Alcoa Corporation

Good afternoon and welcome to the Alcoa Corporation first quarter 2022 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 star then one on your 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.

Thank you, 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. 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. Finally, as previously announced, the earnings release and slide presentation are available on our website. With that, here's Roy.

Thank you, Jim, and welcome to everyone who is joining our first quarter earnings call. As you saw in today's press release, we had record quarterly results for profitability across three key measures, net income, adjusted net income, and adjusted EBITDA excluding special items. Bill will give more detail, but I'm pleased to report that it was a very solid quarter. We had net income of $469 million. Adjusted net income was $577 million. This is a 21% sequential improvement in more than three times what we posted in the first quarter of last year. Adjusted EBITDA, excluding special items, was $1.07 billion. That's 20% higher than the prior quarter and more than double the same period in 2021. And with a focus on our capital allocation framework, we have also repurchased 1 million shares of common stock in the quarter. Looking back at our more than five-year history as a standalone company, It's great to see the effort of our Alcoa teams and the strengthening market mirrored in these record-setting results. In this period of global volatility, we remain strong and steady, guided by our values and focusing on our strategic priorities. We're continuing to eliminate unnecessary complexity and focusing on being low-cost, driving returns with strong margins, and operating sustainably across our global operations. We also remain focused on maintaining a safe workplace for our employees, contractors, and anyone who visits an Alcoa location. In the quarter, we had no serious injuries, and we remain resolute in the use of proactive tools to prevent incidents. When accidents do occur, we investigate to the root cause to continuously improve our safety systems and outcomes. Again this quarter, we continued to make important progress on several fronts. In January, we completed the curtailment of the Sunset Breon smelter in Spain according to the terms of an agreement reached previously with the workforce. Even with improved metal prices, the smelter continued to lose money due to exorbitant energy prices. The agreement to idle the pot lines while continuing to operate the cast house will allow us to control our losses during a two-year curtailment period. will use that time to find an energy solution and deliver on improvements to the plant for its future. Meanwhile, we are continuing in our work to restart aluminum smelting capacity in Brazil and Australia. This additional capacity, once online, will continue to position us well to capture the benefits of stronger markets. In our bauxite business in Brazil, we've signed a deal to divest our full interest in Mineração Rio do Norte, or MRN. The transaction is expected to close in the second quarter of this year. Following this divestiture, we believe we will remain well-positioned in the bauxite business, with high-quality reserves across our global system, and particularly in our Jurati mine in Brazil. The transaction avoids potential capital costs in the future and allows us to focus future bauxite investments in the two Brazilian mines we own and operate. Next, we recorded $77 million in restructuring charges in the first quarter related to the 2019 divestiture of two Spanish smelters, Aviles and La Coruña. We offered to resolve various legal claims related to the sale of those assets, and former employees unanimously agreed this week to accept our proposal. Upon satisfaction of all agreed-upon conditions, this settlement is expected to avoid the potential for costly and lengthy litigation. We are continuing to pursue legal actions against the entity that purchased these assets and failed to meet its promises to our former employees. Finally, the fundamentals of the aluminum business remain strong, and the work we've done over these past several years has enabled us to operate efficiently and capture benefits from positive markets. In the quarter, we saw the average realized price for aluminum increase sequentially 14% to more than $3,800 per metric ton. And that's a good pivot point for Bill to detail the full results, including the positive impact that these strong metal prices had on our adjusted EBITDA. Bill, please go ahead.