Kaiser Aluminum announces preliminary first quarter 2015 financial information

Kaiser Aluminum Corporation today announced that, as a result of the definitive expiration of its obligation to make annual variable contributions to the union voluntary employees' beneficiary association (the "Union VEBA") for any period after September 2017, it has removed from the Company's consolidated balance sheet the Union VEBA's plan assets and liabilities, and related deferred tax liabilities and accumulated other comprehensive income amounts. Additionally, the Company has recorded a liability of $45 million for the quarter ended March 31, 2015 to reflect the estimated remaining annual variable contributions that could be made to the Union VEBA through September 2017.

As previously announced, on January 28, 2015, members of the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC (the "USW") at the Company's Newark, Ohio and Spokane, Washington facilities ratified a new five-year labor agreement, effective October 1, 2015. The new labor agreement extends through September 30, 2020 and did not extend the Company's obligation to make annual variable contributions, up to $17.1 million per year, to the Union VEBA, which expires in September 2017. As disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2014, based on the definitive termination date of the Company's funding obligation, the Company was reviewing the impact that the change to its Union VEBA funding obligation would have on its consolidated financial statements.

The Company has determined that defined benefit accounting is no longer applicable to the Union VEBA, requiring the Company to remove the Union VEBA assets, liabilities and related amounts from its consolidated balance sheet, establish a $45 million liability to reflect the Company's estimated remaining contingent obligation to the Union VEBA, and record a non-cash, after-tax charge in the quarter ended March 31, 2015 of $308 million. The Company plans to release its full financial and operating results for the quarter ending March 31, 2015 on Tuesday, April 28, 2015 after the market closes. Consistent with prior disclosures relating to the Union VEBA, the Company will treat the US GAAP impact of this accounting change as a non-run-rate item and, accordingly, will exclude such impact from the Company's adjusted EBITDA, adjusted net income and adjusted earnings per diluted share.

The new labor agreement with the USW did not affect the Company's obligation to make annual variable contributions, up to $2.9 million per year, to the voluntary employees' beneficiary association with respect to certain other eligible retirees, their surviving spouses and eligible dependents (the "Salaried VEBA") or its accounting for the Salaried VEBA in its consolidated financial statements.

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