Alcoa Corporation

Good afternoon and welcome to the Alcoa Corporation fourth quarter and full year 2019 earnings presentation and conference call. All participants will be in a 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 the star, then one, on your touch-tone 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 Mr. James Dwyer, Vice President of Investor Relations. Please go ahead.

Thank you, Sean. And good day, everyone. I'm joined today by Roy Harvey, Alcoa Corporation President and Chief Executive Officer, and William Opplinger, 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. 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 1, 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 release and slide presentation are available on our website. With that, here's Roy.

Thank you, Jim, and thanks to everyone for joining us today. We've got a lot to discuss, so let's start with a quick overview of the fourth quarter results. For the quarter, we reported a net loss of $303 million for $1.63 per share. This includes charges associated with the closure of our Point Comfort Refinery in Texas, which had been fully curtailed since 2016. And it includes the cost of additional actions we've taken to manage liabilities associated with pensions and other post-employment benefits, excluding special items such we reported an adjusted net loss of $57 million, or 31 cents per share. On an adjusted EBITDA basis, excluding special items, we generated $346 million. Lastly, we closed the fourth quarter with $879 million in cash, the second sequential quarterly increase in our cash balance. Now, as we prepare to close out 2019, Let's review some of the actions we've taken and how our priorities are guiding us to make additional improvements. Last quarter, we've refreshed our company's three strategic priorities. First, we are focused on being a low-cost producer, which means reducing complexity to better compete through all parts of the cycle in our commodity markets. Second, we intend to improve our margins and invest wisely to drive returns. And finally, We are working to advance sustainably, which includes actions toward a strengthened balance sheet, a cycle-proof portfolio, and an enhanced reputation for environmental and social excellence. We've made quick progress last quarter with these refreshed priorities, and more will be done in the quarters ahead to reinforce Alcoa's competitiveness. We have moved with speed to further reduce overhead with a new, leaner operating model. We are working to generate additional cash from the sales of non-core assets, and we have started a comprehensive review of our current portfolio to improve long-term profitability. Turning to our fourth quarter business update, most importantly, we had no serious injuries in the quarter. We also continued our strong operational performance with new quarterly production records from our bauxite mine in Juluti and our wager-up refinery. In the fourth quarter, we also completed a modernized labor agreement in Australia, covering more than half of our unionized employees there. We also became members of the International Council of Mining and Metals, known as ICMM, which is dedicated to improving the sustainable development performance in the industry. We are working with ICMM to develop a global standard for the safe management of tailings dams, and we're honored to be part of this very important effort. Also in December, our joint venture, Elicis, shipped to Apple aluminum produced with a new carbon-free smelting process. Alcoa invented this technology, which eliminates all direct greenhouse gas emissions. Instead, this breakthrough process produces pure oxygen. As an early investor, Apple asked to purchase the first commercial batch of aluminum produced with this new process, while Elicis works to scale up this technology so it can be licensed in 2024. In a world becoming more and more focused on sustainability, this technology has the potential to transform the conventional process used to produce aluminum. Now let's turn to the full year 2019. In addition to closing another fatality-free year, our 2019 accomplishments span across our business and throughout the year. We drove improved stability in our operations and set annual production records for both our Bauxite and Illumina portfolios. We reached several new modernized labor agreements with the Australian Workers Union in November and with unions in the United States and Canada earlier in the year. Taken together, these contracts cover almost 70% of the unionized employees in these three countries. Importantly, They incorporate provisions that will allow our plants to better compete. The multi-year agreements feature improved salaried union collaboration and efficient work practices. In the U.S., we reached a four-year master agreement that covers approximately 1,600 active employees at five locations. In Canada, we reached agreements with the two separate unions that represent 100% of our unionized employees in that country. First, at Becomont, we secured a six-year agreement that covers about 600 employees. Next, after an 18-month lockout, we reached a six-year agreement at the Beconcourt smelter that was ratified on July 2nd. Today, the smelter's restart is progressing well under that new labor contract and is on schedule for completion in the second quarter. All employees eligible for recall are now back to work. Also last year, we completed the divestiture of the historically unprofitable Avilés and La Coruña smelters in Spain after reaching an agreement with workers' representatives at these two facilities. In November, we also implemented our new operating model for a leaner company, which will provide annual savings beginning in the second quarter of this year. Finally, in our markets, 2019 ended in a global deficit for aluminum and surpluses in bauxite and alumina, We see slight surpluses ahead in 2020 for bauxite and alumina and a balanced market for alumina. We'll discuss more on the markets and these other topics after Bill provides a detailed review of the results. So with that, I'll turn it over to Bill.