Alcoa Corporation

Good afternoon and welcome to the Alcoa Corporation third 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, Investor Relations and Pension Investments. Please go ahead.

Thank you. And good day, everyone. I'm joined today by William Opplinger, 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 Bill 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. We have not presented quantitative reconciliations of certain forward-looking non-GAAP financial measures for reasons noted on this slide. Any reference in our discussion today to EBITDA means adjusted EBITDA. Finally, as previously announced, the earnings press release and slide presentation are available on our website. With that, here's Bill.

Thank you, Jim, and thanks to everyone for joining the call today. Before we get started, I want to acknowledge the important contributions from our former CEO, Roy Harvey. Roy played a key role in our evolution into a stronger and more resilient business, and he was pivotal in our 2016 launch as a pure play upstream aluminum company. He led the company through some difficult market environments, including COVID, and his commitment to making Alcoa successful never wavered. He is serving as a strategic advisor to me for the remainder of the year, and I appreciate his counsel. I've interacted with many of you over my 23 years with Alcoa Inc. and Alcoa Corp., both in my CFO and COO roles, and I'm glad to be with you again today. In my first few weeks in this role, I've met with employees, customers, and industry participants. Several questions keep coming up in those conversations, such as what are our priorities and what are Alcoa's key challenges? First, to address the constant in our company, our values. At Alcoa, we act with integrity, operate with excellence, care for people, and lead with courage. These aren't statements that simply live on a plaque. These are the values we expect every Alcoan to live daily. I'm proud to lead a company guided by strong values. Our relentless focus on the safety of our employees, contractors, and visitors to our sites will continue, as will our efforts toward our sustainability targets. As I step into the CEO role, I want to make it clear that I have ambition for this company. That ambition manifests as an expectation of excellence in everything we do, from EH&S, operations, maintenance, and commercial excellence. Alcoa has an impressive history of innovation and leadership in the industry, and we plan to further build on that and strengthen our market connections. We will be action-oriented and make decisions guided by our values, sound business principles, and with a focus on creating value for our stockholders. We've made good progress this year. Across our system, we've improved stability, and we intend to build on that operational momentum. So for the near term, the focus will be gaining approvals for bauxite mining in Western Australia. This is our top priority. We're making progress. We have the right team in place for success, and we understand the improvements that our stakeholders are expecting. We'll be driving for further operational improvements in Brazil. The ongoing startup at the Aliamar smelter in San Luis hasn't gone as planned. We now have conditions in place for a successful restart from here forward. Next, we will be focusing on productivity across our system with every site focused on margin improvements through operational productivity going into 2024. And we have action plans in place to improve the financial results of certain locations in the system that have been underperforming. Each operation is working to become more globally competitive. In the long term, we remain bullish on aluminum as the material of choice. Megatrends continue to drive increased aluminum usage globally, from further EV penetration to the substantial future demand in solar installations. Alcoa is uniquely positioned in the aluminum industry for a world focused on carbon emissions and other sustainability issues, which we are addressing from three vectors. Primary metal production with our joint venture, Elysis, post-consumer scrap usage with our Astraea technology, and carbon and residue emissions with our Refinery of the Future initiative. So before I address the third quarter results, let me reemphasize, we are laser focused on improving the short term, and we are working on developing unmatched industry-leading technology for the long term. Let's begin with safety. I'm disappointed that we had one serious injury with life-altering implications in the third quarter. A worker at our Juruti bauxite mine lost portions of two fingers while performing maintenance on a bulldozer. While this event is unacceptable, overall we are making progress on preventing fatalities and serious injuries. So far this year, our total recordable injury rate has improved by 16%, and days away and restricted time injury, our DART rate, is 27% better on a year-over-year basis. Also, we are increasing the number of on-site field verifications for leaders to evaluate the effectiveness of critical safety controls and coach workers on safety improvements. Now moving to the financials. We reported an adjusted net loss for the third quarter of $1.14 per share and $70 million in adjusted EBITDA, excluding special items, driven by lower average realized prices for both alumina and aluminum. Improvements in both raw material and production costs did not fully offset the impact from lower realized pricing in both of our segments. We ended the quarter with a strong balance sheet and a cash balance of $926 million. We've made meaningful progress on our approvals for bauxite mining in Australia during the quarter and have more visibility on the timeline for decisions from the government and regulators. I'll address this more fully later. In our operations, our Quebec smelter system set production records in the quarter, and we're investing there to increase our casting capabilities for value-add products. From a commercial perspective, we also continue to be encouraged by the reception from customers for our sustain-a-line of low-carbon products, which includes Ecolume metal and Ecosource alumina. And while demand in some key end markets remains soft, there are signals for a rebound in 2024. We'll talk more about that macroeconomic view of the market in a moment, but first let me turn it over now to our CFO. Molly, please go ahead.