8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

November 28, 2007

Date of Report (Date of Earliest Event Reported)

ALERIS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	1-7170	75-2008280
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)

25825 Science Park Drive, Suite 400 Beachwood, Ohio	44122
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (216) 910-3400

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d–2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e–4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD.

On November 28, 2007, Aleris International, Inc. (the “Company”) is making a presentation to analysts. A copy of the presentation is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

The information contained in this Current Report on Form 8-K, including exhibit 99.1 attached hereto, is being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. Furthermore, the information contained in this Current Report on Form 8-K, including the exhibit attached hereto, shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.

The information contained in this Current Report on Form 8-K, including exhibit 99.1 attached hereto, contains certain forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These include statements that contain words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “should” and similar expressions intended to connote future events and circumstances, and include statements regarding future actual and adjusted earnings and earnings per share; future improvements in margins, processing volumes and pricing; overall 2007 operating performance; anticipated higher adjusted effective tax rates; expected cost savings; success in integrating the Company’s recent acquisitions, including the acquisition of the downstream aluminum businesses of Corus Group plc; its future growth; future benefits from acquisitions and new products; expected benefits from changes in the industry landscape and post-hurricane reconstruction; and anticipated synergies resulting from the merger with Commonwealth, the acquisition of the downstream aluminum businesses of Corus Group plc and other acquisitions. Investors are cautioned that all forward-looking statements involve risks and uncertainties, and that actual results could differ materially from those described in the forward-looking statements. These risks and uncertainties would include, without limitation, the Company’s levels of indebtedness and debt service obligations; its ability to effectively integrate the business and operations of its acquisition; further slowdowns in automotive production in the U.S. and Europe; the financial condition of the Company’s customers and future bankruptcies and defaults by major customers; the availability at favorable cost of aluminum scrap and other metal supplies that the Company processes; the ability of the Company to enter into effective metals, natural gas and other commodity derivatives; continued increases in natural gas and other fuel costs of the Company; a weakening in industrial demand resulting from a decline in U.S. or world economic conditions, including any decline caused by terrorist activities or other unanticipated events; future utilized capacity of the Company’s various facilities; a continuation of building and construction customers and distribution customers reducing their inventory levels and reducing the volume of the Company’s shipments; restrictions on and future levels and timing of capital expenditures; retention of the Company’s major customers; the timing and amounts of collections; currency exchange fluctuations; future write-downs or impairment charges which may be required because of the occurrence of some of the uncertainties listed above; and other risks listed in the Company’s filings with the Securities and Exchange Commission , including but not limited to the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2006, particularly the section entitled “Risk Factors” contained therein. The forward-looking statements contained in this report and on such exhibit are made only as of the date hereof. We do not assume any obligation to update any of these forward-looking statements.

Item 9.01. Financial Statements and Exhibits.

Exhibit No.	Description
99.1*	Presentation.

This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be incorporated by reference into any filing under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: November 28, 2007

Aleris International, Inc.
By:	/s/ Joseph M. Mallak
	Joseph M. Mallak
	Senior Vice President,
	Chief Accounting Officer and Controller

EXHIBIT INDEX

Exhibit No.	Description
99.1*	Presentation.

This exhibit shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section, nor shall it be incorporated by reference into any filing under the Securities Act or the Exchange Act.

EX-99.1

Bear Stearns

Commodity and Capital Goods Conference

November  2007

Exhibit 99.1

2

2

Forward Looking Statements

Forward Looking Statements

The

following

information

contains,

or

may

be

deemed

to

contain,

“forward-looking

statements”

(as

defined

in

the

U.S.

Private

Securities

Litigation

Reform

Act

of

1995).

By

their

nature,

forward-looking

statements

involve

risks

and

uncertainties

because

they

relate

to

events

and

depend

on

circumstances

that

may

or

may

not

occur

in

the

future.

The

future

results

of

the

issuer

may

vary

from

the

results

expressed

in,

or

implied

by,

the

following

forward-looking

statements,

possibly

to

a

material

degree.

For

a

discussion

of

some

of

the

important

factors

that

could

cause

the

issuer's

results

to

differ

from

those

expressed

in,

or

implied

by,

the

following

forward-looking

statements,

please

refer

to

the

issuer’s

annual

report

on

Form

10-K,

in

particular,

the

“Risk

Factors”

section

thereof,

and

its

quarterly

reports

on

Form

10-Q

filed

with

the

Securities

and

Exchange

Commission.

Steve Demetriou

Chief Executive Officer

4

4

Reported 3Q & YTD Performance Summary

Reported 3Q & YTD Performance Summary

Sharp volume declines in North America’s B&C and Automotive industries

Solid

performance

by

Rolled

Products

Europe

despite

metal

and

FX

impact

Strong

Global

Recycling

performance;

mitigated

by

weakness

in

NA

Specification

Alloy

Focus

on

working

capital

productivity

generates

strong

free

cash

flow

(1)

See reconciliation of net (loss) income to EBITDA and Adjusted EBITDA on slide 21.

(2)

Free cash flow is defined as Adjusted EBITDA less capital expenditures plus or minus change in working capital.  Please see reconciliation of free cash flow to net income

and cash flow from operating activities on slide 22.

($ in millions)

$ 164

$ 278

$  87

$ 102

Free cash flow

(2)

$ 304

$ 350

$ 123

$ 128

Adjusted EBITDA

(1)

2006

2007

2006

2007

Third Quarter

September YTD

5

5

Sale of Zinc Business Unit

Sale of Zinc Business Unit

Announced

proposed

sale

of

Zinc

for

$295

million

to

Votorantim

Metias

Ltda. subject to regulatory approval and customary closing conditions

Net proceeds to reduce debt

Eliminates exposure to underlying Zinc LME fluctuations

Focuses Aleris’s

portfolio on core aluminum businesses

Commitment to managing portfolio and financial flexibility

6

6

Pro Forma LTM Financial Results, Excl. Zinc

Pro Forma LTM Financial Results, Excl. Zinc

(1)

Pro

forma

for

the

Wabash

Alloys

and

EKCO

Products

acquisitions.

Also,

includes

$40

million

of

Corus

Aluminum,

Wabash

Alloys

and

EKCO

Products

synergies,

the

maximum

amount

of

synergies

allowable

under

the

Term

Loan

Credit

Agreement.

Wabash

Alloys

and

EKCO

Products

financials

were

provided

by

their

management

at

the

time

of

acquisition. 

(2)

Total

Net

Debt

for

pro

forma

LTM

9/30/07,

excluding

Zinc

reflects

the

application

of

the

anticipated

net

proceeds

from

the

sale

of

Zinc

as

a

reduction

to

outstanding

debt.

The

actual

net

proceeds

from

the

sale

of

Zinc

may

differ

from

the

amount

shown.

($ in millions)

$ 201

$ 11

$ 212

Capital expenditures

3.0%

1.9%

2.9%

% of revenue

$2,518

$ 245

$2,763

Total net debt

(2)

$ 282

$ 34

$ 316

Adjusted EBITDA less

CAPEX

7.3%

7.8%

7.3%

% margin

$ 482

$ 45

$ 528

Adjusted EBITDA

$ 6,626

$ 580

$ 7,206

Revenue

6,320

347

6,667

Pounds shipped

LTM 9/30/07 Pro

Forma excl.

Zinc

(1)

LTM 09/30/07

Zinc

LTM 9/30/07 Pro

Forma incl.

Zinc

(1)

7

7

Aleris Timeline

Aleris Timeline

(1)

Strategic combinations creating size, scale and value

(1)       Pro forma LTM 9/30/07 revenues, including the EKCO Products and Wabash Alloys acquisitions and excluding Zinc.  EKCO Products and Wabash Alloys financials       

provided by their management at acquisition. 

December 9, 2004:

IMCO Recycling and

Commonwealth Industries

November 7, 2005:

Ormet Corporation

Recycling and aluminum

rolling mills

December 6,

2005:

Alumitech Inc.

August 31, 2005:

Tomra  Latasa

Recycling operations and

can collection centers

August 1, 2006:

Corus Aluminum

Aluminum Rolled and

Extruded Products

September 7, 2005:

ALSCO Metals

Aluminum rolled

products

December 19, 2006:

Sale of Aleris to

Texas Pacific Group

(TPG)

May 3, 2007:

EKCO Products

Light gauge sheet and

heavy gauge foil

September 11,  2007

Wabash Alloys

Specification alloys

$2.2B Revenues

$4.7B

2006 Revenues as

reported

September 21,

2007:

Alumox Holding AS

Aluminum recycling

$6.6B

(1)

November 20, 2007:

Proposed sale of

Zinc to Votorantim

Metias Ltda. 

8

8

Pro Forma Aleris

Pro Forma Aleris

Revenues                                                         

$4,331

Pro forma LTM Adjusted EBITDA

(1)

$393

Global Rolled & Extruded Products

North America                Europe

Produces rolled aluminum

products

Major

customers

–Alcoa

Home Exteriors, Great Dane,

Gentek, Ryerson

Driven by building and

construction, consumer

durables and transportation

Produces aluminum

rolled and extruded

products

Major customers –

Airbus, Embraer, Boeing,

Audi, Bosch

Driven by  aerospace,

automotive and general

industrial

($ in millions)

Note:

Data

represents

LTM

9/30/07

results,

pro

forma

for

the

Wabash

Alloys

and

EKCO

Products

acquisitions

including

$40

million

of

synergies.

Does

not

adjust

for

$126

million

of

intercompany

revenue

and

$57

million

of

corporate

overhead.

Wabash

Alloys

and

EKCO

Products

financials

provided

by

their

management

at

acquisition.

(1)

Please

see

reconciliation

of

segment

income

to

segment

EBITDA

and

segment

Adjusted

segment

EBITDA

on

slide

20.

Recycles aluminum dross

and scrap

Major customers –Alcoa,

Novelis, Arco, Hydro

Driven by rigid container

and common alloy sheet

consumption

Recycles and processes

aluminum-based spec

alloys

Major

customers

–

GM,

BMW, Daimler, Chrysler,

Ford, Nissan, Honda,

Teksid

Driven by  aluminum usage

in automotive sector

Revenues                                                         

$2,421

Pro forma LTM Adjusted EBITDA

(1)

$147

Global Recycling

Recycling

Specification Alloy

9

9

Initiatives to Further Differentiate Performance

Initiatives to Further Differentiate Performance

and Mitigate Downside

and Mitigate Downside

Relentless drive for productivity

Six Sigma, CIP, best practices, Rapid Transformation

Synergies from acquisitions

Right size organization; closure of high cost manufacturing facilities

Maximize cash flow through working capital productivity

Leverage expanded research and development capabilities

Capitalize on strategic investments

Pursue higher value-added products

Lead direct chill to continuous cast product conversion

Expand coated product position

Continue to pursue acquisitions to grow and optimize unit cost

Geographic / product expansion has diversified portfolio

Continue to focus on asset optimization

Drive the fundamentals

10

10

$25

$35

$50

$65

$99

$0

$25

$50

$75

$100

$125

Merger

May-05

Dec-05

Aug-06

  12/31/06 

Actual

Performance Metrics

Performance Metrics

201

214

239

208

201

187

218

181

238

259

240

0

50

100

150

200

250

300

1Q05

2Q053Q05

4Q051Q06

2Q06

3Q064Q06

1Q072Q073Q07

$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

Volume

Material Margin

Pro

Forma

Adjusted

EBITDA

(1)

Original

Commonwealth/IMCO

Synergies

(1)

Material

Margins

(1)

Pro

Forma

Revenues

(1)

(1)

For

Rolled

Products

North

America

excluding

inventory

hedge

gains

&

losses.

Excludes

acquisitions.

Source:

Company

management;

public

filings

$6,626

$5,475

$4,318

$0

$1,750

$3,500

$5,250

$7,000

2005

2006

LTM 9/30/07

$482

$518

$426

$300

$450

$600

2005

2006

LTM 9/30/07

(1)

Represents

synergies

to

be

realized

during

12-24

month

period

following

the

original

merger.

All

periods

include

Zinc.

($ in millions)

(1)

2005

and

2006

include

the

2005

and

Corus

Aluminum

acquisitions.

LTM

9/30/07

includes

Wabash

Alloys

and

EKCO

Products

acquisitions.

All

periods

exclude

Zinc.

Wabash

Alloys

and

EKCO

Products

financials

provided

by

their

management

at

acquisition.

Please

see

reconciliation

of

Pro

Forma

Adjusted

EBITDA

and

pro

forma

segment

income

on

slide

21.

Updated Targets

(1)

2005

and

2006

include

the

2005

and

Corus

Aluminum

acquisitions.

LTM

9/30/07

includes

Wabash

Alloys

and

EKCO

Products

acquisitions.

All

periods

exclude

Zinc.

Wabash

Alloys

and

EKCO

Products

financials

provided

by

their

management

at

acquisition.

Please

see

reconciliation

of

Pro

Forma

Adjusted

EBITDA

and

pro

forma

segment

income

on

slide

21.

11

11

Reduced Commodity Exposure

Reduced Commodity Exposure

“Pass through”

of metal costs; no price caps

Conversion fee-based revenue model

Hedging focused on metal margins

Manage margin and metal lag through LME hedging

Global Rolled and

Extruded Products

Tolling

–

No metal risk

–

Reduced working capital

–

50% of merchant shipments

Buy/sell

–

Scrap procurement prior to sales agreements

–

Minimal usage of hedges

Global Recycling

Natural gas hedged with contract adjustments and forward

positions

~78% hedged remainder of 2007 and ~41% hedged for 2008

Actively hedging transactional currency exposure

Energy/Currency

12

12

Geographic and End-Use Diversification

Geographic and End-Use Diversification

(1)      Pro forma for Corus Aluminum acquisition; excludes Zinc

business, Wabash Alloys and EKCO Products.

Source:  Company filings and management estimates

Geographic

Other

3%

North America

55%

Europe

39%

Asia

3%

Pro Forma Aleris 2006 Revenues

(1)

End-Use

Euro Automotive

15%

Packaging

7%

Steel

3%

Re-roll

2%

Other

9%

N.A. Building &

Construction

19%

Euro Building &

Construction

4%

N.A. Automotive

12%

Other Transportation

8%

Distribution

11%

Engineering

3%

Aerospace

7%

13

13

Pro Forma Adjusted EBITDA

(1)

Global Rolled and Extruded Products Overview

Global Rolled and Extruded Products Overview

Leading positions in technically

sophisticated applications

Proprietary manufacturing processes;

service high-margin, growing end uses

Developed over 130 process and alloy

patent families

#1 or #2 in most major end-uses

2007 earnings impacted by North America

volume decline

($ in millions)

(1)

Please

see

reconciliation

of

segment

income

to

segment

EBITDA

and

segment

Adjusted

EBITDA

on

Slide

20.

(2)

Pro

forma

for

Commonwealth

merger

only.

(3)

Pro

forma

for

the

2005

Acquisitions

and

the

Corus

Aluminum

acquisition.

Also

includes

$25

million

of

Corus

Aluminum

synergies

and

the

estimated

full

year

impact

of

Ormet

acquisition.

(4)

Pro

forma

for

the

EKCO

Products

acquisition

and

$29

million

of

estimated

synergies

from

the

Corus

Aluminum

and

EKCO

Products

acquisitions.

EKCO

Products

financials

provided

by

their

management

at

acquisition.

$393

$421

$406

$94

$0

$75

$150

$225

$300

$375

$450

2004

2005

2006

LTM  

9/30/07

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

Adjusted EBITDA

LME prices

(2)

(3)

(3)

(4)

14

14

Strong Fundamentals in Aerospace Segment

Strong Fundamentals in Aerospace Segment

Koblenz EBITDA Analysis

Note:

Airplane

deliveries

reflect

Airbus

and

Boeing

only.

Source:

Management

Estimate

Generated consistent cash flow at Koblenz

during 2001-2004 aerospace downturn

Leading aerospace supplier

Airbus –

2005 Supplier of the Year

Embraer

–

lead supplier

Boeing –

growing share

New Koblenz hot mill adds leading

technology and needed capacity

Strong aircraft delivery forecast through

2011

Commercial Airplane Projected Deliveries

832

650

669

833

789

876

600

575

300

400

500

600

700

800

900

1,000

Total Airplane Deliveries

Koblenz EBITDA

1,246

1,218

916

1,021

1,128

600

750

900

1,050

1,200

1,350

2007E

2008E

2009E

2010E

2011E

15

15

Pro Forma Adjusted EBITDA

(1)

Global Recycling Profitability Profile

Global Recycling Profitability Profile

Leading recycler of aluminum and

manufacturer of specification alloys

serving customers in North America,

Europe and South America

European restructuring paying off

in 2007

Recycling expected to remain strong

given relatively high power costs

Exploring opportunities in Asia

Excellent synergy opportunities with

Wabash Alloys acquisition

($ in millions)

$147

$115

$71

$69

$0

$25

$50

$75

$100

$125

$150

$175

2004

2005

2006

   LTM

9/30/07

Adjusted EBITDA

(3)

(2)

(2)

(2)

(1)     Please see reconciliation of segment income to segment EBITDA and segment Adjusted EBITDA on Slide 20.

(2)     2004 as reported; 2005 pro forma for 2005 Acquisitions; 2006 as reported.

(3)     Includes the Wabash Alloys acquisition and $11 million of synergies associated with the acquisition.  Wabash Alloys financials provided by their management at the time of

acquisition.

Includes Wabash Alloys Acquisition

16

16

Wabash Alloys –

Wabash Alloys –

Overview / Rationale

Overview / Rationale

Largest supplier of specification alloys in North America

2006 Revenues of approximately $900 million

Seven operating facilities in the US, Canada and Mexico

Strengthens and diversifies presence in Canada and Mexico

Diversify customer base

Honda

Teksid

(Nemak) / CasTech

Chrysler

Realize

targeted

synergies

of

$30

million

within

12

-

18

months

Centralize scrap metal purchasing

Implement Aleris’s

Six Sigma and continuous improvement culture

Optimize combined Aleris/Wabash asset base

•

Closed Wabash’s Dickson and Guelph plants

•

Idled Aleris’s

Monterrey operation

•

Consolidating back-office functions

Well underway in executing synergies

17

17

$ 30

(4)

$65

(3)

$ 57

(2)

$ 99

(1)

Updated Total

Synergies

7

6

3

20

Shared services

13

45

51

40

Manufacturing

1

7

1

8

Non-metal purchasing

$  9

$  7

$  2

$ 31

Metal sourcing

Updated Savings

Perspective

$ 30

$ 25

$ 45

$ 25

Original Target*

Wabash

Alloys

Acquisition

Corus

Aluminum

Acquisition

Sum of Four

2005

Acquisitions

CII-IMCO 

Merger

Merger Productivity and Synergy Realization

Merger Productivity and Synergy Realization

($ in millions)

*Note:

Represents

estimates

for

synergies

to

be

realized

during

12-24

month

period

following

merger

or

acquisition.

(1)

Actual

synergies

achieved

through

12/31/06.

Includes

the

productivity

and

synergies

associated

with

the

Zinc

business.

(2)

Actual

synergies

achieved

through

9/30/07.

(3)

Updated

target

as

of

August

2007.

(4)

Initial

synergy

target

for

acquisition

as

of

September

2007.

18

18

Pro Forma Capital Expenditures Overview

Pro Forma Capital Expenditures Overview

Total Capital Expenditures

Significant Discretionary Capital Expenditures

(1)

Pro

forma

for

the

2005

Acquisitions

and

the

Corus

Aluminum

acquisition.

All

periods

exclude

Zinc.

(2)

Pro

forma

for

the

2005

Acquisitions,

Corus

Aluminum,

EKCO

Products

and

Wabash

Alloys

acquisitions.

Excludes

Zinc.

($ in millions)

2004

(1)

2005

(1)

2006

(1)

LTM 9/30/07

(2)

Maintenance

$63

$77

$75

$89

Discretionary

56

55

81

112

Total

$119

$132

$1

56

$201

% of revenue

3.0%

3.0%

2.8%

3.0%

Key Projects

2006

LTM 9/30/07

Replacement press Vogt

$12

$1

Newport expansion

4

5

Plate program Duffel

12

8

Narrow width slitter Duffel

6

0

160”

hotline upgrade Koblenz

9

27

Upgrade duo hot mill Duffel

1

6

19

19

Appendix:

EBITDA & Free Cash Flow Reconciliations

20

20

Reconciliation of Segment Income to Segment

Reconciliation of Segment Income to Segment

EBITDA and Adjusted Segment EBITDA

EBITDA and Adjusted Segment EBITDA

($ in millions)

(1)

Pro

forma

for

Commonwealth/IMCO

transaction.

(2)

Pro

forma

for

the

2005

Acquisitions,

the

Corus

Aluminum

acquisition

and

the

TPG

merger,

except

for

the

additional

amortization

associated

with

the

preliminary

appraised values

of

the

acquired

intangible

assets.

(3)

Data

represents

LTM

9/30/07

results,

pro

forma

for

the

Wabash

Alloys

and

EKCO

Products

acquisitions.

Wabash

Alloys

and

EKCO

Products

financials

provided

by

their

management

at

acquisition.

2004

(1)

2005

(2)

2006

(2)

LTM

9/30/07

(3)

Global rolled and extruded products

Reported

Segment

(Loss) Income

$(3.1)

$

160.6

$180.7

$125.4

Segment income of Acquired

66.2

47.4

68.5

1.5

Depreciation & amortization Businesses

24.2

124.7

113.7

153.5

Segment EBITDA

$87.3

$332.7

$362.9

$280.4

Purchase accounting adjustment

6.5

11.9

44.0

96.9

Impact

of

Ormet

acquisition

-

21.7

-

-

Gain on Carson, CA sale

-

-

(13.8)

(13.8)

Estimated Corus Aluminum synergies

-

25.0

25.0

27.0

Estimated EKCO Products synergies

-

-

-

2.0

Expected cost savings associated with closure of the

Carson, CA rolling mill

-

14.2

3.0

-

Adjusted segment EBITDA

$93.8

$405.5

$421.1

$392.5

Global recycling

Reported Segment Income

$46.1

$41.8

$84.8

$63.9

Segment Income of Acquired Businesses

-

3.5

-

17.3

Depreciation & amortization

22.4

25.4

29.8

50.3

Segment EBITDA

$68.5

$70.7

$114.6

$131.6

Purchase accounting adjustment

Estimated Wabash synergies

-

-

-

-

-

-

3.9

11.0

Adjusted segment EBITDA

$68.5

$70.7

$114.6

$146.5

Global zinc

Segment Income

$12.0

$21.0

$65.0

$25.9

Depreciation & amortization

3.6

3.2

2.3

6.7

Segment EBITDA

$15.6

$23.5

$67.3

$32.6

Purchase accounting adjustment

-

(0.7)

1.5

12.8

Adjusted segment EBITDA

$15.6

$23.5

$68.8

$45.4

21

21

Reconciliation of Net (Loss) Income to EBITDA

Reconciliation of Net (Loss) Income to EBITDA

and Adjusted EBITDA

and Adjusted EBITDA

($ in millions)

Note:  Both the Wabash Alloys and EKCO Products  financials were

estimates provided by their respective managements.

(1)

Pro forma for the 2005 acquisitions, the Corus Aluminum acquisition and the TPG merger, except for the additional amortization expense and related income tax benefits

associated with the preliminary appraised values of acquired intangible assets. 

(2)           Pro forma for the Wabash Alloys and EKCO Products acquisitions and the TPG merger.

(3)           Pro forma net (loss) income consists of the following:

2005

2006

LTM 9/30/07

Aleris historical

$74.3

$70.3

$(3.8)

Wabash Alloys historical

--

--

7.8

EKCO Products historical

--

--

1.4

Corus Aluminumhistorical

28.6

50.6

--

ALSCOhistorical

6.3

--

--

Alumitch/Tomra

histroical

2.2

--

--

Pro forma adjustments

(133.7)

(111.9)

(51.7)

Pro forma net (loss)income

($22.3)

$9.0

($46.3)

For the years ended December

31,

2007

Pro forma

2005

(1)

Pro forma

2006

(1)

Q3

YTD Sept.

Pro forma

LTM 9/30/07

(2)

($22.3)

$9.0

$3.5

($14.7)

($46.3)

219.0

219.9

54.9

163.2

230.2

(74.1)

(3.1)

(44.6)

(49.0)

(18.4)

0.5

0.1

0.2

0.6

0.1

162.6

183.8

72.0

154.3

216.3

$285.7

$409.7

$86.0

$18.7

$381.9

$0.0

($13.8)

$0.0

$0.0

($13.8)

29.4

(35.7)

21.6

(26.0)

(61.7)

45.1

43.1

2.3

11.2

51.7

Net (loss) income

(3)

Interest expense (net)

Income taxes

Minority interests

Depreciation and amortization

EBITDA

Gain on Carson, CA property sale

Unrealized (gains)

losses on derivative financial instruments

Restructuring, merger related and executive separation costs

Losses on debt extinguishment

0.0

54.4

-

-

0.7

Realized gains on hedges associated with Corus Aluminum purchase price

0.0

(9.8)

-

-

0.0

Noncash cost of sales impact of recording acquired assets at fair value

-

11.9

45.5

14.2

100.4

113.4

Expected

cost

savings

associated

with

the

closure

of

the

Carson,

CA

rolling

mill

14.2

3.0

-

-

-

Impact of Ormet

acquisition

21.7

-

-

-

-

Estimated Corus Aluminum synergies

25.0

25.0

-

-

27.0

Estimated

EKCO Products

synergies

-

-

-

-

2.0

Estimated Wabash synergies

-

-

-

-

11.0

Stock based compensation

-

10.7

1.1

2.9

6.5

Sponsor management fee

9.0

9.0

2.3

6.9

9.1

Adjusted EBITDA

$442.0

$541.1

$127.5

$349.8

$527.8

Less: Zinc Adjusted segment EBITDA

(23.5)

(68.8)

(45.4)

Adjusted EBITDA, excluding Zinc

$418.5

$472.3

$482.4

22

22

Reconciliation of Free Cash Flow to Net Income

Reconciliation of Free Cash Flow to Net Income

(Loss) and Cash Flow from Operating Activities

(Loss) and Cash Flow from Operating Activities

      For the three 

      months ended 

September 30       

         For the nine 

months ended 

September 30 

        2007

           2006

          2007

           2006

Free cash flow

$102.4

$87.1

$277.5 

$163.6

Increase in accounts receivable, net

75.9

246.1

203.6 

411.8 

Increase (decrease) in inventories

   9.4

425.8

(77.6)

469.6

Impact of recording acquired inventory at fair

value

                -  

                -  

58.4 

                -  

Increase in accounts payable

    (48.5)

(213.9)

     (167.1)

     (344.6)

Less purchased working capital

(55.0)

(449.8)

(80.5)

           (449.8)

Capital expenditures

             43.3 

27.7

135.5

53.5

EBITDA, excluding special items

           127.5 

     123.0 

               349.8 

               304.1 

Unrealized (losses) gains on derivative financial

instruments

     (21.6)

       (24.3)

     26.0

       (7.1)

Loss on early extinguishment of debt.

-

(53.7)

-

(53.7)

Realized hedge gain-Corus Aluminum acquisition

-

9.8

-

9.8

Restructuring and other charges

     (2.3) 

      (2.6)

      (11.2) 

      (2.3)

Impact of recording acquired assets at fair value 

    (14.2) 

         (30.9) 

      (100.4) 

         (32.5) 

Sponsor management fee

     (2.3) 

-

       (6.9) 

-

Stock-based compensation expense

       (1.1) 

         (2.6) 

       (2.9) 

         (7.1) 

EBITDA 

    86.0 

     18.7 

     254.4 

      211.2 

Interest expense, net

(54.9)

(25.7)

(163.2) 

(52.8) 

Benefit from (provision for) income taxes

         44.6 

14.7

        49.0

        (35.0)

Depreciation and amortization

(72.0)

(31.7)

(154.3)

(63.4)

Minority interest, net of provision for income taxes

            (0.2)

(0.2)

               (0.6)

               (0.6)

Net income (loss)

$3.5

(24.2)

$(14.7) 

$59.4 

Depreciation and amortization 

72.0

31.7

154.3

63.4

Benefit from deferred income taxes

(44.5) 

(15.9)

(50.3)

(2.9) 

Excess income tax benefits from exercise of stock

options 

              -

(0.6)

                       -

(3.6)  

Restructuring and other charges:

     Charges 

2.3

2.6

11.2

2.3 

     Payments 

(2.7)

(2.2)

(11.9)

(5.9)

Non-cash loss on early extinguishment of debt

-

16.4

-

16.4

Stock-based compensation expense

1.1 

2.6

2.9 

7.1 

Unrealized losses (gains) on derivative financial

instruments

            21.6

24.3

(26.0) 

                7.1 

Non-cash charges related to step-up in carrying

value of inventory

1.6

-

57.2

-

Other non-cash charges 

2.7

-

8.1

3.7 

Net change in operating assets and liabilities

36.8

49.5

64.2 

3.8

Cash provided by operating activities 

$94.4

$84.2

$195.0 

$150.8

23

23

Q & A