ATI Inc.

Good morning and welcome to the Allegheny Technologies Incorporated fourth quarter and full year 2018 results 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 telephone keypad. To withdraw from the question queue, please press star, then two. Please note that this event is being recorded. At this time, I would like to turn the conference over to Scott Minder, Vice President, Treasurer, and Investor Relations. Please go ahead, sir.

Thank you, Denise. Good morning, and welcome to the Allegheny Technologies' fourth quarter and full year 2018 conference call. This call is being broadcast on our website at atimetals.com. Participating in the call today are Bob Weatherby, President and Chief Executive Officer, John Sims, Executive Vice President, High Performance Materials and Components Segment, Pat DeCourcy, Senior Vice President, Finance and Chief Financial Officer, and Kevin Kramer, Senior Vice President, Chief Commercial and Marketing Officer. If you've connected to this call via the Internet, you should see slides on your screen. For those of you who dialed in, slides are available on our website. After our prepared remarks, we will open the line for questions. During the Q&A session, please limit yourself to two questions to allow time for others. We will make every attempt to reach all in the queue within the allotted call time. Please note that all forward-looking statements are subject to various assumptions and caveats, as noted in the earnings release and shown on this slide. Now I would like to turn the call over to Bob. Thanks. Thanks, Scott.

Good morning to everyone on the call and to those listening on the Internet. I'm pleased and honored to be with you today on my first quarterly earnings call as ATI's president and CEO. I'll start by providing a brief overview of our full year and fourth quarter ATI results and then turn the call over to my team to cover their respective areas in more detail. Let me start by saying that 2018 was a very good year for ATI. We achieved a significant majority of our objectives and clearly outperformed on several key metrics most notably free cash flow generation. ATI's revenues surpassed $4 billion for the first time since 2014, growing by 15% versus the prior year. This increase was led by double-digit growth in aerospace and defense markets, sales in both the HPMC and FRP business segments. Additionally, for the full year, revenues expanded versus 2017 in nearly all of our major markets. This is a testament to our ability to design, manufacture, and deliver a wide range of high-quality products. Our commitment to relentless innovation and disciplined operational performance fuels our ability to meet our customers' increased demand. 2018 segment operating profit expanded by 46% year over year. significantly outpacing our sales growth rate. This outsized operating profit growth reflects our efforts to increase sales of high-value, technically advanced products while reducing our exposure to more commoditized standard products. In addition to a favorable product mix, higher production levels led to increased utilization rates at our world-class production facilities, and we continued to vigilantly control our costs while growing our business. These positives came together to produce 2018 earnings per share, excluding a non-recurring gain recognized earlier in the year, of $1.51. This compares to an adjusted earnings per share of 48 cents for the full year 2017, equating to a year-over-year gain of more than 200%. ATI finished this year with solid fundamentals in the fourth quarter, achieving our fourth straight quarter of double-digit year-over-year earnings per share growth, Consistent with full year results, revenues grew by 14% versus the fourth quarter 2017, with strong contributions from both business segments. As evidence of continued strong underlying customer demand, seven out of our eight major markets posted higher fourth quarter 2018 sales compared to the prior year. Segment operating profits were essentially in line with prior year results, but fell below our expectations. Each business segment was negatively impacted by either the timing mismatch associated with falling raw material surcharges or by higher maintenance and energy expenses. Additionally, we continue to be hampered by a supplier delay within our HPMC segment. We will cover each of these topics in more detail later in this call. Our 2018 performance sets the stage for another year of financial growth in 2019. As we have discussed in the past, 2018's financial progress was not linear. While year-over-year revenue growth was relatively consistent in each quarter, operating profit and margins were higher in 2018's first half as compared to the second half. Looking ahead, customer demand remains strong, and we expect continued revenue and earnings growth in 2019. Similar to my earlier comment, these growth rates will vary quarter to quarter. In 2019, we generally expect second-half growth rates to be stronger than first-half growth rates due to known customer order patterns and anticipated raw material cost stability or improvement. Additionally, we anticipate a $35 million year-over-year increase in 2019 pension and other post-retirement benefit plan expenses for which Pat will provide additional details later in the call. With that as a backdrop, I'll hand the call over to John to provide a more detailed review of our performance in the HPMC segment, and I'll be back after John to cover the FRP segment results, and again following Pat to provide our first quarter and full year 2019 business outlook. John?