Good day and welcome to the Kaiser Aluminum fourth quarter 2008 earnings results conference call. Today's call is being recorded. At this time for opening remarks and introductions, I'd like to turn the call over to Melinda Ellsworth. Please go ahead.

Thank you. Good afternoon, everyone, and welcome to Kaiser Aluminum's fourth quarter and full year 2008 earnings conference call. If you have not seen a copy of our earnings release please visit the Investor Relations page on our website at www.KaiserAluminum.com. We have also posted a PDF version of the slide presentation for this call. Joining me today are President, CEO and Chairman Jack Hockema, Senior Vice President and Chief Financial Officer Dan Rinkenberger, and Chief Accounting Officer Neal West. Jack and Dan will review the results and at the conclusion of our presentation we will open the call for questions. Before we begin I'd like to remind the audience that the information contained in this presentation includes statements based on management's current expectations, estimates and projections that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include statements regarding the company's anticipated financial and operating performance, relate to future events and expectations, and involve known and unknown risks and uncertainties. For a summary of the specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to the company's earnings release in the fourth quarter and full year ended December 31, 2008 and reports filed with the Securities and Exchange Commission. All information in this presentation is as of the date of the presentation. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. Non-run rate items to us are items that, while they may recur from period to period, are particularly material to results, impact costs as a result of external market factors, and may not recur in future periods if the same level of underlying performance were to occur. These are certainly part of our business and operating environment, but are worthy of being highlighted for the benefit of the users of our financial statements. Management's intent is to significantly neutralize the fabricated product segment from fluctuations in underlying metal prices. We characterize metal profit and LIFO charges as non-run rate items that eventually offset to a great extent over the course of a full year. Further presentations, including such terms as net income or operating income before non-run rate or after adjustments are not intended to be and should not be relied on in lieu of the comparable caption under generally accepted accounting principals to which it is reconciled. Such presentations are solely intended to provide greater clarity of the impact of certain material items on the GAAP measure and are not intended to imply such items should be excluded. I would now like to turn the call over to Jack Hockema. Jack?

Thanks, Melinda, and good afternoon, everyone. As Melinda mentioned, you may follow our discussion by viewing the slide presentation on our website at KaiserAluminum.com. I'll begin today with a high level review of 2008 and then turn the call over to Dan Rinkenberger, who will review some of the financial details, and then I'll share some thoughts on our outlook before opening the call for questions. Turning to Slide 5 and a brief look back, let me begin by saying that we are pleased with our 2008 underlying results. Fabricated Products operating income was the second best in our history. Strong aerospace and defense demand enabled record shipments for heat treat plate and supported solid results from the plants that supply products for these applications. As we've previously discussed, our 2008 results would have been even better had it not been for high energy costs and disruptions during implementation of strategic investment and product development initiatives which negatively impacted our manufacturing efficiency. In spite of these challenges, we made significant progress in positioning the company for operational efficiency and long-term growth. For example, we completed the heat treat plate capacity expansion and successfully qualified our capability to supply heavy gauge plate for aerospace and general engineering applications. In addition, we are completing efficiency projects that will have an impact beginning early in 2009, including equipment and facility upgrades in our Chandler, Los Angeles, Sherman and Newark plants. Progress continues on our strategic investment in a world class facility in Kalamazoo that will yield significant efficiencies in our rod and bar value stream. We anticipate that production will commence in early 2010. Finally, we ended the year with financial strength that will serve us well as we navigate a challenging economic environment that we anticipate will continue into 2009. I'll now turn the call over to Dan, who will go into more detail regarding the fourth quarter and full year results, and then I will discuss some industry trends and their implications for Kaiser.

Thanks, Jack. The consolidated financial highlights are shown on Slide 7. As Jack mentioned, our underlying operating income performance for the full year 2008 was solid as we delivered $116 million in operating income excluding significant non-run rate and predominantly non-cash charges. In our Fabricated Products segment we delivered $142 million in operating income excluding nonrun rate items. The Fabricated Products results reflected higher shipments from continued strong aerospace and defense demand, but this was offset by higher energy costs, lower manufacturing efficiencies, and a significant decline in demand for general, industrial and automotive applications during the fourth quarter. In our Primary Aluminum segment, the fourth quarter results included $10 million of insurance proceeds. For the full year, we delivered $20 million in operating income, excluding nonrun rate items, despite operating at lower capacity levels after the transformer fire at Anglesey in June of last year. Our reported results reflected significant non-run rate items that I will discuss in more detail on the next slide. For the full year we reported a net loss of $69 million or $3.43 per share, but full year results adjusted for these significant non-run rate and predominantly non-cash charges would have reflected net income of $63 million or $3.09 per diluted share. A reconciliation to the GAAP reported income and EPS numbers is shown with the financial statements of our news release issued last night. For the fourth quarter we estimate EPS adjusted for non-run rate items would have been approximately $0.83 per share assuming a 45% tax rate. As a reminder, we have approximately $900 million of tax attributes, primarily net operating loss carryforwards, which can be applied against pre-tax U.S. income. As a result, our cash income tax obligations are minimal, relating primarily to state income taxes and our operations outside the…

Thanks, Dan. Slide 15 provides context for a discussion of our outlook. Although the global economic environment remains challenging, our outlook is largely unchanged from what we described during the third quarter earnings call. The long-term fundamentals for aerospace and defense are good. Boeing and Airbus retain substantial backlogs and while they are not impervious to a global recession, the long-term prospects for commercial aerospace are positive. Kaiser is also a well positioned supplier to the defense industry for aerospace and armor applications. As indicated in prior calls, we expect a modest decline in armor plate demand from the 2008 peak; however, we have reasonable visibility to anticipate that overall demand for our portfolio of aerospace and defense products will continue to be robust. The short-term outlook for ground transportation and industrial applications is less encouraging. Industrial production continues to slow and the ground transportation sectors have been severely impacted by the current recession. Destocking continues throughout the entire supply chain and we have limited visibility regarding the true underlying demand for these applications. We expect that the weak demand will continue at least through the first quarter of 2009; however, at some point destocking will run its course and our demand will improve compared to current levels even if the end markets remain weak. So what does this mean for our first quarter outlook? We expect that aerospace and high strength shipments will be similar to the record levels set in the fourth quarter last year, while shipments for other applications will be lower than the fourth quarter as a result of continued destocking and very soft end use demand, as I mentioned earlier. We expect that value added revenue per pound will be similar to the fourth quarter of 2008 as a richer mix offsets some of the…

Thank you, sir. (Operator Instructions) Your first question comes from Timna Tanners - UBS.

I wanted to just nail down a few things on the cost side. What lingering costs might you have related to the Tulsa and Bellwood moves or are those pretty much behind us?

Well, we took reserves for the downsizing of those facilities in the fourth quarter, but we'll have some continuing costs here in the first quarter as we implement that manufacturing inefficiencies and rebalancing throughout the system. But we think most of that will be wrapped up in the first quarter.

So when you refer to first quarter continuing manufacturing inefficiencies, that's the kind of thing that you're referring to that could linger for a quarter or so?

Yes, that's a component, but we're still continuing the Chandler startup. I think they pushed their first billet in late January. Sherman is upgrading their 2,500 ton; the 4,000 ton press at Los Angeles started up late in the year and is still ramping up. So we still have a few items where we're just refining the system and getting launched. So it's a combination of strategic projects and the continued downsizing of our operations because we will have lower volume in the first quarter than the fourth quarter.

But are there a lot of economies of scale when you have pretty high variable costs? How do we think about that?

Well, there's a lag in us, especially when the decline in volume is a precipitous as it has been in this recession. There's a lag in getting those costs out, and that's why we expect we'll have inefficiencies through the first quarter and perhaps into the second quarter. It's really a function of when the destocking wraps up and demand actually stabilizes. That's why we were saying that by the second half of the year we expect that we're going to see significant improvements in our efficiency, but it's difficult to predict exactly when that will happen.

So you are a high variable cost company; however, given the precipitous decline in volume, it doesn't happen on a dime. It takes awhile to adjust.

Exactly.

Switching a little more to your balance sheet and trying to think about cash going forward, how flexible is CapEx? Could you if you needed to put off or delay the Kalamazoo project, which seems to be the biggest source of CapEx? How much is your maintenance versus gross CapEx?

Well, maintenance CapEx, as we've said in the past, is somewhere in the $12 to $15 million per year range. Most of the spending this year is Kalamazoo, as you would suspect. We reviewed that multiple times in the past two or three months and the answer always comes out the same, that that's a very good project that we should pursue. So could we stop it? Yes, we could stop a portion of that spending, but we don't intend to. That's a good project, a high priority project, and we intend to fund it.

So then switching to thinking about the competitive landscape right now, your key competitors are Alcoa and former Alcan operations and then you've got Aleris. I mean, with some of the distressed smaller mom and pops and with Aleris being in bankruptcy, how is that affecting your operations and perhaps you M&A opportunities?

Well, we'll continue to look for complementary acquisitions that add value for the company. It's too early for us to see those at this point, but we would suspect if this economic distress continues that there could be some opportunities on the horizon.

How high of a priority is that for you and are you seeing any changes in the market behavior given some more distressed kind of competitors?

You mean market behavior in terms of pricing?

Price undercutting. Yes, pricing or in terms of the actually opportunities to take market share because of less focus on customers, etc.

Well, I've stated before that when we went through the last recession that we didn't see as much price cutting as we may have seen in prior recessions, particularly as it relates to the extrusion end of the business. However, in general engineering plate the pricing was pretty severe in the last recession. At this point we've not seen a lot of price erosion, although there is price pressure. Some of that has been helped by the precipitous decline in metal, so while prices in total have declined a big portion of that has just been the metal. So at this point we've not seen significant distress in pricing, but in this environment there's always some pressure on pricing.

Okay. And I'll just leave it with that last question. I was still hoping for a little more detail on how you might look at M&A, how big of a priority it is for you, what size, what size borrowing you think you might consider if you were to go that route.

I don't think we want to go there at this point; I mean, the capital markets still are basically frozen. So we continue to monitor the capital markets and we continue to monitor what's happening in terms of acquisitions. Our first priority would be some of the smaller boltons and we mentioned, I believe, on the last call that we were very close on more than one of those at year end. We continue to monitor those situations. And there could be some bigger ones that come along and we'll evaluate those on a case-by-case basis.

Your next question comes from Anthony Rizzuto - Dahlman Rose & Co. Anthony Rizzuto - Dahlman Rose & Co.: First, I just wanted to make sure I heard correctly. Did you guys include in the Primary Aluminum results that there was a $10 million insurance settlement in there?

Yes, there was $10 million received in the fourth quarter. We anticipate the rest of it to come some time in 2009. But it's important to remember that primarily it goes to Anglesey, and so the cash impact to us would depend on the dividends being paid to the partners. Anthony Rizzuto - Dahlman Rose & Co.: Just to refresh my memory, Dan, what was the rest of the amount? I think it was total, what, maybe about $40 million, somewhere along those lines?

In term of dollars and our share, it's not that much. It's probably about $20 million, maybe a little more than that total, for our share. Anthony Rizzuto - Dahlman Rose & Co.: Okay. So you've received $10 million; another $10 million will be coming over the 2009 period?

And again, Anglesey has. Anthony Rizzuto - Dahlman Rose & Co.: My next question is you're talking about the heat treat or the high strength and aero shipments in the first quarter being similar to fourth quarter levels, and when I look at the industry order patterns and they just seem to be falling off a cliff - it's just amazing to watch this develop how comfortable are you, are you that comfortable in making this statement because of the contracts you have at this point or do you see any possibility of maybe some further slippage there, Jack?

Tony, we're pretty confident and have very good visibility for the first quarter, so to be at a level similar to the fourth quarter we have a high degree of confidence in that at this point. And we've not seen tremendous pressure. Is a lot of that a function of our contract positions? Yes, it is. And a lot of it is a function of us being the supplier of choice in some of those categories where we do not have underlying contracts. So it's a combination of factors. Anthony Rizzuto - Dahlman Rose & Co.: Now, in light of this obviously the general engineering, industrial applications, automotive, all kind of falling quite sharply, where are you guys, if you could separate or keep everything else remaining the same, where would you be in terms of your expansion and modernization at Trentwood in relation to where you are today in terms of what your operating at and realizing in terms of [inaudible] volumes?

Well, Trentwood in the fourth quarter - just the heat treat plate is what you're talking about Trentwood in the fourth quarter had the second-best shipments. It was near record heat treat plate shipments, virtually the same as the second quarter, which was the record in 2008. Their total heat treat plate volume in the first quarter right now looks like it will be similar to the pace that we were running last year, which you'll recall we were calling it back then roughly in the low 80s in terms of capacity utilization of the ultimate capacity, which we now have installed at Trentwood. So that remains relatively strong. The big wild card here is general engineering plate, which goes primarily to service centers, and that market is very depressed, as are all service center markets. So the big wild card is general engineering. But again, we think destocking will run its course at some point - I don't know when that point is for general engineering plate - and we'll be running at good, reasonably good, capacity utilizations. Anthony Rizzuto - Dahlman Rose & Co.: So I just want to make sure I understand correctly because some of the heat treat material does go to non-aero applications and if you're operating the heat treat plate, which I would imagine or maybe you were referring to the aero applications in the low 80s - if the combination of what goes to the aero and high strength area as well as general engineering, if you look at both segments combined, would it still be that kind of low 80s type operating range?

Yes. My comment was total heat treat plate in the fourth quarter - aerospace and general engineering combined ran at basically the same level we'd been running all year. And that's in spite of a significant downturn in general engineering demand, and that's because a lot of the increased aerospace and heat treat was actually heat treat plate in the fourth quarter. Anthony Rizzuto - Dahlman Rose & Co.: Can you give us a little bit of guidance in terms of, obviously, looking at the order pattern, shipments have been [down[ less than the order patterns this year, but should we gauge our models in looking at the non-aero business for you as that kind of volume declines when we look sequentially?

Well, I'm not sure exactly what to tell you about what to expect because we don't know what to expect. Our visibility is days, not even weeks or a month in terms of that visibility. All I can tell you right now is we expect that the first quarter's going to be down from the fourth quarter, and the fourth quarter was down substantially from prior quarters as you'll see when you get a chance to look at some of those quarterly trends that we've put in the appendix. So in terms of modeling it, frankly, Tony, we don't know where this is going. And it's the wild card, as I mentioned in my remarks. It's not only destocking at the service centers - and we have some visibility of that, particularly for rod and bar - but it's the destocking through the entire value stream. So service centers are seeing destocking by the OEMs and then the service centers are destocking in addition to that. And so for us to gauge what real demand is is virtually impossible at this point. I mean, for example, in January we have statistics for rod and bar for service centers. In the fourth quarter service center shipments of rod and bar were down 17% year-over-year, but mill shipments to the service centers were down 38% as a consequence of the destocking. So service center demand down 17%, mill demand down 38%. In January, we just got those statistics - in fact, I just got them this morning - rod and bar service center shipments were down 35% year-over-year and mill shipments to the service centers were down 40%. So that's just how dramatic this is. And again, going back to the service centers, they're down 35%, but that's more than the real demand decline because their customers are destocking as well. So how do we judge this? I don't know how to judge it, Tony. We just have to wait a few months for this to sort out. Anthony Rizzuto - Dahlman Rose & Co.: I've just got a couple more questions. In terms of the corporate expenses, I notice they came in about $9 million; we've been modeling at a little bit higher level. Was the [break in audio] level sustainable, gentlemen?

Yes, for the fourth quarter, I mean, that was down because of some adjustments we had. One of them was long-term and short-term incentive compensation that we had a true-up for in the fourth quarter. So it's probably - that's not a level; the fourth quarter is not necessarily a level that you want to be hanging your hat on going forward. Anthony Rizzuto - Dahlman Rose & Co.: Okay, so getting back, Dan, maybe to that kind of $12 - $13 level per quarter?

Probably. We're targeting something for the year in the territory being down a couple million dollars, probably more than just $2 to $4 million. Anthony Rizzuto - Dahlman Rose & Co.: And as far as depreciation, should we be using a similar level? How does that change looking at '09 versus '08?

Well, it will be up a little bit because we've commissioned new pieces of equipment at Trentwood and a few other locations. I don't think it's a dramatic increase, but it's just I wouldn't even [inaudible] put more than just a couple million up, I think, in your model. Anthony Rizzuto - Dahlman Rose & Co.: And then working capital, you made some comments earlier that a lot of the working capital, the use of cash in '08, was clearly in preparation as you were doing the major expansion and various components. I would expect you're going to work awfully hard and really try to extract as much cash as possible. Should we assume that that's going to be a source of cash in '09 and possibly a fairly large one for you?

Oh, absolutely. Jack mentioned we have a target of $20 million for inventory - of cash to be generated from a reduction of inventory over the first half. Anthony Rizzuto - Dahlman Rose & Co.: Okay. I'm sorry I didn't hear that.

And we've been making progress in the fourth quarter as well as currently. I mentioned that our borrowings on the revolver were down from $36 million at year end down to $11 million at January month end, so that was in part as we've been working towards that rightsizing of working capital.

Your next question comes from Timothy Hayes - Davenport & Company, LLC. Timothy Hayes - Davenport & Company, LLC: A few questions on the Kalamazoo and restructuring that side of the business. You had stated before that you expected $23 million of EBITDA from the restructuring. How good is that number given how weak conditions are? What would be the timing of the EBITDA/savings that you expect to get from Kalamazoo in the restructuring?

Well, we would [break in audio] those same order of magnitude benefits at steady state volumes, not at recessionary volumes. And when we get the plant fully operational, which will be some time during the first half of next year, we should be at a fully operational pace. And then what the demand will be at that time no one knows, but it still has that kind of value going forward on a steady state basis. Timothy Hayes - Davenport & Company, LLC: And then the weather impact, how much impact was there to the shipments from the -

Virtually none. The $2 million is all cost related - about $1 million worth of snow removal and $1 million worth of lost production at Trentwood during the month, order of magnitude. Timothy Hayes - Davenport & Company, LLC: And then finally on the working capital, was that a source or did that actually generate cash in Q4 of '08?

Yes.

(Operator Instructions) Your next question comes from [Unidentified Analyst] - KeyBanc Capital Markets.

I just have a couple of questions. As far as the hedged metal pricing, that sort of implied number that we kind of backed into from the value add [break in audio], when would you expect that to get to some more market normalized levels given the fact that the market corrected so dramatically so fast? Meaning, you know, when do your input cost, as far as they flow through the P&L, get to where they kind of currently are in the [LME]?

Well, I think the biggest factor that would make market pricing for metal be different from what is essentially the hedged metal that you backed into is really the hedging of the contracts that we have. So we put those in place in many cases several - a year or so ago - at higher metal prices, and many of those will carry on for a couple of years into the future. So that's why we wanted to make sure we identified that it's hedged metal that's alloyed, not just spot metal.

So that hedged metal level that was [derived] in the fourth quarter, should we expect that to continue foreseeably?

Well, it'll probably over time, as some of the contracts that are at higher metal prices fall off, then you'll be seeing an impact of what the then-current metal prices would be as part of the spot increases and the contract pricing falls off, with the contract-bought pricing being locked in at the higher metal prices of, say, a year ago.

And Jack, in the aerospace and high strength supply chain, can you give us a feel for that right now given the fact that I know stuff like monolithic heat treat plate is different from titanium applications for airframe which, you know, there's just a wide, wide excess of inventory at the subcontractor level for that stuff. I mean, how does the supply chain feel right now for you as far as visibility there?

Well, there is some excess of inventory in the system. Part of that goes back a couple of years with the A380 delays, so Airbus is still working off some of those inventories. And then Boeing has the situation with the 787 that has a much bigger impact on titanium than it does on the aluminum side. And then there was the strike in the fourth quarter at Boeing, so they've had some inventory buildup as well. But I come back to say that in terms of our visibility, we've got pretty good visibility for this year. We know that they'll be looking to work those off, but it's not working them off over a matter of weeks; it's a matter of months and years, as we see it.

And then my last question is, Dan, on the other current assets it looks like there was about a $70 million-ish increase sequentially. What's kind of baked in there?

Yes, that includes - actually, there'll be several places on the balance sheet where you'll see the impact of this when we do the marked-to-market of our hedging positions, a significant piece is in the current assets, but also in the longer-term assets and also long-term liabilities. You'll see a similar impact there. So it happens in actually, I think, four places on the balance sheet where the marked-to-market of our derivative positions appear.

Your last question comes from Anthony Rizzuto - Dahlman Rose & Co. Anthony Rizzuto - Dahlman Rose & Co.: Just a follow up question regarding Boeing. What would the impact, Jack, be if we were to see production curtailments from them on the single aisle aircraft? How would that affect you guys?

Well, it would have some effect. Ad we're not going to go into the specifics regarding our contracts by customer. But many people know that we follow Airline Monitor; Airline Monitor just came out with a forecast and where there previous forecast had no downturn in builds for Airbus and Boeing, they're now predicting a downturn of 10% in the build rate in 2010. But if you put that in context and look at the prior recession, the bottom was down 30% and it was basically at that level for four years, from 2001 through 2004. So would a Boeing downturn have an impact? Eventually it would have some impact on us but, again, we've got some contracts and some that's not protected by contracts in our total mix in terms of aerospace. But at this point we think those backlogs are very strong, and we don't see a significant impact, even if there is a downturn, a modest downturn of 10% or so. Certainly, it'll be an impact, but nothing like we've seen from prior cycles.

And Mr. Hockema, I'll turn the call back over to you for any additional or closing remarks.

Okay, thanks. Just turn to Slide 20 here and I'll reiterate a couple of the important points from the call, the first being that our [break in audio] underlying results were very strong and our long-term business fundamentals remain positive. We believe that we're well positioned with financial [break in audio] competitive strength to manage through these challenging times and the current market cycle. Thanks for joining us today and we look forward to updating you again on our first quarter call in three months.

And that does conclude today's call. Thank you.