, 2015 based on the valuation at December 31, 2014 (see Note 6 ). We therefore did not measure the fair value of theplan assets of the Union VEBA at December 31, 2015 .The plan assets of our Canadian pension plan are managed by advisors selected by us, with the investment portfolio subject to periodic review and evaluationby our investment committee. The investment of assets in the Canadian pension plan is based upon the objective of maintaining a diversified portfolio ofinvestments in order to minimize concentration of credit and market risks (such as interest rate, currency, equity price and liquidity risks). The degree of risk andrisk tolerance take into account the obligation structure of the plan, the anticipated demand for funds and the maturity profiles required from the investmentportfolio in light of these demands.Certain plan assets are valued based upon unadjusted quoted market prices in active markets that are accessible at the measurement date for identical,unrestricted assets (e.g., liquid securities listed on an exchange). Such assets are classified within Level 1 of the fair value hierarchy. Valuation of other investedplan assets is based on significant observable inputs (e.g., valuations derived from actual market transactions, broker-dealer supplied valuations, or correlationsbetween a given U.S. market and a non-U.S. security). Valuation model inputs can generally be verified and valuation techniques do not involve significantjudgment. The fair values of such financial instruments are classified within Level 2 of the fair value hierarchy.Available for Sale Securities. We hold debt investment securities that are accounted for as available for sale securities. The fair value of the debt investmentsecurities, which consist of commercial paper and corporate bonds, is determined based on valuation models that use observable market data. At December 31,2015 , the remaining maturity period with respect to short-term investments ranged from one month to approximately three months . We review our debtinvestment portfolio for other-than-temporary impairment at least quarterly or when there are changes in credit risk or other potential valuation concerns. AtDecember 31, 2015 and December 31, 2014 , the total unrealized loss, net of tax, included in accumulated other comprehensive (loss) income was immaterial andwas not other-than-temporarily impaired. We believe that it is probable that the principal and interest will be collected in accordance with the contractual terms,and that the unrealized losses on these securities were due to changes in normal market fluctuations, and were not due to increased credit risk or other valuationconcerns. In addition to debt investment securities, we also hold assets in various investment funds at certain registered investment companies in connection withour deferred compensation program (see Note 1 and Note 6 ). Such assets are accounted for as available for sale securities and are measured and recorded at fairvalue based on the NAV of the investment funds on a recurring basis. The fair value input of the available for sale securities is considered either a Level 1 or Level2 input depending on whether the debt security or87Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSinvestment fund is traded on a public exchange. The amortized cost for available for sale securities approximates their fair value.All Other Financial Assets and Liabilities. We believe that the fair value of our cash and cash equivalents, accounts receivable, accounts payable and accruedliabilities approximate their respective carrying values due to their short maturities and nominal credit risk.The fair value of the Convertible Notes and Senior Notes is based on their trading prices and is considered a Level 1 input in the fair value hierarchy (see Note3 for the carrying values of the Convertible Notes and the Senior Notes). The Convertible Notes were settled on April 1, 2015.The following table presents our financial instruments, classified under the appropriate level of the fair value hierarchy, as of the period presented (in millionsof dollars): December 31, 2015 Level 1 Level 2 Level 3 TotalFINANCIAL ASSETS: Derivative Instruments (Non-Designated Hedges): Aluminum – Call option purchase contracts$— $0.2 $— $0.2Fixed price purchase contracts— 0.3 — 0.3Fixed price sales contracts— 0.2 — 0.2Midwest premium swap contracts— — 0.9 0.9 Salaried VEBA and Canadian Pension Plan: Fixed income investment funds in registered investment companies 1— 15.7 — 15.7Equity investment funds in registered investment companies 2— 23.8 — 23.8Cash and money market investments 31.9 — — 1.9Diversified investment funds in registered investment companies 414.7 5.7 — 20.4 All Other Financial Assets: Cash and cash equivalents 540.3 32.2 — 72.5Short-term investments— 30.0 — 30.0Deferred compensation plan assets— 7.3 — 7.3Total assets$56.9 $115.4 $0.9 $173.2 88Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2015 Level 1 Level 2 Level 3 TotalFINANCIAL LIABILITIES: Derivative Instruments (Non-Designated Hedges): Aluminum – Fixed price purchase contracts$— $(8.9) $— $(8.9)Fixed price sales contracts— (0.1) — (0.1)Midwest premium swap contracts— — (0.3) (0.3)Natural Gas – Fixed price purchase contracts— (6.7) — (6.7) Derivative Instruments (Designated Hedges): Foreign Currency – Euro forward purchase contracts— (0.2) — (0.2) All Other Financial Liabilities: Senior Notes(207.3) — — (207.3)Total liabilities$(207.3) $(15.9) $(0.3) $(223.5)The following table presents our financial instruments, classified under the appropriate level of the fair value hierarchy, as of the period presented (in millionsof dollars): December 31, 2014 Level 1 Level 2 Level 3 TotalFINANCIAL ASSETS: Derivative Instruments (Non-Designated Hedges): Aluminum – Midwest premium swap contracts$— $— $1.0 $1.0Hedges Relating to the Convertible Notes – Option Assets— 84.7 — 84.7 VEBAs and Canadian Pension Plan Fixed income investment funds in registered investment companies 154.0 340.3 — 394.3Mortgage-backed securities— 30.1 — 30.1Corporate debt securities 6— 75.4 — 75.4Equity investment funds in registered investment companies 2— 191.3 — 191.3United States Treasury securities— 39.5 — 39.5Municipal debt securities— 1.8 — 1.8Cash and money market investments 319.3 — — 19.3Asset-backed securities— 8.1 — 8.1Diversified investment funds in registered investment companies 420.4 6.2 — 26.6 All Other Financial Assets Cash and cash equivalents 529.5 148.2 — 177.7Short-term investments— 114.0 — 114.0Deferred compensation plan assets— 7.3 — 7.3Total assets$123.2 $1,046.9 $1.0 $1,171.1 89Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2014 Level 1 Level 2 Level 3 TotalFINANCIAL LIABILITIES: Derivative Instruments (Non-Designated Hedges): Aluminum – Fixed price purchase contracts$— $(4.2) $— $(4.2)Natural Gas – Fixed price purchase contracts— (6.2) — (6.2)Electricity – Fixed price purchase contracts— (1.7) — (1.7)Hedges Relating to the Convertible Notes – Bifurcated Conversion Feature— (84.7) — (84.7) All Other Financial Liabilities Senior Notes(244.5) — — (244.5)Convertible Notes, including Bifurcated Conversion Feature(263.3) — — (263.3)Total liabilities$(507.8) $(96.8) $— $(604.6)_________________________1. This category represents investments in various fixed income funds with multiple registered investment companies. Such funds invest in diversified portfolios,including: (i) marketable fixed income securities, such as (a) U.S. Treasury and other government and agency securities, (b) municipal bonds, (c) mortgage-backed securities, (d) asset-backed securities, (e) corporate bonds, notes and debentures in various sectors, (f) preferred and common stock, (g) investments inaffiliated and other investment companies, (h) short-term investments and other net assets, and (i) repurchase agreements and reverse repurchase agreements;(ii) other commingled investments; (iii) investment grade debt; (iv) fixed income instruments which may be represented by options, future contracts or swapagreements; and (v) cash and cash equivalents. The fair value of certain assets related to the Union VEBA in this category as of December 31, 2014 wasestimated using the NAV per share of the investments.2. This category represents investments in equity funds that invest in portfolios comprised of: (i) equity and equity-related securities of U.S. and non-U.S. issuersacross all market capitalizations; (ii) common stock in investment trust funds; and (iii) other short-term investments. The fair value of assets related to theUnion VEBA presented in this category as of December 31, 2014 was estimated using the NAV per share of the equity fund investments.3. This category represents cash and investments in various money market funds.4. The plan assets are invested in investment funds that hold a diversified portfolio of: (i) U.S and international debt and equity securities; (ii) fixed incomesecurities such as corporate bonds and government bonds; (iii) mortgage-related securities; and (iv) cash and cash equivalents. The fair value of certain assetsrelated to the Union VEBA in this category as of December 31, 2014 was estimated using the NAV per share of the investments.5. See Note 2 for components of cash and cash equivalents.6. This category represents investments in fixed income corporate securities in various sectors. Investments in the industrial, financial and utilities sectors in2014 represented approximately 51% , 37% and 12% of the total portfolio in this category, respectively. The fair value of certain assets related to the UnionVEBA in this category as of December 31, 2014 was estimated using the NAV per share of the investments.Financial instruments classified as Level 3 in the fair value hierarchy represent Midwest premium swap contracts for which at least one significantunobservable input in the valuation model is a management estimate. This is necessary due to the lack of an exchange traded product with observable marketpricing data. Fair value was determined using a forward curve based on the average pricing quotes from our trading counterparties and applying a discount factorbased on the risk-free interest rate.90Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe following table presents quantitative information for Level 3 Midwest premium derivative contracts: Fair Value atDecember 31, 2015(in millions ofdollars) ValuationTechnique UnobservableInput Settlement Period Price Curve Range ($ in unit price)Assets: Midwest premium contracts $0.9 Discounted fairvalue Forward pricecurve Jan-16 through Dec-17 $0.084 per metric ton to $0.086 per metrictonLiabilities: Midwest premium contracts $(0.3) Discounted fairvalue Forward pricecurve Jan-16 through Dec-17 $0.084 per metric ton to $0.086 per metrictonThe following table presents a reconciliation of activity for the Level 3 Midwest premium derivative contracts on a net basis (in millions of dollars): Year Ended December 31, 2015 2014Fair value measurement at beginning of period$1.0 $1.1Total realized/unrealized (loss) gain included in: Cost of goods sold, excluding depreciation and amortization and other items and Unrealized loss (gain) onderivative instruments(3.9) 4.4Transactions involving Level 3 derivative contracts: Purchases(4.0) 2.8Sales— —Issuances— —Settlements7.5 (7.3)Transactions involving Level 3 derivatives - net3.5 (4.5)Transfers in and (or) out of Level 3 valuation hierarchy— —Fair value measurement at end of period$0.6 $1.0 Total loss included in Unrealized loss (gain) on derivative instruments, attributable to the change in unrealizedgain/loss relating to derivative contracts held at December 31:$0.6 $1.0Fair Values of Non-Financial Assets and LiabilitiesCAROs. The inputs in estimating the fair value of CAROs include: (i) the timing of when any such CARO cash flows may be incurred; (ii) incremental costsassociated with special handling or treatment of CARO materials; and (iii) the credit-adjusted risk-free rate applicable at the time additional CARO cash flows areestimated; all of which are considered Level 3 inputs as they involve significant judgment from us.91Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe following table summarizes the activity relating to our CARO liabilities (in millions of dollars): Year Ended December 31, 2015 2014 2013Beginning balance $4.8 $4.4 $4.1Liabilities settled during the period (0.2) — (0.2)Accretion expense 0.3 0.4 0.4Adjustment to accretion expense due to revisions to estimated cash flow and timing ofexpenditure 1 — — 0.1Ending balance $4.9 $4.8 $4.4__________________________________________ 1. The adjustments in 2013 did not have a material impact on the basic and diluted net income per share for 2013. The estimated fair value of CARO liabilities at December 31, 2015 and December 31, 2014 were both based upon the application of a weighted-average credit-adjusted risk-free rate of 8.7% . CAROs are included in Other accrued liabilities or Long-term liabilities, as appropriate (see Note 2 ).During 2015 , we performed a review of our property, plant and equipment held for future development that we determined not to deploy for future use,resulting in impairment charges to reflect the scrap value of such assets (see Note 1 ). With the exception of the impairment of these assets, we concluded that noneof our non-financial assets, including goodwill and intangible assets and liabilities subject to fair value assessments on a non-recurring basis required a materialadjustment to the carrying amount of such assets and liabilities at December 31, 2015 and December 31, 2014 .12. Net (Loss) Income Per ShareBasic and diluted net (loss) income per share for 2015 , 2014 and 2013 were calculated as follows (in millions of dollars, except share and per share amounts): Year Ended December 31, 2015 2014 2013Numerator: Net (loss) income $(236.6) $71.8 $104.8Denominator – Weighted-average common shares outstanding (in thousands): Basic 1 17,201 17,818 18,827Add: dilutive effect of non-vested common shares, restricted stock units and performanceshares — 179 178Add: dilutive effect of warrants — 596 241Diluted 2 17,201 18,593 19,246 Net (loss) income per common share, Basic: $(13.76) $4.02 $5.56Net (loss) income per common share, Diluted: $(13.76) $3.86 $5.44_____________1. The basic weighted-average number of common shares outstanding during the periods presented excludes non-vested common shares, restricted stock unitsand performance shares.2. The diluted weighted-average number of common shares outstanding during the periods presented was calculated using the treasury method. There were 16,645 fully-vested options outstanding at both December 31, 2015 and December 31, 2014 , in each case exercisable to purchase common sharesat $80.01 per share.92Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSWarrants relating to approximately 3.7 million common shares which were outstanding at December 31, 2014 settled during a period from July 1, 2015 throughDecember 18, 2015. Upon settlement, each Warrant holder received a number of shares of our common stock equal to (a) the number of notional shares associatedwith each Warrant settling on such date multiplied by (b)(i) the excess (if any) of the volume weighted average price of our common stock on each exercise dateover the then effective strike price of the Warrants divided by (ii) such volume-weighted average price of our common stock. The exercise price of the Warrantsdeclined over the settlement period from $60.44 to $60.20 per share. As a result of the Warrant settlements, we issued 1,015,185 shares of our common stock andpaid a de minimis amount in cash in lieu of fractional shares. See Note 3 for additional information relating to the Warrants.The following securities were excluded from the weighted-average diluted shares computation for 2015 , 2014 and 2013 as their inclusion would have beenanti-dilutive (in thousands of shares): Year Ended December 31, 2015 2014 2013Options to purchase common shares — 17 21Non-vested common shares, restricted stock units and performance shares 302 — —Warrants 639 — —Total excluded 941 17 21During 2015 , 2014 and 2013 , we paid a total of approximately $28.1 million ( $1.60 per common share), $25.4 million ( $1.40 per common share) and $23.0million ( $1.20 per common share), respectively, in cash dividends to stockholders, including the holders of restricted stock, and dividend equivalents to theholders of certain restricted stock units and to the holders of performance shares granted prior to 2014 with respect to the target number of underlying commonshares (constituting approximately one-half of the maximum payout). Additionally, during the third quarter of 2013, $0.6 million of cash dividends paid in respectof our common shares held in trust by a third-party, as well as 9,001 of such common shares, were returned to us. The fair market value of the shares was includedin Other (expense) income, net (see Note 15 ).From time to time, we repurchase shares pursuant to a stock repurchase program authorized by our Board of Directors. Repurchase transactions will occur atsuch times and prices as management deems appropriate and will be funded with our excess liquidity after giving consideration to, among other things, internal andexternal growth opportunities and future cash flows. Repurchases may be in open-market transactions or in privately negotiated transactions and the program maybe modified or terminated by our Board of Directors at any time.In 2015 and 2014 , we repurchased 647,520 and 633,230 shares of common stock at a weighted-average price of $76.35 and $70.87 per share, respectively,pursuant to the stock repurchase program. The total cost of $49.4 million and $44.9 million was recorded as Treasury stock as of December 31, 2015 andDecember 31, 2014 , respectively. At December 31, 2015 and December 31, 2014 , $123.3 million and $72.8 million , respectively, were available to repurchaseour common shares pursuant to the stock repurchase program.13. Segment and Geographical Area InformationOur primary line of business is the production of semi-fabricated specialty aluminum products, such as aluminum plate and sheet and extruded and drawnproducts, primarily used in aerospace/high strength, automotive, general engineering and other industrial end market applications. We operate 11 focusedproduction facilities in the United States and one in Canada. Consistent with the manner in which our chief operating decision maker reviews and evaluates ourbusiness, the Fabricated Products business is treated as a single operating segment. At December 31, 2015 , approximately 63% of our employees were covered bycollective bargaining agreements and approximately 10% of our employees were covered by collective bargaining agreements with expiration dates occurringwithin one year from December 31, 2015 .In addition to the Fabricated Products segment, we have a business unit, All Other, which provides general and administrative support for our operations. Forpurposes of segment reporting under GAAP, we treat the Fabricated Products segment as a reportable segment. All Other is not considered a reportable segment.The accounting policies of the Fabricated Products segment are the same as those described in Note 1 . Segment results are evaluated internally bymanagement before any allocation of corporate overhead and without any charge for income taxes, interest expense, or other net operating charges.93Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSThe following tables provide financial information by reporting segment and business unit for each period or as of each period end, as applicable (in millions ofdollars): Year Ended December 31, 2015 2014 2013Net sales: Fabricated Products$1,391.9 $1,356.1 $1,297.5Segment operating (loss) income: Fabricated Products 1,2$190.8 $151.4 $188.6All Other 3(536.7) (13.5) (15.3)Total operating (loss) income$(345.9) $137.9 $173.3Interest expense(24.1) (37.5) (35.7)Other (expense) income, net(1.8) 6.7 5.6(Loss) income before income taxes$(371.8) $107.1 $143.2Depreciation and amortization: Fabricated Products$31.9 $30.6 $27.6All Other0.5 0.5 0.5Total depreciation and amortization$32.4 $31.1 $28.1Capital expenditures: Fabricated Products$62.4 $58.5 $69.8All Other0.7 0.9 0.6Total capital expenditures$63.1 $59.4 $70.4 December 31, 2015 December 31, 2014Assets: Fabricated Products$904.8 $878.9All Other 4345.3 864.8Total assets$1,250.1 $1,743.7__________________1. Operating income in the Fabricated Products segment for 2015 , 2014 and 2013 included $1.7 million , $1.2 million and $4.0 million , respectively, ofenvironmental expense. Fabricated Products segment operating income included $0.1 million and $1.5 million of asset impairment charge relating to certainproperty, plant and equipment for 2015 and 2014 , respectively, and none for 2013 . Also included in the Fabricated Products segment operating income for2015 was a $2.6 million lower of cost or market inventory write-down.2. Fabricated Products segment results for 2015 , 2014 and 2013 included a non-cash mark-to-market (loss) gain on primary aluminum, natural gas, electricityand foreign currency hedging activities totaling $(3.4) million , $(10.4) million and $0.7 million , respectively. For further discussion regarding mark-to-market matters, see Note 10 .3. Operating loss of All Other included net periodic postretirement benefit cost (income) of $2.4 million , $(23.7) million and $(22.5) million for 2015 , 2014 and2013 , respectively. Additionally, operating loss in All Other included Loss on removal of Union VEBA net assets of $493.4 million during the year endedDecember 31, 2015 . See Note 6 for further details.4. Assets in All Other represent primarily all of our cash and cash equivalents, short-term investments, financial derivative assets, net assets of VEBAs (see Note6 and Note 11 ) and net deferred income tax assets.Net sales by product categories based on end market applications for the Fabricated Products segment were as follows (in millions of dollars):94Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2015 2014 2013Net sales: Aero/HS products$695.5 $686.3 $677.0Automotive Extrusions199.2 173.5 129.5GE products426.1 419.5 411.0Other products71.1 76.8 80.0Total net sales$1,391.9 $1,356.1 $1,297.5Geographic information for net sales based on country of origin, income taxes paid and long-lived assets were as follows (in millions of dollars): Year Ended December 31, 2015 2014 2013Net sales to unaffiliated customers: Fabricated Products – United States$1,321.3 $1,254.0 $1,204.7Canada70.6 102.1 92.8Total net sales$1,391.9 $1,356.1 $1,297.5Income taxes paid: Fabricated Products – United States$0.6 $2.1 $1.2Canada1.7 1.4 0.9Total income taxes paid$2.3 $3.5 $2.1 Year Ended December 31, 2015 2014Long-lived assets: 1 Fabricated Products – United States$459.6 $432.6Canada30.9 17.4Total Fabricated Products long-lived assets490.5 450.0All Other – United States4.9 4.9Total All Other long-lived assets4.9 4.9Total long-lived assets$495.4 $454.9__________________1. Long-lived assets represent Property, plant and equipment – net.The aggregate foreign currency transaction gains (losses) included in determining net (loss) income were immaterial for 2015 , 2014 and 2013 .For the years ended December 31, 2015 , December 31, 2014 and December 31, 2013 , one customer represented 25% , 22% and 23% , respectively, ofFabricated Products Net sales. For the years ended December 31, 2015 and December 31, 2014 , a second customer represented 10% for both periods of FabricatedProducts Net sales.Two individual customers each accounted for 17% of the trade receivables balance at December 31, 2015 . Two individual customers accounted for 12% and10% of the trade receivables balance at December 31, 2014. 95Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSInformation for export sales and primary aluminum supply from our major suppliers were as follows: Year Ended December 31, 2015 2014 2013Percentage of Net sales: Export sales19% 19% 17% Percentage of total annual primary aluminum supply (lbs): Supply from the Company's five largest suppliers86% 71% 86%Supply from the Company's largest supplier28% 30% 25%Supply from the Company's second and third largest suppliers36% 25% 35%14. Supplemental Cash Flow Information Year Ended December 31, 2015 2014 2013 (in millions of dollars)Interest paid$22.1 $25.6 $28.1Non-cash investing and financing activities: Stock repurchases not yet settled (accrued in accounts payable)$0.2 $0.8 $1.0Unpaid purchases of property and equipment$10.5 $1.8 $4.4Purchases of property and equipment through capital leasing arrangements$— $— $0.215. Other (Expense) Income, NetOther (expense) income, net consisted of the following for each period presented (in millions of dollars): Year Ended December 31, 2015 2014 2013Interest income$0.4 $1.0 $0.4Unrealized gain on financial derivatives 1— 3.6 3.2Realized gain on investments0.8 1.0 1.4Distribution from third-party trust 2— — 0.6All other, net 3(3.0) 1.1 —Other (expense) income, net$(1.8) $6.7 $5.6____________1. See Note 1 for a discussion of our accounting policy for such instruments.2. See Note 12 for discussion of the distribution.3. See Note 3 for a discussion of the loss we recognized on our repurchase of Senior Notes during the year ended December 31, 2015 .16. Other Comprehensive Income (Loss)The following table presents the tax effect allocated to each component of other comprehensive income (loss) for each period presented (in millions of dollars):96Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income Tax Before-Tax (Expense) Net-of-Tax Amount Benefit 1 Amount2015 Defined benefit pension plan and VEBAs: Net actuarial loss arising during the period$(12.9) $4.9 $(8.0)Prior service credit arising during the period6.8 (2.6) 4.2Total actuarial loss and prior service costs(6.1) 2.3 (3.8)Reclassification adjustments: Amortization of net actuarial loss 21.1 (0.4) 0.7Amortization of prior service cost 23.0 (1.2) 1.8Removal of obligation relating to Union VEBA106.6 (40.2) 66.4Other comprehensive income relating to defined benefit pension plan and VEBAs104.6 (39.5) 65.1Available for sale securities: Unrealized loss on available for sale securities(0.1) — (0.1)Reclassification adjustments: Reclassification of unrealized gain upon sale of available for sale securities 3(0.4) 0.2 (0.2)Other comprehensive loss relating to available for sale securities(0.5) 0.2 (0.3)Unrealized loss on foreign currency cash flow hedges(0.3) 0.1 (0.2)Foreign currency translation loss(0.2) — (0.2)Other comprehensive income$103.6 $(39.2) $64.4 2014 Defined benefit pension plan and VEBAs: Net actuarial loss arising during the period$(39.0) $14.5 $(24.5)Prior service cost arising during the period(90.5) 33.8 (56.7)Total actuarial loss and prior service costs(129.5) 48.3 (81.2)Reclassification adjustments: Amortization of net actuarial (gain) 2(1.8) 0.7 (1.1)Amortization of prior service cost 210.6 (3.9) 6.7Other comprehensive loss relating to defined benefit pension plan and VEBAs(120.7) 45.1 (75.6)Available for sale securities: Unrealized loss on available for sale securities(0.2) 0.1 (0.1)Reclassification adjustments: Reclassification of unrealized gain upon sale of available for sale securities 3(0.1) — (0.1)Other comprehensive loss relating to available for sale securities(0.3) 0.1 (0.2)Foreign currency translation gain0.4 — 0.4Other comprehensive loss$(120.6) $45.2 $(75.4) 97Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income Tax Before-Tax (Expense) Net-of-Tax Amount Benefit 1 Amount2013 Defined benefit pension plan and VEBAs: Net actuarial gain arising during the period$87.0 $(32.5) $54.5Prior service cost arising during the period(84.8) 31.8 (53.0)Total actuarial gain and prior service costs2.2 (0.7) 1.5Reclassification adjustments: Amortization of net actuarial loss 21.5 (0.5) 1.0Amortization of prior service cost 24.2 (1.6) 2.6Other comprehensive income relating to defined benefit pension plan and VEBAs7.9 (2.8) 5.1Available for sale securities: Unrealized gain on available for sale securities1.0 (0.3) 0.7Reclassification adjustments: Reclassification of unrealized gain upon sale of available for sale securities 3(1.0) 0.3 (0.7)Other comprehensive income relating to available for sale securities— — —Foreign currency translation gain0.2 — 0.2Other comprehensive income$8.1 $(2.8) $5.3____________1. Income tax amounts reclassified out of Accumulated other comprehensive loss relating to VEBA adjustments and sales of available for sale securities wereincluded as a component of Income tax benefit (provision).2. Amounts reclassified out of Accumulated other comprehensive loss relating to VEBA adjustments were included as a component of Net periodicpostretirement benefit cost (income) relating to VEBAs.3. Amounts reclassified out of Accumulated other comprehensive loss relating to sales of available for sale securities were included as a component of Other(expense) income, net. We use the specific identification method to determine the amount reclassified out of Accumulated other comprehensive loss.17. Condensed Guarantor and Non-Guarantor Financial InformationWe issued $225.0 aggregate principal amount of our Senior Notes, of which $197.8 million aggregate principal amount remained outstanding as ofDecember 31, 2015 , pursuant to an indenture dated May 23, 2012 ("Indenture"), among Kaiser Aluminum Corporation ("Parent"), the subsidiary guarantors partythereto ("Guarantor Subsidiaries") and Wells Fargo Bank, National Association, as trustee ("Trustee"). The Guarantor Subsidiaries currently include KaiserAluminum Investments Company, Kaiser Aluminum Fabricated Products, LLC, Kaiser Aluminum Mill Products, Inc., Kaiser Aluminum Washington, LLC andKaiser Aluminum Alexco, LLC, all of which are 100% owned by the Parent. The guarantees are full and unconditional and joint and several but have customaryreleases in the following situations: (i) the sale of the Guarantor Subsidiary or all of its assets; (ii) the declaration of a Guarantor Subsidiary as an unrestrictedsubsidiary under the Indenture; (iii) the termination or release of the Guarantor Subsidiary’s guarantee of certain other indebtedness; or (iv) our exercise of legaldefeasance or covenant defeasance or the discharge of our obligations under the Indenture.The following condensed consolidating financial information as of December 31, 2015 and December 31, 2014 , and for the years ended December 31, 2015 ,December 31, 2014 and December 31, 2013 presents: (i) the financial position, results of operation and cash flows for each of (a) Parent, (b) the GuarantorSubsidiaries on a combined basis and (c) the Non-Guarantor Subsidiaries (as defined below) on a combined basis; (ii) the adjustments necessary to eliminateinvestments in subsidiaries and intercompany balances and transactions among Parent, the Guarantor Subsidiaries and the Non-Guarantor Subsidiaries; and (iii) theresulting totals, reflecting information for us on a consolidated basis, as reported. In the following tables, "Non- Guarantor Subsidiaries" refers to Kaiser AluminumCanada Limited, Trochus Insurance Company, DCO Management, LLC, Kaiser Aluminum France, S.A.S. and Kaiser Aluminum Beijing Trading Company; and"Consolidating Adjustments" represent the adjustments necessary to eliminate the investments in our subsidiaries and other intercompany sales and cost of sales98Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTStransactions. The condensed consolidating financial information should be read in conjunction with the consolidated financial statements herein.CONDENSED CONSOLIDATING BALANCE SHEET(In millions of dollars)December 31, 2015 Parent GuarantorSubsidiaries Non-GuarantorSubsidiaries ConsolidatingAdjustments ConsolidatedASSETS Current assets: Cash and cash equivalents $— $72.2 $0.3 $— $72.5Short-term investments — 30.0 — — 30.0Receivables: Trade receivables – net — 114.0 2.7 — 116.7Intercompany receivables — 111.2 1.1 (112.3) —Other — 3.8 2.3 — 6.1Inventories — 216.3 6.6 (3.3) 219.6Prepaid expenses and other current assets 0.2 56.2 1.7 (1.4) 56.7Total current assets 0.2 603.7 14.7 (117.0) 501.6Investments in and advances to subsidiaries 1,077.2 31.4 — (1,108.6) —Property, plant and equipment – net — 464.3 31.1 — 495.4Long-term intercompany receivables — — 3.1 (3.1) —Deferred tax assets – net — 155.6 — 7.0 162.6Intangible assets – net — 30.5 — — 30.5Goodwill — 37.2 — — 37.2Other assets 3.2 19.5 0.1 — 22.8Total $1,080.6 $1,342.2 $49.0 $(1,221.7) $1,250.1LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $0.5 $73.6 $2.6 $— $76.7Intercompany payable 106.5 14.8 4.0 (125.3) —Accrued salaries, wages and related expenses — 38.3 1.5 — 39.8Other accrued liabilities 1.4 52.3 0.4 (1.4) 52.7Short-term capital lease — 0.1 — — 0.1Total current liabilities 108.4 179.1 8.5 (126.7) 169.3Net liabilities of Salaried VEBA — 19.0 — — 19.0Deferred tax liabilities — — 2.1 — 2.1Long-term intercompany payable — 3.1 — (3.1) —Long-term liabilities — 81.3 6.2 — 87.5Long-term debt 197.8 — — — 197.8Total liabilities 306.2 282.5 16.8 (129.8) 475.7 Total stockholders’ equity 774.4 1,059.7 32.2 (1,091.9) 774.4Total $1,080.6 $1,342.2 $49.0 $(1,221.7) $1,250.199Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATING BALANCE SHEET(In millions of dollars)December 31, 2014 Parent GuarantorSubsidiaries Non-GuarantorSubsidiaries ConsolidatingAdjustments ConsolidatedASSETS Current assets: Cash and cash equivalents $— $175.3 $2.4 $— $177.7Short-term investments — 114.0 — — 114.0Receivables: Trade receivables – net — 126.1 3.2 — 129.3Intercompany receivables 204.2 4.0 0.9 (209.1) —Other — 5.6 5.3 — 10.9Inventories — 208.0 7.6 (0.9) 214.7Prepaid expenses and other current assets 85.1 93.1 0.4 — 178.6Total current assets 289.3 726.1 19.8 (210.0) 825.2Investments in and advances to subsidiaries 1,209.2 32.5 — (1,241.7) —Property, plant and equipment – net — 437.4 17.5 — 454.9Long-term intercompany receivables — — 15.9 (15.9) —Net assets of Union VEBA — 340.1 — — 340.1Deferred tax assets – net — 23.8 — 7.1 30.9Intangible assets – net — 32.1 — — 32.1Goodwill — 37.2 — — 37.2Other assets 4.4 18.8 0.1 — 23.3Total $1,502.9 $1,648.0 $53.3 $(1,460.5) $1,743.7LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $1.3 $73.8 $6.3 $— $81.4Intercompany payable — 221.3 3.3 (224.6) —Accrued salaries, wages and related expenses — 36.5 3.1 — 39.6Other accrued liabilities 88.2 43.8 0.8 — 132.8Current portion of long-term debt 172.5 — — — 172.5Short-term capital lease — 0.1 — — 0.1Total current liabilities 262.0 375.5 13.5 (224.6) 426.4Net liabilities of Salaried VEBA — 17.2 — — 17.2Deferred tax liabilities — — 0.9 — 0.9Long-term intercompany payable — 15.9 — (15.9) —Long-term liabilities — 50.3 8.0 — 58.3Long-term debt 225.0 — — — 225.0Total liabilities 487.0 458.9 22.4 (240.5) 727.8 Total stockholders’ equity 1,015.9 1,189.1 30.9 (1,220.0) 1,015.9Total $1,502.9 $1,648.0 $53.3 $(1,460.5) $1,743.7100Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME(In millions of dollars)Year Ended December 31, 2015 Parent GuarantorSubsidiaries Non-GuarantorSubsidiaries ConsolidatingAdjustments ConsolidatedNet sales $— $1,361.6 $123.3 $(93.0) $1,391.9Costs and expenses: Cost of products sold: Cost of products sold, excluding depreciation andamortization and other items — 1,095.6 108.4 (88.6) 1,115.4Lower of cost or market inventory write-down — 2.6 — — 2.6Unrealized loss on derivative instruments — 3.4 — — 3.4Depreciation and amortization — 31.3 1.1 — 32.4Selling, general, administrative, research anddevelopment: Selling, general, administrative, research anddevelopment 4.3 76.5 9.3 (2.0) 88.1Net periodic postretirement benefit cost relating toSalaried VEBA — 2.4 — — 2.4Loss on removal of Union VEBA net assets — 493.4 — — 493.4Total selling, general, administrative, research anddevelopment 4.3 572.3 9.3 (2.0) 583.9Other operating charges, net — 0.1 — — 0.1Total costs and expenses 4.3 1,705.3 118.8 (90.6) 1,737.8Operating (loss) income (4.3) (343.7) 4.5 (2.4) (345.9)Other (expense) income: Interest expense (23.5) (0.9) — 0.3 (24.1)Other (expense) income, net (2.5) 3.5 (2.5) (0.3) (1.8)(Loss) income before income taxes (30.3) (341.1) 2.0 (2.4) (371.8)Income tax benefit — 122.5 1.3 11.4 135.2(Loss) earnings in equity of subsidiaries (206.3) 0.9 — 205.4 —Net (loss) income $(236.6) $(217.7) $3.3 $214.4 $(236.6) Comprehensive (loss) income $(172.2) $(153.5) $3.5 $150.0 $(172.2)101Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE (LOSS) INCOME(In millions of dollars)Year Ended December 31, 2014 Parent GuarantorSubsidiaries Non-GuarantorSubsidiaries ConsolidatingAdjustments ConsolidatedNet sales $— $1,323.4 $133.9 $(101.2) $1,356.1Costs and expenses: Cost of products sold: Cost of products sold, excluding depreciation andamortization and other items — 1,098.3 117.8 (98.6) 1,117.5Unrealized loss on derivative instruments — 10.4 — — 10.4Depreciation and amortization — 30.0 1.1 — 31.1Selling, general, administrative, research anddevelopment: Selling, general, administrative, research anddevelopment 4.1 69.7 9.9 (2.3) 81.4Net periodic postretirement benefit income relating toVEBAs — (23.7) — — (23.7)Total selling, general, administrative, research anddevelopment 4.1 46.0 9.9 (2.3) 57.7Other operating charges, net — 1.5 — — 1.5Total costs and expenses 4.1 1,186.2 128.8 (100.9) 1,218.2Operating (loss) income (4.1) 137.2 5.1 (0.3) 137.9Other (expense) income: Interest expense (37.5) (0.6) — 0.6 (37.5)Other income (expense), net 3.7 3.2 0.4 (0.6) 6.7(Loss) income before income taxes (37.9) 139.8 5.5 (0.3) 107.1Income tax (provision) benefit — (50.2) 0.8 14.1 (35.3)Earnings in equity of subsidiaries 109.7 6.0 — (115.7) —Net income $71.8 $95.6 $6.3 $(101.9) $71.8 Comprehensive (loss) income $(3.6) $19.9 $6.6 $(26.5) $(3.6)102Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATING STATEMENT OF COMPREHENSIVE INCOME(In millions of dollars)Year Ended December 31, 2013 Parent GuarantorSubsidiaries Non-GuarantorSubsidiaries ConsolidatingAdjustments ConsolidatedNet sales $— $1,275.2 $118.0 $(95.7) $1,297.5Costs and expenses: Cost of products sold: Cost of products sold, excluding depreciation andamortization and other items — 1,026.0 105.7 (92.8) 1,038.9Unrealized gain on derivative instruments — (0.7) — — (0.7)Depreciation and amortization — 27.0 1.1 — 28.1Selling, general, administrative, research anddevelopment: Selling, general, administrative, research anddevelopment 3.8 70.1 8.9 (2.4) 80.4Net periodic postretirement benefit income relating toVEBAs — (22.5) — — (22.5)Total selling, general, administrative, research anddevelopment 3.8 47.6 8.9 (2.4) 57.9Total costs and expenses 3.8 1,099.9 115.7 (95.2) 1,124.2Operating (loss) income (3.8) 175.3 2.3 (0.5) 173.3Other (expense) income: Interest (expense) income (36.6) 0.5 — 0.4 (35.7)Other income, net 3.9 2.0 — (0.3) 5.6(Loss) income before income taxes (36.5) 177.8 2.3 (0.4) 143.2Income tax (provision) benefit — (68.1) 15.7 14.0 (38.4)Earnings in equity of subsidiaries 141.3 17.6 — (158.9) —Net income $104.8 $127.3 $18.0 $(145.3) $104.8 Comprehensive income $110.1 $131.6 $19.0 $(150.6) $110.1103Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS(In millions of dollars)Year Ended December 31, 2015 Parent GuarantorSubsidiaries Non-GuarantorSubsidiaries ConsolidatingAdjustments ConsolidatedCash flows from operating activities: Net cash provided by (used in) operating activities $285.7 $(127.2) $0.3 $— $158.8Cash flows from investing activities: Capital expenditures — (47.9) (15.2) — (63.1)Purchase of available for sale securities — (0.5) — — (0.5)Proceeds from disposition of available for sale securities — 84.0 — — 84.0Net cash provided by (used in) investing activities — 35.6 (15.2) — 20.4Cash flows from financing activities: Repurchase of Senior Notes (30.0) — — — (30.0)Settlement of Convertible Notes (175.0) — — — (175.0)Proceeds from cash-settled call options related tosettlement of Convertible Notes 94.9 — — — 94.9Payment for conversion premium related to settlement ofConvertible Notes (94.9) — — — (94.9)Cash paid for financing costs (0.6) — — — (0.6)Excess tax benefit upon vesting of non-vested shares anddividend payment on unvested shares expected to vest — 1.3 — — 1.3Cancellation of shares to cover employees' taxwithholdings upon vesting of non-vested shares (2.8) — — — (2.8)Repurchase of common stock (49.2) — — — (49.2)Cash dividends paid to stockholders (28.1) — — — (28.1)Intercompany loan — (12.8) 12.8 — —Net cash (used in) provided by financing activities (285.7) (11.5) 12.8 — (284.4)Net decrease in cash and cash equivalents during the period — (103.1) (2.1) — (105.2)Cash and cash equivalents at beginning of period — 175.3 2.4 — 177.7Cash and cash equivalents at end of period $— $72.2 $0.3 $— $72.5104Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS(In millions of dollars)Year Ended December 31, 2014 Parent Guarantor 1Subsidiaries Non-GuarantorSubsidiaries Consolidating 1 Adjustments ConsolidatedCash flows from operating activities: Net cash provided by operating activities $35.6 $351.8 $6.7 $(270.0) $124.1Cash flows from investing activities: Capital expenditures — (56.4) (3.0) — (59.4)Purchase of available for sale securities — (93.5) — — (93.5)Proceeds from disposition of available for sale securities — 108.2 — — 108.2Net cash used in investing activities — (41.7) (3.0) — (44.7)Cash flows from financing activities: Payment of capital lease liability — (0.1) — — (0.1)Excess tax benefit upon vesting of non-vested shares anddividend payment on unvested shares expected to vest — 0.8 — — 0.8Cancellation of shares to cover employees' taxwithholdings upon vesting of non-vested shares (2.4) — — — (2.4)Repurchase of common stock (44.1) — — — (44.1)Cash dividends paid to stockholders (25.4) — — — (25.4)Cash dividends paid to Parent — (270.0) — 270.0 —Intercompany loan 31.3 (23.2) (8.1) — —Net cash used in financing activities (40.6) (292.5) (8.1) 270.0 (71.2)Net (decrease) increase in cash and cash equivalents duringthe period (5.0) 17.6 (4.4) — 8.2Cash and cash equivalents at beginning of period 5.0 157.7 6.8 — 169.5Cash and cash equivalents at end of period $— $175.3 $2.4 $— $177.7____________1. The presentation of cash flows from operating activities and cash flows from financing activities in the 2014 table above has been restated from the prior yearpresentation to reflect $270.0 million of dividends paid in the fourth quarter of 2014 from the Guarantor Subsidiaries to the Parent.105Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSCONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS(In millions of dollars)Year Ended December 31, 2013 Parent GuarantorSubsidiaries Non-GuarantorSubsidiaries ConsolidatingAdjustments ConsolidatedCash flows from operating activities: Net cash (used in) provided by operating activities $(29.2) $131.7 $9.2 $— $111.7Cash flows from investing activities: Capital expenditures — (66.5) (3.9) — (70.4)Purchase of available for sale securities — (227.8) — — (227.8)Proceeds from disposition of available for sale securities — 183.1 — — 183.1Change in restricted cash — 0.7 1.0 — 1.7Net cash used in investing activities — (110.5) (2.9) — (113.4)Cash flows from financing activities: Payment of capital lease liability — (0.1) — — (0.1)Excess tax benefit upon vesting of non-vested shares anddividend payment on unvested shares expected to vest — 1.1 — — 1.1Cancellation of shares to cover employees' taxwithholdings upon vesting of non-vested shares (2.5) — — — (2.5)Repurchase of common stock (78.3) — — — (78.3)Cash dividends paid to stockholders (23.0) — — — (23.0)Cash dividend returned to the Company 0.6 — — — 0.6Intercompany loan 132.4 (130.5) (1.9) — —Net cash provided by (used in) financing activities 29.2 (129.5) (1.9) — (102.2)Net (decrease) increase in cash and cash equivalents duringthe period — (108.3) 4.4 — (103.9)Cash and cash equivalents at beginning of period 5.0 266.0 2.4 — 273.4Cash and cash equivalents at end of period $5.0 $157.7 $6.8 $— $169.5106Table of ContentsKAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS18. Quarterly Financial Data (Unaudited)The following tables present the unaudited financial data for each of the interim periods in 2015 and 2014 (in millions of dollars, except per share amounts): QuarterEnded31-Mar 1 QuarterEnded30-Jun QuarterEnded30-Sep QuarterEnded31-Dec2015 Net sales $371.7 $367.2 $336.4 $316.6Cost of products sold, excluding depreciation, amortization and other items 302.3 294.8 267.3 251.0Lower of cost or market inventory write-down — — — 2.6Unrealized loss (gain) on derivative instruments 4.5 1.5 1.7 (4.3)Gross profit 64.9 70.9 67.4 67.3Operating (loss) income (458.6) 37.0 40.5 35.2Net (loss) income $(292.2) $20.2 $22.1 $13.3Net (loss) income per common share, Basic $(16.85) $1.19 $1.29 $0.76Net (loss) income per common share, Diluted $(16.85) $1.11 $1.21 $0.73_________________________1. The quarter ended March 31, 2015 includes the loss recognized on removal of the Union VEBA net assets. See Note 6 for additional information. QuarterEnded31-Mar QuarterEnded30-Jun QuarterEnded30-Sep QuarterEnded31-Dec2014 Net sales $335.1 $344.1 $338.9 $338.0Cost of products sold, excluding depreciation, amortization and other items 282.9 275.5 280.4 278.7Unrealized (gain) loss on derivative instruments (2.0) (1.6) 3.6 10.4Gross profit 54.2 70.2 54.9 48.9Operating income 32.1 46.4 32.6 26.8Net income $15.8 $24.5 $15.9 $15.6Net income per common share, Basic $0.88 $1.38 $0.90 $0.88Net income per common share, Diluted $0.85 $1.33 $0.85 $0.8519. Subsequent EventsDividend Declaration . On January 15, 2016 , we announced that our Board of Directors declared a quarterly cash dividend of $0.45 per common share, orapproximately $8.2 million (including dividend equivalents), which was paid on February 12, 2016 to stockholders of record at the close of business on January 25,2016 .107Item 9. Changes in and Disagreements with Accountants on Accounting and Financial DisclosureNone.Item 9A. Controls and ProceduresEvaluation of Disclosure Controls and Procedures. We maintain disclosure controls and procedures that are designed to ensure that information required to bedisclosed in our reports under the Securities Exchange Act of 1934 is processed, recorded, summarized and reported within the time periods specified in theSecurities and Exchange Commission's rules and forms and that such information is accumulated and communicated to management, including the principalexecutive officer and principal financial officer, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls andprocedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance ofachieving the desired control objectives and management is required to apply our judgment in evaluating the cost-benefit relationship of possible controls andprocedures. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures was performed as of the end of the periodcovered by this Report under the supervision of and with the participation of our management, including the principal executive officer and principal financialofficer. Based on that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures wereeffective as of December 31, 2015 at the reasonable assurance level.Management's Annual Report on Internal Control Over Financial Reporting. Our management is responsible for establishing and maintaining adequate internalcontrol over financial reporting as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designedunder the supervision of our principal executive officer and principal financial officer and effected by our Board of Directors, management and other personnel, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance withaccounting principles generally accepted in the United States and include those policies and procedures that:(1) Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets;(2) Provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with accountingprinciples generally accepted in the United States and that our receipts and expenditures are being made only in accordance with authorizations of ourmanagement and Board of Directors; and(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have amaterial effect on our financial statements.Because of our inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determinedto be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we assessed theeffectiveness of our internal control over financial reporting as of December 31, 2015 , using the criteria set forth by the Committee of Sponsoring Organizations ofthe Treadway Commission in Internal Control - Integrated Framework as established in 2013. Based on that evaluation, our principal executive officer andprincipal financial officer concluded that our internal control over financial reporting was effective as of December 31, 2015 .Deloitte & Touche LLP, the independent registered public accounting firm that audited our consolidated financial statements for the year ended December 31,2015 included in Item 8. "Financial Statements and Supplementary Data" of this Report, has issued an audit report on the effectiveness of our internal control overfinancial reporting.Changes in Internal Controls Over Financial Reporting . We had no changes in our internal control over financial reporting during our most recently completedfiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Item 9B. Other InformationNone.108Part IIIItem 10. Directors, Executive Officers and Corporate GovernanceThe information required by this item is incorporated by reference to the information included under the captions "Executive Officers," "Proposals RequiringYour Vote – Proposal 1 – Election of Directors," "Section 16(a) Beneficial Ownership Reporting Compliance" and "Corporate Governance" in our proxy statementfor the 2016 annual meeting of stockholders.Item 11. Executive CompensationThe information required by this item is incorporated by reference to the information included under the captions "Executive Compensation," "DirectorCompensation" and "Corporate Governance – Board Committees – Compensation Committee – Compensation Committee Interlocks and Insider Participation" inour proxy statement for the 2016 annual meeting of stockholders.Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder MattersThe information required by this item is incorporated by reference to the information included under the captions "Equity Compensation Plan Information" and"Principal Stockholders and Management Ownership" in our proxy statement for the 2016 annual meeting of stockholders.Item 13. Certain Relationships and Related Transactions and Director IndependenceThe information required by this item is incorporated by reference to the information included under the captions "Certain Relationships and RelatedTransactions" and "Corporate Governance – Director Independence" in our proxy statement for the 2016 annual meeting of stockholders.Item 14. Principal Accountant Fees and ServicesThe information required by this item is incorporated by reference to the information included under the caption "Independent Public Accountants" in ourproxy statement for the 2016 annual meeting of stockholders.109PART IVItem 15. Exhibits and Financial Statement Schedules1. Financial Statements Report of Independent Registered Public Accounting Firm Consolidated Balance Sheets Statements of Consolidated (Loss) Income Statements of Consolidated Comprehensive (Loss) Income Statements of Consolidated Stockholders’ Equity Statements of Consolidated Cash Flows Notes to Consolidated Financial Statements 2. Financial Statement SchedulesAll schedules are omitted because they are either inapplicable or the required information is included in the Consolidated Financial Statements or the notesthereto included in Item 8. "Financial Statements and Supplementary Data" and incorporated herein by reference.3. ExhibitsReference is made to the Index of Exhibits immediately preceding the exhibits hereto (beginning on page 112 ), which index is incorporated herein byreference.110SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized. KAISER ALUMINUM CORPORATION /s/ Jack A. Hockema Jack A. Hockema President and Chief Executive Officer Date: February 22, 2016Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant andin the capacities and on the dates indicated./s/ Jack A. Hockema President, Chief Executive Officer,Chairman of the Board and Director(Principal Executive Officer) Date: February 22, 2016Jack A. Hockema /s/ Daniel J. Rinkenberger Executive Vice President and ChiefFinancial Officer(Principal Financial Officer) Date: February 22, 2016Daniel J. Rinkenberger /s/ Neal West Vice President and ChiefAccounting Officer(Principal Accounting Officer) Date: February 22, 2016Neal West /s/ Carolyn Bartholomew Director Date: February 18, 2016Carolyn Bartholomew Director David Foster Director L. Patrick Hassey /s/ Teresa A. Hopp Director Date: February 18, 2016Teresa A. Hopp /s/ Lauralee Martin Director Date: February 18, 2016Lauralee Martin /s/ Alfred E. Osborne, Jr., Ph.D. Director Date: February 18, 2016Alfred E. Osborne, Jr., Ph.D. Director Jack Quinn /s/ Thomas M. Van Leeuwen Director Date: February 18, 2016Thomas M. Van Leeuwen /s/ Brett E. Wilcox Director Date: February 18, 2016Brett E. Wilcox 111INDEX OF EXHIBITSExhibitNumber Description3.1 Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Registration Statementon Form 8-A, filed by the Company on July 6, 2006, File No. 000-52105). 3.2 Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated July 2, 2008 (incorporated byreference to Exhibit 3.2 to the Quarterly Report on Form 10-Q, filed by the Company on August 7, 2008, File No. 000-52105). 3.3 Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company dated June 2, 2015 (incorporated byreference to Exhibit 3.1 to the Current Report on Form 8-K, filed by the Company on June 8, 2015, File No. 000-52105). 3.4 Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 8-A, filedby the Company on July 6, 2006, File No. 000-52105). 3.5 Amendment to Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K, filed by the Company on June 8, 2015, File No. 000-52105). 4.1 Indenture, dated May 23, 2012, by and among Kaiser Aluminum Corporation, each of the guarantors named therein and Wells Fargo Bank,National Association, as Trustee (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed by the Company onMay 24, 2012, File No. 000-52105). 4.2 Form of 8.250% Senior Note due 2020 (included in Exhibit 4.2). 10.1 Credit Agreement, dated as of December 1, 2015, among the Company, Kaiser Aluminum Investments Company, Kaiser AluminumFabricated Products, LLC, Kaiser Aluminum Washington, LLC and Kaiser Aluminum Alexco, LLC, certain financial institutions fromtime to time party thereto, as lenders, JPMorgan Chase Bank, N.A., as administrative agent, J.P. Morgan Securities LLC and Wells FargoCapital Finance, LLC, as joint bookrunners and joint lead arrangers, Wells Fargo Capital Finance, LLC, as documentation agent, and Bankof America, N.A., as syndication agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by theCompany on December 1, 2015, File No. 000-52105 ) . 10.2 Description of Compensation of Directors (incorporated by reference to Exhibit 10.11 to the Quarterly Report on Form 10-Q, filed by theCompany on April 25, 2014 File No. 000-52105) **10.3 Amendment to Restricted Stock Award Agreement, dated March 31, 2014, between the Company and Jack A. Hockema (incorporated byreference to Exhibit 10.6 to the Quarterly Report on Form 10-Q, filed by the Company on April 25, 2014, File No. 000-52105). **10.4 Employment Agreement, dated as of December 31, 2015, between the Company and Jack A. Hockema (incorporated by reference toExhibit 10.1 to the Current Report on Form 8-K, filed by the Company on January 5, 2016, File No. 000-52105). **10.5 Amendment to Performance Shares Award Agreement, dated March 31, 2014, between the Company and Jack A. Hockema (incorporatedby reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q, filed by the Company on April 25, 2014, File No. 000-52105). **10.6 Form of Director Indemnification Agreement (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K, filed by theCompany on July 6, 2006, File No. 000-52105). **10.7 Form of Officer Indemnification Agreement (incorporated by reference to Exhibit 10.9 to the Current Report on Form 8-K, filed by theCompany on July 6, 2006, File No. 000-52105). 112**10.8 Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.10 to the Current Report on Form 8-K,filed by the Company on July 6, 2006, File No. 000-52105). **10.9 Kaiser Aluminum Fabricated Products Restoration Plan (incorporated by reference to Exhibit 10.14 to the Current Report on Form 8-K,filed by the Company on July 6, 2006, File No. 000-52105). **10.10 Amendment to the Kaiser Aluminum Fabricated Products Restoration Plan (incorporated by reference to Exhibit 10.4 to the Current Reporton Form 8-K, filed by the Company on December 31, 2008, File No. 000-52105). 10.11 Letter agreement effective September 10, 2014 between the Company and the USW (incorporated by reference to Exhibit 10.1 to theCurrent Report on Form 8-K, filed by the Company on September 11, 2014, File No. 000-52105). 10.12 Amended and Restated Director Designation Agreement dated February 13, 2015 (incorporated by reference to Exhibit 10.1 to the CurrentReport on Form 8-K, filed by the Company on February 13, 2015, File No. 000-52105). **10.13 Form of Change in Control Severance Agreement for John M. Donnan, Keith A. Harvey, and Daniel J. Rinkenberger (incorporated byreference to Exhibit 10.33 to the Annual Report on Form 10-K for the period ended December 31, 2002, filed by the Company onMarch 31, 2003, File No. 1-9447). **10.14 Form of Amendment to the Change in Control Severance Agreement with John M. Donnan, Keith A. Harvey, and Daniel J. Rinkenberger(incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K, filed by the Company on December 31, 2008, File No. 000-52105). 10.15 Kaiser Aluminum Corporation Amended and Restated 2006 Equity and Performance Incentive Plan (incorporated by reference to Exhibit10.7 to the Quarterly Report on Form 10-Q, filed by the Company on April 24, 2013, File No. 000-52105). **10.16 2007 Form of Executive Officer Option Rights Award Agreement (incorporated by reference to Exhibit 10.3 to the Current Report onForm 8-K, filed by the Company on April 5, 2007, File No. 000-52105). **10.17 Form of Non-Employee Director Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Quarterly Report onForm 10-Q, filed by the Company on August 7, 2008, File No. 000-52105). **10.18 2013 Form of Executive Officer Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Current Report onForm 8-K, filed by the Company on March 8, 2013, File No. 000-52105). **10.19 2013 Form of Executive Officer Performance Shares Award Agreement (incorporated by reference to Exhibit 10.3 to the Current Report onForm 8-K, filed by the Company on March 8, 2013, File No. 000-52105). **10.20 Kaiser Aluminum Corporation 2013 - 2015 Long-Term Incentive Program Summary of Management Objectives and Formula forDetermining Performance Shares Earned (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed by theCompany on March 8, 2013, File No.000-52105). **10.21 Description of 2013 Long-Term Incentive Umbrella Plan under the Kaiser Aluminum Corporation Amended and Restated 2006 Equity andPerformance Incentive Plan (incorporated herein by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q, filed by the Companyon April 24, 2013, File No. 000-52105). **10.22 2014 Form of Executive Officer Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Current Report onForm 8-K, filed by the Company on March 7, 2014, File No. 000-52105). 113**10.23 2014 Form of Restricted Stock Award Agreement (Bunin and Harvey) (incorporated by reference to Exhibit 10.1 to the Current Report onForm 8-K, filed by the Company on June 6, 2014, File No. 000-52105). **10.24 2014 Form of Executive Officer Performance Shares Award Agreement (incorporated by reference to Exhibit 10.3 to the Current Report onForm 8-K, filed by the Company on March 7, 2014, File No. 000-52105). **10.25 2014-2016 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed by the Companyon March 7, 2014, File No. 000-52105). **10.26 Description of 2014 Long-Term Incentive Umbrella Plan under the Kaiser Aluminum Corporation Amended and Restated 2006 Equity andPerformance Incentive Plan (incorporated by reference to Exhibit 10.9 to the Quarterly Report on Form 10-Q, filed by the Company onApril 25, 2014, File No. 000-52105). **10.27 2015 Short-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by the Company onMarch 9, 2015, File No. 000-52105). **10.28 2015 Form of Executive Officer Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.2 to the Current Report onForm 8-K, filed by the Company on March 9, 2015, File No. 000-52105). **10.29 2015 Form of Executive Officer Performance Shares Award Agreement (incorporated by reference to Exhibit 10.3 to the Current Report onForm 8-K, filed by the Company on March 9, 2015, File No. 000-52105). **10.30 2015-2017 Long-Term Incentive Plan (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K, filed by the Companyon March 9, 2015, File No. 000-52105). **10.31 Description of 2015 Short-Term Incentive Umbrella Plan under the Kaiser Aluminum Corporation Amended and Restated 2006 Equity andPerformance Incentive Plan (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q, filed by the Company onApril 30, 2015, File No. 000-52105). **10.32 Description of 2015 Long-Term Incentive Umbrella Plan under the Kaiser Aluminum Corporation Amended and Restated 2006 Equity andPerformance Incentive Plan (incorporated by reference to Exhibit 10.7 to the Quarterly Report on Form 10-Q, filed by the Company onApril 30, 2015, File No. 000-52105). *12.1 Statement Regarding Computation of Ratios. 21.1 Significant Subsidiaries of Kaiser Aluminum Corporation (incorporated by reference to Exhibit 21.1 to the Annual Report on Form 10-K,filed by the Company on February 18, 2014, File No. 000-52105. *23.1 Consent of Independent Registered Public Accounting Firm. *31.1 Certification of Jack A. Hockema pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *31.2 Certification of Daniel J. Rinkenberger pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. *32.1 Certification of Jack A. Hockema pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *32.2 Certification of Daniel J. Rinkenberger pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *101.INS XBRL Instance *101.SCH XBRL Taxonomy Extension Schema114 *101.CAL XBRL Taxonomy Extension Calculation *101.DEF XBRL Taxonomy Extension Definition *101.LAB XBRL Taxonomy Extension Label *101.PRE XBRL Taxonomy Extension Presentation_____________________________* Filed herewith. ** Management contract or compensatory plan or arrangement required to be filed as an exhibit to this Annual Report on Form 10-K.115Exhibit 12.1KAISER ALUMINUM CORPORATION AND SUBSIDIARY COMPANIESCOMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES(In millions of dollars, except for ratio of earnings to fixed charges) Year Ended December 31, 2015 2014 2013 2012 2011 Earnings: (Loss) income from continuing operations before taxesand equity in losses (earnings) of unconsolidatedaffiliates $(371.8) $107.1 $143.2 $139.6 $41.3Fixed charges 28.6 42.5 41.6 34.1 22.6Interest capitalized (1.8) (2.5) (3.4) (1.7) (1.3)Amortization of interest capitalized 1.0 0.9 0.8 0.7 0.6Earnings $(344.0) $148.0 $182.2 $172.7 $63.2 Fixed Charges: Interest expense, including amortization of discounts,debt issuance costs and interest component of rentexpense $24.1 $37.5 $35.7 $29.1 $18.0Interest capitalized 1.8 2.5 3.4 1.7 1.3Amount representative of the interest factor in rents 2.7 2.5 2.5 3.3 3.3Fixed charges $28.6 $42.5 $41.6 $34.1 $22.6 Ratio of earnings to fixed charges N/A 3.5 4.4 5.1 2.8 Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement No. 333-165869 on Form S-3 and Nos. 333-170513 and 333-135613 on Form S-8 of ourreport dated February 22, 2016 , relating to the consolidated financial statements of Kaiser Aluminum Corporation and the effectiveness of Kaiser AluminumCorporation’s internal control over financial reporting, appearing in this Annual Report on Form 10-K of Kaiser Aluminum Corporation for the year endedDecember 31, 2015./s/ DELOITTE & TOUCHE LLPCosta Mesa, CaliforniaFebruary 22, 2016Exhibit 31.1CERTIFICATION PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, Jack A. Hockema, certify that:1. I have reviewed this report on Form 10-K of Kaiser Aluminum Corporation;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrantand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting. /s/ Jack A. Hockema Jack A. Hockema President and Chief Executive Officer (Principal Executive Officer)Date: February 22, 2016A signed original of this written statement required by Section 302 has been provided to Kaiser Aluminum Corporation and will be retained by KaiserAluminum Corporation and furnished to the Securities and Exchange Commission or its staff upon request.Exhibit 31.2CERTIFICATION PURSUANT TO SECTION 302OF THE SARBANES-OXLEY ACT OF 2002I, Daniel J. Rinkenberger, certify that:1. I have reviewed this report on Form 10-K of Kaiser Aluminum Corporation;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statementsmade, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financialcondition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in ExchangeAct Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrantand have:(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure thatmaterial information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly duringthe period in which this report is being prepared;(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, toprovide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles;(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness ofthe disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and(d) Disclosed in this report any changes in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscalquarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, theregistrant’s internal control over financial reporting; and5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely toadversely affect the registrant’s ability to record, process, summarize and report financial information; and(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control overfinancial reporting. /s/ Daniel J. Rinkenberger Daniel J. Rinkenberger Executive Vice President and Chief Financial Officer (Principal Financial Officer)Date: February 22, 2016A signed original of this written statement required by Section 302 has been provided to Kaiser Aluminum Corporation and will be retained by KaiserAluminum Corporation and furnished to the Securities and Exchange Commission or its staff upon request.Exhibit 32.1CERTIFICATION PURSUANT TO18 U.S.C. 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002February 22, 2016In connection with the Annual Report on Form 10-K by Kaiser Aluminum Corporation, a Delaware corporation (the “Company”), for the year endedDecember 31, 2015 (the “Report”), as filed on the date hereof with the Securities and Exchange Commission, the undersigned, Jack A. Hockema, President andChief Executive Officer of the Company, does hereby certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,that to such officer’s knowledge:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as ofthe dates and for the periods expressed in the Report.IN WITNESS WHEREOF, the undersigned has executed this certification as of the date first above written. /s/ Jack A. Hockema Jack A. Hockema President and Chief Executive Officer (Principal Executive Officer)A signed original of this written statement required by Section 906 has been provided to Kaiser Aluminum Corporation and will be retained by KaiserAluminum Corporation and furnished to the Securities and Exchange Commission or its staff upon request.Exhibit 32.2CERTIFICATION PURSUANT TO18 U.S.C. 1350AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002February 22, 2016In connection with the Annual Report on Form 10-K by Kaiser Aluminum Corporation, a Delaware corporation (the “Company”), for the year endedDecember 31, 2015 (the “Report”), as filed on the date hereof with the Securities and Exchange Commission, the undersigned, Daniel J. Rinkenberger, ExecutiveVice President and Chief Financial Officer of the Company, does hereby certify, pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to such officer’s knowledge:(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as ofthe dates and for the periods expressed in the Report.IN WITNESS WHEREOF, the undersigned has executed this certification as of the date first above written. /s/ Daniel J. Rinkenberger Daniel J. Rinkenberger Executive Vice President and Chief Financial Officer (Principal Financial Officer)A signed original of this written statement required by Section 906 has been provided to Kaiser Aluminum Corporation and will be retained by KaiserAluminum Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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