KAISER ALUMINUM CORP Revenue Disclosure

Revenue Recognition. We recognize revenue as we satisfy performance obligations and transfer control of products to our customers. For products that have an alternative use and/or for which we do not have an enforceable right to payment (including a reasonable profit) during the production process, we recognize revenue at a point in time. For revenue recognized at a point in time, transfer of control usually occurs upon shipment or upon customer receipt of the product, depending on shipping terms. For certain products with no alternative use and where we have an enforceable right to payment (including a reasonable profit), revenue is recognized over time. For contracts recognized over time, control transfer occurs incrementally during our production process as progress is made on fulfilling the performance obligation. We use the input method of determining our progress, capturing direct costs beginning at the point that billet or cast ingot is introduced into production at either the extrusion phase or the rolling phase, respectively. We believe the input method more accurately reflects the transfer of control as it represents the best information available of work completed to date for which we have an enforceable right to payment. For products in production, we recognize revenue using estimates of the cost incurred to date plus a reasonable margin. As the duration of our contracts for accounting purposes is typically less than one year, we do not present quantitative information about the aggregate transaction price allocated to unsatisfied performance obligations at the end of the reporting period.

Contracts are generally short-term and based on customer purchase orders, although purchase orders may reference a longer term “blanket purchase order” or a “terms and conditions” agreement, both of which may span multiple years. We adjust revenue for variable consideration such as metal price adjustments, volume rebates, and sales discounts, estimated based on forecasted order data and historical payment trends for specific customers. Accounts receivable is recorded when our right to payment becomes unconditional. We do not adjust for financing components as payment terms are generally less than one year.

Contract assets represent amounts for work performed but not yet billed, including amounts related to finished goods in transit at period end.

Incremental Costs of Obtaining a Contract. We expense the costs of obtaining a contract as incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. If the expected benefit exceeds one year, the costs are recorded as an asset to Other assets on our Consolidated Balance Sheets and amortized over the term of the contract.