Alcoa Corporation

Good afternoon, and welcome to the Alcoa Corporation second quarter 2019 earnings presentation and conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your touchtone phone. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to James Dwyer, Vice President of Investor Relations. Please go ahead. James Dwyer Thank you, Sean.

And good day, everyone. I'm joined today by Roy Harvey, Altoa Corporation President and Chief Executive Officer, and William Obliger, Executive Vice President and Chief Financial Officer. We will take your questions after comments by Roy and Bill. As a reminder, today's discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation and in our SEC filings. In addition, We have included some non-GAAP financial measures in this presentation. Reconciliations to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. Any reference in our discussion today to EBITDA means adjusted EBITDA. Also a note on our financial statements, effective January 1st, 2019, the company changed its accounting method for valuing certain inventories from LIFO to average cost. The effects of the change in accounting principle have been retrospectively applied to all prior periods presented. Finally, as previously announced, the earnings released and the slide presentation are available on our website. With that, here's Roy.

Thank you, Jim, and thank you to everyone for joining today's call. In the second quarter, we maintained stability in our operations and took several steps to improve the business. In our segments, bauxite reported healthy profitability and alumina achieved production records and steady profits despite lower alumina prices. Lower alumina prices combined with other favorable impacts helped our aluminum segment to rebound from quarterly loss even as metal prices weakened further. And across our segments, our renewed focus on manufacturing excellence continued to bear fruit through greater stability and better operational performance. As we had committed, our businesses also drove the benefits of lower raw material costs to our bottom line. Lastly, we made a progress on long-term projects to strengthen our aluminum portfolio and closed a significant transaction tied to our modern joint venture, which provides immediate benefits for our companies. While restructuring charges tied to that transaction were largely responsible for our second quarter net loss, excluding those special items on an adjusted EBITDA basis, we reported steady profitability. With that, let's start with an overview of second quarter results. We reported a net loss of $402 million, or $2.17 a share. Excluding special items, we reported an adjusted net loss of $2 million, or one cent per share. On an adjusted EBITDA basis, excluding special items, we generated $455 million. Lastly, we ended the quarter with a solid $834 million of cash, even after sizable cash outlays in the quarter. Turning to safety. We're disappointed that we experienced two serious injuries in the second quarter, both in our aluminum business. As a reminder, our focus is on preventing serious injuries, defined as life-ending or life-altering. Both employees are now focused on rehabilitation and recovery. Still, these incidents underscore the importance and urgency of our work to further strengthen our safety programs. Safety remains our most important goal. ensuring that everyone who walks through our doors goes home safe and sound. We also made real progress this quarter on a number of portfolio strengthening initiatives. We amended our Mazen joint venture agreement and divested our minority interest in the rolling mill. The exit reduces operating losses and simplifies our business in Saudi Arabia. Our interests in the remaining portion of the Mazen joint venture remain the same. In our aluminum portfolio in Quebec, we reached two competitive six-year labor contracts, the first at Bequemont and the second at Beconcourt. The contract at Beconcourt ends an 18-month lockout at the smelter, and the process to fully restart idle capacity gets underway later this month. Also in Quebec, we're implementing plans to increase the production capacity at Deschambault, one of the lowest-cost smelters in the Alcoa system. The Canadian government will offset some costs for the project expected to be complete in 2021. In Spain, we made significant progress toward removing historically uncompetitive capacity from our aluminum portfolio. Earlier this month, we signed a conditional agreement with a private equity investment firm to divest the Alcoa Avilés and La Coruña plants. Lastly, turning to markets. While we're reducing our estimate for global aluminum demand growth, we continue to project a global aluminum deficit for the year. We also see aluminum inventory trending lower and other reasons for optimism. With that, I'll turn it over to Bill for a detailed review of our second quarter results.