Good day, and welcome to the Kaiser Aluminum third quarter 2013 earnings conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Melinda Ellsworth. Please go ahead, ma'am.

Thank you. Good afternoon, everyone, and welcome to Kaiser Aluminum's third quarter 2013 earnings conference call. If you've not seen a copy of our earnings release, please visit the Investor Relations' page on our website at kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call. Joining me on the call today are Chairman, President and Chief Executive Officer, Jack Hockema; Executive Vice President and Chief Financial Officer, Dan Rinkenberger; and Vice President and Chief Accounting Officer, Neal West. Before we begin, I'd like to refer you to the first 2 Slides of our presentation and remind you that the statements made by management and the information contained in this presentation that constitute forward-looking statements are based on management's current expectations. For a summary of specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to the company's earnings release and reports filed with the Securities and Exchange Commission, including the company's Annual Report on Form 10-K for the full year ended December 31, 2012, and Form 10-Q for the quarter ended March 31, 2013. The company undertakes no duty to update any forward-looking statements to conform the statement to actual results or changes in the company's expectations. In addition, we've included non-GAAP financial information in our discussion. Reconciliations to the most comparable GAAP financial measures are included in the earnings release and in the appendix of the presentation. At the conclusion of the company's presentation, we will open the call for questions. I would now like to turn the call over to Jack Hockema. Jack?

Thanks, Melinda. And thanks to everyone for joining us for our earnings call on Friday afternoon. Also thanks to our accounting department for facilitating an early close to accommodate my travel schedule next week. Turning to Slide 5, our third quarter results were impacted by the continuing aerospace supply chain inventory overhang as well as throughput and manufacturing inefficiencies at our two largest facilities that while temporary in nature negatively affected our sales and cost for the quarter. Trentwood's throughput and efficiency were affected by disruption from significant construction activities related to the Phase 5 expansion project and the installation of the new casting complex. You may recall it, during the second quarter earnings call I expressed surprise, that Trentwood's construction activity had very little impact on our operating efficiencies. That observation was based on the second quarter, when the major construction activity was focused on expansion of heat treat furnace capacity, the fifth expansion of that kind. And with the benefit of experience, we were able to proficiently manage the disruption related to these activities. In the third quarter our focus shifted to construction of the new casting complex and installation of new ingot preheating furnaces for the hotline in the area adjacent to the new casting complex. These activities combined to create interference with logistics and operations in both the casting and the hot rolling operations. The result was less third quarter throughput and greater manufacturing inefficiencies than anticipated at Trentwood. Although, the investment projects negatively impact our short-term results, the longer-term benefits are significant, providing additional capacity to meet heat treat plate demand growth and addressing critical production bottlenecks that currently impede our ability to maximize operational efficiency and flexibility. In addition to the issues at Trentwood in the third quarter, we experienced an extended outage during…

Thanks, Jack. Total value-added revenue of $182 million in the third quarter was slightly below the first half 2013 run rate. However, looking behind the numbers, there are two important developments. The first is a step-change in value-added revenue for automotive extrusions, which increased 22% in the third quarter from the first half run rate, as production ramped up in new and existing automotive extrusion programs. Stricter CAFE standards continue to be a significant catalyst for our participation in aluminum extrusion content growth on new vehicle platforms. The second development is a 4% decrease in aerospace value-added revenue in the third quarter compared to the first half run rate, primarily reflecting lower demand for non-plate aerospace products due to the inventory overhang that Jack mentioned. As well as the impact of a $4.5 million customer contract payments that we received and recorded in the first half of the year. Adjusted EBITDA in the third quarter declined approximately $6 million compared to the run rate of first half of the year. And our adjusted EBITDA margin declined to 22% from the 25% first half run rate, reflecting lower demand for non-plate aerospace products, throughput and manufacturing inefficiencies from the construction activities at Trentwood, inefficiencies related to an extended equipment outage on our Newark facility and increased major maintenance expense. For the nine months ended September 30, 2013, value-added revenue declined to 2% and EBITDA declined to 4% in the comparable 2012 period. EBITDA margin, however, remained strong at approximately 24%, which is comparable to the same period of 2012. Moving on to Slide 8. We reported $42 million of operating income in the third quarter, which included $8 million of non-run-rate gains. Adjusting for these non-run-rate gains, our third quarter operating income was $34 million, a decline compared to the prior…

Thanks Dan. Turning to Slide 9, on aerospace. Despite the current headwinds, the outlook for commercial aerospace demand remains very positive. Airframe orders continue to exceed the expected full year deliveries and we anticipate that the end of year 2013 backlog will hit a new record high. In addition, airframe manufactures have been ramping up build rates and real demand is expected to remain strong. However, as I mentioned earlier, fluctuations in supply chain inventories some times create lumpier demand for our products than one might assume based on the relatively linear growth in commercial airframe builds. We experienced this dynamic in the supply chain inventory overhang for plate prior to 2012, which was followed by a strong demand search. In 2013, demand for non-plate aerospace products has been suppressed by an inventory overhang and a developing inventory overhang for aerospace plate is now expected to suppress industry demand in 2014. Unfortunately, these lumpy demand patterns are a fact of life in this industry. As it relates to our fourth quarter outlook, we anticipate that value-added revenue for our aerospace and high-strength applications will be higher than the third quarter, as we expect improved throughput at Trentwood, despite continued disruption from construction activities. And reiterating my earlier comments, we expect that Trentwood's Phase 5 expansion will be in full production in early 2014 and we expect to realize additional benefits from our new casting complex, when it reaches full production by mid-year 2014. Turning to Slide 10, on automotive. While we expect normal downward seasonal pressure on fourth quarter automotive demand. We anticipate that the step-change in our value-added revenue for automotive applications will persist in the fourth quarter, as we continue to benefit from the ramp up of our new automotive extrusion programs. Turning to Slide 11, on general…

(Operator Instructions) And we'll take our first question from Edward Marshall with Sidoti & Company. Edward Marshall - Sidoti & Company: So the question I guess to start is, could you quantify the impact maybe either from volume and/or value-added revenue, and may be to a bigger degree the profit of the disruptions that you had from the maintenance level?

Major maintenance. Yes, that's probably a percentage basis and I'm thinking of the third quarter compared to the first half, it's approximately 1% or so of EBITDA margin impact.

That's the major maintenance. If you compare the third quarter to the first half run rate, we're down rounded 3%. It's really 2.7% and it's roughly equal components, as Dan mentioned in his comments, a portion at the first quarter had customer contract payment that boosted the margin there. We had the major maintenance, which he said is roughly a-third of the impact, third quarter compared to the first half and then the other third roughly is manufacturing inefficiencies and the lesser operating leverage. So it's really three parts: the lack of a customer payment; the higher major maintenance cost; and the manufacturing inefficiencies and slightly lower leverage that we had from our sales. Edward Marshall - Sidoti & Company: And so you're tackling I guess quite a few different upgrade and adjustments to your production and manufacturing. What stage or inning are you on in these upgrades? I mean I know the timeline is when you want to complete, but I guess are there further significant maybe pigeon holes that you guys could be in that could cause an extended shutdown or an unexpected shutdown at one of the facilities?

Well, I mean you never know when an unexpected shutdown is going to come. But the construction at Trentwood is the big issue here. I mean we had the glitches at Newark that impact us and those things happen in manufacturing operations, and they happen to bite us, at the same time we were going through the construction issues at Trentwood. But in terms of the construction at Trentwood, and I know I said a lot of words there early, so let me just repeat some of the things that I said. We had a lot of construction in the second quarter, but it was primarily on our heat treat plate furnaces. And that's something we've done now, we're in our fifth iteration. And so our team up there has gotten very, very good at installing new heat treat plate capacity and minimizing the disruption on operations. I commented on the last call, it was only a couple of weeks after I visited Trentwood and I saw the massive construction. It's in two areas. One, at that point, was a huge hole in the ground, where we're installing the new casting complex at Trentwood. With just adjacent to that we were installing and are installing some new ingot preheat furnaces for the hotline and those are just one bay apart in the plant. So we had two major construction activities underway simultaneously and it really tangled up the logistics. So they did a great job, frankly, managing around it, but it bit us some in terms of our efficiencies and throughput. As we go through the fourth quarter here and even into next year, the construction in casting will continue. And until we wrap that up in the middle of the year, that's going to continue to be an inhibitor…

Well, you're partially correct. But what you don't see as transparently is the impact that it had on general engineering plate. And one of our board members in fact asked us yesterday, if it had an impact on delivery, and the answer to that is, no, it didn't have a big impact on delivery. Even though it was reduced throughput, the issue was, we missed opportunities for spot sales that we otherwise would have had, if we'd had the kind of throughput that we expected. Edward Marshall - Sidoti & Company: And lastly, I think you mentioned in the prepared remarks, but maybe you can elaborate a little bit and talk about potentially if this is a new run rate maybe for you. But the automotive value-added revenue per pound, it looked like a significant jump there in the quarter sequentially and year-over-year. Can you kind of address that?

I would expect that that's probably a peak. It had more to do with the product mix that we shipped in the third quarter. Some of it's a function of the new products that we launched, but it's also the mix of the new products and existing products. That maybe the highest quarter that we'll ever have, and I don't know, you never know what's going to happen to mix, but as we look at it longer-term, we would expect the longer-term value-added revenue price per pound on automotive to decline from that level because as we go longer-term, the preponderance of the business that we'll book will be at lower value-added prices than what was there in the third quarter.

And we'll take our next question from Tony Rizzuto with Cowen & Company. Tony Rizzuto - Cowen & Company: Just wanted to follow up also on that. Just how should we think about the dislocation with casting versus the hot mill, would think that it should be less, correct? I'm just trying to gauge that a little bit better. And I think you indicated that we should expect that those inefficiencies should recede as you go through the first half. Can you give us a little bit more granularity on that?

Those will recede, but if you're trying to predict the first half, you need to pull together the whole storyline that I put in there. And that whole storyline was that we'll see less inefficiency and hopefully growing efficiencies as we progress through the year and the first quarter probably will be a little better than the fourth quarter of this year. But by the time we get to the fourth quarter next year, hopefully we'll start seeing some pretty good efficiencies in the operation. But the flipside is that while we expect to see the inventory overhang persisting and although not having a huge impact on our volumes next year, because of the situation specific, it's having a significant impact on the competitive environment. So we are anticipating some pretty significant price pressure on our spot prices for plate next year. And when I say anticipating, we're already seeing it on business in the first quarter of next year. So we're going to see pressure on price that's also going to be somewhat offset from where we've been this year. And again I'll reiterate the comment that I made and I know we didn't put anything in news release, but the comment that I made in my prepared remarks here is that we expect next year is going to be a very good year, but still it's going to be in the same ballpark as 2012, 2013. We think it will better than that as we look at it now with the limited granularity we can provide, but there are going to be some headwinds there next year, beyond the improvements that we have in operating efficiencies. Tony Rizzuto - Cowen & Company: Jack, is it possible to give us some indication of the kind of assumption you're making for the pressure on the spot price that you're looking at 10% to 15% type of magnitude?

I'm not going to put a number on it right now, Tony, because it's a moving target. But as we look at it right now, and again, there is a wide standard deviation at this point looking at 2014, the numbers we have 2014 in total is a better year for us in terms of both value-added revenue and in terms of EBITDA then what we're looking at this year and even where we were in 2012. But there is not huge margin of error given the potential variability there. And I really don't want to get any more granular then that because it's way too premature. Tony Rizzuto - Cowen & Company: Can you give us an idea how comfortable are you with the efficiency improvements that you're seeing out of Kalamazoo at this stage?

We're comfortable that they are there and I am also comfortable that we're anywhere near where we will be ultimately, so there is still a lot of runway to improve those operations. We've got lots of potential to do better in our operations. We're not at all pleased with where we are right now. And we've got lots of runway ahead of us. Tony Rizzuto - Cowen & Company: You guys don't have any meaningful labor contracts coming up for expiry, do you in 2014?

In '14, we've got I think the Florence plant. We've got one small plant. We've got the Sherman plant late this year. So we have two small plants late fourth quarter of this year and I think first quarter next year. The master contract that covers Trentwood and Newark expires in the third quarter of 2015. Tony Rizzuto - Cowen & Company: And then I think in the last quarterly conference calls you guys did, Jack, I think you may have referred to the U.S. manufacturing recoveries as being feeble. And we've heard some things from other companies and anecdotally, and some of the steel guys that have reported recently. And it seems like things maybe picking up a little bit, little bit of acceleration. How do you characterize the tenor of the manufacturing economy as it stands today and looking out over it?

I just look at the hard statistic, which is service center, rod and bar shipments year-to-date in 2013 and the nine month number, first nine months of 2013 is slightly higher than 2004 and slightly lower than 2005. So the economy has now recovered to the 2004 level. That's my read on it. It's anemic. We see a little bit of improvement here, but we've got the index of industrial production for manufacturing in there, it's like a 2% rate. We're not seeing anything of consequence in our markets, Tony. Tony Rizzuto - Cowen & Company: And one final question for me. I'm sorry to ask you so many questions, but the final one would be, now you mentioned about the competitive pressures in the plate market. What can you tell us, are you seeing more pressures from the folks in South Africa and some of the other locals where they do produce the plate and try to come in here at lower than market prices?

Yes. There is import price pressure from Western Europe and from South Africa that's been pretty persistent. And then there is the additional pressure from other competitive forces. Tony Rizzuto - Cowen & Company: Would that be in Greece, the producer over there, ELVAL?

No, it would be from better well known names.

We'll go next to Steve Levenson with Stifel.

While the call was starting, Boeing came out announcing that they're going to cut another quarter of the 747 per month from production, so three a year. Do you consider that to be material or not significant?

No, not significant.

I guess I'm wondering a little bit, is it a chicken or an egg or what? We've done a little survey of service centers and distributors and they just seem to be unwilling to invest in inventory. Do you think it's really so much an overhang or is it an overhang caused because of their unwillingness to order more material?

No, I think the service centers have been pretty consistent over the past several years, in fact, of really managing their inventories aggressively, and part of it since the recession started in 2008 is that there has been slack capacity in the mills. So mill lead times have been short and they've had the benefit of rather prompt deliveries from the mills, as when the mills push out lead times as when they had really forces them to build their inventories. So no, we don't think the service centers per se are the issue other than the whole rate readiness scenario that I think cause an over reaction, not necessarily the service centers, but at machine shops and through the whole supply chain. And then we've got some OEM overbuying, that's creating that situation specific inventory overhang and there are lots of causes behind that too in terms of push outs and production delays. So truly a number of factors there, but again it's, as I said in the prepared remarks and we talk about this often, and I know other people on our supply chain say the same thing, it's a fact alive here, it's a very long supply chain and we get very lumpy demand. And some times it's sort of way better than it should be and some times it's not as good it should be, and right now we're in one of those phases where it's not quite as good as it should be.

I know on the titanium side where we watch things and it's a little bit easier to track, it seems like there's been a glut and maybe its six months until that has abated from a combination of using up inventory and build rates going up. Do you think it's going to be longer for your products?

Well, for the non-plate, I miss fired on the last call, because we thought we were seeing some signs that the non-plate inventory overhang was abating and that turned out not to be the case. We remain hopeful, but we're more reticent right now to call the end of that inventory overhang. I'm certainly hopeful that it didn't last very far into next year, but again the lead times on these products are so short, we only have a few weeks of visibility, if that. In plate, it's a different story. We have better visibility of plate and it's pretty clear that this, what I've characterized as situation-specific plate overhang that is certainly is going to persist through 2014 and there is even some indication that there maybe some elements of that overhang that carryover into a portion of 2015.

And we'll go next to David Katz with JPMorgan.

I was hoping to drive down a little more into the automotive extrusion. So as you said, it was a good mix of business, but I guess there was a $0.16 difference between the two quarters. With the understanding that we're moving down, how much of that $0.16 move do you think would be needed to give back, given the new products to get to what the new normal would be?

We have forecast. Dan's here, he's going to look at some papers here. It will come down a few cents. We don't think in the short-term it's going to come back to where it was. We think we're going to have a relatively richer mix of products. Somebody signaling maybe a dime or so.

I think that's the end of our territory.

So may be a dime or so.

Giving back a dime, in other words?

David, that's in the short-term. In the longer-term, it will receive further than that. As we book more and more programs, because a lot of the new programs will come on, it won't have as higher value-added revenue as the mix that we're running right now.

And then on the plate and the non-plate, would you be able to refresh what those two forms is, as a mix of the value-added revenue and the EBITDA?

David, we don't break that out. I think you're talking about our aerospace and high-strength how much of that is plate and how much is non-plate. But they're two relatively equal portions, in order of magnitude, not 50-50, may be 60-40 or 75-25. I don't know the split.

In favoring?

That's a good question.

And then coming back to the share repurchases, the purchases this past quarter were relatively meager in comparison to where they were at the beginning of the year. Obviously, the stock has moved up over the last couple of months. Was that behind the reticence to purchase more and where do you see the company's and the board's willingness to go over the next couple of months?

Well, I think the entire year we feel that the purchase of shares would be a good value for the investors. But our program is one that is moderate overtime. We want to be purchasing shares at more at lower prices and less at higher prices and our program tries to follow up that kind of guideline. That's because we know the market is going to fluctuate from time to time. And there are going to be opportunities where you'd rather spend, what the board has authorized at the lower prices. And so while we don't have an urgency to spend it all, we'll be looking for opportunities overtime.

We'll take our next question from Josh Sullivan from Sterne, Agee.

Just looking at the cash position you guys are holding and understanding you guys maybe have a flatter outlook going forward. Can you just talk about return potential on M&A versus internal investments and how that's being debated? I mean, obviously you already have a lot going on, but are there any larger internal investments such as automotive sheet being discussed or transformative M&A?

Well, in terms of the relative values, organic investments almost always have a better return than what we would get from an acquisition investment. In terms of looking at something transformative, certainly we look at things like automotive body sheet as a potential growth opportunity, but we take a very clear-eyed look at that because that's not much different in our case from doing an acquisition, because it would most likely require a green site type operation if we did it ourselves. So we look at those and we continue to look for acquisitions, but we come back to the premise that this is a very good business. And we were not driven to do something "transformative". We were only looking for good opportunities that where we have a clear idea of how it creates value for our shareholders.

We'll go next to Timna Tanners with Bank of America.

I'm running the risk here of asking a question that's already been asked in a different way, but I'll just go for it because we've been pretty thorough. Obviously it seems like in the aerospace channel there's been a lot of fluctuation as you pointed out, restocking destocking, we've seen it in jet engines and now in the airframe. But what makes us so confident that this isn't a structural change, that your success hasn't attracted too much supply on the heat treat plate for aerospace?

Well, it's not our success per se. There is capacity coming on stream, some of it or most of it capacity, that's come on stream is not qualified capacity from traditional suppliers, so there is some capacity rattling around out there, but we know very clearly on plate, what the demand situation is. We have a very good fix on that. And we know that this is a situation specific inventory overhang and in plate the biggest portion of the overhang, we know precisely what is causing it and have a pretty good idea how long it will last.

That's helpful. That's good color. It just makes us nervous sometimes when these things roll off so quickly. I think you answered these questions with regard to M&A and share buybacks. Are there any other uses of cash that you want to highlight or any other thoughts on cash use?

I think Jack covered it, that the best opportunities we have are our organic growth initiatives. We have quite a few of those that we can do over the next few years. But of course, we bit off some pretty big, significant of those programs this year that we want to make sure we execute well on as we go into the next year. Acquisitions, we'll look at those and we'll see if they are added too. But certainly we want to grow the business if there is a good opportunity there. And then share repurchases, we still that those are good returns for shareholders and we think that we can pursue both growth as well as share repurchases and distributions to shareholders. Beyond that, we obviously will be having a liquidity consumption as we get into the first part of 2015 with our converts maturing.

We'll take a follow-up from Edward Marshall with Sidoti & Company. Edward Marshall - Sidoti & Company: Just one more question on the plate demand if I could and what you expect for 2014. Could you quantify it as an epidemic of maybe the rate readiness program that happened in 2012, and then maybe continuing a little bit in the first half of this year, and now it's upside and that's a created inventory glut. I think you just kind of addressed industry capacity in general. And there's probably two or three questions in here, but maybe you can help me out as you hear the whole thing. The defense side of the world, I know you do very little to defense. But are there other shifts in capacity elsewhere that maybe went to the defense world that are now coming back to the commercial aerospace industry and creating some kind of additional capacity in there that wasn't previously there.

Let me start with the demand side. On commercial aerospace demand for plate, as I have said and answered to Timna's question, we have a pretty good fix on what happened there and that's not really a function of the rate readiness. That rate readiness that we described was more than non-plate, where demand is very fragmented, whereas in the plate the big OEMs have much better control of the buy on the plate. So what's happened in plate really is a function of some of the shifts in programs and starts and stops and programs moving to the right, anticipation of those versus what actually happened rather than the rate readiness situation. From a supply standpoint, the supply is there to satisfy what would be normal demand on plate. And yes, there is some additional plate supply coming on, that's not specifically qualified for aerospace plate applications. But it is qualified for other plate applications and that too is looking for a home. So that's creating some of the price pressure. But other price pressure is being created, because there is this inventory overhang that began this year, but now it's going to take a bigger bite next year, and maybe even extend it to 2015. And so as a consequence, we're seeing some people react looking for business and the place they look for business typically is spot business. And so we're seeing some pressure on those spot prices and we think that too will be temporary. How long is temporary? But those who have been following us will remember, we went through this in 2010 and 2011, and in 2011 specifically we had a pretty big bite on our spot prices. And then they began to improve in the third and fourth quarter of 2011 and we had significant price improvement in 2012. And if you go back and read some of our transcripts or look at our comments, you will see what happened. And when we talked about the step-change and results in 2012 compared to 2011, in prior years, we said, roughly a third of that huge improvement was related to prices and most of that was related to spot prices. So these prices have fluctuated up and down as the demand dynamics and supply-demand dynamics have changed and we fully anticipate the longer term that they'll come back to equilibrium, but right now we think there is going to be a dislocation. And we're already seeing some with the first quarter bookings some dislocation here in the first quarter. Edward Marshall - Sidoti & Company: You mentioned a function of shifting programs to the right. Do you have specific examples of programs you're thinking of, because I thought, it seems like to me the build rates seem to be, as you mentioned earlier, linear. I'm just kind of curious as to what programs are kind of being pushed to the right. Is that more on defense side of the world?

No, that's on the commercial side. I mean if you go through them, you look at the 787, the 350, who knows what will happen to the 777 here and look at the 747-A, look at virtually everyone of these programs, as it has been launched they've moved to the right. And then there have been occasional blips in some of these major programs, they get into production and then there are issues that caused them to either stop buying or stop producing one of the two or they reduced the build rates. So there are lots of things going on there, as they've launched these new major programs. And again, it's a extremely long supply chain, and so the supply chain gets geared up to be sure that it's in position to supply what the anticipated build rates are and then as they start to recede, it creates dislocations. It's just a fact of doing business in this industry. It happens almost every time. Edward Marshall - Sidoti & Company: I know you have very little percent to, say defense, in general. I know you have some, but how about the industry supply of maybe plate, heat treat plate to the defense industry? Do you know what the percentage maybe? And maybe that's an unfair question, but do you have an idea?

What we say when asked, the question about defense, is we say it's roughly 10% to 15% of our total value-added revenue. At this stage a portion of it is plate, but our supply to those products has more other products than it does plate. There is still significant amount of plate that goes into defense. But we have a lot of sheet, we have a lot of cold finish, we have a lot of extrusions that go into defense-type applications and we've not seen major, major changes on the defense side. It's been relatively stable here.

And we'll go next to Josh Sullivan with Sterne, Agee.

One follow-up. So on the Kaiser Select product, I mean are you having success getting that designed into the new programs like the A350. I know you just talked about those programs, maybe moving to the right, but how is the Kaiser Select design going?

The Kaiser Select is going very well. It does not typically get written into a spec for an airframe. It's more likely either to be written in as a spec for a specific part, and for example a very demanding part from a machining standpoint, it could be designed in for math standpoint. But the more likely way that it gets spec is a machine shop discovers that our product is vastly superior to other product, creating significant improvements in their productivity, significant reductions in their conversion cost or significantly improving the quality of their product. So you end up with individual machine shops who will go specify to a service center or will come direct to us and say we want that product.

And we'll go next to Phil Gibbs with KeyBanc Capital Markets.

I just had a question on some of the pricing you had talked about, Jack. And it maybe the aerospace plate book and some of that being spot. I was under the thought process that a lot of your pricing and/or volume allocations on your aerospace plate book were largely fixed or managed to from a pricing perspective. Can you tell me where I'm wrong there?

That's a very good and appropriate question here, Phil. When I talked about price pressure, I talked about price pressure generically on plate or more specifically the combination of general engineering and aerospace plate. And you're right, that a significant percentage of aerospace is on contract. However, when you look at our total mix of plate, both aerospace and general engineering a significant proportion, not 50%, but a very significant proportion of our plate is actually spot buy, so as spot prices have a pretty significant impact. And again, I'll go back, if you remember the scenarios that we were describing in late 2010, early 2011, and then the improving prices in 2011 and 2012. So we've gone through cycles like this before. Will it be as severe as it was back then? Hope not. I mean, it's way too soon to predict. All we can say, right now is that we're seeing pressure on spot prices.

And your thought process on 2014, you're potentially a bit better than 2013 as predicated on the volume aspect to the aerospace book being okay, but pricing being a partial offset. And the fact that you get some efficiencies rolling through the system from your capital projects this year, so maybe some better automotive content, it sounds like too?

It's what we expect in terms of total demand across the board, including what we think will be a very strong demand in automotive or strong sales for us in automotive. So we think sales are going to be decent. And we think we're going to have the price pressure that we've talked about. But we also expect that we're going to have better manufacturing efficiencies next year than this year. Part of it is we're moving a lot of the distractions that have and disruptions that have hurt us this year from a construction standpoint and part of it is just beginning to see improvements in operations as we bring all the new equipment on as well as removing the distractions.

And just lastly, Jack, any update on the M&A front, for you guys, as far as your willingness to enter into the acquisitions?

We're very willing and we're very active. We're looking at acquisition opportunities almost daily and certainly every week or so. So there're still lots of opportunities that we look at, but we're very discriminating. It goes back again to the comment that we've got a really good business here and we're very discriminating in terms of what we go after. We're not just going to grow for growth sake or looking things that are very good strategic fit and things that not only are strategic fit, but where we have a clear path for value creation. So we're very disciplined in what we do there, but we intend to do acquisitions. We look hard at acquisitions and are hopeful that we'll do that, but we're not going to do them just to do them.

Now, we'll take the follow-up from Tony Rizzuto with Cowen & Company. Tony Rizzuto - Cowen & Company: Jack, do you have any concerns at all about Aleris' capacity in China. And I heard it's moving forward and the product quality is improving. Are you concerned at all about possibly some of that supply leaking into the market and affecting the supply-demand?

There is capacity coming on-stream of non-qualified aerospace suppliers and that's one of those. So certainly there would be some of that product in the marketplace. Tony Rizzuto - Cowen & Company: And then in the past you've talked about Trentwood Phases 6, 7 and 8, possibly. Obviously, if things move accordingly you've got the footprint capabilities, et cetera. How are you feeling about those as you look at the market over the medium to longer-term and the need for those expansions? Have you changed your thought process there at all?

No, not at all Tony. Our outlook for demand and our outlook for our participation in that demand hasn't changed at all. All we're seeing right now is some lumpiness in demand because of fluctuations in the supply chain. You may recall, although we haven't stated that often, but when we did this Phase 5, it really was the combination if you go back a couple of years of what we call Phases 5 and 6. And there were some reasons for doing that. There were some elements of Phase 6 that created significant flexibility in operations. And I've mentioned before on these calls that we've been very hampered at Trentwood, because we have a lot of different types of equipment that's not all fully qualified to make the broad mix of products. So we pulled ahead portions of Phase 6. And the original Phase 6 and the Phase 5 and so this is a bigger increment of capacity then Phase 3 was or Phase 4 was. So we think this Phase 5 buys us some additional time before we make the next move. But in our five year outlook, we still have capital spending program for what we characterized as Phases 7 and I believe even Phase 8 in the five year outlook. So that really hasn't changed. And we remain confident that long-term demand is going to be there and we'll justify that.

It appears there are no further questions. I'd like to turn the conference back to Jack Hockema for any additional or closing remarks.

Thanks again everyone for joining us, especially for joining us on Friday afternoon. And we look forward to updating you again in February on our fourth quarter and full year 2013 call. Thanks again.

This does conclude today's conference. We thank you for your participation.