Ladies and gentlemen, thanks for standing by and welcome to Second Quarter 2013 Earnings Call. At this time, all lines are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions being given at that time (Operator Instructions) and as a reminder, today’s conference is being recorded. I would now like to turn the conference over to our host, Peter [indiscernible]. Please go ahead, sir.

Thank you very much, Gary, and good afternoon everyone and welcome to today's call. Before we begin, I would like to remind you that today’s discussion will contain forward-looking statements related to future events and expectations including our expected future financial performance, results of operations and financial conditions. These forward-looking statements involve important known and unknown risks and uncertainties which could cause our actual results to differ materially from those expressed in our forward-looking statements. Please review the forward-looking statements disclosure in today’s slides and press release for a full discussion of these risks and uncertainties. In addition, we have included some non-GAAP financial measures in our discussion. Reconciliations to the most comparable GAAP financial measures can be found in the appendix to today’s presentation and on our website at centuryaluminum.com. With that, I’d like to now introduce Mike Bless, Century’s President and Chief Executive Officer.

Thanks Pete and thanks everybody for joining us this afternoon. We're happy to be talking to you here for the first time from our new offices in Chicago. And with that, if we could turn to Slide 4 please, let us give you a quick rundown on what we've been working on over the last couple of months. We think we've had a pretty productive quarter here at Century despite conditions in the commodities markets that are obviously on the weak side. As you would expect, we are trying hard to implement what we are able to, obviously focusing on lowering the Company's cost structure and improving our competitive position. Our intent is to set the Company up to tough through these kinds of times, like we're going through right now, and to take advantage of better conditions when they come. We think we've made a lot of good progress in doing that. Let me take you through it. We continue to take costs out of the operations, and that will be evident when Shelly updates our financial estimates for you here in a couple of minutes. This is even before the substantial improvement coming from the new Kentucky power contracts which we'll discuss in detail in a moment. Let me just take you through at a high level the last quarter's results to give you a sense of how this is bearing on the actual financial results. If you look at Q2 over Q1, look at the sales change quarter to quarter, sales were up $11 million, again Shelly will give you more detail on all of this, and gross profit as reported Q1 to Q2 was down $23 million. But if you dissect that $23 million decrease, the lower aluminum price itself, simply the commodity price fall, drove…

Alright, thanks Mike. You could turn to Slide 8 please. I'll take you through the Company's financial performance for the quarter. Shipments were up 11% quarter over quarter and this was entirely due to the Sebree acquisition. Shipments at Mt. Holly were up about 4% due to one additional day in Q2 and a reduction in inventory. But as Mike mentioned, we built about 5,000 tons of finished goods at Hawesville, so shipments of that plant were down about 4% in the quarter. In Iceland, we had direct shipments of approximately 2,300 tons and total volume for Iceland was up slightly due to the extra day in the quarter. On a one-month lagged basis, the average cash LME price was down 9% from Q1 to Q2. When you look at our realized unit prices in the U.S., they were down 7% with higher premiums offsetting a portion of the LME impact. In Iceland, our realized unit prices were down 11% and this reflects the impact of higher co-shipments during the quarter. Moving on to the income statement data, net sales were up 3% Q2 over Q1. The acquisition drove net sales up by 12% but lower LME prices offset most of this increase. For operating income, we had our normal adjustments for depreciation and amortization and lower cost of market inventory adjustments. In addition, we had $2 million of relocation expenses in Q2 associated with the headquarters move to Chicago. So on an adjusted basis, operating income decreased $20 million from Q1 to Q2 primarily due to the negative LME impact on revenues, net of the benefit from our LME-linked alumina and power contracts. For Q2, we had an adjusted loss of $24 million or $0.25 per share and we had several unusual items during the quarter. So let me…

Thanks Shelly. If we could just turn to Slide 11 please, let me just take you through quickly, now we can get to the Q&A, but I want to take you through the things that we'll be focusing on here over the next couple of months so you can look out for our progress. Obviously job one here is on Hawesville power, we need to finalize the regulatory approvals and the transmission related issues. We did set up to be a very significant market power purchaser and put in place our price management strategy. So, net-net, you have to look for an announcement for us on progress on the regulatory and other fronts sometime between now and mid-August. On Sebree, as I said, we need to establish an appropriate safety and operations baseline and get our systems and processes there up to our expectations. And then again as I detailed earlier, we need to replicate the Hawesville power arrangement for Sebree, should be a reasonably straightforward progress, process rather. At Grundartangi, we'll continue as Shelly said to execute the expansion project. They are well ahead of schedule there as you'll be able to calculate when you look at the numbers during this last quarter, they're now producing at an annualized rate that's just shy of 290,000 tons, so great, great progress at Grundartangi. And as Shelly said again, we'll prepare for the Vlissingen, for the Netherlands anode plant to restart in the fourth quarter. At Helguvik, as you remember when we talked to you in April, we were talking about the Icelandic elections, that have obviously now taken place and the new government has been seated. The summer holidays are in full swing in Iceland now, so not very much is getting done but we are maintaining some dialogs which we expect will accelerate here as we move into late August and into the fall. Before the end of the year, we believe we need to determine if we can reach the basis of agreement with the two power companies with whom we signed contracts in 2007, and also as we've discussed with you in the past, importantly, to determine if and on what basis the National Power Company can play a role in this project. Lastly, as Shelly detailed, we spent a lot of time and will continue to, to preserve the Company's financial strength and flexibility. We've ceased all discretionary spending other than these two important projects at Grundartangi, we believe it's appropriate even in this current tough environment to continue with those projects, to complete the restart of the anode plant in the Netherlands and to keep pushing forward on the capacity creep at Grundartangi. And as Shelly said, we are continuing to maintain good liquidity and financial flexibility. And with that, Gary, I think we can take questions.

(Operator Instructions) First question comes from the line of Bruce Klein with Credit Suisse. Please go ahead, your line is open.

Just on the Hawesville power, what is sort of your view would be the biggest risk I guess in terms of regulators, what would they be viewing as an impediment or have you heard any impediments that they are articulating?

We haven't heard any impediments, we don't believe there should be any impediments. Again as you know, the deal is a market-based deal, it preserves the smelter obviously, it doesn't put any incremental cost on the other rate payers or the power company. It's exactly what we were intending to do, it's exactly what the politicians wanted us to do. So that is the long-winded answer. There should be no impediments but until it's over it's not over in our view and that's why we're going to keep going here until we get the final approval.

Alright, thanks. And in terms of hedges, I don't know if you picked them on the power side, is that something that's more on the forefront or layer or any, if you could talk about this?

Yes, I mean we're looking at it. Obviously until we have a firm deal that's been approved, you can't, you don’t have a liability to go out and hedge. So we've not done anything to-date but we're spending a lot of time looking at it and we're going to be buying 480 megawatts at Hawesville and then when Sebree is at market, we're going to be buying over 800 megawatts, so very, very major purchase. There's plenty of power out there, the physical power is there in abundance, but as it is a very deep and liquid market, as you know, that allows you to hedge this in any manner that you wish you can buy forward, you can buy puts and calls if you want to put a range on it, or any combination of that that you can buy from financial, you can transact with financial intermediaries or physical sellers, we're talking to them all right now. So, again we haven't come to any conclusion yet. My guess is at the end of the day, like in most things, we won't hedge at all and we won't hedge none of it, it will be somewhere in between. The other comment I might make just to give you a sense of how we look at this is that you have to be really careful when you're only looking at hedging one side of the equation, right. So if you're looking at hedging the power price, I'm not saying we will or we won't but you have to carefully – so you're looking at hedging a cost that represents say 40% of your cost, it will be less once we go to market, so let's say 30% plus. You also have to carefully look at the revenue side of that as well or else you might be unbalanced. So we're grinding through all of that as we speak.

Next we turn to the line of Sal Tharani with Goldman Sachs. Please go ahead.

Shall we move on and he can get back in the queue.

Certainly, we'll go to the line of Timna Tanners with Bank of America. Please go ahead.

Can you help go through again the breakeven cost of production, I just want to make sure that I distinguished the U.S. versus the overall Company once all the cost savings are done?

Sure, absolutely. Now what I gave you was the total Company, so bottom, bottom line, all the smelters, US and Iceland, all the, for want of a better term, corporate costs and just corporate SG&A and all the rest of that, and that number was 1,750, again once, as you say, all the – both of the Kentucky smelters are on market power. Shelly now has given you a slightly different format. We don't want people to get confused. What she gave you is at a range of LMEs, 1,800 to 2,000, she gave you the actual cost estimates for the U.S. as distinct from Iceland. So it's slightly different. Obviously the breakeven has a circular reference in it if you will because of the costs that are referenced to the aluminum prices.

Okay, so I just want to make sure I understand that. Now those are cash costs but with the corporate overheads implied in there, is that correct?

Yes, this is all cash, we're talking only cash here, so we're not putting in any non-cash cost, and all the corporate – everything is in. Basically, it's the bottom line what you would think of as free cash flow, so it's after everything, after interest, after corporate SG&A, after taxes, after pension contributions, after maintenance CapEx. The only thing that's not in that 1,750 breakeven is discretionary CapEx, investment CapEx, CapEx that we choose to spend on improving the plants, expanding the plants, et cetera, et cetera.

Okay, but no depreciation or anything, right?

No, no depreciation, this is not on a GAAP basis, this is pure cash.

And just to clarify what Mike just said, that's all referring to his 1,750 breakeven that he referred to. If you go to the second half items we've put out, those numbers are plant specific because we give you things like interest and SG&A exactly and we don't want them double counted. So just want to make sure there was no confusion there.

Okay, we'll sort that out, thank you. So that's really helpful. What happened to Ravenswood, I don't think we mentioned it in this call?

Yes, I mean Ravenswood has just been, it's been at steady-state, Timna, this past quarter. The short answer is, there's been no change. The long answer is, we are continuing to talk there with the power company and the state and all the rest of the constituents, the retiree group on finding a way. We haven't lost, I'm glad you raised it, there's just so much going on this past quarter, we couldn't fit it in, that's probably not a great way to say it, but we haven't lost our interest in reopening this plant and we think that maybe the solutions that we're hopefully about to reach here in Kentucky might hold some answers to how to breach the final gap in West Virginia, but the short answer is, there is no change at Ravenswood regrettably.

Okay, and then final question on the inventory side, the big increase and just want [indiscernible] steady-state with Sebree?

Yes, I think it's reasonably steady-state. You know obviously that we assumed that or we bought that inventory, received that inventory. As Shelly said, it was a little bit less than the contractually guaranteed amount, so I guess all else being equal, we'll bulk up by a couple of million and pay a couple of million dollars less on the final purchase price, the difference between the $61 million and the $48 million that we've paid thus far as Shelly said, but I think Shelly, reasonably steady-state going forward?

Yes, for Sebree, and as we talked about for Hawesville, we go high on inventory there, we talked about a 5,000 ton build, so by year end, you would expect to see that come back down.

That's an excellent point. So we are still roughly $8 million, $9 million of Hawesville inventory higher than we otherwise would be because we really thought it prudent to make sure that that high purity stuff that is as you know in very short supply in the U.S. and around the word and customers there need that material and they need it in that specification in order to make sure that they have the confidence to continue to deal with us which they want to do because there's just no other U.S. suppliers, we thought it was the right thing to do to build those couple of thousand tons. So to Shelly's point, those should go away here in the third and fourth quarters.

Thank you. I hope you're enjoying in Chicago.

Thanks very much, we are, thank you.

(Operator Instructions) I'll next return to the line of David Olkovetsky with Jeffries. Please go ahead.

So I apologize but I hopped on a bit late and I hope you didn't already go through this but can one of you guys go through that first paragraph of the earnings release where we talked about what are the various one-time items and just let me know where on the income statement some of them are?

Sure, yes, we'd go through them but your question is a good one, we didn't give you the geography as we call it here. Where we are on the income statement, that's a good question, probably many people have the same sense. Shelly, why don't you just march through them.

Yes, sure. What I've done, I've gone to Slide 15 of the presentation and basically this reconciles and lines up with that first paragraph. So LCM will be in cost of goods, power contract amortization that's going to be in your depreciation and amortization expense, the gain on bargain purchase, we'll treat that as a separate line item, same with extinguishment of debt, and then corporate relo is in SG&A.

Okay. And then, on Slide 6, you guys show that your cash cost is 1,800 and then on 10 it's 1,730 to 1,780, I just wondered if you could reconcile that for me?

Sure, absolutely, this may have been what we were talking about before. The first slide that you referenced David is – oh 6, I'm sorry, 6 is a global cost curve and all we were doing there, sorry it's a bad picture there, all we were doing there at 1,800 is drawing a line where the LME was two days ago when we made this slide. So that's the only thing that that horizontal 1,800 represents on 6.

Oh okay, I got you.

Sorry about that. On the second slide that you referenced, those are at that range of LMEs that you see there are actual cash costs for the second half of this year and going forward as you see.

Okay, got it. And then any update on a CFO?

Good question. The answer is, no. Right now as you know since the changes I guess almost 2 years ago now, it was the fall of November 2011, I've been acting as CFO. We've got two tremendously talented senior finance executives who've been with the Company for some time in those jobs. Shelly as you know here handles obviously investor relations, the treasury side of things, capital markets insurance and otherwise, and Steve Schneider is our Chief Accounting Officer, handles IT and a whole mess of other things, and that's been working very well thus far. And we think in this current environment, without being too penny wise obviously, we're making sure we don't do that and our Board is making sure I don't do that, but we think in this environment with things running well, it's worked well and it's been prudent here to run the Company in this way, but believe me, we continue to talk about it at the Board level very frequently, but for now, no change.

Okay. And then one more if I could, on Slide 10 again, the cash cost, obviously there's a bit of a difference there in terms of July, August, September, December, is that just due to like peak power prices in summer months?

No, no, let me go through it with you because this is important for everybody to understand. So it's pretty straightforward. July and August is the company – which is the only differences between these three data points are the two plants in Kentucky. So July and August are the two plants in Kentucky as we currently sit, i.e., both plants buying the cost-based power from Big Rivers. As we told you, they're paying just shy of $50 a megawatt hour. So that kind of steady-state the company as it exists. Then moving to that second line, the Sep to Dec, there are two changes actually, they go opposite ways. So what happens is that through August 20, Hawesville drops to market power and Hawesville's cost go down significantly. At the same time, Sebree until February remains on the Big Rivers system, and what happens on the Big Rivers system is because Hawesville is leaving, the costs of all the other ratepayers including Sebree go up. So it is Hawesville going down in the Sep to Dec period and Sebree going up by about 17%. And then pro forma is after January of next year and that's with Hawesville still at market power, no change there, and Sebree leaving the Big Rivers system as they are contractually able to do after January 31 and going to market based power. So, with apology, it's a little bit confusing but we wanted to give people the data to be able to crunch the numbers really on monthly basis here over the next six months.

Okay, that's a great explanation, thanks very much and I guess I will talk soon.

Next we turn to the line of David Gagliano with Barclays. Please go ahead.

I have a really, really quick basic question. I just noticed the SG&A line [indiscernible] at a bit higher quarterly Q1, Q2 versus last year, what's the reason behind that and should we expect that run rate $15 million, $16 million per quarter to continue?

Good question, David. The answer to the second part of your question is absolutely no and it's easily explainable. In fact that whole delta is basically divided in half explained by two items, one is the corporate relocation and obviously that is now essentially done, we'll have some additional expense here just as we complete the transition over the next couple of months. And the second is specific to the restart of the Vlissingen plant in the Netherlands and the way it works, the accounting works is that until this plan starts producing, we've hired a bunch of employees there to help with the restart and to get the system set up and all the rest of it, and the way the accounting works is that until the plant starts producing, those costs have to be reported in SG&A but as soon as the plant is like a normal plant, it is producing, those costs will be reported where they should be which is in cost of goods sold. So again the answer to the second part of your question is, no, it ought to go back to a traditional kind of level. The $7 million where we were before was the result of some positive one-time things as you may remember, and so if you look at the guidance that Shelly took you through, kind of the run rate SG&A on a cash basis here at Century is a little bit over $10 million a quarter, and on a book basis it's as you can see we're showing $26 million but including the one-time stuff. So, it will go back to kind of the level where it was but in sort of $9 million to $10 million reported where we used to be.

Speakers, we have no further questions in queue.

Okay. We thank everybody very much for their participation and interest today, and again we will be talking to you certainly when we report third quarter and you'll see some announcements from us in August as we progress in Kentucky. Thanks again.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation and for using AT&T Executive TeleConference Service. You may now disconnect.