Alcoa Corporation

Good afternoon and welcome to the Alcoa Corporation second quarter 2023 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 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 Molly Bierman, Executive Vice President and Chief Financial Officer. We will take your questions after comments by Roy and Molly. 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. For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. With respect to our outlook, we have not presented a quantitative reconciliation of certain forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures Because it is impractical to forecast certain special items without unreasonable efforts due to the variability and complexity associated with predicting the occurrence and financial impact of such special items as described in 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 thanks to everyone for joining our call. I'm happy to be here today with Molly Bierman, our Executive Vice President and Chief Financial Officer. She'll soon provide a detailed review of the financial results, but let's start first with safety. We always strive to protect our employees, contractors, and visitors from injuries. This is the expectation in all of our daily activities, and it is particularly important when we consider any modifications to our processes or when upset conditions occur. Every quarter, we report during this call any serious incidents that we would classify as an FSIA, which stands for fatal or serious injury actual. This would involve injuries that are life-altering or fatal. I'm disappointed to report that an employee at our Icelandic smelter lost partial vision in one eye from an injury that happened when he was sampling molten metal. We have investigated the incident, and we are working to prevent it from occurring at any of our locations. In the second quarter, our overall injury rates continued to decline. We also are seeing positive trends in leading indicators showing we're proactively identifying and correcting potential risks before they result in injuries. We are focused on continued improvement. Any injury is unacceptable, and we expect our teams to be constantly learning and adapting. Now, let me turn to our financial results. We generated slightly higher sequential revenue in the quarter of $2.68 billion. We increased to shipments, which outweighed lower average realized pricing. Still, as you can see, this quarter's challenging market conditions and operational disruptions led to an EBITDA outcome that demonstrates the need for continued improvement. We did pay another quarterly cash dividend, and we finished the quarter with $1 billion in cash. We also continued to strengthen the balance sheet by reducing risk from pension plans. This was accomplished via another annuitization, our sixth such transaction. This one was for certain retirees and beneficiaries in Canada, providing them the same benefits while removing the liabilities and corresponding assets from our books. No cash funding was required for this transaction. Operationally, in the second quarter, we were also pleased to reach a new labor agreement with the United Steelworkers that covers more than 800 employees at two of our smelters in the United States, Warwick in the state of Indiana and Messina in the state of New York. Also, we were pleased to announce in May a major sales contract with Emirates Global Aluminium to supply smelter-grade alumina from Western Australia. This is an eight-year deal beginning in 2024 and will represent a significant portion of our third-party aluminum sales. We will be EGA's largest third-party supplier, supplementing their own production at their refinery in Abu Dhabi. We appreciate the confidence that this customer places in us and the many others we serve. Before I hand it over to Molly, I'd like to outline our most critical steps to drive improved performance. Importantly, I am pleased to see improving stability across our operations. We have a united team focused on taking action on items most critical to our success. Let me quickly highlight some areas of attention for us in the coming weeks. First, we are focused on securing our approvals for bauxite mining in Western Australia. This is a key priority. In the meantime, we are currently using bulk site with lower grade, and our global centers of excellence are working to optimize our refining system to process these lower grades. Second, we are continuing to implement our plans to drive stability across our operations. Our third quarter outlook, to be covered in detail by Molly, shows that operational stability drives financial improvement. Our leaders are focused on spending even more time on the shop floor, setting clear stability criteria, and moving towards proactive maintenance to prevent emergency breakdowns. We ended the second quarter with good improvement and have seen a strong start to the third quarter. Third, we are watching the ongoing developments in our markets so we can adapt our programs, product portfolio, and operations to today's conditions, but also to emerging demands from our customers. Aluminum is a critical part of a decarbonized world, and our portfolio of low-carbon, customer-centric value-add products will help us to continue to be a supplier of choice. And finally, we are continuously focused on ensuring that we are operating our facilities in an optimal fashion and making decisions that can drive short-, medium-, and long-term profitability across our company and through the cycles. We continuously review all of our facilities to be sure we are operating the right portfolio of assets for current and expected conditions. With that, I'll turn it over to Molly to talk about the results, a few key emerging trends, and our outlook for the third quarter. Molly, please go ahead.